March 25, 2009

Panama FTA: AIG Sues U.S. for Back Taxes Dodged in Panama Tax Haven

Please write your members of Congress and urge them to reject the Panama FTA and all other "trade" agreements that empower corporate abuse.

Dear Fair Trade Supporter,

The recent American International Group (AIG) scandal has outraged Americans from red and blue states alike. And now, we learn that AIG has the gall to sue the U.S. government demanding over $306 million back in taxes it paid - twice the amount of the now infamous executive bonuses.

AIG is claiming that it overpaid taxes related to activities of an AIG-linked Panamanian corporation chartered in tax haven Panama. No surprise then, that none other than AIG - along with other bailed-out banks - supports a hangover Bush Free Trade Agreement with Panama.[1]

Write your members of Congress now to alert them about this AIG-Panama FTA outrage!

At issue is AIG-linked Starr International Company (SICO), which, it turns out, is AIG's largest shareholder. It is also the manager of a compensation fund for AIG employees, who are paid, you guessed it, in AIG shares. Oh, and SICO's chairman is former AIG chairman Maurice "Hank" Greenberg.

The Panama FTA, a hangover trade deal negotiated by the Bush administration would grant SICO and other Panama-registered corporations with offshore ties with expansive new rights to challenge U.S. public-interest regulations in foreign tribunals - to, um, demand taxpayer compensation for regulations that undermine their expected future profits.

Click here to make sure Congress knows about this AIG-Panama FTA outrage.

Why is SICO, which is so extensively connected to U.S. firms and individuals, based in Panama? Well, the country applies low to no regulations and taxes on foreign firms registered there, of which there are 350,000 - second only to Hong Kong. And under the Panama FTA, SICO and many of these other 350,000 corporations could challenge U.S. policies that crack down tax cheating, money laundering and risky shady financial dealings. The FTA would allow these corporations to directly sue the U.S. government for taxpayer-dollar damages in an FTA-established foreign tribunal!

Whatever the eventual outcome of the U.S. court battles, this case shows that AIG will exploit every available channel to escape U.S. taxes and regulations and to profit at the taxpayers' expense.

The Panama FTA takes us in precisely the wrong direction at a time when all of our energies should be dedicated to fixing the mess made by corporations like AIG.

Send an email to your members of Congress today to tell them to reject the Panama FTA or any "trade" agreement that empowers more corporate abuse! Then, tell a friend!

Thank you for all you do,
James Ploeser, Senior Field Organizer
Public Citizen's Global Trade Watch division

[1] See this Latin American Trade Coalition letter.

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