Bailout of Wall St. could fund rum ads

captain morgan at the democratic national practice in denver, august 2008. photo by on the level james.

by Frank James

Will U.S. taxpayers be subsidizing Captain Morgan Rum ads?

No, I don’t have a little Captain in me, so to speak. That could actually be the result of something that was stuck into the Wall Street bailout legislation.

The group Tax Payers for Common Sense and ProPublica, an investigative reporting outfit, have both probed the rum provision and believe one result of it could be U.S. taxpayers paying for rum ads.

Little noticed beneficiaries of the Emergency Economic Stabilization Act of 2008, commonly known as the $810 billion bailout bill, are the liquor companies Diageo (producers of Captain Morgan) and Bacardi.

A Taxpayers for Common Sense (TCS) analysis has found that both of these liquor conglomerates benefit from a program renewed in the bailout bill. This program, known as a “cover over,” rebates excise taxes charged on rum imported from Puerto Rico or the the U.S. Virgin Islands back to the territorial governments. The governments in turn provide as much as 35% of the rebated revenue back to the distillers to help market rum in the U.S. - to teach Americans to “do the mojito”and find out if they “have a little Captain” in them.

This may explain a scene I witnessed at the Democratic National Convention. There was a guy dressed in a Captain Morgan outfit accompanied by a couple of mini-skirted women holding signs that said “Captain for president.” Not unexpectedly, he made something of a scene as he strolled near the Pepsi Center and stopped to talk with delegates and the otherwise curious.

I don’t think the guy in the pirate suit was lobbying necessarily. But there’s nothing like making sure your brand has top-of-mind awareness as you try to get a taxpayer subsidy to pay for marketing your rum and building a new distillery.

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