UK documentary stirs up wrath of Cayman Finance

| 20/10/2010

(CNS): A UK documentary which aired on Monday evening has accused a number of British Cabinet ministers and Conservative party members of avoiding their tax obligations by using offshore tax havens, including the Cayman Islands. The Channel4 Dispatches programme has stirred up the wrath of the Cayman Finance chair and its media representatives in the UK, who accuse the programme makers of “taking their intelligence on the Cayman Islands from pot-boiler novels and Hollywood films” and relying on “hoary old myths”. The programme suggested that the Foreign Office had granted special financial treatment to the Cayman Islands, indirectly benefiting companies run by Conservative Party donors.

In an article taking the programme ‘How the rich beat the taxman’ to task, Jack Irvine, Cayman Finances UK media and political adviser, slams the show for “cliché ridden journalism” and depending on the Tax Justice Network – Cayman Finance’s Nemesis — as its main source of information. In the article the UK Cayman Finance representative criticises the TJN for working out of a “semi detached house”, saying it is not a very powerful.

The programme’s main focus was to question the behaviour of some UK cabinet members in terms of their financial affairs and points to the role the Cayman Islands has played as the domicile of companies run by wealthy Tory donors, such as Hugh Sloane, worth £185 million, and Michael Hintze, worth £250 million.

The documentary also points to a change in the UK’s policy towards Cayman from the previous Labour Foreign Office Minister Chris Bryant. Anthony Barnett (picured above in front of Ugland House), the programme‘s reporter, says that Bryant had tried “to force the islands to introduce direct taxation” by restricting access to loans to plug the budget deficit, but under the new UK government the Foreign Office changed its position and allowed the Cayman government to borrow an extra £150 million with no demands for direct taxes.

With more than 20 millionaires in the UK cabinet, How the Rich Beat the Taxman probes the financial affairs of some ministers and others who have helped the new coalition government. Barnett visited a number of UK offshore tax havens, including the Cayman Islands, and reveals what he says are tax avoidance ploys. All of the cabinet ministers have denied the accusations of avoiding their tax obligations made in the programme, saying they have done nothing illegal and their financial affairs are a matter of public record.

When it comes to Cayman’s role, Irvine accuses the programme makers of misrepresenting the jurisdiction and allowing Richard Murphy of TJN to peddle the common misconception that the Cayman Islands is a tax haven and that there is a “high degree of secrecy”, even though Cayman is an OECD white listed jurisdiction.

Irvine quotes Anthony Travers as he defends the Cayman Islands against the accusations made in the documentary.

“Cayman attracts hedge funds because it has relevant and attractive laws, a high standard of professional service, an effective Court system with ultimate appeal to the Privy Council and full IOSCO transparency. Having sensible judges a UK common law basis to your legal system and regulator to regulator disclosure matters,” the Cayman Finance Chair is quoted as saying in Irvine’s article. “Cayman has been and remains highly attractive as a tax transparent but tax neutral jurisdiction in which relevant structuring can be undertaken to pool funds invested from the international capital markets.”

Irvine also makes personal slights about the sexuality of the former overseas territories minister, Chris Bryant, who appears in the programme. Irvine claims that Bryant has no right to say that what the UK Tories are doing in Cayman andother offshore jurisdictions is “morally indefensible” because he claimed over £92,000 in expenses in the MPs expenses scandal and because he left “his life as a vicar to marry his gay lover,” Irvine stated.

In response to Irvine’s criticisms, Richard Murphy (who calls him "a hired gun") points out that Irvine, and by implication Cayman Finance, have ignored the substantive issues raised by the documentary and instead focused on attacking anyone who opposes the offshore view.

See Irvine’s article here

See TJN response here

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Category: Business

Comments (16)

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  1. Offshore Worker says:

    I watched the documentary.  It was fairly unimpressive tabloid stuff, blaming "high risk" hedge funds for the banking crisis etc.

    The only damaging thing for Cayman was the interview with Kurt Tibbetts.  He came across as a complete buffoon.  It may have been the editing but his answers to the questions were very very poor.

    • Anonymous says:

      Yet more political rhetoric. I wonder if there could ever be any article published on this website without one the fantastic "two party" system’s fanatical (yet ignorant) chipping in with some pure nonsense.

      Mac this…..

      McKeeva that……….

      Let’s rip this country in two. You act like a bunch of children – which is what you are.


    • Anonymous for Cause says:

      I haven’t seen the program, but even though he is one of our favouriate beating horses, Kurt Tibbetts is definiately not a buffoon!

      • Patricia X says:

        I don’t care about PPM or UDP or XTC but I can tell you that the post was accurate.  He came across terribly. 

  2. Voice of Reason says:

     I watched it. Thought it constituted some fantastic free advertising for the the Cayman Islands. Most of it was complete clap trap but there were some good shots of Grand Cayman and if it makes a few people think about structuring their affairs through here then so much the better.

    If the wealthy are structuring their finances through the use of Cayman Islands’ structures then there must be a damn good reason to do so. Hopefully it will encourage other people to do so. 

    The program made it clear from the commentary and cinematography that Cayman clear is a sophisticated financial jurisdiction. That’s a great message to be getting out there.

    It’s not as if it could have made our reputation any worse…… the Cayman Islands (or "the Caymans" as they often incorrectly referred to) gets mentions in the new Wall Street movie and several other movies which are much more recently shot than "The Firm", which now looks horribly dated, and not in a particularly glowing light either. 

    Plus, let’s not forget that Cayman was being discussed in a program which also focused on activities in the Channel Islands. The Channel Islands are well respected in the UK as an offshore financial centre with a preferable taxation regime, this is not news and has been known for years. The Cayman Islands certainly appeared much more transparent than the BVI’s which were also featured. Not only was Mr Murphy able to get interviews with senior members of the government but he also showed a very modern looking Companies Registry from which he was able to get information on a  company for a mere $35 dollars. In the BVI’s he wasn’t even allowed to film near one of the Financial Institutions. They really shot themselves in the foot!

    I hope lots of people watched it. I severely doubt many people did – as interesting as it was for us as residents of the Cayman Islands it would of been incredibly boring viewing back in the UK. These days with broadband internet and television on demand I suspect that most people would have been watching something else. Probably Desperate Housewives or some other rubbish…..


  3. Anonymous says:

    cayman financial services industry = tax evasion industry….

    accept it and move on…

    a great backbone for a fine christian ‘nation’……..zzzzzz

    • Anonymous says:

      You clearly have no no idea what you’re talking about. You do undderstand the difference between tax evasion and tax avoidance , don’t you? 

  4. Anonymous says:

    How tasteless of Cayman Finance to allow anything to be mentioned about the personal and private life of anyone at all – in any forum – particularly in such a public forum.

    I would suggest Mr Travers do all the talking for Cayman Finance as when its been left to one of his juniors so far, it has not come out very well. I refer also to the article in April by another employee of Cayman Finance which was poorly recieved locally.





  5. Anonymous says:

    this guy irvine feels the need to gay bash in his response to a dispatches programme.  Come on get real. Why is it always about god gays or some other issue here?  I think all of these protestations by Cayman would be more useful if they could point to cases where the police and courts had used the international AML legislation effectively.  It just never gets used – sits on the statute book but no-one ever investigates!

  6. Anonymous says:

    I watched the programme (Dispatches: How the rich beat the taxman) on Monday; I would never have done so, but for the chance to see images of my beloved Cayman Islands. It was featured in the last quarter of the programme.

    It is true that the programme was extremely biased and full of nonsense; that is what ‘Dispatches’ is about. Indeed the whole of Channel 4 is full of left-wing claptrap as is most of the output of the BBC.
    Getting over excited about the programme is futile. In general the viewers of the programme would already hold a negative opinion of the Cayman Islands and all it would have done would be to reinforce that opinion. No matter how much protest is made they will never change their mind; it would probably encourage their opinion.
    Very little damage would have been caused to the reputation of the Cayman Islands to the people that matter as they would be highly unlikely to have watched it. Even if they had, they would know that it was socialist biased rubbish and not be influenced by it.
    It would be helpful to Cayman if local journalists were a tad more careful who they talk to.
    • Anonymous says:

      Re: Your third paragraph: This is known as a "backfire phenomenon " where misinformed people who are given correct information not only reject that information, but end up believing that information more strongly. @

  7. Anonymous says:

    Haven’t seen the documentary, but Richard Murphy has a track record of ignorance on tax matters. Not only that, a few years back he was giving advice on tax avoidance schemes and appears to have structured his personal affairs to minimize the level of tax he pays. For example:

    His "tax gap" arguments have been comprehensively dismantled on many occasions, he clearly has no comprehension whatsoever about Cayman’s position in the global financial system, and cannot or will not understand the need for tax neutral jurisdictions in which to pool capital and manage investment.

    Even the slightest scrutiny of his arguments reveals them to be little more than "pay as much tax as possible", notwithstanding his own, personal tax avoidance schemes.

  8. Anonymous says:

    Anyone interested in a more balanced approach to understanding the complexities of the offshore world , and more specifically the role of Ugland House, than was given in this documentary by Anthony Barnett see the report conducted by the United States Government Accountability Office to the US Senate Committee (published July 2008) here

    It is an extremely interesting read and I think it is important that Caymanians, people who live here, or are associated with the Cayman Islands have a clearer understanding of what our place in the world of finance really is.

    Be informed.

  9. Donkey says:

     Watched the programme usual BS spouted by Richard Murphy and his cronies. One question: why was it down to Mr. Kirk Tibbitts to defend the island on camera, where was our great leader??? Off island doing some important promotional tour!!!!!!

  10. Dennis Smith says:

    "Tax Justice Network" Who’s justice, what network?

    Its amazing how creative humans can be when it comes to making a job for themselves. This one sounds so righteous that some groups give money to it just to be on the safe side.

    Seriously, just how much work can these guys really be doing? Creative writing for sure, I seen their Web Site mature as they constantly invent new programs, reports and tie everything together, so I guess they have some talent. With enough rewrites every novel gets better. Sounds like a pretty good racket. 

    Reminds me of some preachers, start a church, twist things around a bit, reinterpret the good book (again), preach gloom and doom and then offer salvation, for a fee.

    It looks like they are also inventing the questions that they use to tabulate their so-called “Jurisdiction Report”. Here is the result of question number 7 for Cayman: “Did not respond to Tax Justice Network requests for information” How did they get so important that anyone needs to respond to anything they ask anyway?

    Can you imagine inventing an investigative Web Site and then demanding international companies or their representatives to talk to you or you will publish a report that states that they failed the test? Who cares?

    If they were any better at this game they would have all the OFC hiring them as consultants and advisors just to provethat they were creditable. More religion than substance.

  11. noname says: