As governor, Dean signed bill that aided offshore insurers

[Justice]

http://www.boston.com/news/politics/president/dean/articles/2003/12/19/as_governor_dean_signed_bill_that_aided_offshore_insurers/

As part of Howard Dean's effort to attract companies to set up so-called "captive" insurance businesses in Vermont, he signed legislation that enabled a Bermuda-based company to establish a Vermont branch, which industry analysts said at the time could provide a tax break for the parent firm.

Dean has criticized corporations that incorporate in Bermuda for tax reasons. Yesterday, in a speech prepared for delivery in New Hampshire, Dean said, "It's time to look behind the fiction that allows corporations to become citizens of places like Bermuda and avoid paying income taxes on their foreign income."

In May 1999, Dean signed a bill designed to help self-owned, or "captive," insurance companies that intended to remain offshore. The legislation, for example, allowed an offshore-based captive insurance company to set up a "branch" in Vermont as a way of complying with US labor laws. This occurred when the captive wanted to cover employee benefits, a new form of business for the captives. The branch was not in an actual building, but was an operation run by Vermont-based specialists in the insurance business.

Dean campaign spokesman Jay Carson defended the legislation, saying, "It was the Washington politicians that allowed these companies to go offshore in the first place. Governor Dean worked hard to bring at least part of these companies back to the United States and in so doing created record economic growth in Vermont." Carson stressed that the arrangement also had to be approved by the Department of Labor, which had to certify that the program was good for employees.

[slinkerwink]

1. BOOM ! DEBUNKED!

The vision to bring this industry to Vermont was born in the 70's, before Dean even came to Vermont. The law that enabled and encouraged this was passed 11 years before Dean became governor. The industry was very strong right from the start and was very well rooted long, long before Dean became Governor. The ONLY thing Dean can legitimately be criticized over on this is that he obviously would rather have Vermont and a US state benefit from a thriving business that is always going to exist than having Bermuda or the Caymans benefit from it. At least it's keeping SOME of one industry in the US instead of sending it offshore. What, pray tell, is so wrong about that?

[BootinUp]

3. Do you have any links

To support your debunked claim?

[KaraokeKarlton]

5. I can go find some for you

I live in Vermont, and that article is VERY inaccurate. I'll go see what I can find. I've provided links before but the thread is buried in the archives of GD somewhere. It might take me a little bit..but this story has more holes in it than swiss cheese.

[Democrats unite]

9. Debunked

So what your saying is if (and that is a very big if) Dean becomes President it's ok to let Washington stay the status quo, because it happened Before Dean got there? Surley you can do better than that.

I want change, seems to me Dean had a chance to make a change and didn't now debunk that!

[KaraokeKarlton]

13. You're missing the point

This was an industry that took hold back in 1981. It was well established and provided many jobs long before Dean became governor.

Take a realistic look at the situation. The industry is a perfectly legal and acceptable one. The only part of the industry that has been bad is that companies were taking these businesses to Bermuda and the Caymans because it was easier and cheaper to do so. Why on earth would Dean outlaw an environmentally safe, legitimate industry from Vermont, cause the loss of hundreds, if not thousands of jobs, turn away a massive revenue the state gets from taxes on the premiums if doing so would just cause another industry to be exported off shore?

You need to set aside your dislike of Dean for a second and look at the issue objectively. Dean would have been crazy to close down captives in Vermont. If any of the other candidates were in his position they would have done the exact same thing Dean did because it was the best choice for not only Vermont, but the country.

This really is one of the more silly attacks on Dean that I've seen.

[LuminousX]

26. How was/is the captive insurance industry bad?

[sandnsea]

27. It's basically a tax shelter

It's a self-insurance scheme for the wealthy and large corporations where they "insure" themselves. The corporation pays "premiums" into the captive company and avoid alot of taxes. Insurance companies invest their premiums and make money. The captives do the same, with less or no taxes. I don't know whether consumers can be hurt or not. Vermont did have to take over the company Enron set up as one of its self-insurers. There's also legitimate uses by doctors in order to keep malpractice premiums down, but I don't know what happens if the company doesn't have enough investment to cover a large lawsuit. Seems like one of those things the rich can do just because they're rich. The rest of us have our insurance premiums go up, up, up and don't get the benefit of having our "premiums" earn money and become tax deductible all at the same time.

[KaraokeKarlton]

28. I know there are things in place to address those issues

Although I'm not entirely familiar with them. The industry has helped Vermont a great deal. It's provided an enviornmentally clean business that brought a lot of good paying jobs here. The companies do pay taxes on the premiums and various fees for licensing and what not. It has kept these jobs in the US instead of Bermuda or the Caymans and it has helped pay for our health care programs as well as covered a full 1/3 of Vermonts seniors with a REAL prescription drug benefit.

Did you know that Dean endorsed efforts buy a non-profit to buy Canadian drugs to safe people money? This was awhile back, but this is another thing that Dean would make a real effort to deal with. He will take on the drug companies just like he did here in Vermont. He made them report their "gifts" and set up a "preferred drug list" that encourages the use of cheaper generics over the expensive name brand drugs. He did a GREAT job explaining to NH voters what this new drug benefit bill REALLY does at his town meeting last night. This kind of talk to people is another reason he does so well...he explains exactly what Bush is doing to them, and that sticks in their minds.

[Justice]

10. Don't Light the Fuse Just Yet....

First of all, the article is referencing an amendment to the original law - the amendment allowed Bermuda captives to have a branch (not even a real physical presence - just people) in VT.

The article quotes Best's (insurance rater) description of the law -
"Although a company has a property/casualty captive established offshore, it would take a tax hit under the US Employee Retirement Income Security Act for lumping the employee benefits in with the captive's business. By creating a branch captive in the United States -- in this case, in Vermont -- the company would be spared the tax penalty.'"

The article suggest Dean did something to help an offshore captive be spared a US federal tax penalty. The article suggests this is not about the business being in Bermuda versus VT.

[KaraokeKarlton]

14. I'll see what I can find to get to the real facts

What the article is claiming is not something that the Vermont legislature would embrace. Our politicians are pretty clean and upstanding...regardless of their party. I suspect the article is not telling the truth. I'll look into it and see what I can find. Again, if there was some significant change that was scandalous, it would have been all over our news here and there would have been a huge argument. There was none that I recall...which is a pretty good indicator that this is nothing but crap.

[Saudade]

2. Dean

Dean's record in Vermont is quite similar to Bush's record in Texas. I don't believe that the real Howard Dean is anything close to progressive.

[KaraokeKarlton]

8. Actually, they are almost total opposites

Hopefully someone will post the information that compares things in Vermont to things in Texas. Vermont scores very high on all the good things and Texas scores very low.

I live in Vermont and have to tell you that Dean was a great governor. That's why we re-elected him 5 more times. :D

[KaraokeKarlton]

4. The law was actually passed in 1981

Dean didn't even enter politics until 1982. And wasn't governor until 1992. Not only did Dean not bring captives to Vermont, but he didn't even have the ability to vote on it.

This article has been posted a lot and has been shown to be inaccurate as well as misleading every time it's posted. I wouldn't trust this source for news, because this is a very, very lazy and careless article.

[maddezmom]

6. do you know what bill Dean signed in 1999?

was there another bill related to this?

[KaraokeKarlton]

11. I am not aware of any 1999 bill

Even when I was searching for links to debate this the first time it was passed I saw absolutely no reference to any bill in 1999. I'll look for that too. The article may be talking about a 1993 tax cut that benefitted captives. However, I am pretty sure that was one of Snelling's cuts from the previous year before he died that went into effect in 1993. And before anyone brings up Enron's captive...that didn't come to Vermont until 1995...2 years after the tax cut. Also, no one knew Enron was a bunch of crooks back then. The article is just looney rhetoric, nothing more, nothing less.

[Justice]

15. Why Would Dean's People Defend A Non Existent Law?

My google search revealed lots (5-6) of amendments to the captive insurance law in the period 1997-2000. I don't have time to sift thru them all - but there were amendments.

Also, Dean's person defended the amendment - he did not say it didn't happen or it happened before Dean's time.

[Justice]

12. Article Refers to a 1999 Amendment - Not About the Original Law

[TrueAmerican]

7. Looks like Dean will get the Al Gore treatment

All his misstatements and deeds will come back to haunt him in republican ads if he is handed the nomination.

[KaraokeKarlton]

16. Well, here is the Amendment to the Bill from 1999

And I don't see anything scandalous in it. :shrug:


http://www.leg.state.vt.us/DOCS/2000/ACTS/ACT080.HTM

[Justice]

17. So There Is A 1999 Amendment

Glad we got that cleared up.

Does it permit what the article and Best says it permits?

[KaraokeKarlton]

18. not that I can see

I gave you a link...so you're free to read it.

There's nothing in there that even mentions offshore anything. It looks to be an amendment that simply adds some standards and procedures that are pretty basic and nothing at all what the article implies.

Honestly, this whole story isn't even significant unless you're wanting to portray Dean as someone who encourages actions to prevent more jobs from going offshore. This is a non-issue.

[maddezmom]

20. looks like it's from 2000 not 1999?

is there another?

[KaraokeKarlton]

29. It went into effect in 2000, but was enacted in 1999

and it's the only one I could find from 1999 specific to captives.

[KaraokeKarlton]

19. Okay, now that this has been debunked for about the 10th time

in less than a week...can we stop posting this now and find something more interesting than insurance to talk about? This topic is dull, boring and getting very redundant. :shrug:

[TrueAmerican]

22. Sounds like you are saying move on

Nothing to see here. hmmm. No, I rather get the facts.

[KaraokeKarlton]

30. You've already seen the facts

I posted the Amendment and there's nothing in it to support the article.

If you want to keep pouring over the same facts trying to come up with something that's not there, all the more power to you, but I think the majority of people are probably pretty bored by this story with how many times it's been discussed already...and always to the same end result...there's nothing there that hurts Dean.

[Padraig18]

21. "It was the Washington politicians that allowed ...."

Pretty well sums it up, doesn't it? Governor Dean did what was best for the people of--- *GASP* --- Vermont! :shrug*

[TrueAmerican]

23. Looks like he is not taking responsibility

That is a poor character trait.

[Padraig18]

24. We'll have to agree to disagree on that.

I think he's frankly admitted why he signed the legislation, and has correctly identified where the real problem lay; a governor should always try to do what is in the best interests of his particular constitutency, IMO.

:hi:

[maxanne]

25. this story

must be scheduled to be thrown into the mix about once a week. Wasn't it discussed last weekend, and the weekend before?

[jcgadfly]

32. Must be nothing positive going on with their candidate(s)

So out comes the (oft debuked) mud

[quinnox]

31. VERMONT: THE NEW BERMUDA

Candidate: Howard Dean
Category: Intellectual Honesty
Grade: F

Deanophiles love to spin their candidate's weaknesses into strengths--arrogance is a sign of conviction, tactlessness is straight-talk, and so forth. So I'm curious to see how they'll spin the latest Dean misstep: hypocrisy.

Turns out that while old Howard has been bashing the coziness of the Bush administration with corporate America, Vermont has quietly become the leading state for a dubious tax-break scheme known as "captive insurance"--under Dean's direction.

As a University of Connecticut law school professor told the Globe, "Dean apparently has no problems with tax havens as long as they are in the state of Vermont." And what an operation he's built: by introducing tax breaks and successfully scuttling a proposed Clinton-era regulation designed to stymie the scheme, Dean ensured Vermont is home to more captive insurers than the rest of the country combined. In 2001, he boasted that he wanted Vermont to "overtake Bermuda" as the number one destination for such operations.


http://www.tnr.com/primary/index.mhtml?pid=1075

The more Dean's record gets examined, after going beyond the campaign self-platitudes, the more it appears Dean is business as usual.