No government work for offshore companies

SSN Staff  - 
Thursday, April 1, 2004

On page 36 of your February issue you featured a brief item titled, “Tyco’s Bermuda base remains a bone of contention.” This was a very informative article that touched on a subject that has raised questions in the past.

The Wall Street Journal has mentioned many, many times in past years that Tyco is based in Bermuda but managed from several different locations in the U.S. for “tax purposes.”

A recent edition of the Journal even reported what Tyco’s management people had to say about how much more taxes they would have to pay if they were U.S.-domiciled. The Tyco Board arrogantly voted to maintain this ruse to evade U.S. taxes.

Meanwhile, in Tyco’s ADT central station in Littleton, Colo., there is an entire section that is devoted to monitoring U.S. government accounts, including Department of Defense installations. This special section is considerably larger than most independent central stations operated by alarm companies.

There is a provision of U.S. federal law that specifically disallows such arrangement whereby federal business is given to offshore enterprises.

Most of your readers who are in the alarm business are domestic companies that pay U.S. taxes. Most of us are proud to do so, but it seems unfair to give government contracts to people who operate offshore to evade their share of the tax load.

Tyco has more lawyers on staff than most of us have total employees (they have needed them lately). I feel sure they have some shell game gimmick to legalize this, at least in their own eyes, but it sure don’t smell right from some others’ perspective.

Vernon Gilbert, director
Aprotex Corp.
Midland, Texas