Petition to revoke Liberty Mutual tax break
The Liberty Mutual insurance company is one of the wealthiest corporations in the world. Ranking 82st on the Forbes 100 in 2011, it took in $33 billion in revenue (that is, premiums paid by the mutual owners) and netted $1.7 billion in profit. Liberty’s CEO, Edmund "Ted" Kelly, has been drawing an annual salary of $50 million -- $200,000 each workday -and paying his executive team a hefty $63 million.
Yet, when Kelly decided to build a new office tower for his Boston-based workforce, he had no trouble getting almost $50 million in taxpayer subsidies for it. He simply met privately with Governor Deval Patrick and Mayor Thomas Menino and asked for it.
To provide this subsidy, Patrick and Menino mis-used a city/state tax break program that is restricted to exceptionally difficult-to-build projects in blighted areas. Although the Liberty tower project did not qualify, the Mayor had the Boston Redevelopment Authority declare the site to be blighted and unbuildable without public subsidy. Based on this false declaration, the Mayor and City Council awarded Liberty a 20-year property tax waiver worth $24 million. For the state portion, the Governor granted a subsidy of $22.5 million -- a figure his economic development staff derived by secretly falsifying Liberty’s application so as to inflate the "job creation" commitment.
Why did our elected officials give away this money? Certainly not for any of the publicly stated reasons. Liberty’s spokesman said at a hearing that the company was never considering leaving Boston, and he boasted that Liberty would build the $300 million tower without even taking a construction loan, just using cash on hand.
Further, Liberty is not going to "create jobs." In fact, they got this "job-creation" subsidy by promising to CUT hiring for 20 years. They promised to hire an insignificant 30 people a year - 75% FEWER than the modest 125 they had been hiring in previous years. The new tower will be filled simply by shifting Liberty workers from two other Back Bay buildings the company recently bought. And as it happens, those buildings also have blight-based tax exemptions (yes, more blight in the Back Bay, one of the most prosperous neighborhoods in the country). Liberty will then lease out those untaxed buildings at market rents, and enjoy extra profits courtesy of the taxpayers.
No worthwhile company makes decisions based on public subsidies, a fact that Deval Patrick has publicly acknowledged. Indeed, this has been amply proven by economists’ studies. It’s all gravy. As another developer admitted at his tax-break hearing: "I don’t need the money, but if you’re giving, I’m taking." But these corporate subsidies continue because they serve the politicians, who want to claim that they’ve created jobs and economic growth. Corporate campaign contributions probably help, too; state records show that Liberty personnel have contributed a total of $250,000 to political campaign funds, including $65,000 to Patrick and $9,500 to Menino.
There’s never a good time to squander public money, but it’s especially unconscionable when we’re suffering devastating cuts to transit, schools, libraries, parks, human services and public works. Fifty million dollars really matters to the people who need those services. To Kelly and company, it is - literally -- pocket change.
We shouldn’t sit by while we’re betrayed by our own elected officials. Let’s make this kind of wheeling and dealing politically risky business for them.
Start by signing a petition demanding revocation of these tax breaks, at http://www.green-rainbow.org/liberty_mutual_tower_subsidy_petition. We should get at least 46,500 signatures, one for each thousand dollars our Governor and Mayor are diverting from our public services to fatten Ted Kelly’s wallet. They made this dishonorable deal with a back-room handshake. When fifty thousand people protest, they’ll rescind it the same way.