Bonum Certa Men Certa

Waggener Edstrom and Microsoft's Government Insider Defend the Company's Reluctance to Pay Tax

"In the fall of 1982, Pam Edstrom [of Waggener Edstrom], a diminutive woman with piercing blue eyes, was recruited by Microsoft. [...] In modern-day business, flacks were responsible not only for avoiding bad press, but for spinning the good. [...] Hanson and Edstrom would spin a whole new image for Gates himself. They would tap the best and worst of Chairman Bill, changing his clothes, his voice, and his allegiances, driving him to become not just the boss, but, essentially, the company mascot—a sort of high-technology Colonel Sanders."

--Pam's daughter



Summary: Microsoft and its PR department are under great pressure, so instead of addressing the issue they just start spinning and lying with press presence and self-serving 'studies' that they fund

MICROSOFT'S bad habits when it comes to paying tax are made increasingly worse as the company not only refuses to pay tax like all citizens do but it also arranges campaigns to hide the problem. Why pay tax when it's so much cheaper to just change perception? We wrote about it last week and this week we see similar responses from other sources, notably from Jeff Reifman, a former Microsoft employee who fights others like Rep. Hunter from Microsoft, who is now helping Microsoft escape tax in Washington. Watch Rep. Hunter as he continues to help his former employer while publicly denying that he does such a thing:



It appears that Rep. Hunter has successfully re-inserted the amnesty clause for Microsoft's thirteen year Nevada tax dodge (earlier, Rep. Santos' amendment had removed this clause for unrelated reasons).
(2) Section 201 of this act does not apply to any tax periods ending before May 1, 2010, that were included in a completed field audit conducted by the department.
Section 201 is the clause that was supposed to help the Dept. of Revenue crack down on these kinds of abusive tax transactions - more on this in a moment.

Interestingly, Rep. Hunter's latest blog post is about Tax Freedom Day. Thanks to Rep. Hunter, April 10th is quickly becoming Tax Freedom Day for Microsoft.


This is the type of thing that happens when Microsoft employees enter the government. It's more or less like legalised corruption. Microsoft Nick was among those who gave this PR routine its intended undeserved coverage [1, 2], but there is more on that rebuttal from Reifman right here. See the comments too.

As we pointed out last week, Microsoft had arranged -- along with its outsourced PR department -- a bunch of fake 'studies' and press events to spin what it's doing in Washington. Reifman responds:

Last week, Microsoft's PR firm, Waggener Edstrom, invited local reporters to a press conference with Microsoft General Counsel and possible architect of its Nevada tax dodge, Brad Smith, to discuss an update to a Microsoft-funded University of Washington study on Microsoft's overwhelming economic impact on our state.

[...]

The only problem with Microsoft's WagEd press conference is if you actually pay any attention to the illogic of Mr. Smith's message. For example, quoting from TechFlash:

* "It absolutely remains the case that Washington state is Microsoft's home." - unless of course we're reporting the revenue received from our $20.7 billion annual licensing business, the home for that business is in Nevada.

* "If you'd ask what is more at play in the future, it's more a question of whether the jobs that Microsoft is able to add will be added in Washington state, another state, or outside the United States. The big issues playing into that decision include the company's ability to secure visas for foreign workers, quality of life (including education, transportation and cultural life) and the cost of doing business"

In other words, in order for Microsoft to add more jobs in Washington State, it needs to secure more visas for foreign workers.


Brad Smith is part of the tax fiasco [1, 2, 3], yet here he is along with Waggener Edstrom just lying to trick the public for PR purposes. Microsoft's Tax Dodge has an audio track now. Their problem is not going away.

It is going to get even worse. Based on this new post, Microsoft will consciously expand its influence in the United States government by inreasing/pacing up lobbyists in Olympia:

It would be naive to say Microsoft hasn't had plenty of influence on Washington politics through lobbyists in Olympia. But the state's second-largest private employer plans to be more publicly vocal about issues its leadership thinks are important, an executive said.


Microsoft is already funding more 'studies' in the University of Washington (that's where the tax dodge was justified, by paying academics) that are to have an impact on the press, which asks no questions about Microsoft's known bias.

According to a new University of Washington study funded by the Bill and Melinda Gates Foundation, California's pregnancy-related death rate (19 per 100,000 in 2008) is higher than the national average (17 per 100,000). It's double that of Canada and most Western European nations, and it's worse than Bosnia, Serbia, Poland and Qatar.


Here is another new example of self-serving 'studies' but one that we'll expand on later.

The school counseling world experienced a bit of a shakeup recently when a report entitled "Can I get a Little Advice Here?" was released by the Public Agenda (www.publicagenda.org) for the Bill & Melinda Gates Foundation.

[...]

Unfortunately, the Gates Foundation report did not discuss some of these barriers and why it might be that a counselor did not have time to provide the services the students who were surveyed were seeking. No recommendations were given as to how to change these trends nor did the report highlight how in some schools, with proper support and staffing, school counselors indeed make a difference in the lives of their students. Hopefully, that's the next report to be released on behalf of the Gates Foundation.


Same here:

In a recent poll conducted by Microsoft, 56% of the teens questioned think the Web allows bullies to prosper, while 67% say they spend most of their time using Facebook and MySpace.


A poll conducted by Microsoft is simply not reliable.

Here is another last finding. Just like Rep. Hunter acts as Microsoft's guardian in Washington's government, Gary Gigot does his service through another policy-making move from Microsoft veterans. See the following short new report:

Washington's Governor "joined us" on stage for a role-playing exercise. And with the help of a prototype Time Machine, we explored several opportunities for businesses, researchers and policymakers to create a prosperous future in clean energy.

[...]

Panelist Gary Gigot is Chief Marketing Officer at Optimum Energy. His company reduces energy use in the air-conditioning systems of large, commercial office buildings.

Forthrightness compels me to add that Optimum Energy is a past client. I was the company's interim VP of marketing in 2007, up until Gigot was recruited as CMO. Gigot brings his prior experience in marketing at Microsoft and, prior to that, Visio.


With the prior role as a Microsoft marketer, can he be trusted to be unbiased?

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