The mega-valuable company that makes your laptop is under US congressional scrutiny this week for alleged offshore tax-dodging. It all started in 1980, when Apple's California execs moved their operation to Ireland with a fake company with the codename "Waldwill Limited."
When pressed on the Ireland debate, Tim Cook revealed himself to be quite the slippery southern gent this week. He's always been deft with press and presentations, but Cook sidestepped questions and "disagreed with characterisations" with the ease of Capitol Hill greats. Much of the railing honed in on Cook's insistence that Apple is an American company. He made the statement -- verbatim -- over and over again, mantra-like. The patriotism by volume was maybe Cook's only hope of countering the unflattering truth: Apple keeps billions of dollars away from the tax man by stowing cash reserves in Ireland, which levies a two per cent tax rate (or less). One of these shell firms, Apple Operations International (AOI), retains ownership of Apple's fantastically valuable intellectually properties -- the formalised ideas that've made it the most valuable country in the world.
It started here, in August 1980, with a generic memo signed off by the Irish government. These papers gave Apple an inconspicuous home away from home -- only two shares in "Waldwill Limited" were issued.
Thirty years later, Waldwill Ltd. is AOI, with over 700,000 outstanding shares, shareholders that include a shadowy British Virgin Islands firm Apple taps to move money, and executive "directors" who are actually in California. "Byzantine" plots like this are fairly standard for a company of Apple's size, says an attorney I spoke with who's familiar with similar tax strategies. "Companies like Apple use code names for acquisition vehicles and then don't bother to change the name after the acquisition, particularly if the entity is only holding assets, so the stranger the name, the more likely it's an Apple affiliate." Strange names, geographical tricks, and flattened taxes: Apple really is an American company.