ICYMI: Loeffler Helped ICE Set Up “Offshore Tax Dodge” at the Height of the Great Recession

September 15, 2020

While Georgians were suffering, Loeffler “played no small role” in setting up a tax dodge for banks engaging in “risky Wall Street bets”

ATLANTA — A new report reveals that unelected “political mega-donor” Senator Kelly Loeffler spent her time at ICE helping the company “establish a Cayman Islands offshore tax dodge months after the Great Recession hit.”

Loeffler’s work with her firm “allowed some of the world’s biggest banks to avoid paying U.S. taxes on their risky Wall Street bets” while Georgia families were suffering in the aftermath of Wall Street’s reckless behavior. As vice president of investor relations, she “played no small role” in the company as it was setting up this system and even later bragged about Republicans’ irresponsible tax giveaway to the wealthy and well-connected — also backed by her opponent Congressman Doug Collins — which “might have worked in [ICE’s offshore clearinghouse’s] favor.”

And Loeffler was well-rewarded for her work: an earlier New York Times investigation showed that before she left for her bought-and-paid-for Senate appointment, ICE had “altered the terms of Loeffler’s compensation in a move one corporate governance expert said should not be considered “on the up-and-up.” 

Today, Loeffler still sits on a committee that serves as “an overseer of the overseers of the company that made her rich”, where her assignment already created “a potential conflict of interest” and was “a cause for concern.”

Read more about Loeffler and ICE’s “tax dodge” history:

Salon: Sen. Kelly Loeffler helped big banks get offshore tax relief after the Great Recession

  • Sen. Kelly Loeffler, the appointed Georgia Republican who faces a tough election race this fall, helped her company establish a Cayman Islands offshore tax dodge months after the Great Recession hit. 
  • This allowed some of the world’s biggest banks to avoid paying U.S. taxes on their risky Wall Street bets — including on the financial instruments that were key contributors to the global economic collapse.
  • Loeffler, the wealthiest member of Congress, at the time served as the top communications and marketing officer for Intercontinental Exchange (ICE), where she helped market a new program called ICE Clear Credit. That was a credit default swap (CDS) clearinghouse that included a Cayman Islands corporation that would allow its clients, including some of the biggest banks in the world, to dodge U.S. taxes.
  • Loeffler drew scrutiny this spring for controversial stock trades she made after a private Senate briefing on the new coronavirus. Shortly after that news broke, her husband Jeffrey Sprecher, who is chairman of the New York Stock Exchange, made a $1 million donation to the pro-Trump America First Action PAC, according to a Federal Election Commission filing.
  • According to the New York Times, upon accepting her Senate appointment in January, Loeffler appears to have received stock and other contributions from ICE worth more than $9 million, on top of her 2019 salary and bonus of about $3.5 million. The company told the paper that it did not want to “discourage” her from serving in the Senate.
  • Following the Great Recession, ICE created an offshore CDS clearinghouse for what was essentially a coalition of all the largest banks in the U.S., as well as foreign banks Deutsche Bank, UBS and Credit Suisse.
  • U.S. companies want to access profits that their foreign subsidiaries make overseas, but may be eager to avoid paying the 35% tax when they bring those profits back home. To get around this, they put the money in offshore holding companies.
  • To get around the tax law, ICE added a Cayman Islands offshore account, called ICE US Holding Company LP, to the structure. Now banks trading foreign earnings can still use the clearinghouse, and execute CDS trades, without having to pay U.S. taxes.
  • Loeffler played no small role. While the system was being constructed — amid the wreckage of a global collapse — she served as vice president of investor relations at ICE. Transcripts obtained by Salon show her participating in several company calls during which the new clearinghouse (which contained the offshore tax dodge) was discussed.
  • In a December 2019 radio interview, a few weeks after Kemp appointed her to fill the Senate seat left vacant by the retirement of Sen. Johnny Isakson, Loeffler nodded to her company’s offshore system while praising President Donald Trump’s 2017 tax bill.
  • Collins had also argued for the 2017 tax breaks that would benefit multinationals, however, suggesting that the “international side” of the tax bill could be expanded. Between 2014 and 2016, Collins voted against multiple efforts to close offshore tax loopholes, including an amendment that would make it harder for companies to invert their residence to a low-tax country.

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