Bailout Madness: US Lawmakers Gave British Distiller Billions in Tax Dollars & Tax Breaks
Posted by Jim Hoft on Monday, February 21, 2011, 5:49 AM
No wonder Captain Morgan is smiling.
US lawmakers gave the British Company that produces Captain Morgan rum $2.7 billion in enticements that included tax dollars and tax breaks.
Bloomberg reported this in 2009:
In June 2008, U.S. Virgin Islands Governor John deJongh Jr. agreed to give London-based Diageo Plc billions of dollars in tax incentives to move its production of Captain Morgan rum from one U.S. island — Puerto Rico — to another, namely St. Croix.
DeJongh says he had no idea his deal would help make the world’s largest liquor distiller the most unlikely beneficiary of the emergency Troubled Asset Relief Program approved by Congress just four months later.
Today, as two 56-foot-high (17-meter-high) tanks for holding fermenting molasses will soon rise from the ground on the Caribbean island of St. Croix, the extent to which dozens of nonbank companies benefited from last October’s emergency financial rescue plan is just beginning to come to light.
The LA Times had more on the tax breaks to the British liquor producer:
Yo ho ho and a bottle of rum.
With little fanfare, a deal is moving forward to provide billions in tax dollars and tax breaks to an unlikely beneficiary — the giant British liquor producer that makes Captain Morgan rum.
Under the agreement, Diageo in London will receive tax credits and other benefits worth $2.7 billion over 30 years, including the $165-million cost of building a state-of-the-art distillery on the island of St. Croix in the Virgin Islands, a U.S. territory.
Virgin Islands officials say the arrangement complies with the letter and spirit of tax law and will help the islands’ sagging economy.
Captain Morgan is now produced in the U.S. commonwealth of Puerto Rico, and critics say the Virgin Islands’ subsidy for the new distillery, along with the other benefits, is so generous that it practically guarantees a profit on every gallon of rum produced there by Diageo, the biggest distilled spirits maker in the world.
“The U.S. taxpayer is basically being asked to line the pockets of the world’s largest liquor producer,” said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan watchdog organization.
With the exception of Ellis and a handful of lawmakers, however, the deal has attracted little opposition in Congress or elsewhere.
Thanks to US lawmakers the rum keeps flowing.
Yo-Ho-Ho.
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Published February 22, 2012 at 4:19 pm - 32 Comments
Ladue Pundit commented:
So the terms “drunken spending spree” and “drunk with power” are literally true.
The All Real Numbers Symbol commented:
So now that the Dems have invested 2.7 billion taxpayer dollars in this, how many bottle of rum are they goiing to recieve? How much money will be donated to Obama’s re-election campiagn?
There’s something fishy going on here, and I don’t just mean this underhanded deal.
greg commented:
Subsidies in Puerto Rico historically have been rather generous and created the huge pharmaceutical industry there. Objective is to provide good jobs in an economy that has 25 % unemployment, by luring companies from the mainland. 936 was the reference to US companies the set up operations in PR. That particular break allowed remittance to the US without incometax of profits earned there and of course transfer pricing encouraged companies to service those sites well below cost .
This capt morgan deal is the first I have heard of the Virgin Islands stealing jobs from its neighbor PR and paying with fed monies
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Andreas K. commented:
Where’s my bailout?
dunce commented:
The govt, is so good at picking winners and causing other competitors to be losers by not having billions of tax payer dollars of subsidys. Later they will fix it by giving subsidys to all and claim they have a right to tell them how to run the business. The govt. robs peter to pay paul ,tells paul they own him and impoverished peter needs govt. help to survive. The govt. thus gains control of all and is in the last few loops of a death spiral of incompetence.
Stuart commented:
I guess it’s fitting that their company mascot is a pirate.
wanumba commented:
So, the real question is, WHO got bribed?
Usually the answer to that is the explanation for otherwise apparently inexplicable, illogical and treasonous behaviors.
MikeMose commented:
If you are a foreign company and you’re going broken and need a bailout, You call the Democrat party and they send $2.7 BILLION over seas to a country not named America, or the US, or the USA and then you need $$$ for an election campaign in 2012 and since your country doesn’t have to follow American law….they can send you any amount you ask for!!
RIGHT…?
Well, would this past the Supreme Court test….maybe!
We now live in a lawless society and anarchy has been the rule of law for some time! I’m glad we got that straight! Aren’t you?
chuck in st paul commented:
Fair’s fair folks. If I can subsidize your windmills you can subsidize my rum and Coke’s. (*grin*)
silentcal_rox commented:
captain morgan, ugh! Now, Bombay Sapphire I can see! Just cut aid to Egypt to fund it!