New book cranks up tax haven criticism

| 10/01/2011

(CNS): Coming on the heels of the positive international news exposure the Cayman Islands received as a result of the sinking of the Kittiwake last week, The Guardian published two extracts from a new book this weekend that paints Cayman back in a more familiar image in the eyes of the global press. Nicholas Shaxson’s latest book, Treasure Islands: Tax Havens and the Men Who Stole the World, examines the history and present day offshore sector and takes a swipe at Jersey, Cayman, Bermuda and Switzerland, among others. The book, which criticises tax havens, also looks closely at the history and development of offshore finance. The author says the impression given by denunciations of tax havens by world leaders that the offshore system has been tamed is untrue.

“In fact quite the opposite has happened,” he writes. “The offshore system is in very rude health — and growing fast.”

Shaxson states that more than half of world trade passes, at least on paper, through tax havens. “More than half of all banking assets and a third of foreign direct investment by multinational corporations are routed offshore,” the author reveals.

Describing offshore financial centre as “fortified nodes of secret, unaccountable political and economic power, where financial and criminal interests have come together to capture local political systems and turn the havens into their own private law-making factories”, he says they are protected against outside interference by the world’s most powerful countries – most especially Britain.

Shaxson claims that Britain’s overseas territories, “such as the Cayman Islands – are substantially controlled by Britain, and combine futuristic offshore finance with medieval politics” and believes the UK has considerable influence over the financial sector here.

Quoting what he describes as a senior Caymanian politician, he says the UK wants to have a significant degree of control on the islands, but at the same time it does not want to be seen to have that control, the unnamed politician reportedly said. “Like any boss, it wants influence without responsibility; they can turn around when things go wrong and say ‘it’s all your fault’ – but in the meantime they are pulling all the strings."

The importance of the UK is further emphasized when he suggests that Britain is the bedrock to the country’s financial sector. “If Caymanians gained full control, most of the money would flee,” writes the author.

The book, which is published by The Bodley Head, comes out in the UK this week and in the US in April. Shaxson is a British writer, journalist and investigator and author of the acclaimed 2007 book Poisoned Wells: the Dirty Politics of African Oil. He is an Associate Fellow of Chatham House (the Royal Institute of African Affairs in London) and a full-time writer and researcher for the Tax Justice Network. Since 1993 he has written extensively on global business and politics for the Financial Times, Reuters, the Economist and its sister publication the Economist Intelligence Unit, International Affairs, Foreign Affairs, the American Interest, the BBC, Africa Confidential, African Energy, and a wide range of others.

Guardian extracts:

part 1

part 2

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  1. friendly neighborhood spiderman says:

    Does it really matter how a few upset individuals feel about us and our “tax haven “? As a banking industry i feel and my fellow masked crusaders feel the same way that once we’re making the money by the books there shouldn’t be a problem. what’s really wrong is that these other countries are sore that we are making some money and they want it all (boohoo America here’s a tissue to wipe those sweet beautiful tears) if people would wake up and see the bigger picture and realize just what is going on with the world today and the way the power hungry countries are trying to change it instead of bickering about how we’re helping tax evaders (there are no weapons of mass destruction in this bank sir). That’s all for today I’m going to swing on by Gino’s to make sure all is well there and the people can have their pizza in piece.

  2. Mr. Travers’ stock in trade since assuming the Chairmanship of Cayman Finance seems to be to insult those who say something he doesn’t agree with. It is remarkably juvenile, smacks of insecurity and is an embarrassment to Cayman in the outside world.

    I am at a loss as to how anyone in Cayman’s financial services industry considers a policy of alienation to be effective in terms of promoting the island internationally.

    • Anonymous says:

      What is childish is inventing stories, or purposely distorting the facts to fulfill one’s own aims (i.e. to sell books and make ill-gotten gains!).  We are fortunate to have Travers speaking for us and calling these fabricators out on their fantastical stories.  He is refreshing in his forthright ability to cut to the chase and I would suggest that if someone does not wish to be presented with his bold truths, they should not tell lies in the first place. 

  3. Anonymous says:

    Keep in mind this is the follow up to "Poisoned Wells: the Dirty Politics of African Oil".  Writing dirge is what this guy does.  He is not coming from any credible background of authority.  His next book might as well be about Berlusconi’s misgivings, and would probably sell more copies.

    • Anonymous says:

      Yeah, you’re right this guys obviously off his rocker. Who in their right mind would write a book claiming that the oil industry has contributed to Africa’s problems? Everybody knows that dictators and the oil industry always think about the well being of people first.

      And now this book! The nerve of him to suggest that we help people duck paying taxes in their homeland. Outrageous!

      • Anonymous says:

        Unlike all of that Russian money in London and South American money in the U.S.  I am sure that all of the interest income is properly reported by the beneficial owners to their tax authorities.

        Give me a break.

        I  bet 100 times as many Americans "hide" their money in Canadian bank accounts (and vice-versa) than Cayman or Swiss bank accounts.  Go to any large bank along the U.S. / Canada border on a Friday night or Saturday morning and count the number of license plates you see from the other country.

  4. Anonymous says:

    Calling Mr. Travers.

    Cue the line about how rich people and companies only put their money here because our receptionists are really efficient and our paperclips are cute. It absolutely has nothing to do with cheating/legally ducking taxes.  




    • What is particularly revealing is that Cayman-based Cedrus Investments ‘acquired’ the "institutional business" of California-based Global Crown Capital just a few months after the IRS filed a tax lien for $232,000 against Global Crown Capital and just five days after after a $1.7 million arbitration award was entered in the USA against Global Crown Capital in favor of a client who claimed to have been defrauded. What do you think the odds are of the above being satisfied?

      Cedrus Investments is represented in Cayman by Thorp Alberga: Indeed, Michael Alberga is a director of Cedrus. And which organization does Thorp Alberga share office space with? Step forward Cayman Finance (Chairman: A. Travers, Esq.).

      So, last year, while Thorp Alberga’s company management arm was refusing to make available to OffshoreAlert a complete copy of Cedrus Investment’s register of members (which must be made publicly available under Cayman’s Companies Law), Cayman Finance was in another part of the office putting out press statements about how transparent Cayman is.

      • Aron Salomon says:

        If it is an exempt company, why must the register of members be made publicly available?

        • It is not an exempted company so your question is irrelevant.

          Cedrus Investments Ltd. is an ‘Ordinary Resident Company’ and, as such, its complete register of members must be made available on a daily basis under Section 44 of the Companies Law.

          Requests to view Cedrus’ Register of Members are directed to Michael Alberga personally. After repeated attempts on the part of OffshoreAlert, which involved engaging a local attorney, Mr. Alberga finally relented but only made a partial register available.

          Cayman’s Registrar of Companies informed me that she was powerless to force production and, essentially, said OffshoreAlert was ‘on its own’ in terms of attempting to have the law enforced. OffshoreAlert contemplated filing a legal action at the Grand Court of the Cayman Islands in an attempt to force production but were advised that it was likely that we would have to place a substantial amount of money with the court up-front. On top of our own legal fees, we were looking at an outlay of tens of thousands of dollars to obtain a register that, by law, must be made publicly available for only a few bucks.

          The above highlights the difference between reality and hot air.

  5. Anonymous says:

    He doesn’t care about the truth. He just wants to sell books. How many people would buy his book if it was about how offshore financial centers provided a great service that was well regulated.    

  6. expat weirdo says:

    Can the people of the Caymans stop lying to themselves and finally admit it that the only reason anyone would bank here is for either tax evasion or to launder money?


    • Rockafellas says:

       Sounds like you should book your flight and buy your plane ticket early so you don’t bucket up into any of these tax evaders or money launders. You can leave the dirty money right here too.

    • Anonymous says:

      expat weirdo  I have only one word for you, and it is "Envy"   And to really stick in the pin,  which country can be more tax evasivethan USA  and England.  Get a life.

    • Anonymous says:

      Maybe your comment is true maybe it isn’t but I think its a bit unfair how they target Cayman because they are bigger, it has been brought up many times and I will bring it up again, what is somewhere like Delaware?  Is that not there for just the reason of tax evasion?  But nobody is writing a book on that??  And as mentioned below look at what happens in NY, people robbing people of their money through fraudulent investments etc.

    • Anonymous says:


    • Anonymous says:

      Wrong on both counts. No informed money launderer or tax evader would try to use Cayman for that purpose given the ‘Know Your Customer’ requirements and number of information exchange agreements it has entered into with all the major onshore jurisdictions plus treaties. If you were correct, then Cayman’s financial industry would have died a long time ago as all the money fled.

      Just to support that point firms in Panama have for some time been using the advertising line that Cayman is no longer secure as a tax haven (i.e. for tax evaders) as it is has too many mechanism to release information should use Panama instead.  


      Far easier to launder money in the U.S. or U.K. You should stop lying to yourself and admit that.  

  7. Anonymous says:

    fair play….about time we had some straight talking regarding the tax evasion,…sorry i mean ‘financial services’ industry…..

  8. Anonymous says:

    You have to realise that this is about BIG BUSINESS. London and New York are the self admitted top money laundering centres in the world. Just ask the US Government Accountability Office, GAO if you do not accept that as fact.

    This is about the loss of business in those two centres…that is all with maybe a little jealousy mixed in.

    • Anonymous says:

      I hear Israel is up there too

      • Anonymous says:

        Yes, but the moment anyone criticizes Israel for anything, that person is immediately branded as being anti-Semetic.

    • Anonymous says:

      Well said 10:28, you have hit the nail on the head.  Now let them take that to the Bank and cash it. LOL.!!!