Tyco Paid Big Bucks To Lobby For Offshore Tax HavensNov 4, 2002 | USA Today Battling to keep an offshore tax break, Tyco International spent hundreds of thousands of dollars this year on a squad of Washington lobbyists that included former senator Bob Dole.
Bob Dole Enterprises was one of at least five firms that Bermuda-incorporated Tyco hired in a so-far-winning bid to block a crackdown on companies that trim their tax bills by moving their mailboxes offshore.
The latest available disclosure reports show Tyco spent at least $270,000 to lobby Congress on the tax break and other issues from January through June, when then-CEO Dennis Kozlowski was being investigated for allegedly evading more than $1 million of New York sales taxes on art purchases.
Kozlowski resigned in June, not long before he was indicted on charges of evading taxes and reaping hundreds of millions from Tyco through improper loans and other deals. Prosecutors are now checking whether Kozlowski, who has pleaded not guilty, evaded New York state and city income taxes.
Tyco, joined by top firms like Arthur Andersen spinoff Accenture, mounted a major lobbying campaign as Congress reacted to the 2002 business scandals by considering a cutoff of corporate havens and a federal contract ban on companies that use them.
The proposals posed a significant threat to Tyco. The company has saved tens of millions of dollars since its 1997 incorporation in Bermuda via a reverse merger with ADT, the security systems giant. Tyco also held more than $206 million in federal government contracts during fiscal year 2001.
Tyco spokesman Gary Holmes says the five firms enlisted for the lobbying battle all represented Tyco "for a number of years," with most of the work unrelated to Bermuda.
Dole was the most prominent hired gun. His firm received $80,000 for the tax-issue lobbying, congressional records show.
Dole, who first registered as a Tyco lobbyist three months after his wife, Elizabeth, entered a hotly fought Senate race in North Carolina, no longer represents the firm, spokesman Doug MacKinnon says.
Other Tyco lobbyists included:
The Advocacy Group, a Washington firm that was paid $30,000 for work on the offshore legislation and a homeland security measure.
Bergner Bockorny Castagnetti Hawkins & Brain, a Washington firm that got $60,000 for work on the tax bills and other issues.
Greenberg Traurig, a Washington law and lobbying firm that was hired to work on the tax proposals.
Wilmer Cutler & Pickering, a Washington law firm that was paid $20,000 to work on the tax measures.
Also, Tyco Worldwide Service, the firm's Washington office, reported $80,000 in lobbying expenses on the tax bills and issues such as homeland security laws.
Congress adjourned for the 2002 elections without voting on the tax bills. That is expected to put off debate until next year.