By Megan R. Wilson - 10/09/14 10:19 AM EDT
Burger King has enlisted a team of lobbyists at Akin Gump, including former Reps. Vic Fazio (D-Calif.) and Bill Paxon (R-N.Y.), to ease tensions with the Obama administration over its inversion deal with Tim Hortons.
Documents say that Akin Gump will “develop and implement a comprehensive strategy to deal with U.S. governmental officials in conjunction with Burger King's transaction with Tim Hortons.”
The acquisition, which would move Burger King’s holding company to Canada and lower its U.S. corporate tax bill, set off criticism within the administration and on Capitol Hill.
The Treasury Department last month unveiled new rules that could make these types of “inversion” deals more difficult and less profitable, but the two fast-food chains responded in a joint statement that their merger would be unaffected.
“We are moving forward as planned,” Burger King and Tim Hortons said last month. “As we’ve said previously, this deal has always been driven by long-term growth and tax benefits.”
Under the deal, the companies said, Burger King would still be headquartered in Miami and Tim Hortons in Toronto. The only move would be for Burger King’s parent company.
In addition to Fazio and Paxon, more than a dozen other lobbyists are working on the account, including Joel Jankowsky, Arshi Siddiqui, a former aide to then-Speaker Nancy Pelosi (D-Calif.), and Jeff McMillen, the former Republican staff director for the House Ways and Means Subcommittee on Select Revenue Measures.
Some congressional Democrats were outraged by the merger announcement, with Sen. Sherrod BrownSherrod BrownLawmakers play catch-up as smartphone banking surges Overnight Finance: McConnell offers 'clean' funding bill | Dems pan proposal | Flint aid, internet measure not included | More heat for Wells Fargo | New concerns on investor visas House votes to eliminate Olympic medal tax MORE (D-Ohio) calling for a Burger King boycott, and Majority Whip Dick DurbinDick DurbinSpending bill doesn't include Cruz internet fight Overnight Tech: GOP says internet fight isn't over | EU chief defends Apple tax ruling | Feds roll out self-driving car guidelines | Netflix's China worries Reid blasts Cruz over internet fight MORE (D-Ill.) signing a letter along with four other democratic senators asking the burger restaurant to reconsider the merger.
President Obama has called companies that pursue inversion deals “corporate deserters.”
The practice has led to talks of legislation to curb it, while Republicans would rather overhaul the corporate tax structure and lower rates for companies.
Billionaire Warren Buffett has also defended the Burger King-Tim Hortons deal — as his company, Berkshire Hathaway, has invested $3 billion in the transaction — also arguing that it made good business sense.
Tim Hortons, for example, has had higher earnings than Burger King and could help propel the burger joint further into the breakfast market.
Last month, James Moore, Canada’s industry minister, said that he received Burger King’s foreign-investment review application and expected it to be processed “within a few weeks,” according to a Canadian news report.