The Lucrative Art of War

Congress is finally moving to shut one of the more egregious forms of Iraq war profiteering: defense contractors using offshore shell companies to avoid paying their fair share of payroll taxes. The practice is widespread and Congressional investigators have been dispatched to one of the prime tax refuges, the Cayman Islands, to seek a firsthand estimate of how much the Treasury is being shorted. No one will be surprised to hear that one of the suspected prime offenders is KBR, the Texas-based defense contractor, formerly a part of the Halliburton conglomerate allied with Vice President Dick Cheney. According to a report in The Boston Globe, KBR, which has landed billions in Iraq contracts, has used two Cayman shell companies to avoid paying hundreds of millions in payroll, Medicare and unemployment taxes.