Washington • A cache of newly leaked documents shows that former Utah Gov. and now-U.S. Ambassador to Russia Jon Huntsman — as well as another Utahn who ranks as America’s top bank watchdog — oversaw offshore companies.
As Republicans in Congress look to pass tax reform in part to entice U.S. companies to move profits back to U.S. soil, the new documents reveal that President Donald Trump has appointed a number of wealthy aides who used a legal process that can shield their holdings, their company’s holdings or their clients’ holdings in foreign tax havens.
Huntsman, now in Moscow, was listed as a director of the HICI International Sales Corp. in Barbados, according to The Guardian newspaper, which is part of the International Consortium of Investigative Journalists that shared the 1,400 gigabytes of data leaked to a German newspaper.
HICI was formed in 1999 as an offshore vehicle for overseas sales for Huntsman ICI, a subsidiary of Huntsman Corp, The Guardian reported, and was set up as a foreign sales corporation that allowed U.S. citizens to waive 32 percent of overseas income. That loophole was closed in 2007, the newspaper reported.
There is no indication Jon Huntsman personally benefited from the tax savings derived from this legal entity.
Gary Chapman, vice president for global communications at Huntsman Corp., said Monday that HICI was not “significant to the company” and not listed on filings with the Securities and Exchange Commission because the agency requires notice only of “significant subsidiaries.”
HICI was dissolved in 2003 and qualified as a foreign sales corporation under U.S. tax law intended to promote and facilitate exports.
“The operations of that legal entity were fully disclosed on our U.S. tax filings with the IRS and were fully open to the IRS at all times,” Chapman said. “As such, its existence and purposes were never hidden.”
Moreover, Chapman said, Huntsman Corp. maintains “offshore companies because we do business offshore, and legal entities in those jurisdictions are required in order to operate there.”
“One important function of legal entities around the world is to facilitate payment of taxes in the appropriate jurisdictions,” he added.
Another Utahn, Randal Quarles, who is now the nation’s top banking watchdog as the Federal Reserve’s vice chairman for supervision, also popped up in the leaked documents, known as the “Paradise Papers” because of the Caribbean location of the offshore accounts.
Quarles, who served in the administration of each President George Bush, is named in the papers as an officer of two firms incorporated in the Cayman Islands by the Carlyle Group, a private equity giant with which Quarles was a partner until 2013, according to The Guardian.
The newspaper reported that the documents show transactions between one of Quarles’ offshore firms and Bermuda-based bank called Butterfield.
Federal authorities had sought court orders to banks, including Butterfield, to seek Americans who may be trying to evade taxes. After being nominated by Trump, Quarles disclosed to federal ethics officials that he had assets worth up to $25 million in a Carlyle Group fund that held stake in Butterfield but that he would sell his holdings there.
A spokesman for the Federal Reserve, which Quarles joined in early October, told The Guardian that the Utahn “had no specific responsibilities, was not delegated any responsibilities by the board, and received no income for this position.” The spokesman said Quarles had divested himself of any ownership or assets in Butterfield before joining the Federal Reserve.
Editor’s note: Ambassador Jon Huntsman is a brother of Paul Huntsman, the owner and publisher of The Salt Lake Tribune.