Secondly, this kind of groundbreaking, precedent-setting news would not be plugged into a press release and e-mailed out like a normal earnings announcement. If GE had decided to give over $3 billion to the U.S. government of its on volition, you can be sure that the story would have been offered as an exclusive to a high profile media outlet like The New York Times or The Wall Street Journal. (Fun game: imagine the contents of the Journal editorial that would accompany this news )
“We want the public to know that we’ve heard them, and that we know many Americans are going through tough times,” said GE CEO Jeffrey Immelt. “GE will therefore give our 2010 tax refund back to the public and allow the public to decide how to spend it.”
Immelt acknowledged no wrongdoing. “All seven of our foreign tax havens are entirely legal,” Immelt noted. “But Americans have made it clear that they deplore laws that enable tax avoidance. While we owe it to our shareholders to use every legal loophole to maximize returns - we also owe something to the American people. We didn’t write the laws that let us legally avoid paying taxes. Congress did. But we benefit from those laws, and now we’d like to share those benefits. We are proud to be giving something back to America, and we are proud to set an example for all industry to follow.”
Well, at least the hoaxsters spelled Immelt’s name correctly. I’ll also give them credit for drafting a section that strike a balance between responsibility to shareholders, concern for liability (“Immelt acknowledged no wrongdoing”) and humility drenched in pomposity. These are the hallmarks of canned CEO quotes. But to hear a major CEO talk about using legal loopholes while listing the specific number of foreign tax havens used by the company is, well, beyond believable. Which was exactly the point, according to Wedes.
He told me the quotes from Immelt were meant to present him as the CEO they want him to be. Wedes said the quotes were drafted to reflect a “concerned and attentive CEO who is watching out for not only his shareholders and himself, but for his country That’s the CEO who is speaking in this press release. A responsive CEO who cares about his country.”
Over the coming weeks, GE will conduct a nationwide survey to determine how the company’s $3.2 billion returned refund is to be allocated. The survey will be conducted both online and offline, and will permit the public to weigh in on which of the recently-enacted budget cuts they would like to see reversed.
Wait a second, didn’t we just read that the money was being donated to the U.S. Treasury? Now it’s going to be allocated according to a public survey, and the company is going to tell the U.S. government where the funds need to be applied. Wow, is GE also going to demand that the Treasury Building be renamed the GE Treasury building and ask for a commemorative plaque out front?
When I pointed out this strange contradiction in the release, Wedes complimented me for being so perceptive.
“You will have an exclusive,” he told me, still paying the part of the media manipulator.
He explained I had unwittingly hit upon the next phase of their plan: to ask the American people where they would like the imaginary $3.2 billion to be spent. Have a look at this video, which is online at Samuel Winnacker’s Vimeo account:
“The hoax was just the opening—the real work has to be done now,” Wedes said. “Changing the climate is not a one day thing.”
In tandem with the gift, the company is also announcing a host of new policies to restore public faith in the GE brand, including a commitment to keep American jobs in America, and to create one U.S. job for each new job created abroad. The ambitious plan will overhaul accounting systems to allow public transparency and phase out the use of tax havens in five years. “Given my recent appointment as President Obama’s Chairman of the Council on Jobs and Competitiveness, it is no longer appropriate for GE to engage in practices that, whether by fact or perception, are at odds with the greater good of the nation,” Immelt said.
GE is an international company with operations in over 100 countries, and “more than half of GE’s revenues come from outside the United States.” It’s not going to retreat back into the United States. Nor is Immelt going to link his advisory position with the Obama administration with the way he runs his company. It’s quite the fabulism.