August 9, 2012
By Marc Bussanich, LaborPress City Reporter
Just as one big labor battle ends, with Local 1-2, UWUA members returning back to work, another one may be looming, for the second time. It’s one year since CWA and IBEW contracts with Verizon expired, but the company is still demanding severe cuts to health care and pension benefits from the nearly 45,000 unionized workforce, and wants to outsource more union jobs.

One way CWA members are trying to get a fair contract is leafleting on “Wireless Wednesdays” where members are handing out leaflets revealing Verizon CEO Lowell McAdam’s $23.1 million annual compensation to passerby and Verizon customers.

On July 25, Verizon and the unions agreed to federal mediation and on Monday, August 6, the Federal Mediation and Conciliation Service director, George Cohen, wrote in a press release that “the negotiations have been constructive and progress has been made, but significant key issues remain to be resolved.”

According to Pete Sikora, however, political director for CWA District 1, the company has set the deadline for mediation this Friday, August 10, which, if mediation is not successful, the company can potentially impose the terms of its final offer.

“We’re prepared to do whatever is necessary to fight and win a fair contract. So, the possibility of a strike is looming,” said Sikora.

Sikora added, “Verizon wants to gut pensions and healthcare and outsource even more jobs. The company has already outsourced overseas thousands of call center jobs and is increasingly contracting out in the U.S. to low-wage, low-benefit contracting operations that dig up the earth required to place the communication infrastructure, as well as different aspects of installation work.”

CWA has also been informing the public about Verizon’s pervasive tax evasion. It commissioned Citizens for Tax Justice ( and Good Jobs First ( to produce an analysis of Verizon’s tax dodging. The ensuing report, “Unpaid Bills: How Verizon Shortchanges Government through Tax Dodging and Subsidies” reveals the lengths Verizon goes to avoid paying its 35 percent corporate tax rate.

It also shows the enormous government subsidies it receives when opening new facilities. For example, the report states that, “Verizon enjoyed some $14 billion in federal and state corporate income tax subsidies in the 2008-2010 period even though it earned $33.4 billion in pre-tax U.S. income during that time.”

LP readers can read the entire report via

On the CTJ’s website it shows that Verizon, one of 30 tax-dodging companies, had a negative federal income tax rate of -3.8 percent for the period from 2008 through 2011

Rebecca Wilkins, Senior Counsel for federal tax policy at CTJ, explained how a giant of a company such as Verizon can pay so little, or no, taxes.

“One factor is the tax breaks that Congress has written into the tax code, such as Accelerated Depreciation. Verizon spends a lot of capital on its plant and equipment and over the past few years it has written off 100 percent in the year it buys the equipment rather than take the deductions over the life of the asset, which are the normal rules.”

While Verizon is very good at taking advantage of the tax rules Congress writes, it also is very aggressive in its tax planning, noted Wilkins. For example, Verizon has used a special tax loophole called the Reverse Morris Trust to sell its landline assets without a paying tax on the gain.

“Back in 2009, when the company divested its landline infrastructure in Northern New England to FairPoint Communications, Inc., it didn’t pay taxes,” Wilkins said. A synopsis of the CTJ report posted on the CWA’s website reveals Verizon saved $1.5 billion in taxes from 2008 to 2010 because of the Reverse Morris Trust.

Verizon’s tax skirting epitomizes the current political fight going on in the nation’s capital where the very wealthy are fighting back hard against attempts to eliminate their tax cuts or tax them. As this fight has raged, the Tax Justice Network dropped a bombshell in late July when it reported that “There may be as much as $32 trillion of hidden financial assets held offshore by high net worth individuals,” according to TJN’s “The Price of Offshore Revisited.” The report is available via

Of course, Verizon, like most big companies, say they have to pay their shareholders. But Wilkins noted, those Verizon shareholders who are benefiting from the company’s financial tactics are “far and away the shareholders in the top five percent of high-income households. Not only is Verizon providing higher returns to their shareholders, but they’re making shares more valuable, which increases the amount of their compensation.” 


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