Intelsat Ltd.
4455 Connecticut Ave., NW
Washington, DC

The war in Iraq -- where satellites are a key component of precision-guided "smart" bombing systems -- has been a boon to satellite companies, many of whom were nearly bankrupt after the high-tech stock market crash.

To add to its three orbiting fleets, the Pentagon "is hoovering up all the available capacity," Richard DalBello, president of the Satellite Industry Association, told The Washington Post. ("Pentagon Scrambles for Satellites; Military Buying Access to Commercial Vehicles to Meet War Needs," Christopher Stern, Washington Post, March 20, 2003)

According to Defense Policy Board member Ken Adelman ("A Weak Link in Offshore Haven," Washington Times, 9/24/02), Intelsat receives some $200 million from the Defense Department, or roughly three-fourths of all commercial space contracts that were given out by the Defense Information Systems Agency before the war. Adelman says many of these contracts were written in a way that it was hard for any company besides Intelsat to compete.

When it was privatized in 2001 -- it was founded as an intergovernmental organization -- Intelsat's headquarters were already conveniently located in the tax-haven triangle of Bermuda. So while it happily gets hundreds of millions in contracts, it paid only $33 million in taxes in 2002.

Company officials point out that they were operating in Bermuda long before the company was privatized. But that may not be explanation enough for Senator Fritz Hollings (D-SC) and Representative Edward J. Markey (D-MA), who have asked the GAO to assess the extent of tax benefits Intelsat derives from its Bermuda incorporation.

Intelsat's lawyers told The Washington Post last fall that provisions that would have barred contracts to "corporate runaways" left the company unscathed.

Last Updated April 3, 2003