The House and Senate have now passed PIRG-backed legislation (our release) ending what our tax and budget attorney John Krieger has correctly called a "disgraceful" scam of setting up off-shore shell corporations to avoid paying the Medicare and Social Security benefits of thousands of Americans working in Iraq. From the Boston Globe story Senate OK's bill barring contractors from avoiding tax by Farah Stockman:

KBR appears to be the largest offender in Iraq, but others also use the practice. In March, one other major defense contractor in Iraq surveyed by the Globe acknowledged using the practice. But subsequent investigations found that MPRI, a Virginia-based contractor, hires about 400 Americans through a subsidiary based in Bermuda. DynCorp International, a defense giant, employs 750 to 1,000 American police trainers in Iraq through a wholly owned subsidiary based in a tax-free zone in the United Arab Emirates. A DynCorp recruitment advertisement for those police training positions states that "no federal income or Social Security taxes are withheld" from their $134,110 annual salaries.

"By reining in tax-dodging private contractors who use gimmicks to avoid their basic responsibilities, this Congress chose good governance and accountability over cronyism and favoritism," said tax and budget attorney John Krieger of U.S. PIRG.