Storm brews over bill's offshore provision

WASHINGTON, Nov. 10 (UPI) -- Representatives of multinational corporations say they're trying to preserve language in a spending bill that would dilute a U.S. ban on federal contracts.

The provision, inserted in the Senate bill at the request of the Obama administration, would weaken a ban on federal contracts for so-called inverted companies by saying the ban will not apply if it conflicts with U.S. obligations under an international agreement, The Hill reported Tuesday. Inverted corporations operate mainly in the United States but incorporate overseas to reduce their U.S. tax exposure.

Before the 2002 ban began, four of the 100 largest federal contractors were inverted, a Government Accountability Office report indicated. In 2001, those four companies received $2.7 billion in federal contracts but they haven't won contracts since the ban was enacted.

Sen. Byron Dorgan, D-N.D., said he and a bipartisan group of lawmakers said they want to protect the ban and prevent inverted companies from being awarded government contracts, the Washington publication said.

"The only reason you want to invert and get rid of your American citizenship is to avoid paying U.S. taxes," Dorgan said during a floor speech last week. "We say: 'You don't want to pay U.S. taxes, you know what? You ought not get to do business with the federal government.'"

The Senate bill hasn't reached the floor. The House of Representatives has approved a version that doesn't include the language that would weaken the ban.