A strong wave of populist outrage greeted last month's news that G.E.--in addition to paying no income tax on $5.1 billion in U.S. profits--received a $3.2 billion tax refund from the government. Given the country's sour fiscal condition, the company's big refund sparked a fresh round of calls to end large-scale tax breaks for corporations--and for the rich more broadly--as the best way to shrink the deficit.
Enter the Yes Men--a group of anticorporate pranksters known for carrying off convincing parodies of corporate speech and pro-business spin that often receive broad media pickup. The group mocked up a G.E. press release that purported to return the company's IRS refund back to the U.S. Treasury in order to assist the ailing jobs economy.
The fake release included the G.E. logo and a link to a slick website that looked very much like the company's official one. The Associated Press fell for it, as did USA Today (the paper promptly removed its story, and then ran a piece pointing out how the AP had fallen for the prank).
"The AP did not follow its own standards in this case for verifying the authenticity of a news release," AP Business Editor Hal Ritter said in a story explaining the gaffe.
Below is an excerpt from the fake press release:
GE CEO Jeffrey Immelt has informed the Obama administration that the company will be gifting its entire 2010 tax refund, worth $3.2 Billion, to the US Treasury on April 18, Tax Day, and will furthermore adopt a host of new policies that secure its position as a leader in corporate social responsibility.
"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."
And just to complete the giddy circuit, the Yes Men--which teamed with another advocacy group known as US Uncut on the prank--sent out its own post-hoax PR statement, underlining the bigger political point.
"This action showed us how the world could work," US Uncut spokesman Carl Gibson said in the statement on the Yes Men's actual website. "For a brief moment people believed that the biggest corporate tax dodger had a change of heart and actually did the right thing. But the only way anything like this is really going to happen is if we change the laws that allow corporate tax avoidance in the first place."
G.E. has long operated an in-house accounting department that's legendary for taking maximal advantage of US tax laws and loopholes. More than 970 employees staff the company's tax division--among them a clutch of onetime IRS agents and former government officials. As one tax specialist noted as word spread of G.E.'s 2010 refund, the company prospers via "fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore."