The man who helped Burger King ditch its U.S. citizenship


http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/15/wonkbook-the-man-who-helped-burger-king-ditch-its-u-s-citizenship/

Burger King completed its merger with Tim Horton’s on Friday, giving up its U.S. citizenship and becoming a Canadian company. The transaction could save Burger King anywhere from $10 million to  over $1 billion, depending on how you count. Dozens of companies have relocated the headquarters abroad in recent years in moves that many analysts say are intended to avoid paying U.S. taxes, but Burger King is unique for two reasons.

First, everyone knows Burger King, unlike some of the more obscure pharmaceutical brands that have reincorporated abroad in what are known as corporate inversions. Second, Antonio Weiss, nominated by President Obama for a post in the Treasury Department, advised Burger King on the merger as a banker at Lazard.

Burger King has said the merger was not motivated by tax savings, but the company could hardly be faulted for seeking them in any case: Modern corporations owe loyalty to their shareholders, not to their country, and an inversion just reveals a firm’s true colors. Inversions reduce the taxes available to the U.S. government for years to come, which is “not right,” White House counselor John Podesta has said. He promised that Weiss would support the administration’s efforts to discourage them.

Weiss’s connections with Lazard and Wall Street have made him surprisingly controversial for a nominee whose soporific title would be under secretary for domestic finance. A group of Democratic senators opposes Weiss on the grounds that he is too close to the industry.

In a speech last week, Sen. Elizabeth Warren (D-Mass.) railed against the practice of appointing former bankers to regulate the financial sector, and suggested that appointing Weiss to the Treasury would just be to add one more official who shares Wall Street’s point of view. Weiss will receive a reported $21 million from Lazard on his departure.

Weiss did not advise Burger King on taxes specifically, but as Matthew Yglesias writes, he has become a symbol of the Democratic Party’s relationship with finance. And his association with Burger King makes him a powerful symbol.

Update, 1:07 p.m.: More detail about Weiss’s involvement in the Burger King transaction was added.

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