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Google is hiding behind shell companies to score tax breaks and land deals

By DPennington · 12 replies
Feb 18, 2019
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  1. According to a staggering report by The Washington Post, Google has used shell companies and fake brand names to obtain land and secure huge tax breaks for their expansion efforts across the US.

    The report sheds light on how major tech companies, notably Amazon and Google, cut deals with local governments and secure both land and property without disclosing who they are. When the search giant approached the city of Midlothian, Texas, to build a data center there, it operated under a subsidiary called Sharka LLC. Other pseudonyms Google used for development projects included Jet Stream LLC and Questa LLC.

    Often, Google forces both its development agencies and city officials to sign non-disclosure agreements that forbid them to announce who is actually behind the deal. This allows Google to secure potentially millions of dollars in tax breaks and other incentives without the public knowing who's moving in. In the case of the Texas data center, Google won $10 million in tax savings over 10 years.

    Travis Smith, the editor in chief of the Waxahachie Daily Light, the local paper in Midlothian, sums up the problem with this practice.

    “I’m confident that had the community known this project was under the direction of Google, people would have spoken out, but we were never given the chance to speak. We didn’t know that it was Google until after it passed.”

    In a statement to the Post, Google defended its methods, calling them "common industry practices."

    “We believe public dialogue is vital to the process of building new sites and offices, so we actively engage with community members and elected officials in the places we call home,” Google spokeswoman Katherine Williams said. “In a single year, our data centers created $1.3 billion in economic activity, $750 million in labor income, and 11,000 jobs throughout the United States. Of course, when we enter new communities we use common industry practices and work with municipalities to follow their required procedures.”

    While the report focuses largely on the Texas data center, shell companies were also used to secure incentives and property in Iowa, South Carolina, North Carolina, and Tennessee.

    In all of these cases, Google was revealed as the deal maker too late in the process for the public to debate their presence there.

    While it's true that these new sites will create jobs, at the center of the debate over this practice is whether or not the public should have more say in the process. If Google, and others, are operating under shell company names, the public is kept in the dark until it's too late to do anything about it.

    The Post report comes to light after the recent decision by Amazon to scrap plans for their new HQ in New York City. That project was subject to massive public outcry over tax breaks and incentives given to the company, prompting Amazon to pull the plug.

    Permalink to story.

     
  2. psycros

    psycros TS Evangelist Posts: 2,510   +2,210

    "While it's true that these new sites will create jobs, at the center of the debate over this practice is whether or not the public should have more say in the process. If Google, and others, are operating under shell company names, the public is kept in the dark until it's too late to do anything about it."

    Job creation does little good if the greedy developers and landlords force everyone out except those with the highest incomes. These big companies need to be locating in small town America rather that big city suburbs already suffering from urban decay. At least in those semi-rural areas their unlikely to do as much harm and might provide employment where its most needed. But we all know that top executives will only live in areas that offer all the amenities their seven-figure salaries can provide.
     
    seeprime likes this.
  3. Evernessince

    Evernessince TS Evangelist Posts: 3,526   +2,838

    Trickle down economics working as intended.
     
    iamcts likes this.
  4. 1776andallthat

    1776andallthat TS Rookie

    Are those tax breaks really intended to help multi-billion dollar international companies?

    These tech giants continue to drive their revenue off the back of the public and their shell companies need greater up-front scrutiny before city officials are gagged to ensure tax breaks go to the deserving businesses not the devious and greedy.

    If it says Google on the building and anything else on the contract there should be no public money that could have gone to schools, roads, libraries, policing.....

    The honest, moral and god fearing do not need to hide where the money is going so the use of non-disclosure agreements reinforces these guys know what they are doing is not MORAL, not in the public interest, just skirting legality and a great up yours to the community they seek to settle in.
     
  5. captaincranky

    captaincranky TechSpot Addict Posts: 14,518   +3,702

    You mean like, "as a suppository"?
     
    JaredTheDragon likes this.
  6. Evernessince

    Evernessince TS Evangelist Posts: 3,526   +2,838

    Take once daily ;)
     
    JaredTheDragon likes this.
  7. captaincranky

    captaincranky TechSpot Addict Posts: 14,518   +3,702

    [​IMG]
    OW, my a**
     
    JaredTheDragon and Evernessince like this.
  8. Uncle Al

    Uncle Al TS Evangelist Posts: 4,869   +3,311

    It's just a matter of time before there is a movement to break up these monopolies. Rockefeller's Standard Oil, Bell Telephone, and a few others also met their match but in the current political climate it is doubtful. Still, sooner or later the "little guy" gets in the position to bring them down and those ivory towers will crumble ......
     
    JaredTheDragon likes this.
  9. JaredTheDragon

    JaredTheDragon Banned Posts: 545   +361

    Operating under shell companies IS the name of the game for these megacorps - because they are also shell companies. Climb the ladder, follow the money, and it leads us all back to Blackrock and Vanguard yet again. Blackrock owns $40B of Google while Vanguard owns $45B. They own $53B / $59B of Apple. They own $45B / $54B of Microsoft. They own $36B / $41B of Amazon. They own $24B / $28B of Facebook. They own $25 / $28B of JPChaseMorgan. This is just the tip of the iceberg.

    These two investment firms own the majority share of every major corporation in the Western world right now. But who owns THEM?
     
    Evernessince likes this.
  10. iamcts

    iamcts TS Addict Posts: 213   +141

    Their shareholders - who demand record-breaking profits every quarter.
     
  11. JaredTheDragon

    JaredTheDragon Banned Posts: 545   +361

    Circular. Who are these shareholders? Who owns Blackrock and Vanguard? It's the same question.
     
  12. iamcts

    iamcts TS Addict Posts: 213   +141

    Welcome to capitalism!
     
  13. JaredTheDragon

    JaredTheDragon Banned Posts: 545   +361

    Slow down. You misspelled "crony capitalism" there, Turbo. ;)
     

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