Corporate Corruption News ArticlesExcerpts of key news articles on corporate corruption
The more aggressively a bank lobbied before the financial crisis, the worse its loans performed during the economic downturn -- and the more bailout dollars it received, according to a study published by the National Bureau of Economic Research this week. The report, titled "A Fistful of Dollars: Lobbying and the Financial Crisis," said that banks' lobbying efforts may be motivated by short-term profit gains, which can have devastating effects on the economy. "Overall, our findings suggest that the political influence of the financial industry played a role in the accumulation of risks, and hence, contributed to the financial crisis," said the report, written by three economists from the International Monetary Fund. Data collected by the three authors -- Deniz Igan, Prachi Mishra and Thierry Tressel -- show that the most aggressive lobbiers in the financial industry from 2000 to 2007 also made the most toxic mortgage loans. They securitized a greater portion of debt to pass the home loans onto investors and their stock prices correlated more closely to the downturn and ensuing bailout. The banks' loans also suffered from higher delinquencies during the downturn.
A noted plant scientist who spent much of his career at Purdue University sent a letter to the USDA informing the agency that he'd discovered a mysterious new disease-causing organism in Monsanto's (MON) genetically engineered Roundup Ready corn and soybeans. Now, that scientist - Don Huber - has written a follow-up letter ... and appears in a videotaped interview where he presents an even scarier picture of the damage he claims Monsanto's herbicide chemical glyphosate (the main ingredient in Roundup) is doing to both plants and the animals who eat them. Use of glyphosate has soared thanks to widespread use of Monsanto's soy and corn seeds, which are genetically modified to survive its effects. The problem with glyphosate, Huber says, is that it effectively "gives a plant AIDS," weakening its defenses and making it more susceptible to pathogens, such as the one his team discovered. The scientists have taken to calling the bug "the electron microscope (EM) organism," since it can only be seen with an electron microscope. Huber claims that the double whammy of weakened defenses and the new EM organism have contributed to "unexplained epidemics" of disease on farms. He's heard from cattle farmers who are struggling because they're experiencing a 15% infertility rate and 35% rate of spontaneous abortions among their herds. When the farmers switch to non-GE soy and corn for feed, the problems decline dramatically.
Just under three years ago, people in the village of Gumbi in western Malawi went unexpectedly hungry. Not like Europeans do if they miss a meal or two, but that deep, gnawing hunger that prevents sleep and dulls the senses when there has been no food for weeks. Oddly, there had been no drought, the usual cause of malnutrition and hunger in southern Africa, and there was plenty of food in the markets. For no obvious reason the price of staple foods such as maize and rice nearly doubled in a few months. Unusually, too, there was no evidence that the local merchants were hoarding food. It was the same story in 100 other developing countries. There were food riots in more than 20 countries and governments had to ban food exports and subsidise staples heavily. A new theory is emerging among traders and economists. The same banks, hedge funds and financiers whose speculation on the global money markets caused the sub-prime mortgage crisis are ... taking advantage of the deregulation of global commodity markets [to make] billions from speculating on food and causing misery around the world. As food prices soar again to beyond 2008 levels, it becomes clear that everyone is now being affected. Food prices are now rising by up to 10% a year in Britain and Europe. What is more, says the UN, prices can be expected to rise at least 40% in the next decade.
Note: Remember that speculation is behind almost all of the economic bubbles and busts. The price of oil spiked a couple years ago almost purely because of speculators, while the oil companies raked in record profits. It looks like the speculators are now driving food prices as high as they can. For a treasure trove of reports from reliable sources investigating the many different strategies used by financial corporations to enrich themselves at the expense of common people, click here.
The US embassy in Paris advised Washington to start a military-style trade war against any European Union country which opposed genetically modified (GM) crops, newly released WikiLeaks cables show. In response to moves by France to ban a Monsanto GM corn variety in late 2007, the ambassador, Craig Stapleton, a friend and business partner of former US president George Bush, asked Washington to penalise the EU and particularly countries which did not support the use of GM crops. "Moving to retaliation will make clear that the current path has real costs to EU interests and could help strengthen European pro-biotech voices," said Stapleton, who with Bush co-owned the St Louis-based Texas Rangers baseball team in the 1990s [and is married to Dorothy Walker, a first cousin of former U.S. president George H.W. Bush]. In other newly released cables, US diplomats around the world are found to have pushed GM crops as a strategic government and commercial imperative. In addition, the cables show US diplomats working directly for GM companies such as Monsanto. It also emerges that Spain and the US have worked closely together to persuade the EU not to strengthen biotechnology laws. In one cable, the embassy in Madrid writes: "If Spain falls, the rest of Europe will follow." The cables show that not only did the Spanish government ask the US to keep pressure on Brussels but that the US knew in advance how Spain would vote, even before the Spanish biotech commission had reported.
Note: For a powerful 13-minute video revealing the disturbing results of the first long-term scientific study on GMOs and showing how they greatly increased cancer incidence in rats, click here. For more revealing information on this from Dr. Mercola, click here. For an excellent overview of scientific studies on the risks from genetically-modified foods, click here.
Inside the humdrum offices of a tiny trading firm called Tradeworx, workers ... tend high-speed computers that typically buy and sell 80 million shares a day. But on the afternoon of May 6, as the stock market began to plunge in the “flash crash,” someone here walked up to one of those computers and typed the command HF STOP: sell everything and shutdown. Across the country, several of Tradeworx’s counterparts did the same. In a blink, some of the most powerful players in the stock market — high-frequency traders — went dark. The result sent chills through the financial world. After the brief 1,000-point plunge in the stock market that day, the growing role of high-frequency traders in the nation’s financial markets is drawing new scrutiny. Over the last decade, these high-tech operators have become sort of a shadow Wall Street — from New Jersey to Kansas City, from Texas to Chicago. Depending on whose estimates you believe, high-frequency traders account for 40 to 70 percent of all trading on every stock market in the country. Some of the biggest players trade more than a billion shares a day. These are short-term bets. Very short. The founder of Tradebot, in Kansas City, Mo., told students in 2008 that his firm typically held stocks for 11 seconds. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years, he said.
Note: For key reports on the dubious practices which underlay the financial crisis and the impoverishment of the public treasury, click here.
Of the 84,000 chemicals in commercial use in the United States -- from flame retardants in furniture to household cleaners -- nearly 20 percent are secret, according to the Environmental Protection Agency, their names and physical properties guarded from consumers and virtually all public officials under a little-known federal provision. Under the 1976 Toxic Substances Control Act, manufacturers must report to the federal government new chemicals they intend to market. But the law exempts from public disclosure any information that could harm their bottom line. Government officials, scientists and environmental groups say that manufacturers have exploited weaknesses in the law to claim secrecy for an ever-increasing number of chemicals. In the past several years, 95 percent of the notices for new chemicals sent to the government requested some secrecy, according to the Government Accountability Office. About 700 chemicals are introduced annually. Some companies have successfully argued that the federal government should not only keep the names of their chemicals secret but also hide from public view the identities and addresses of the manufacturers.
Note: So according to this law, the bottom line (profits) trumps public health. For lots more on corporate and government secrecy, click here.
Just before Christmas, the US President, Barack Obama, signed into law one of his country's biggest aid pledges of the year. It was bound not for Africa or any of the many struggling countries on the World Bank's list. It was a deal for $US2.77 billion ($3 billion) to go to Israel in 2010 and a total of $US30 billion over the next decade. Israel is bound by the agreement to use 75 per cent of the aid to buy military hardware made in the US. For the first time the US is also providing $US500 million to the Palestinian Authority, including $US100 million to train security forces, under the strict proviso that the authority's leadership recognises Israel. For many years Israel has been the largest recipient of US foreign aid, followed by Egypt ($US1.75 billion), which also receives most of its assistance in tied military aid. The Congressional Research Service says that the US spent 17 per cent of its total aid budget - or $US5.1 billion - on military aid in 2008, of which $US4.7 billion was grants to enable governments to receive equipment from the US.
Note: Israel's population is 7.5 million. If you do the math, the US is providing the equivalent of $4,000 in aid to every man, woman and child in Israel over the next decade, with $3,000 of that to buy US military hardware. For lots more on government-facilitated profiteering in the arms industry, click here and here.
Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments, according to former Goldman employees with direct knowledge of the deals who asked not to be identified because they have confidentiality agreements with the firm. Goldman was not the only firm that peddled these complex securities ... and then made financial bets against them, called selling short in Wall Street parlance. Others that created similar securities and then bet they would fail ... include Deutsche Bank and Morgan Stanley, as well as smaller firms like Tricadia Inc., an investment company whose parent firm was overseen by Lewis A. Sachs, who this year became a special counselor to Treasury Secretary Timothy F. Geithner. How these disastrously performing securities were devised is now the subject of scrutiny by investigators in Congress, at the Securities and Exchange Commission and at the Financial Industry Regulatory Authority. While the investigations are in the early phases, authorities appear to be looking at whether securities laws or rules of fair dealing were violated by firms that created and sold these mortgage-linked debt instruments and then bet against the clients who purchased them, people briefed on the matter say.
Note: So the banks were betting that their own customers would lose money on their products. Hmmmm. For lots of reliable, eye-opening reports on banking secrecy and corruption, click here.
In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled one of the nation's premier investment banks to pass most of its potential losses to others before a flood of mortgage loan defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman promoted as triple-A investments were closer to junk. Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy Newspapers investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws. "The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion," said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's big banks. "This is fraud and should be prosecuted."
Note: For an eye-opening, powerful PBS video which reveals how the economic crisis was conscously allowed to happen, click here. It reveals that Fed chairman Alan Greenspan was against investigating any fraud. For many reports from reliable sources on corruption at the core of the Wall Street collapse and bailout, click here.
Quality, affordable health care is on the critical list in America. And so is the newspaper business. So maybe it's not surprising that one of the most powerful papers in the country attempted an unholy alliance, trying to turn a profit from its newsroom's coverage of the fight for health care reform. You may have missed the story because it broke on the eve of the July 4th weekend. The publisher of The Washington Post, Katharine Weymouth — one of the most powerful people in the nation's capital — invited top officials from the White House, the Cabinet and Congress to her home for an intimate, off-the-record dinner to discuss health care reform with some of her reporters and editors covering the story. But she then invited CEOs and lobbyists from the health care industry to come, too — providing they fork over $25,000 a head, or a quarter of a million if they want to sponsor a whole series of these cozy little get-togethers. And what is the inducement she offers them? Nothing less than — and I'm quoting the invitation verbatim — "An exclusive opportunity to participate in the health care reform debate among the select few who will actually get it done." The invitation promises this private, intimate, and off-the-record dinner is an extension "of The Washington Post brand of journalistic inquiry into the issues, a unique opportunity for stakeholders to hear and be heard." Let that sink in. The "stakeholders" in health care reform in this case do not include the rabble — the folks across the country who actually need quality health care but can't afford it. If any of them showed up at the kitchen door on the night of this little soiree, a bouncer would drop kick them beyond the beltway.
Note: To read the complete text, click on the link above and scroll below the video box at the top of the page. For an excellent article on the Washington Post's ties to the CIA and manipulative politics, click here.
President Obama must stop the bailouts and start the prosecutions. It's time to focus on anti-poverty programs to protect the growing unemployed from hunger and homelessness. Stealth payments to billionaire bondholders must cease immediately. Since the mid-1970s, average Americans' wages have stayed flat when adjusted for inflation. Productivity rose, profits rose, but not wages. To compensate for stagnant wages and the desire to consume more each year, Americans worked more, retired later, spouses went to work, and many burned savings. Then they started borrowing. Debt became America's growth industry. The scheme collapsed because Americans' wages weren't sufficient to pay the interest on existing debts. The administration and the banks keep talking about a credit crisis, but there isn't one. Banks are lending. If you want a mortgage and can afford to pay it back, you can borrow at low rates today. But most Americans don't want more debt because it is a debilitating path to poverty. The average American family already pays 14 percent of annual income in interest to banks. To fix this fake crisis, there are fake discussions about what the government must do. The endlessly recycled plan to buy "troubled" assets isn't to get banks lending again, because they haven't stopped lending. The plan seeks for taxpayers to buy worthless assets at high prices to absorb rich investors' losses. That's it. It keeps coming back as a different plan, but with that same goal. There is no goal beyond that one goal: keep rich people from taking losses.
Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend. Yet ... how different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole? The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated. High pay on Wall Street was a major cause of that divergence. Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials ... who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms ... politicians have walked when money talked. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.
Note: This entire, penetrating article is well worth a read at the link above. For many revealing reports from reliable sources on the realities of the Wall Street bailout, click here.
The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents. "Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job. Bowing to aggressive lobbying - along with assurances from banks that the troubled mortgages were OK - regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way. The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s. Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Those proposals all were stripped from the final rules.
Note: For many revealing reports on the Wall Street bailout from reliable sources, click here.
I spent Sunday afternoon brooding over a [New York Times] front-page article, entitled ["Citigroup Saw No Red Flags Even as It Made Bolder Bets”]. In searing detail it exposed ... how some of our country’s best-paid bankers were overrated dopes who had no idea what they were selling, or greedy cynics who did know and turned a blind eye. But it wasn’t only the bankers. This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics. So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so. Citigroup was involved in, and made money from, almost every link in that chain. And the bank’s executives, including ...the former Treasury Secretary Robert Rubin, were ... so ensnared by the cronyism between the bank’s risk managers and risk takers (and so bought off by their bonuses) that they had no interest in stopping it. These are the people whom taxpayers bailed out on Monday to the tune of what could be more than $300 billion.
Note: For many revealing reports on the Wall Street bailout from major media sources, click here.
Some of the nation's biggest banks are in for a windfall – on top of the $700 billion government bailout – thanks to a new tax policy quietly issued by the Treasury Department. The notice gives big tax breaks to companies that acquire struggling banks hit hard by the mortgage crisis. In some cases, the tax breaks could exceed the cost of acquiring the banks, according to analyses by private tax experts. The change could cost the Treasury as much as $140 billion by enabling firms that acquire struggling banks to use more losses incurred by those banks to offset their own taxable profits. San Francisco's Wells Fargo & Co., which made a bid to acquire Wachovia Corp. just days after the notice was issued, stands to reap about $20 billion in additional tax savings because of the change, according to the analyses. Wells Fargo paid $14.8 billion in a stock deal to buy Wachovia. The notice was issued Sept. 30 as Congress debated the $700 billion bailout plan. Some members of Congress are upset that such a sweeping tax change was issued with no public hearings or congressional input. "I am concerned that the notice, which was never debated by Congress, could end up costing taxpayers tens of billions of more dollars on top of the hundreds of billions of dollars already approved by Congress in the financial rescue plan," Sen. Chuck Schumer, D-N.Y., said in a letter last week to Treasury Secretary Henry Paulson. Some tax lawyers questioned the legality of the notice. Before the notice was issued, the merged bank could write off only a limited amount of the losses. The notice removed those restrictions, enabling the acquiring banks to make huge reductions in their tax liabilities.
Note: With no limitations placed on the nine biggest banks receiving many billions of dollars in bailout money, they are free to buy up smaller banks. And they will likely receive huge tax breaks, sometimes even greater than the purchase price, for doing so! For many revealing, reliable reports on the Wall Street bailout, click here.
Having been handed vast authority and almost no restrictions in the bailout law that Congress passed ... a committee of five little-known government officials, aided by a bare-bones staff of 40, is picking winners and losers among thousands of banks, savings and loans, insurers and other institutions. It is new and unfamiliar terrain for the officials, who are making monumental decisions — a form of industrial policy, some critics say — that contradict the free market philosophy they usually espouse. Predictably, the process is stirring alarm from Capitol Hill to Wall Street. Among the problems, critics say, is that despite earlier promises of transparency, the process is shrouded in secrecy, its precise goals opaque. Treasury officials have refused to disclose their criteria for deciding which banks ... get money. And officials have yet to say they even have a broader strategy, though banking executives are convinced the government wants to encourage acquisitions. Already, critics from Capitol Hill to Wall Street are lashing out at the program, saying the banks are misusing the capital infusions by hoarding the money rather than lending it. The government, the critics say, is wrongly steering funds to banks to take over weaker rivals. All this comes after Mr. Paulson abruptly shifted the focus of the program to injecting capital rather than buying distressed mortgage-related assets from the banks. This meant that Congress had never debated the details of how the government ought to carry out a recapitalization.
Note: With the intense secrecy and all of the lobbyist and big guns for banking fighting for hundreds of billions of dollars given practically free by the government, do you really think these "five little-known government officials" will be impartial in their decisions? For many revealing, reliable reports on the Wall Street bailout, click here.
“Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?” It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question [during] an employee-only conference call. The JPMorgan executive who was moderating the employee conference call didn’t hesitate to answer. “What we ... think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way.” Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction. In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation. Treasury would even funnel some of the bailout money to help banks buy other banks. And, in an almost unnoticed move, it recently put in place a new tax break, worth billions to the banking industry, that has only one purpose: to encourage bank mergers. As a tax expert, Robert Willens, put it: “It couldn’t be clearer if they had taken out an ad.”
Note: Was the real purpose of the "bailout" to strengthen the biggest banks by enabling them to gobble up the smaller ones at the public's expense? No wonder the legislation was rushed through without discussion! For lots more highly revealing reports on the Wall Street bailout, click here.
People who remember when tobacco advertising was a prominent part of the media landscape ... probably recollect that actors like Barbara Stanwyck and athletes like Mickey Mantle routinely endorsed cigarettes. But how about doctors and other medical professionals, proclaiming the merits of various cigarette brands? Or politicians? Or children? Even Santa Claus? Those images — some flabbergasting, even disturbing — were also used by Madison Avenue to peddle tobacco products. An exhibit ... in New York presents cigarette ads from the 1920s through the early 1950s in an effort to demonstrate what has changed since then — and what may not have. The exhibit is the brainchild of Dr. Robert K. Jackler of the Stanford School of Medicine. “The very best artists and copywriters that money could buy” would work on cigarette accounts, said Dr. Jackler. “This era of over-the-top hucksterism went on for decades,” he added, “and it was all blatantly false.” The genesis of the exhibit was an ad from around 1930 for Lucky Strike cigarettes, which shows a doctor above a headline proclaiming that “20,679 physicians say ‘Luckies are less irritating.’ ” The Luckies doctor was joined in Dr. Jackler’s collection of about 5,000 ads by scores of scientists and medical professionals — doctors, dentists, nurses — making statements that are now known to be patently untrue. Some of the claims being made in the ads, you did not have to be a scientist in a laboratory to dispute ... ads that smoking certain brands “does not cause bad breath” or “can never stain your teeth.”
Note: The Journal of the American Medical Association (JAMA) promoted cigarette ads for 20 years "after careful consideration of the extent to which cigarettes were used by physicians in practice." Will people, even highly respected members of society, bend the truth and even lie when paid enough? This article seems to answer that with a resounding yes. Is that still true today? For excerpts from many highly revealing articles showing it's as true now as ever, click here and here.
About two-thirds of corporations operating in the United States did not pay taxes annually from 1998 to 2005, according to a [report] from the U.S. Government Accountability Office. In 2005, after collectively making $2.5 trillion in sales, corporations gave a variety of reasons on their tax returns to account for the absence of taxable revenue. The most frequently listed included the cost of producing their goods, salary expenses and interest payments on their debt, the report said. Sen. Byron L. Dorgan (D-N.D.) called the findings "a shocking indictment of the current tax system." "It's shameful that so many corporations make big profits and pay nothing to support our country," he said. "The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls." In 2005, about 28 percent of large corporations paid no taxes. Of the 1.3 million corporations included in the study, 998 were categorized as "large." Dorgan and Sen. Carl M. Levin (D-Mich.) requested the report out of concern that some corporations were using "transfer pricing" to reduce their tax bills. The practice allows multi-national companies to transfer goods and assets between internal divisions so they can record income in a jurisdiction with low tax rates. Levin said: "This report makes clear that too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."
Note: For lots more on corporate corruption, click here.
Unlike the rest of us, most U.S. corporations and foreign companies doing business in the United States pay no federal income tax, according to a new report from Congress. The study by the Government Accountability Office ... said two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, and about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period. Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate. "It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study. The GAO study did not investigate why corporations weren't paying federal income taxes or corporate taxes and it did not identify any corporations by name. More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts. The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S. "It's time for the big corporations to pay their fair share," Dorgan said.
Note: For many revealing reports on corporate corruption from reliable, verifiable sources, click here.
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