October 23, 2007 / 2:37 AM / 12 years ago

Sen. Kerry queries Bush admin on Blackwater taxes

WASHINGTON (Reuters) - U.S. Sen. John Kerry on Tuesday asked the Bush administration about any role it played in the possible evasion of nearly $32 million in taxes by Blackwater USA, the private security firm already under scrutiny over the killing of Iraqi civilians.

U.S. Senator John Kerry (D-MA) speaks at the session 'The Future of the Middle East' at the World Economic Forum (WEF) in Davos January 27, 2007. Kerry on Tuesday asked the Bush administration about any role it played in the possible evasion of nearly $32 million in taxes by Blackwater USA, the private security firm already under scrutiny over the killing of Iraqi civilians. REUTERS/Sebastian Derungs (SWITZERLAND

“The Bush administration can’t hide Blackwater in the shadows anymore — it’s time to bring all of their dealings to light,” Kerry, a Massachusetts Democrat and chairman of the Senate’s Small Business Committee, said in a statement.

Kerry sent a letter to the Small Business Administration (SBA), which his committee oversees, expressing concern that Blackwater relied on an SBA decision for tax purposes.

“The SBA must explain to the American people what role they may have played in helping Blackwater avoid paying $31.8 million dollars in taxes,” Kerry said. “The SBA should not be involved in tax-related decisions.”

An SBA spokeswoman said the agency had just received the Kerry letter and had no immediate comment.

Blackwater faced questions on Monday when another Democratic lawmaker accused it of “significant tax evasion.”

House Oversight and Government Reform Committee Chairman Henry Waxman, a California Democrat, alleged that Blackwater failed “to withhold and pay millions of dollars in Social Security, Medicare, unemployment and related taxes.”

Blackwater spokeswoman Anne Tyrrell said on Monday that Waxman was incorrect in contending that Blackwater personnel in Iraq and Afghanistan should not be treated as independent contractors but rather as employees for tax purposes.

Tyrrell said the government always has known of Blackwater’s relationship with its deployed personnel, adding that the SBA determined that for tax purposes, Blackwater security contractors are not employees.

Kerry requested from SBA Administrator Steven Preston “any determinations that the SBA has made concerning the classification of Blackwater’s workers and any other documents that would lead Blackwater to believe that their workers are not employees for tax purposes.”

The senator also asked the SBA to clarify whether it “is making or has made employee versus independent contractor determinations for tax purposes.”

Kerry set a deadline of November 2 for Preston to respond.

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