In December I got a phone call from a private banking insider who wanted to set me straight about a blog I’d recently written, entitled Brazil Gets Tough on Global Pirate Bankers. http://taxjustice.blogspot.com/2010/11/brazil-gets-tough-on-global-investment.html
This was a pick-up from a Bloomberg story that starts with a picture of submachine-gun wielding Brazilian federal agents arresting Alexandre Caiado of Merrill Lynch Co. He got put in the back of the pickup truck for a five-hour journey to Curitiba, his hometown, where he was handcuffed in front of press photographers and jailed along with nine others. The guy was mystified as to why he had been arrested.
“I kept trying to figure out what I did wrong,” says Caiado, in his first interview ever with journalists. “It was Merrill Lynch, one of the most respected places to work on the planet. They were emphatic about the fact that it was OK to transfer money abroad.”
His job at Merrill was to open new accounts, manage assets and transfer funds out of Brazil — all of which his bosses told him was legal, he says. The Brazilian judge thought otherwise.
This seemed like a refreshing change from the tales of impunity that I uncovered, time and again, as I researched Treasure Islands. Here was a banker who’d actually been put behind bars – in humiliating conditions. Armed with this optimism, I finished my blog with this:
“it is fantastic to see Brazil get tough on these pinstripe pirates.”
Hence the phone call from the private banking insider. I won’t reveal my source’s name, but I will quote, verbatim:
“When I read the blog post a while back on the Brazilians, I thought: you are missing the point. When you do this fanfare on private bankers getting prosecuted – No. The real powers-that-be who run this stuff from an elite level, if they sit there and read your stuff they will be sniggering. The point is that that guy is minor. It is a diversion. Maybe he pissed someone off. Maybe he got silly and was dropped from the circle. Maybe someone was afraid he would talk. They shut him up. At the same time they say to the outside world – ‘look at what we are doing. We are taking a stance against money laundering and tax evasion. There you go, civil society!’ And in the meantime, in plain sight, this shit goes on.”
At the time, I had also just written a blog about the Bahamas, criticising some things that were being aired in the Nassau Guardian.
Take a look at that story, first. Now, back to my informant:
“Look at that thing you wrote in your blog about the Bahamas. They are bragging about this in their newspaper. They are bragging about it http://www.thenassauguardian.com/BFSB-seeking-to-tap-into-Brazilian-market on the website of the Bahamas Financial Services Board. Important people from the Bahamas, the Caymans and the BVI are doing this shit in plain sight. And then there is this ‘da da da!’ Fanfare! We are now complying! We are not involved in tax evasion any more!
This is why your work will be so difficult. The people in their NGOs want to get their nice little salaries to do this work, they will keep themselves in employment for a very long time – unless you recognise that that is the issue you are dealing with you will never ever ever get anywhere.
The OECD stuff is a fig leaf, a diversion. The real power mongers want the whole system to keep going, and to put out these diversions. While they are all doing all this stuff for the popular press, for the NGO world and Civil Society who don’t know how it works from the inside – at the same time they are saying to their clients (as on the BFSB website) ‘all is hunky dory in the world of confidentiality.’ They are all saying to their clients: it is business as usual.”
I accept – I was wrong. In fact, a kind of mea culpa on this very point appeared on the Tax Justice Network blog recently.
But what we need to understand is that this is what is really going on in our globalised world. What looks like a giant cover-up is underway. The OECD, as I outline in the chapter entitled Resistance, is a big culprit. Treasure Islands is, I am sure, the first ever comprehensive attempt to show just how big and bad the tax haven phenomenon really is.
What has astonished me from the moment when I first began to understand the scale of what has been going on – is how the world can have ignored the issue for so long.