WASHINGTON -- A Democratic senator has asked the Obama administration to immediately... more »
WASHINGTON -- A Democratic senator has asked the Obama administration to immediately bar Facebook co-founder Eduardo Saverin from re-entering the U.S., based on a previously unenforced 1996 law.
Sen. Jack Reed of Rhode Island, who as a congressman in 1996 authored an amendment that excludes from reentry into the U.S. citizens who renounced their citizenship for tax purposes, sent a letter to Homeland Security Secretary Janet Napolitano on Thursday, asking her to enforce the law -- for the first time -- by barring Saverin.
"By all accounts Mr. Saverin has renounced his U.S. citizenship for the purposes of avoiding taxes despite taking advantage of the multiple opportunities afforded to him by the United States," Reed wrote. A Homeland Security spokesman couldn't be reached for comment after the close of business Thursday.
Saverin renounced his U.S. citizenship and moved to Singapore in September. Reed's letter comes on the eve of Facebook's initial public stock offering that is expected to value Saverin's share of the company at around $4 billion. Saverin's switch to Singaporean citizenship, which came to light two weeks ago, could save him hundreds of millions in taxes if his Facebook stock increases in value after the company sells stock to the public.
Earlier on Thursday, two Democrats proposed legislation that would hit Saverin with heavy taxes and bar him from reentering the U.S.
But Reed's plan doesn't call for a congressional action -- just an executive decision.
Reed wrote in his letter that the secretary of Homeland Security now has the power that was once only vested in the attorney general to determine who should fall under the 1996 statute.
And just like Homeland Security can bar aliens involved in terrorism or drug trafficking, Reed wrote, "I urge a similar and vigorous treatment for the exclusion of expatriates that have renounced their citizenship in order to avoid taxes."
Saverin issued a statement Thursday, insisting he was grateful to the U.S. and still intends to pay plenty of taxes.
"I am obligated to and will pay hundreds of millions of dollars in taxes to the United States government," Saverin said. "It is unfortunate that my personal choice has led to a public debate, based not on the facts, but entirely on speculation and misinformation."
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