Jun 06 2011

My Cayman book award isn’t big enough

(Apologies for the recent lack of posts – I’ve been on holiday. I’m back now, though still working only part-time today, for family health reasons.)

Just as I went away on holiday on May 25th, I discovered that my old favourite Anthony Travers, chairman of the Cayman Islands Stock Exchange and former chairman of Cayman Finance, not content with calling me an “imbecile,” has suddenly popped up again to offer me a spoof award in its ‘fairy tale’ category, along with what looks like a genuine offer of $1,000 to a Cayman charity of my choice.

Caymans News Service covers the story, pretty fairly I think, here (though I do think the term ‘onshore tax haven’ that they use to refer to the U.S. and the U.K. is a bit of an oxymoron).

OK – now let’s deal with what Travers actually said. (I’ll leave aside the question raised by several commenters under the Cayman News Service story of how appropriate it is for the stock exchange of what is by its own figures the world’s fifth or sixth biggest banking centre to be in the business of issuing spoof book awards.)

First, it should be noted that Travers refused to see me when I visited Cayman – and directly instructed other top officials to shun me too. (And yes, I can back that up with evidence, if he challenges me to prove it.)

Second, Travers has serious form in terms of vague mudslinging in my general direction, without actually saying what, specifically, he objects to. (My guess here is that Travers has at last got around to actually reading Treasure Islands – which is why he suddenly uncorked himself again in late May, over four months after the book was launched. Although – as I explain shortly – I’m not completely sure that he really has read it.)

This time he gets a little more specific – but only a little. This is about as close as he gets:

This is a work of intricate speculation where the author has managed to layer mischaracterization on misrepresentation on half truth and omission to create a fabulous tale of exuberant  derring-do without feeling the slightest obligation to resort to the research or evidence presented by the IMF the OECD, IOSCO  the FATF or indeed the US General Accountability Office.

So, let me deal with that. In short, his statement is is factually incorrect – and absolutely so.

If I were a very different sort of person, and wealthy, with a lot of spare time on my hands (and lawyers at my fingertips), and if I nursed a real sense of grievance here, I might consider suing him over such a comment. (I won’t do anything of the kind, of course: none of those qualifications apply to me. I’m just saying.)

Just how wrong is that still-very-vague statement? Let’s start with the IMF. Look in the index of the UK edition of Treasure Islands, and you’ll find 15 references to the IMF, and pointers to a range of different IMF reports. Or take the OECD: there are 25 listings in the index, several of them spanning two or more pages, and indeed a whole chapter (entitled “Resistance”) which dedicates itself very significantly to looking at the OECD.

Indeed, one of the important tasks of Treasure Islands is to expose and explain these organisations – particularly the OECD – as being very much the tools of tax haven interests, and therefore hardly likely to mount serious attacks on them (the OECD’s 1998 report notwithstanding.) So for one thing, their reports aren’t going to be the last word on tax havens.

Perhaps what Travers may object to here is that I didn’t widely parrot his favourite reports from the IMF and OECD, but instead took a step back and looked at their role in the whole game, looked at what they said versus what they actually did, and demonstrated beyond any doubt the appalling systems they have set up to ‘appraise’ the tax havens.

To reiterate: I quote from each of them at great length, repeatedly.

I also do look at, and quote from, the FATF and the U.S. G.A.O., though I don’t pay them quite such extensive attention as I do to the OECD and the IMF.

Mr. Travers, though, is correct on one point – I do largely ignore the workings of the International Organization of Securities Commissions (IOSCO) which tries to set up international co-operation between securities regulators. IOSCO matters, and I could easily have mentioned it in Treasure Islands. But I didn’t, for the simple reason that there are only so many pages in a book, so much to write about – and only so many acronyms most readers can cope with.  (If it means anything, I also note that the extremely pro tax haven book Offshore Financial Centres and Regulatory Competition – pressed into my hands recently by two different prominent offshore officials on two separate occasions –  only mentions IOSCO once, in passing, on p80. It’s an important player in this game, but not that important.)

Now back to this fact that Travers accuses me, incorrectly, of not dealing with the IMF, the OECD and so on, makes me wonder, again, whether he has actually read Treasure Islands. Has he? He must own a copy, surely? He must have read at least parts of it? Has he read it all? Or is his copy too badly damaged from being thrown against the wall, too hard, too many times? Or is it someone else in the Cayman Islands getting Travers to say these things? I doubt it.

I don’t know the answer to any of these questions. But I am delighted with the attention.

Now I issue a challenge. In all seriousness.

Dear Mr. Travers.

Please outline what it is – specifically – and I mean specifically – that you think is actually factually wrong in Treasure Islands. I have already identified some mistakes, here; and in such a groundbreaking and original book there are bound to be others. There will be.

I genuinely hope that you can help me identify some more. I can then respond to your points, and the process of debate and understanding of this crucial and gigantic issue will be pushed forwards. I look forward to your further contributions in this respect.

But I must stress once more – please be specific. I put it to you that you have not yet publicly identified a single specific failing in the book. I hope you can now set that right.

Yours sincerely

Nicholas Shaxson

Now the press release from the Cayman Stock Exchange offers, specifically, that:

The $1000 award will be paid to the Cayman Island charity of Mr Shaxson’s choice.

That is very nice of them. Now I am afraid I am not especially up to speed on Cayman charities. I have done a little research, contacting a few people – though it’s hard for me to conduct due diligence or an exhaustive study on this at short notice – and I’ve settled on this one:

The Cayman Islands Crisis Centre. They were recommended to me, and I like their mission:

To provide safe, temporary, shelter and a supportive environment for abused women and their children.

But I would now add something to that. This award, from the stock exchange of the world’s fifth or sixth biggest banking centre, seems tiny. How about multiplying that $1,000 by ten?

Just a thought.

Finally, there are some quite lovely comments under the Cayman News Service story. I particularly like this one:

Thank you Mr. Travers for your repeated and clear explanation to the ignorant about what it is we do here in the Cayman Islands. Of course we do not facilitate the legal and quasi-legal dodging of taxes by corporations and the wealthy. And of course we would never assist murderous dicatactors (sic) with hiding money they rob from their nations. As you often explain, clients choose to place their millions and billions here because our receptionists are so nice and our template-completing lawyers so efficient. It is absurd to suggest that there is something sleazy or immoral at play in this.

As I’ve said before: all of this would be quite funny – if this stuff weren’t so serious.

Update: The Telegraph has covered the story here. It’s a pretty fair appraisal.

11 comments so far

Jimmy Robinson 6th June, 2011 8.06 am


Glad to see you back from holiday and welcome.
May I say reading the above it comes across as being a bit personal.
Just let the facts do the talking,………. may I say with respect.

Best Regards

Jimmy Robinson

Nick Shaxson 6th June, 2011 12.22 pm


Thanks for the comment. I suppose it is a little bit on the personal side – well, that’s, I think, the style of this blog site – quite chatty. I’m sorry if it’s not to your taste.

Demetrius 6th June, 2011 3.49 pm

Coincidences are always interesting, especially to geneaologists. Travers? Any link to the LSE Travers?

Nick Shaxson 6th June, 2011 10.53 am

Hmm – interesting point. I have no idea – my guess is that there’s no link, as it’s a common enough name.

Patrick Chalmers 6th June, 2011 4.12 pm

Hi Nick

Great book by the way, I learnt a great deal from it for which I thank you.

For this guy, I wouldn’t waste my time on him if I were you other than to invite him to do an on-the-record, on-camera discussion with you for which you pledge to tackle any queries or “misunderstandings” that he might have with regard to your book’s treatment of the Cayman islands specifically or secrecy jurisdictions in general. He’ll refuse, of course, probably won’t even respond but that’s his problem, not yours.

Remember Chomsky and Herman forecast that their Propaganda Model analysis of the media would be plain ignored or panned by mainstream elites precisely because it was the unpalatable truth. Ditto Treasure Islands. It comes with the territory.

In the meantime, keep on digging up the nuggets and building networks of reporting and activist alliances. I’d be on for both in due course given my personal obsession with democracy and journalism and my nearing-completion book on those twin subjects.

ivan chan 6th June, 2011 5.33 pm

Nick Shaxson 6th June, 2011 10.48 am

Kim Bjo 6th June, 2011 2.26 am

Nick –

Have you actually tried calling up a Cayman Islands bank, or law firm, and setting up a bank account?

Why don’t we set it up, ask them for $1000 to test your theory. Set up a fake website, and pretend to solicit business. See how easily you can set up a company and bank account in the structure that you describe in your book.

I think you’ll find that the answer is – it’s not easy at all. The ‘know your customer’ rules are strictly enforced in the Caymans. As much as you ‘hand wave’ that it’s easy to set up an offshore trust that owns a company that owns a foundation that has a flight clause to move it’s assets to another company etc, the reality is that it’s not that simple or straight forward.

In fact, honestly go to any bank, and TRY setting up a bank account with any such structure. THe first thing you need is apostled copies of your passport, birth certificate, etc. Then a detailed listing of benficiaries, things that you can’t just delegate to your lawyer to do end-to-end.

In short, I feel the main thing lacking in your book was the practical experience of setting structures up. Sure some lawyers may boast that they can do this or that or the other. But look at what happened to Ali and Omar Bongo — billionaires with lots of money to hide their stolen wealth.

What happened? Well the senate sub committee in the United States did find out about their bank accounts in the United States.

Delaware corporation or no delaware corporation. At the end of the day, it’s not as easy as you describe to ‘hide money’.

Nick Shaxson 6th June, 2011 10.46 am

Thanks Kim,
Indeed, I didn’t set up any structures myself as research for the book. I considered it, but then Jason Sharman did a great job of it – and found that indeed, as you say, it was places like the UK and the US which were the worst. Which I reported in full in the book – and backed up this point with reams and reams of other data and research and interviews and so on. I focused one chapter on the Caymans because it’s fascinating, well known, a huge financial centre, and because I went there. At no point did I say it was an especially egregious tax haven. For example I explicitly compared Ugland House’s 18,000-odd corporations with the 200+,000 corporations in that building in Orange Street, Wilmington, Delaware, whose entrance looked like that of a pizza parlour.

So I don’t disagree with you on the substance of what you said – but what you said doesn’t disagree with what’s in Treasure Islands either. It’s fully covered. (And btw I think that report referred only to my favourite ex-dictator Omar Bongo, not to Ali – well, perhaps just in passing. And there’s a whole chapter on Gabon in Treasure Islands too!)

[…] as I explain in Treasure Islands (are you reading this, Mr. Travers?). Anyone who thinks tax havens had nothing to do with the financial crisis is gravely mistaken. And […]

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