Not content to let the IRS and Congress finish their investigation first (and perhaps fearing a negative outcome), Blackwater has gone on the offensive. The company, which has found itself go from Blackwater to hot water (I know, bad pun) has recently issued a press release claiming that its “model of using independent contractors Is consistent with law and good practice.
Maybe it seemed like PR but good law…? What tax attorney gave this a stamp of approval? Citing such evidence as “[t]hese men and women only work several months at a time” will certainly not bolster their claim of independent contractors. A first-year law student knows that length of time of service isn’t indicative of employment – you can be an employee for one day.
Blackwater goes on to say, more or less, that if they did do something wrong – and they’re not saying that they did – but if they did, it wasn’t on purpose because they relied on an accountant. They won’t say who it is but they do say it is “a large, nationally-recognized accounting firm.” Ooh, I hope it’s KPMG. Just saying.
If you want to read the whole thing yourself, you can view it here. Be prepared: it’s more of a legal memorandum than a press release (I’m guessing they farm that out, too, from the looks of it). In fact, it’s broken into parts with Roman numerals and cites. What PR firm thought it was a good idea to do that? Or end the press release with this catchy conclusion:
For these reasons, and the ones set forth above, the Chairman’s allegations to the contrary are simply incorrect.
Pssst…they are claiming 530 relief.
I know – but don’t you think that’s odd to lay out in a press release? In excruciating detail? It’s a loooong press release for what it is.
Don’t you think its odd for a Congressional Committee Chair to accuse a company of “significant tax evasion” based on one SS-8 ruling?
Is this a long press release- yes, it is – however from the WSJ aricle they indicated it was 14 pages which is more than the press release.
I personally am curious to how this plays out and I am upset with Congressman Waxman political drama and accusation. This is nothing more than a political agenda – if this is a tax issue let the IRS or DOJ handle it. If this was 1950 Waxman would simply be using the term Communist!
I agree that it has political overtones. That said, I think the reason that it is being held to more scrutiny than, say a Walmart, is because of the millions (if not billions) of dollars of government money (i.e. tax dollars) that directly fund Blackwater – as opposed to a purely private sector company. In that regard, I do think it’s appropriate.
As to the press release, it’s on Blackwater’s own web site and is clearly touted as a “press release” (you can check the link) but it is written almost like a legal memorandum. That’s just really bizarre. At my firm, we deal with companies of all sizes – and this is the first time in my career that I’ve ever seen a “press release” like this.
It reminds me of Shakespeare: “Me thinks he doth protest too much.”
Protest too much? No, not at all, actually if I were counseling “The Prince Group” (Blackwater) I would not have waited a month to respond and I would have had my attorney or GC on every national news program. Is the “Press Release” lengthy – it is – but its easy to follow and I think they have made their position clear. Sure this probably started out as a legal memorandum and it was probably dummied down into a PR.
As for the comment on Balckwater held to more scrutiny because its goverment money – all tax dollars are the same. All tax issues are goverment money whether they go into the Treasury or come out of it, its the same! If Congress wants an investigation they should focus on the oversight with the killing of innocent people in Iraq. Again I do not want to confuse this issue its not a political issue – its a tax issue, in other words the politics of a democratic congressman need to be left out otherwise this becomes a witch hunt. Should you or I be scrutinized more because we are supporting the current administration?
We’ll have to agree to disagree on the tax dollar argument… I absolutely disagree that all tax dollars are the same. A private sector company has a responsibility to its shareholders. If my dollars are the primary force funding a company (and Blackwater itself touts the US government as one of its best clients on its web site) then I believe it has a responsibility to me to do the right thing – kind of a quasi-shareholder relationship.