GE Tax Hoax Claimed by Activists Seeking $3.2 Billion Refund 'Re-Gifting'
US Uncut, a group protesting corporate tax issues and government service cutbacks, claimed responsibility for a fake press release that said General Electric Co. (GE) would return a "$3.2 billion tax refund.”
The release, which was picked up by the Associated Press, was part of the group’s effort to pressure companies to pay their taxes, Andrew Boyd, a spokesman for the group, said in an interview. US Uncut had the idea for the GE tax effort and then cooperated on execution of it with a group known as the Yes Men, which has been involved in similar hoaxes.
“By pretending GE did the right thing by re-gifting their tax refund, we hold them accountable to that better future,” said Boyd. “People are moving very fast and are going to reprint the release, and we think there’s also an unconscious motivation that they’re happy to see the news.”
The statement, which purported to be from GE Communications, claimed the Fairfield, Connecticut-based company was responding to a “public outcry” and would “allow the public to decide how to spend” the returned money. Earlier this month, GE said on its website that it received no 2010 tax rebate, refund or payment from the government.
GE fell 7 cents to $19.94 at 4 p.m. in New York Stock Exchange composite trading. Shares have risen 9 percent this year.
“Like any American, we do like to keep our tax rate low,” Immelt said in a speech March 31 at the Economic Club of Washington. “But we do it in a compliant way, and there are no exceptions.”
Immelt commented after a March 24 report in the New York Times that GE had a tax bill of zero in 2010, an assertion the company called misleading on its GE Reports website.
The Associated Press said the fake release, which was sent by e-mail, included a GE logo and a link to a website designed to look like GE’s own site.
“The AP did not follow its own standards in this case for verifying the authenticity of a news release,” said Hal Ritter, business editor, in a story AP published about the event. US Uncut had studied the font and language of previous GE press releases, Boyd said.
Yes Men co-founder Mike Bonanno confirmed US Uncut’s responsibility for the idea and his group’s help. He said that, although GE has the right to take legal action, he thinks misrepresenting the company’s actions in a comic way is part of free speech and protected by the First Amendment.
“If you speak as GE, people listen,” said Bonanno. “If we spoke as ourselves, no one would listen. We come clean with our lies right away.”
The Yes Men have claimed responsibility for several other political hoaxes, including issuing a fake press release by U.S. Chamber of Commerce President Thomas Donohue in October 2009 that said the business group was reversing its position on climate change. The Chamber of Commerce sued the Yes Men and the case is still ongoing, according to Bonanno.
History of Scams
Phony news releases in the past have caused sharp stock price movements. On Aug. 25, 2000, Emulex Corp. (ELX) plunged as much as 62 percent after a fake release said the maker of networking products reversed its quarterly profit to a loss and was being investigated by the U.S. Securities and Exchange Commission. Days later, a 23-year-old community college student was charged with defrauding the company’s investors.
Lucent Technologies Inc. temporarily lost about $7 billion in market value on March 30, 2000 after a day-trader posted a fake profit warning on a Yahoo! Internet message board. Last year, PR Newswire transmitted a hoax press release that said U.S. President Barack Obama had ordered a probe into General Mills Inc. (GIS)’s supply chain.
This year, California made it a crime to impersonate someone online with malicious intent. Pranksters imitating another person can be fined up to $1,000 and spend a year in jail. Victims can also file civil lawsuits for additional damages.
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