Bailout Madness: US Lawmakers Gave British Distiller Billions in Tax Dollars & Tax Breaks
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.