Elizabeth Warren’s New Bill Could Save Taxpayers Billions

<a href="http://www.flickr.com/photos/mdfriendofhillary/6860127956/in/photolist-bscX3d-cYxL5U-cYxACY-cYxGrN-cYxvJG-bscVUJ-bF7PzT-cYxMh3-cYxCdu-cYxFqL-cYxwrs-cYxBK3-bF7PUp-bF7QK4-bF7QXV-bscWxm-bF7QoK-bF7QBt-bscX1o-bF7QR4-bscXof-bF7QpM-bF7QHK-bscWm5-bscWK5-bF7N4n-bscWTW-bscWWG-bF7QPR-bscXgs-bscUxY-bscUuo-bscX8o-bF7QvV-bscXkj-bF7Qqv-bscWfy-bscWPs-bscWhm-bscWNL-bscWQh-bscUwW-bscWw7-bscWR5-bscXnm-bF7N9Z-bscX1C-bF7PYa-bF7PZv-bF7QA6-bscWZ9/">Edward Kimmel</a>/Flickr

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Last week, Sen. Elizabeth Warren (D-Mass.) introduced a bill with Sen. Tom Coburn (R-Okla.) that aims to make government settlements with corporations more transparent and fair. It could end up saving taxpayers billions of dollars.

When banks and other corporations are accused of breaking the law, the government often settles cases instead of going to trial. In the wake of the financial crisis, for example, the Department of Justice (DOJ) and government banking watchdogs have settled cases against banks that helped tank the economy. Regulatory agencies have argued that settlements are adequate tools to enforce the law, but Warren has protested. She notes that many settlements are tax-deductible. Other deals are confidential, meaning the public has no idea whether the terms of the agreement are fair.

Warren’s bill would discourage tax-deductible settlements by forcing federal agencies to explain why certain settlements are confidential, and to publicly disclose the terms of nonconfidential agreements so that taxpayers can see how much settlement tax-deductibility is costing them.

For a sense of how much Americans could save if Warren and Coburn’s legislation passes, just take a look at how much taxpayers lost in each of these settlements over the past decade:

JPMorgan Chase

Jamie Dimon

JPMorgan Chase CEO Jamie Dimon Steve Jurvetson/Flickr

In October, JPMorgan reached a record-breaking $13 billion settlement with the DOJ over the dicy financial products that it created and sold in the run up to the financial crisis. But JPMorgan will be allowed to soften the blow by claiming up to $4 billion in tax deductions from the settlement.

 

Fresenius Medical Care Holdings

rangizzz/Shutterstock

In 2000, the health care company Fresenius Medical Care Holdings entered into a $486 million settlement agreement with the federal government over allegations that it defrauded Medicare and other federal health care programs. Last year, a court allowed Fesenius to write off $50 million of that settlement payment.

 

BP

BP/Facebook

BP, the company responsible for the massive 2010 Gulf oil spill, entered into a settlement that year with the federal government that set up a $20 billion clean up fund. BP was able to deduct $10 billion of that settlement.

 

HSBC

Michael Fleshman/Flickr

Last year, the banking giant HSBC settled charges that it turned a blind eye to billions of dollars of money laundering by entering into a $1.9 billion settlement with the federal government. The DOJ has not yet disclosed whether the settlement is tax-deductible, but if it is, taxpayers will lose $700 million.

 

Exxon

Paulo Ordoveza/Flickr

Exxon got a $576 million tax deduction on its $1.1 billion Alaska oil spill settlement, which saved the oil giant half of the cost of the deal.

 

Marsh & McLennan

Marsh & McLennan

In 2005, the insurance brokerage firm Marsh & McLennan reached an $850 million settlement with New York state regulators over bid-rigging and conflicts of interest. The firm was eligible for up to a $298 million tax write-off, according to calculations by Francisco Enriquez, an expert on corporate taxation at US Public Interest Research Group, a consumer advocacy organization.

WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we need readers to show up for us big time—again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

payment methods

WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we need readers to show up for us big time—again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate