Center for Immigration Studies Thursday, June 10, 2004 U.S. Immigration News, 6/10/04 House Panel Votes to Halt Accenture Pact By Mark Glassman The New York Times, June 10, 2004 http://www.nytimes.com/2004/06/10/business/10secure.html WASHINGTON -- The House Appropriations Committee voted on Wednesday to block a border-security contract worth up to $10 billion between the Homeland Security Department and Accenture because the company is based outside the United States. The Republican-controlled committee voted 35-16 in favor of a budget amendment that would prohibit contracts between the Homeland Security Department and corporations based abroad and prevent an overseas company already under a government contract from receiving additional ones. Representative Rosa DeLauro, Democrat of Connecticut, sponsored the amendment on the grounds that Accenture, which is based in Bermuda, would be exempt from paying the lion's share of its taxes to the United States. "This is about leveling the playing field," Ms. DeLauro said, suggesting that the Homeland Security Department award contracts to domestic companies like Lockheed Martin. The Accenture contract with Homeland Security, for a project aimed at creating a "virtual border" around the country to head off would-be terrorists entering the United States, would last five years, with five additional one-year options. It would be worth up to $10 billion. Shares of Accenture dropped sharply after the vote before recovering somewhat and closing at $24.83, down 65 cents. Despite the vote, executives from Accenture noted that the action could be reversed by the full House. "It's early in the legislative process, and we continue to monitor developments closely," a spokeswoman for Accenture, Roxanne Taylor, said. "The Department of Homeland Security chose the Accenture-led Smart Border Alliance based on cost, capability and management criteria. Preventing successful companies from bidding on government contracts just because they are not incorporated in the U.S. rejects the free market principles of the federal procurement system." Ms. DeLauro said that Accenture's global corporate structure allowed the company to dodge federal taxes. "If they were wanting to pay taxes in the United States, they would not have set up the elaborate structure that they have," she said. "It's an elaborate structure that cuts back on their tax liability." Ms. Taylor said that Accenture would pay income taxes on the contract and defended the company's national interests, pointing out that it employs 25,000 people in the United States. The contract, announced on June 1 by Asa Hutchinson, the under secretary for border and transportation security at the Homeland Security Department, would make Accenture the principal contractor for the border program. The program would record the entry and exit of non-United States citizens and verify the identity of incoming visitors through the use of digital-finger scans and digital photos taken at ports of entry, and check entrants' visa and immigration status.