The Wall Street scandals that dominated the news last summer may have died down, but Congress need look no further than its own front yard to see daily reminders of the continuing questions about corporate governance.

Littering the Capitol Visitor Center construction site are scads of equipment bearing the Ingersoll-Rand brand name. It’s not unusual for Ingersoll-Rand to be associated with U.S. government construction contracts; in fact, Ingersoll-Rand jackhammers were used to carve the presidential quartet on Mount Rushmore.

What’s different now is that technically, Ingersoll-Rand is no longer a U.S. company. It renounced its corporate citizenship in 2001. By renting a mailbox in Bermuda for $27,000 annually, Ingersoll-Rand avoids nearly $40 million in U.S. taxes on its international holdings, according to documents compiled by the House’s leading offshore tax-haven opponent, Rep. Richard Neal (D-Mass.).

“I don’t know anyone who can defend this with a straight face,” said Neal, who has gotten at least 120 other House Members to sign onto his bill outlawing what has become known as corporate inversions.

Despite the bipartisan outrage over corporations abandoning the already stretched federal Treasury in a time of a possible war, it still appears increasingly unlikely that anything will happen to prevent them from relocating to tax-friendly Bermuda or the Cayman Islands. “There’ll be a lot of saber-rattling, but there probably won’t be much done in this area this year,” predicted one lobbyist working the issue.

The Senate last year attempted to prohibit the federal government from granting federal contracts for homeland security to companies that reincorporate overseas, but the provision was stripped at the last minute by House Republican leaders.

Despite that setback, Neal is inundating lawmakers with research.

Neal estimates that Ingersoll-Rand received $40 million in federal contracts in 2001 alone. Other companies with offshore tax havens, such as New Jersey engineering and construction company Foster Wheeler, have received $286 million in federal contracts. Also in 2001, Tyco, which relocated to Bermuda in 1997, received $224 million in federal contracts, while the similarly Bermuda-based consulting firm Accenture netted $281 million in federal contracts.

Nevertheless, sympathetic lawmakers and lobbyists say it’s the U.S. tax code, not money-hungry executives, that forces companies to abandon their nation.

“They don’t want to go. They’re just being forced by competition,” said Rep. Nancy Johnson (R-Conn.), who found herself in the middle of the corporate tax debate during her tough re-election fight last year when she beat then-Rep. Jim Maloney (D).

A Connecticut company, Stanley Tools, had threatened to reincorporate elsewhere. Johnson fought to stop what she feared would be not just lost tax revenue, but also lost Connecticut jobs. It took what turned out to be an empty threat by Speaker Dennis Hastert (R-Ill.) to act on a Johnson bill establishing a moratorium on corporate inversions to keep Stanley Tools in Connecticut.

Now Johnson says that rather than a simple moratorium, Congress needs to deal with the overriding international tax issues, and she’s firmly with Ways and Means Chairman Bill Thomas (R-Calif.) in devising an overhaul of the international tax code as a way of addressing offshore tax shelters.

“It’s imperative that we pass the appropriate tax laws to address this in the next six months,” Johnson said.

But many say that may just be wishful thinking. Thomas tried the same approach last year without much luck. He plans on reintroducing the measure again this year, including a three-year moratorium on overseas reincoporations. The moratorium would only be necessary to give regulators time to rewrite international tax rules, said Johnson.

Currently, the United States is one of a handful of countries that taxes not only income derived from a company’s U.S. holdings, but also income from foreign subsidiaries of companies registered in the United States. Tax experts acknowledge that some double taxation of income occurs, because companies sometimes pay both foreign and domestic taxes, despite U.S. attempts to provide tax credits for foreign taxes. Thomas’ bill attempts to rectify that problem, according to aides.

Although lobbyists have praised Thomas’ good intentions to solve the problem comprehensively, his approach has been met with skepticism by other lawmakers and industry insiders.

“I know the empty rhetoric of pulling up the tax code by its roots,” said Neal, “but it’s just not going to happen.”

Most troublesome for Thomas is his Senate counterpart, Finance Chairman Chuck Grassley (R-Iowa). Grassley acknowledges the international tax code needs to be revamped, but says the problems inherent in taking up such a mammoth tax measure would prevent Congress from dealing more quickly with offshore tax havens.

“I have a lot of sympathy [for the companies], but we can’t deal with it right now, and we’ve got to stop the bleeding in the meantime,” Grassley said.

Grassley criticized Thomas’ approach as too ambitious. “I see it as a problem that needs to be dealt with now,” he said. “He’s connecting it to a bill that has a lot of problems.”

Grassley wants to stop corporate inversions without delving into larger international tax issues and use the additional tax revenue generated by keeping companies at home to pay for a pension overhaul bill.

Of course, Grassley has tried that tack before. He originally wanted to use revenue generated from outlawed corporate inversions to pay for the president’s so-called faith-based initiative. Grassley said he dropped the corporate inversion provision because “it wasn’t needed” to pay for the faith-based measure, but lobbyists say the bill would have faced substantial opposition if he had included it.

“It have might doomed the CARE Act from getting done,” said one lobbyist.

By keeping the issue alive, however, Grassley is able to prevent other lawmakers from challenging him on his veracity in wanting to get it done, according to the lobbyist.

“He’d like to keep others from doing this. His hope is that by having this bill out there, he’s done that, and he’s dampened the market for inversions,” the lobbyist said.