businessweek | More than 40 U.S. companies have reincorporated in tax havens, a
strategy known as inversion, 11 of them since 2012. Seven more are in
the process of doing so. Last month, Medtronic (MDT),
a Minnesota medical device maker whose customers include the Veterans
Affairs Department, announced plans to become Irish. The government
awards more than a dozen companies that have left the U.S. contracts
worth more than $1 billion a year.
The law defining inverted
companies doesn’t cover Accenture, a company with Chicago roots that
incorporated in Bermuda in 2001. The same is true for Chicago Bridge & Iron (CBI),
a Texas-run corporation with a Dutch address. According to public
records, Accenture earned $960 million from federal contracts in 2013,
and CB&I made $734 million. A spokesman for CB&I says the
company complies with the law. Accenture spokesman James McAvoy says the
company is eligible for government contracts because it was never
incorporated in the U.S. When it first separated from Chicago-based
Arthur Andersen in 1989, it was set up as a network of separate
partnerships around the world overseen by a Swiss entity. For that
reason the U.S. General Accounting Office concluded in 2002 that
Accenture wasn’t an inverted company. McAvoy says a 2012 review by the
U.S. Department of Homeland Security confirmed that Accenture, now based
in Ireland, isn’t subject to the ban.
In its brochures, Ingersoll-Rand touts its projects for the Army and
Navy. Yet for years it told shareholders and customers in public filings
that it might be subject to the law. Recently the company conducted an
“exhaustive legal analysis” and decided it’s not covered, says
spokeswoman Misty Zelent. The government relies on contractors to police
themselves. Zelent says the company works closely with government
contracting officials to ensure compliance with a “complex area of the
law.” Its contracts show just how complex it is and how many legal ways
there are around the rules.
