Monday, February 5, 2018

Global Shipping Business Tied to Mitch McConnell, Secretary Elaine Chao Shrouded in Offshore Tax Haven



ON JUNE 6, 2016, Majority Leader Mitch McConnell joined his wife, Elaine Chao, now the U.S. secretary of transportation, at a ceremony on the Harvard Business School campus to dedicate a new building emblazoned with the Chao family name. Funded by a $40 million gift from the Chao family and its foundation, the building would serve as a new hub for Harvard’s Executive Education program. But the family’s generosity appears to have come at the expense of taxpayers — the money, it turns out, would already have been in the public treasury had it not been sheltered from the government in complex offshore tax havens.

Over a period of five years, millions of dollars were quietly funneled to a Chao family foundation via two offshore firms that list a New York address but are not incorporated anywhere in the United States. Two entities with the same names, however, are incorporated in the Marshall Islands, known as one of the world’s most secretive offshore havens for firms seeking to avoid taxes and a preferred foreign locale for the Foremost Group, the Chao family’s New York-based shipping business. The Foremost Group and a spokesperson for the Department of Transportation declined to comment on where the two donating firms are incorporated.

Chao, notably, has been a key voice in promoting the Trump administration economic policies, including the historic rewrite of the tax code — a legislative accomplishment that is likely the pinnacle of McConnell’s congressional career. The reform shifted the corporate tax code to a territorial system, a move highly expected to reward firms that funnel earnings through offshore tax havens, such as the Cayman Islands or the Marshall Islands. Speaking at the Davos World Economic Forum’s annual meeting in January, Chao called Trump’s “America first” policies “the affirmation of American exceptionalism.” Critics, she noted, “who don’t want to listen to him can leave.”

The connection between the offshore accounts and the donation to the Chao family foundation were found through a search of the Paradise Papers — a trove of more than 13 million leaked documents from tax havens around the world obtained by German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with reporting partners around the world.

https://theintercept.com/2018/02/05/mitch-mcconnell-elaine-chao-offshore-paradise-papers/

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