Thursday, May 22, 2014

Not Wanting to Pay for the Government’s Protection

Not Wanting to Pay for the Government’s Protection

May be it’s just me, but I’m having trouble reconciling the Department of Justice’s indictment of five Chinese officials for stealing corporate secrets with Pfizer’s ongoing attempt to acquire the British pharmaceutical company AstraZeneca.  As I wrote on Tuesday, the indictment seems to be more symbolic than real, since the indicted officials are beyond the reach of the American judicial system.  However, it is clear that U.S. corporations are interested in receiving as much help as possible from the U.S. government in order to thwart Chinese hackers.  Undoubtedly, Westinghouse, SolarWorld, U.S. Steel, Allegheny Technologies Inc. (ATI), the United Steel Workers International Union, and Alcoa were harmed by the systematic hacking by Unit 61398 of the Third Department of the Chinese People’s Liberation Army.   Moreover, the Chinese government has invaded the computers of hundreds of other U.S. corporations, including Pfizer.

Meanwhile, Pfizer is trying to acquire AstraZeneca in order to become a British Corporation and substantially reduce its tax burden.  Pfizer is following in the footsteps of other companies who have altered their corporate structure in order to avoid U.S. taxes.  For example, Apple has an intricate structure that enables it to allocate its profits to very low corporate tax jurisdictions.  Nonetheless, these companies expect the rest of us to foot the bill so that the U.S. government can protect their intellectual property, strategic plans, and pricing strategies from Chinese hackers. 

Putting aside the NSA’s programs to track and store massive amounts of personal information, the NSA also invades foreign government and corporate computers in order to advance trade negotiations and related economic matters.  Once again, the average taxpayer pays for NSA efforts (legal or not), while all too many U.S. companies figure out how to avoid paying the government for these services.

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