WILL MITT RUN AGAIN OR JUST HIS MONEY OFFSHORE?
TURNING TURTLE IN TORTOLA, BVI:
THE VIEW FROM THE VIRGIN ISLANDS
By JOHN McCARTHY
MODERATE VOICE COLUMNIST
Mitt Romney made offshore tax havens like the Cayman Islands
household words.
But even Willard might blush at how much money the BVI took
in last year.
That’s right, while I was eating cheese and bread, my
neighbors 40 miles to the north were raking in $92 billion in 2013.
That’s more than Brazil and India combined, but less than
the United States, China and Russia did individually.
In fact, little old Road Town, Tortola, where the fresh
smell of the Caribbean Sea is around every corner – lost the bronze to Russia
by only $2 billion – making them a close fourth in “foreign direct investment”
worldwide.
In case you’re wondering, Brazil brought in $63 billion and
India netted $28 billion. The world’s biggest economy, the United States, took
in $159 billion last year, while China took in $127 billion and Russia got $94
billion.
The BVI government says its country is not a tax dodger’s
paradise. But with 500,000 shell companies established just last year, the
International Consortium of Investigative Journalists (ICIJ) said it discovered
“clear evidence of financial fraud” in 2,500 documents it examined.
At least 60 percent of the British Virgin Islands’ revenues
come from offshore account fees, so there is little wonder why that Caribbean
dependency is seeking to crack down on journalists who publish leaked
confidential financial information.
Shell company registrations fell by 23 percent in the final
quarter of 2013 after the ICIJ made its disclosure. Le Monde newspaper reported
earlier this year that the BVI was concerned it would lose its confidential
clients to Hong Kong and Singapore.
Now that a bill has passed
the BVI’s House of Assembly mandating that people who leak or share the names
of secret investors face a sentence of 20 years in prison and a $1 million fine
– it only needs the signatue of British-appointed Governor Boyd McCleary to
become law.
This Freedom FROM Information Act from a country that only
made incest a crime in the 1980s – and is now proposing to make child
pornography illegal in this The Year of Our Zombie Apocalypse – 2014.
The United Nations and the Group of 20 Leading Economies (G20)
say they want to put pressure on “non-cooperative jurisdictions” like the
British Virgin Islands and Cayman Islands because they say such notorious tax
havens have sucked an estimated $20 trillion out of the world economy.
The lack of
transparency in Tortola made it easier for jailed fraudster Achilleas Kallakis
to pull off the biggest mortgage con in history – worth an estimated $750
million. Kallakis used BVI shell companies to hide his fraud from lax British
and Irish banks.
The BVI
government’s clients also include Scot Young, a London property magnate and
“fixer” for deceased oligarch Boris Berezovsky. Dundee-born Young is in jail
for contempt of court for concealing assets from his ex-wife.Young's lawyer, to
whom he signed over power of attorney, appears to control interests in a Road
Town company that owns a potentially lucrative Moscow development with a value
estimated at $100 million.
India, Pakistan,
Iran, China, Thailand and former communist states are also in the running in
the BVI shell game lottery. The Cayman and Cook Islands are represented in the
2,500 documents, but most of the offshore accounts are in Road Town, Tortola,
BVI.
Since the 1980’s, the BVI has attracted more than one
million offshore entities. Here is a brief list of the main offenders:
• Denise
Eisenberg-Rich of the United States, the former wife of commodities trader Marc
Rich, who was controversially pardoned by President Clinton on tax evasion
charges. Eisenberg-Rich put $144M into the Dry Trust, formed in the Cook
Islands.
• Dictator's
daughter Maria Imelda Marcos Manotoc, a provincial governor in the
Phillippines, is the eldest daughter of former President Ferdinand Marcos,
known for deep pockets of corruption.
•A
senator's husband in Canada. Anthony “Tony” Merchant, a Saskatchewan lawyer,
deposited more than $800,000 into an offshore trust. Merchant paid fees in cash
and demanded that written communication to be "kept to a minimum.”
• Jean-Jacques
Augier of France was Francois Hollande’s 2012 election campaign co-treasurer.
Augier set up a Cayman Islands-based distributor in Beijing with a 25 percent
partner in a BVI company. He says his partner is Xi Shu, a Chinese businessman.
• Spain's
wealthiest art collector, Baroness Carmen Thyssen-Bornemisza, a former beauty
queen and widow of a Spanish steel billionaire. The Baroness uses offshore
accounts to buy paintings and avoid a VAT.
• The wife of
Russia's deputy prime minister. Olga Shuvalova. Her husband Igor Shuvalov has
denied charges of wrongdoing about her offshore accounts.
• Mongolia’s
former finance minister, Bayartsogt Sangajav established “Legend Plus Capital,
Ltd” with a Swiss bank account while he served as finance minister from 2008 to
2012. Sangajav says he goofed in not declaring the money and says he is considering
“resigning” from his position in the 19th largest country in the
world.
• The president
of Azerbaijan and his family. A local construction magnate, Hassan Gozal,
launched paper entities in the names of President Ilham Aliyev's two daughters.
The result of the
BVI’s boom in offshore accounts is that the government there has sported an
upscale “glass elevator” for several years so that visitors and officials alike
can travel indoors in style. It has been the source of envy for U.S. Virgin
Islands legislators for donkey years.
Although it has
been known for decades that the BVI provides safe harbor for the “ethically
challenged” investment community, the Financial Secretary in Tortola, Mr. Neil
Smith, denies wrongdoing on the part of the government.
“Our legislation
provides a more hostile environment for illegality than most jurisdictions,”
Smith said.
Meanwhile the
British Foreign Office is able to subsidize the costs of running an empire
based on its cut of the $92 billion Tortola took in. Lawyers and accountants
based in London also heavily benefit from these offshore accounts when they act
as intermediaries.
Tortola means
“land of the turtle dove” and certainly most contributors were safe and sound
when the ICIJ looked under the turtle’s shell.
Secretary Smith
promises that the BVI will act “swiftly and decisively” if any of “legitimately
private” companies are implicated in illegal activity.
In the meantime,
if Mitt really is running again in 2016 as Bob Schieffer first reported, he
might be wise to move his money from the Cayman Islands to the British Virgin
Islands.
Maybe by then
Tortola will have turned completely turtle – locked up all the journalists who
sought to expose corruption – and made the only money there that is visible the
bills that drop into the ocean at the Soggy Dollar Bar.
© 2014 John Francis
McCarthy/Secret Goldfish Publishing House, LLC
John McCarthy is an investigative
reporter, artist and photojournalist based in the U.S. Virgin Islands. Please
send questions and comments to: johnfmccarthy807@msn.com
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