Following Bailout Money To Tax Havens

Sharyl Attkisson reports that exotic locals frequently serve as tax havens for many banks that have received federal bailouts.
They're exotic and faraway places known to tourists for coral reefs and sandy beaches.

But to the business world they're known as tax havens, with strict bank secrecy and privacy laws, where U.S. companies can pay fewer taxes and help wealthy customers avoid taxes, too. From the Caribbean and Europe - to Panama. CBS News Investigative Correspondent Sharyl Attkisson reports.

And guess who's turned up in a new government report about tax havens?

Eleven giant recipients of your bailout tax dollars - American Express, AIG, Bank of America, Citigroup, General Motors, GMAC, Goldman Sachs, JP Morgan Chase, Merrill Lynch, Morgan Stanley, and Wells Fargo. Together they've collected more than $227 billion.

Even as they benefit from tax money, they operate hundreds of subsidiaries in places widely known for helping people evade taxes.

Although proponents say most business in tax havens is perfectly legal and legitimate, it's estimated that tax havens cost U.S. taxpayers $100 billion a year in lost revenue.

The stakes are so high that one tax haven insider was put under witness protection after he exposed hundreds of tax dodgers, and testified to Congress about his job.

One favorite among the bailout companies is the Cayman Islands. There's no income tax, no corporate tax and no capital gains tax.

Goldman Sachs has 15 subsidiaries there. Bank of America: 59. Citigroup: 90.

But Morgan Stanley beats them all with at least 158 subsidiaries in the Cayman Islands - seven times the number of hotels.

When asked about how hard it is for the U.S. government to "get at" what is going on in some of these tax havens, Dean Zerbe, a former congressional tax investigator, said "it's incredibly hard."

Zerbe believes the Treasury Department should demand that bailed-out banks cough up details of their offshore interests.

"Here we are sending taxpayers' monies to you. Tell us, banks, what you're doing to ensure that you are not helping folks avoid taxes coming the other way," Zerbe said.

None of the bailout companies we contacted would talk about their subsidiaries in tax havens, except insurance giant AIG which told us their operations do not "exist solely for tax benefit."

So the next time you're reminded the U.S. economy is in shambles, remember - there are places where business is still booming.

Places where some bailed out companies are getting your tax dollars, and may be helping others pay less.

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.