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President Obama will be nominating investment banker Antonio Weiss to the Treasury Department, to serve as the undersecretary for domestic finance, according to the Wall Street Journal. But Weiss isn’t just any investment banker. He’s the banker who advised Burger King on their tax-dodging purchase of Canadian chain Tim Horton’s.
Burger King’s proposed purchase of Tim Horton’s (which we and almost 100K other signers called on them to stop) would allow them to relocate their corporate headquarters to Ontario, Canada, thereby dodging their American taxes in a calculated move called “tax inversion.”
The Treasury Department has been trying to fight exactly these types of moves…at least in theory. In September, they tightened parts of the tax code to make inversions “harder and less profitable.”
But if President Obama and the Treasury Department were really so serious about fighting inversions, why would the President appoint the very architect of this sneaky corporate inversion?
One answer may simple be, well, MONEY! Michael De La Merced noted for the NYTimes noted that Weiss is “a significant donor to the Democratic party.” And Ian Katz and Zachary R. Mider, writing for Bloomberg, called Weiss “a top Wall Street donor to Obama.”
The NYTimes notes that this appointment will probably make people angry:
“Still, the nomination might generate some controversy because of Mr. Weiss’s work advising Burger King Worldwide in its takeover of the Canadian coffee chain Tim Hortons. The deal is technically a corporate inversion, in which a United States company relocates to another country through a merger to reduce its tax bill.”
The Wall Street Journal, who also predicted that the appointment would cause controversy, seems to be taking pains to knock down criticisms before they start, citing anonymous sources who say, conveniently, “Mr. Weiss didn’t advise on the tax strategy of the deal, according to people familiar with the matter.”
But whether or not he worked on the tax strategy part of the deal is irrelevant. Weiss still worked on a highly controversial deal which exploits a loophole Obama himself called “unpatriotic tax loophole”? But how can we take Obama’s criticisms seriously when he appoints the poster child of tax inversions?
Senator Elizabeth Warren and Senator Chuck Grassley agree. Bloomberg reporter Silla Brush tweeted today that Obama’s Weiss nomination shows his “hypocrisy” on tax inversions:
Grassley Says Weiss Treasury Nomination Shows Obama ‘Hypocrisy’
— Silla Brush (@sabrush) November 13, 2014
“Agrees with Senator Grassley that his past work with corporate inversions is a major issue, and she’s had growing concerns with the Administration being loaded with so many appointees from Wall Street rather than more people who would bring different perspectives.”
As Senator Warren notes, is hardly the first time the Obama administration has looked to bankers to become high-level officials. Even the Wall Street Journal concedes this point:
At least five former Citigroup Inc. officials now hold top jobs in Washington, including Mr. Lew; Nathan Sheets, the Treasury’s undersecretary for international affairs; U.S. Trade Representative Michael Froman ; Federal Reserve Vice Chairman Stanley Fischer ; and Marisa Lago, the Treasury’s assistant secretary for international markets and development.
But the question remains: why in the WORLD would the Obama Administration appoint someone who worked on the Burger King/Tim Horton’s merger, which generated immense outrage? If the Treasury Department is serious about cracking down on tax inversions, it seriously undermines their credibility if they have one of the advisers to one of the biggest, baddest, most recent attempts at said tax inversion. It makes the Administration look unserious about cracking down on tax inversions, and quite frankly, it also makes them look like clowns at best, or totally captured at worst.
It’s almost as if this Administration is bought and sold… and doesn’t care how obvious that is.