February 7, 2006
HarryTho 2/7 Natalee Holloway CommentaryTopics: Natalee Holloway
Following up on last evening's editorial, I will explore News Corporation, owned by Rupert Murdoch. From last evening's editorial, we learned that the Murdoch family owns 30% of News Corporation. News Corporation (News Corp.) owns Fox News.
What was left unearthed was that News Corp. was a master of off-shore banking and essentially a resident of tax havens.
Murdoch Empire and Newscorp find business not so taxing with Offshore Banking.
News Corp. has mastered the use of the offshore tax haven. The company reduces its annual tax bill by channeling profits through dozens of subsidiaries in low-tax or no-tax places such as the Cayman Islands and Bermuda. The overseas profits from movies made by 20th Century Fox, for instance, flow into a News Corp.-controlled company in the Caymans, where they are not taxed, according to an executive familiar with the operation.
The extent of News Corp.'s current tax shelter activities isn't publicly available. But as of June, News Corp. listed more than 60 subsidiaries incorporated in the Cayman Islands, Bermuda, the British Virgin Islands and the Netherlands Antilles, all nations that have low or no corporate taxes and limited financial disclosure laws.
In comparison, "News Corp., in its most recent fiscal year, reported paying $103 million in worldwide taxes on operating income of $1.32 billion, an effective tax rate of 7.8 percent, according to company documents. By contrast, American-based competitor Walt Disney Co.'s effective tax rate was 28 percent. Viacom Inc., the parent of MTV and Paramount Pictures, paid 22 percent. Time Warner Inc., a U.S. media and entertainment company that is roughly the same size as News Corp., paid taxes at a 17 percent rate.
That pattern has persisted through the 1990s. News Corp.'s tax rate has averaged 5.7 percent in this decade, while those of Walt Disney, Time Warner and Viacom have averaged from 27.2 percent to 32.5 percent."
Interestingly, Murdoch's off-shore tax haven of choice is none other than the Netherlands Antilles.
Finding out the specifics of News Corporation's tax affairs is difficult because of the company's complex structure. In its latest accounts, the group lists roughly 800 subsidiaries, including some 60 incorporated in such tax havens as the Cayman Islands, Bermuda, the Netherlands Antilles and the British Virgin Islands, where the secrecy laws are as attractive as the climate.
For Rupert Murdoch, International Influence Outweighs Wealth
We want to put our programming everywhere and distribute everybody's product around the world," Murdoch said in a recent interview, as he sat slouched in a white armchair at his New York headquarters, his eyes darting to seven televisions. The office has none of the oversize bowls of fruit or shiny plaques favored by other media moguls. But the man whose family holds 30 percent of the News Corp. dominates his space, as well as the conversation, by brooking few interruptions, dismissing questions and speaking so softly he can be difficult to hear.
A big percentage of publishing profits -- close to an estimated $100 million in 1989 -- were siphoned off to the Netherlands Antilles company in the form of a royalty, thus reducing United States taxable income.
What does all this have to do with Natalee Holloway?
Recently, notions were surfacing designed to restrict and identify off-shore banking participants.
Although this effort was designed more for tracking drug traffickers, it would have some undesirable effects for someone operating, legitimately, from an offshore account. First, multiple transactions above a specific value would trigger identity requests. For someone operating with multiple companies, sooner or later, the identity of the main source would be identified. With that information, the flow of capital in an out of these accounts could be monitored and used to extrapolate the amount of business activity. Since Murdoch maintains secrecy in order to plead for lower tax percentages, his empire could experience double or even triple tax liabilities, if challenged with a better grasp of the activity of his companies.
One question here involves the mood of the Netherlands Antilles banking community with respect to outlawing tax havens and secrecy concerns. In a prior editorial, we mentioned how Banco de Carib expressed concerns over a decline in off-shore banking accounts. This, as it turned out, may have persuaded Banco de Carib in selling controlling interest to Hushang Ansary.
To date, we have focused on Aruba's tourism industry as the target for the American media campaign. And, I have theorized that, perhaps, the goal was to open up the oil industry to exploration and development. Now, I can see an end run on the banking community. Perhaps, the Netherlands Antilles and Aruba were under pressure from the international community to amend their lax tax and off-shore banking laws. Banco de Carib did mention a decline in off-shore accounts that worried them.
With the discovery that News Corp. weaves its accounting through Netherlands Antilles' off-shore banks for the purpose of tax evasion ... successful evasion, I might add ... the desired result of the American media frenzy over Aruba may well be for the Netherlands Antilles and Aruba to abandon any such thoughts about increased regulation of their off-shore banking industry.
In support, Hushang Ansary bought a bank in the Netherlands Antilles. News Corp., the media outlet for the White House, practically thrives in the banking community of the Netherlands Antilles. Fox News, owned by News Corp., has been the lead aggressor in the media attack on Aruba and the Dutch, in general.
From research today, I have not found any legislation approved, designed to control this practice.
In my recollection, I recall a bill before Congress that was defeated, during this administration, which was designed to clamp down on such practices.
On cable news: Greta of Fox News (owned by News Corp. via tax haven arrangements in the Netherlands Antilles) announced the Van der Sloots' complaints against Beth Twitty.
Greta interviewed John Q. Kelly over the calling of Joran van der Sloot a rapist. John Q. avoided the question and reverted to old news about the case in order to run down Joran's reputation. He pleaded his uncomperative theory concerning Joran in order to avoid the damaging statements of his client, and continues to ride the periphery of the case in order to mitigate the question from Greta. There was even some wasted talk about Tim Miller and his latest contraption. Clearly, Greta never got a response on Beth's damaging statements. John Q. was on the ropes for the entire interview, and it is apparent that he has no response or excuse for Beth's erratic and damaging behavior.
... until tomorrow's editorial. Aloha,
Posted for HarryTho
Posted by Richard at February 7, 2006 11:13 PM
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