Judicial Watch • British Liquor Co. Gets Billions Of U.S. Tax Dollars

British Liquor Co. Gets Billions Of U.S. Tax Dollars

British Liquor Co. Gets Billions Of U.S. Tax Dollars

SEPTEMBER 04, 2009

In a covert deal that no Obama Administration official or federal lawmaker has bothered to oppose, billions of U.S. tax dollars will help boost a British liquor company’s already lucrative profits by, among other things, financing a new state-of-the-art distillery.

While this may sound preposterous in the midst of the nation’s worst-ever financial crisis and unemployment rate, it’s very real and the best part is that the country’s tax-cheating Treasury Secretary and top federal legislators refuse to intervene.

The deal involves the giant London-based liquor company Diageo, which produces a popular brand of rum among its many spirits. Currently the rum is produced in Puerto Rico but the operation will move to the Virgin Islands and the U.S. government is picking up the hefty tab since both are unincorporated American territories in the Caribbean.  

In all, the European booze maker will get $2.7 billion in tax credits and benefits, including the construction of a new $165 million distillery in the Virgin Island of St. Croix. Officials justify the move by saying it will bring much-needed jobs to the Virgin Islands’ suffering economy, but the reality is that the new distillery will only create 40 to 70 new jobs while Puerto Rico will likely lose hundreds of jobs in the deal.  

Treasury Secretary Timothy Geithner says he doesn’t have the authority to block or investigate the controversial deal even though his agency is heavily involved because a chunk of the government’s subsidies will come from a special tax collected on every bottle of rum sold in the U.S. That’s nearly $500 million a year. The country’s useless and corrupt tax-writing committee chairman (New York Democrat Charles Rangel), too busy with his own scandals, refuses to intervene as well. 

At least a Republican congressman from Indiana bothered to take a fact-finding mission to the region, citing a need to intervene when unreasonable subsidies are given to foreign companies at taxpayer expense. No word on the mission’s findings, however. Perhaps rum-sipping in the warm and festive Caribbean islands softened his stance.

Sign Up for Updates!





0