Killing the Golden Goose

There was a glowing account of California tech firm SanDisk in last Friday’s Irish Times. The firm set up in Ireland in April 2005 and within eight months had taken in revenues approaching €762 million and, according to the article, had “helped boost employment in Ireland.

But the firm had no direct employees whatsoever in 2005 and yet its newly established Irish base accounted for nearly half of SanDisk’s revenue of $.2.3 billion for that year. Since last April the firm has increased its staff from 12 to 35, hardly a massive boost to national employment.

All very odd and mysterious until TCD Prof. Anton Murphy enlightened everybody on RTEs This Week programme last Sunday. (First item) In effect, SanDisk, along with numerous other multi-nationals, is using Ireland as a profit/tax laundering base to avoid paying billions in tax obligations.

It should be emphasized that there is nothing illegal about these activities but as Prof. Murhpy says they are giving Ireland a Cayman Islands type financial reputation and could eventually “kill the golden goose that’s laying plenty of golden eggs here.”

Personally, if I was a Cayman Islands citizen I would consider it an insult to be associated with the ‘Wild West’ financial culture of Ireland.

In an echo back to the DIRT and Ansbacher scandals, Prof. Murphy says that the Government, political parties, the IDA and other State agencies are effectively colluding in this profit laundering but because of various short term interests nobody is saying anything – Why am I not surprised?