Treasure Islands: Dirty Money, Tax Havens and the Men Who Stole Your Cash

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Treasure Islands: Dirty Money, Tax Havens and the Men Who Stole Your Cash Page 37

by Nicholas Shaxson


  Gill, Casey, 99–100

  Gillard, Michael, 136

  Glasman, Maurice, 72–4, 86, 244n73

  Glass-Steagall Act (1933), 67

  Global Development Finance: Illicit Flows Report 2009, 30

  global financial crisis (2007–present), 30–2, 46, 52, 98, 132, 166, 169

  Global Financial Integrity (GFI)

  Program, 29, 131, 139–40, 170, 183, 217, 237n44, 257n50

  globalization, 10, 32–3, 56, 59–60, 86, 130, 132, 149, 152–3, 219, 221, 233n2, 240n22

  Goldman Sachs, 68, 71, 81, 103, 119, 125, 132, 213–14

  Google Inc., 14, 125

  Gordon report, 117, 251n2

  Gramm, Phil, 140, 226 les grands, 2, 4, 10

  Great Britain: See British empire; British tax havens

  Great Depression, 31, 35, 52, 54–5, 63, 70, 108, 130, 169, 240n17

  The Greatest Trust in the World (Armour), 36

  Greenberger, Michael, 68

  Greenspan, Alan, 107

  G20, 30, 106, 168–9, 215, 223

  Guernsey (British Crown Dependency), 17, 27, 69, 79, 87, 103, 205, 235n19

  Gurría, Angel, 168

  Halliburton, 17, 235n17

  Harper’s magazine, 255n18

  Harvard Club, 9

  Hayward, Nathan, 194–5

  Hayek, Friedrich, 59

  Healey, Dennis, 25, 245n24

  Helms, Jesse, 160–1

  Helmsley, Leona, 7

  Henry, Jim, 140–2

  Heritage Foundation, 150–1

  Heys, John, 189

  Hezbollah, 178

  Hitler, Adolf, 50, 98, 113, 156, 188

  Hodge, Sir Julian, 184

  Hoffman, Michael, 58

  Hogan, Paul, 33

  Honduras, 13–15

  Hong Kong, 18–19, 27–8, 74, 85, 88, 97, 105–6, 111, 121, 133, 147, 158, 162, 244n71, 245n30, 251n36

  Hoover, Herbert, 36

  Hopkins, A. G., 66

  Hopkins, Harry, 54

  Hot Money (Naylor), 97–8, 115

  Houthakker, Hendrik, 83

  HSBC, 63, 148

  Hu Jintao, 106

  Hudson, Michael, 107–10, 114, 116, 118, 142–3, 246n3, 251n33

  Hulland, W. G., 89

  Hummler, Konrad, 203

  Hussein, Saddam, 131

  income tax, 155, 162–3

  India, 12, 16, 20, 27, 54, 56, 65, 99, 105, 127, 133, 147–8, 169, 184, 209, 217, 223

  Indonesia, 58–9, 106, 121

  inequality, 52, 60, 131, 162–4, 190

  inheritance rules 6, 11, 122–3

  Inland Revenue (England), 45, 47, 104

  inquisitorial legal system (French), 2

  Interest Equalization Tax, 75, 79–80, 246n10

  interest rates, 52, 56, 63, 65, 82, 98, 116, 193–4, 197, 199–200, 240n16,17, 244n66, 255n18

  International Accounting Standards Board (IASB), 222, 257n1

  International Banking Development Act (1983), 200

  international banking facility (IBFs), 114–15, 118–19, 200

  International Chamber of Commerce, 42

  International Monetary Fund (IMF), 56, 58, 60, 68, 122, 141, 143–4, 155–6, 188, 211, 215–16, 233n2, 235n15,22, 237n44, 240n22, 241n17, 250n22,26, 252n16, 256n37

  Investors Overseas Services (IOS), 96–8

  investment banking, 67

  Iran, 69, 111, 133, 178, 183

  Iraq war (2003–present), 84

  Ireland, 14, 17, 19, 26, 73, 88, 92, 192, 212–13, 234n12, 236n25, 256n41,42

  islands, 17, 24, 182, 185–91

  Isle of Man (British Crown Dependency), 14, 17, 38, 69, 79, 88, 103, 147–8, 192, 205, 235n19

  Israel, 14, 65, 137–8, 249n17

  Japan, 22, 69, 108, 115, 141, 147, 209

  Jersey (British crown dependency), 3, 4, 9–10, 14, 17, 19, 24, 26, 44, 46, 69, 74, 79, 87, 103–5, 116, 146–8, 150, 168, 182–92, 201–12, 228, 235n19, 254n10, 256n33

  Jersey Bankers’ Association, 104–5

  Jersey Finance, 105, 168, 186–7, 209

  Jeune, Reg, 207

  Johnston, David Cay, 113, 163, 204, 252n22

  Joly, Eva, 2–5, 8, 28, 70

  JP Morgan, 103, 196–7

  Junkanoo cultural celebrations (Bahamas), 172

  Kennedy, John F., 20, 75, 79, 110, 246n10,12

  Kenton, Glenn, 195–6, 198

  Kenya, 97, 145, 183

  Keogh, James, 81

  Kerry, John, 132, 135

  Keynes, John Maynard, 49–61, 63, 67, 82, 110, 218–19, 221

  and capital controls, 56–61

  on German war reparations, 50

  Khun Sa, 133

  Kim Jong-Il, 17, 131, 156

  Kirkby, Robert, 209

  Knapp, Frank, 15

  Knightley, Philip, 35, 42, 47

  Korshak, Sidney, 113

  KPMG, 25, 33, 71, 202, 209, 238n52

  Krall, Beth, 171–7

  Krugman, Paul, 61

  Kynaston, David, 65, 82, 244n72

  Labour Party, 73

  laddering, 27–8

  Lanchester, John, 7

  land value taxation, 224–5

  Lansky, Meyer, 88–90, 97–8, 111, 113

  Laos, 97, 133

  Latin America, 9, 14, 21–2, 27, 82, 91–3, 97, 99, 103, 110–11, 120, 133, 142–3, 172–3, 177

  League of Nations, 415

  Lecasble, Valerie, 4

  Lehman Brothers, 67–8, 132, 218, 236n27

  Leigh-Pemberton, Robin, 136

  Lend-Lease Act (1941), 54–5

  lending, 76–8

  Levin, Carl, 14, 21, 122, 156, 162, 168, 173, 226, 236n29, 247n27, 254n11

  Lewis, Michael, 82

  Liechtenstein, 4, 88, 99, 146, 223, 225, 236n23

  Liberia, 23, 208

  libertarianism, 101, 150–1, 154, 159, 184–5

  Libreville, Gabon, 1–5, 8–9

  limited liability corporation (LLC), 121–2, 202–4, 235n17

  limited liability partnership (LLP), 202–9

  Lloyds Bank, 64, 69–70

  loan-back technique, 88

  lobbyists, 9, 30, 58, 70, 73–4, 83, 85, 107, 110, 112, 114, 122, 148, 161–2, 170, 189–90, 197, 209, 240n17

  Lodge, Henry Cabot, 58

  London, England: See City of

  London Long Term Capital Management (LTCM), 211, 218

  Lord Mayor of London, 71, 73, 76, 85, 244n69–71

  Lucas, Robert, 61

  Luxembourg, 3, 14, 16–17, 26, 28, 69, 97, 116, 128, 134, 138, 161, 172, 212–13, 235n14,15, 249n5

  Macau, 27, 106

  Macmillan, Harold, 59

  MacShane, Denis, 69

  Madeira, 18

  Madoff, Bernie, 218

  Malaysia, 115–16, 184

  Malta, 27

  Manhattan, 23–4, 27, 69, 114, 134, 178, 239n9

  See Wall Street

  Manton, Peter, 184

  Manuel, Trevor, 147

  Marcos, Ferdinand, 141–2

  Marcos, Imelda, 141–2

  Marshall, Alfred, 50

  Marshall Islands, 22–3, 236n31

  Marshall Plan of 1948, 58–9

  Marx, Karl, 51, 75, 86, 104

  Matthews, Gary, 205, 207–8

  Mauritius, 16, 23, 27, 147–8

  McClatchy’s, 214

  McDonald’s, 51

  McDowell, Harris B., 198

  McIntyre, Bob, 159, 170

  McIntyre, Michael J., 117–19, 169

  meatpacking industry, 35–42, 47

  Merhet, Maurice, 189

  Merrill/BoA, 68

  Mexico, 9–10, 30, 58, 142–3, 218

  MHT Bank, 141

  Miami, Florida, 89, 101, 111–12, 143, 157, 165, 218

  Microsoft, 14

  Middle East, 6, 33, 54, 104, 137

  Midland Bank (Britain), 63–6, 172

  Minnesota, 193

  MI6 (British Secret Intelligence Service), 18, 235n21

  Mitchell, Austin
, 205, 249n13, 252n13

  Mitchell, Daniel J., 150–63, 170

  Mitterrand, François, 4

  mob/mafia, 7, 20, 22, 29, 88–90, 97, 113, 120, 131, 150–1, 175, 192

  Monaco, 17, 26

  monetarism, 76–8, 114, 159

  money creation, 76–8, 114

  money supply, 78, 114, 159

  Montserrat, 87

  Moon, Sun Myung, 161

  Morgan Guaranty bank, 75, 81

  Morgan Stanley, 20, 22, 68, 103, 106, 125

  Morgenthau, Henry, 38, 54–5, 65

  Morgenthau, Robert, 27–8, 69, 134–6, 178

  Moscow, 10, 71, 75, 81, 137, 249n16, 250n20

  Moscow Narodny Bank, 71, 75, 81

  Mourant du Feu & Jeune, 201–2, 207

  Mugabe, Robert, 156

  Mugniyah, Imad, 178

  Muirhead, Patrick, 187

  multinational corporations, 10, 11–16, 25–6, 35–43, 57, 108, 112–13, 132, 145–7, 216–17, 221–2, 227, 234n12, 239n10

  central problem with taxing, 41

  history of, 35–43

  and tax havens, 13–16

  and zero taxation, 12–15

  See Vestey brothers Murdoch, Rupert, 7

  Murphy, Richard, 112–13, 125, 159, 217, 222, 234n5

  MySpace, 7

  Nasser, Abdel, 65

  Nauru, 27

  Naylor, Tom, 97–8, 115

  Nazi Germany, 49, 59, 98, 156–7, 234n13

  Netherlands, 17, 27, 39, 111, 117–18, 138, 143, 147, 192

  Netherlands Antilles, 111, 117–18, 143

  Nevada, 22, 44, 120, 125, 223

  New Deal, 31, 109, 114, 131, 200

  New Jersey, 39, 104, 108

  New York City, 18

  See Manhattan; Wall Street Newfoundland, 38

  News Corporation, 7, 20, 22

  Nidal, Abu, 133, 135

  Nigeria, 1, 17, 30, 58, 97, 105, 127, 183, 248n43

  Nixon, Richard, 98

  Norman Conquest (1066), 71–2

  Norman Star (ship), 35, 38, 46

  North Africa, 1, 26–7

  North Korea, 17, 28, 122, 131, 133, 188

  Northern Ireland, 73

  O’Neill, Martin, 158

  O’Neill, Paul, 160–2

  Obama, Barack, 51, 106, 110, 125, 153

  Offshore Magic Circle, 25, 201–2

  offshore system

  banana example, 13–14, 42, 108

  and capital, 98

  centers of, 16–23

  See British tax havens; European tax havens; U.S. tax havens

  and criminality: See criminal money

  defined, 6–8, 11–12

  and deflection, 166–7

  as ecosystem, 25

  as “efficient”: See “efficiency”

  employment in, 171–92

  features of

  See double taxation; laddering; “on request” information; reinvoicing; “round-tripping”; shell companies; tax deferrals; transfer pricing; trusts; usury; zero taxation

  and inequality: See inequalities

  and lending, 76–8

  central figure of

  See City of London

  opposite of: See John Maynard Keynes

  and ordinary citizens: See ordinary citizens

  overview of, 6–10, 11–16, 23, 25–8

  and “plausible deniability,” 167

  rationalizations for, 156–8, 165–7

  reform of: See reform and regulation, 169–70

  and silence, 30, 170, 171–80

  and slavery, 140

  statistics on, 11, 26, 28–9, 32

  and tax havens: See tax havens

  and taxation, 144–8

  as unpatriotic, 39–43

  See multinational corporations; tax havens

  oil, 1–4, 7–9, 17, 19–20, 22–3, 36, 39, 60, 68–9, 82, 105, 107–8, 114, 127, 131, 133, 137–9, 145, 165, 225, 246n2, 249n18, 250n25

  Oklahoma, 120

  Okonjo-Iweala, Ngozi, 127

  Olenicoff, Oleg, 178

  “on request” information, 167–9

  onshore tax reform, 224–5

  ordinary citizens, 7, 15, 20–1, 29, 31–2, 35, 38–40, 68, 77, 116, 140, 217

  Oregon, 120

  Organisation for Economic Cooperation and Development (OECD), 24–5, 120, 127, 146, 149–52, 150, 160–2, 167–70, 188, 217, 222–3

  and “blacklist” for tax havens, 24–5, 150, 161–2, 168–9

  project against tax havens, 149–52, 160–2, 167–70

  Organization of the Petroleum Exporting Countries (OPEC), 82, 152–3

  Owens, Jeffrey, 24

  ownership and finance, 52–3

  and LLCs, 121–2, 202

  and offshore secrecy, 37, 120, 133, 173–4, 225–6

  and regulation, 42

  as separate from operation, 52–3, 218, 239n18

  and trusts, 43–6, 69

  Packwood, Bob, 151

  Padilla-Kaltenborn, Stephanie, 177

  Pakistan, 30, 58, 133

  Palan, Ronen, 114–15

  Panama, 6, 23, 26–7, 38, 44, 97, 99, 108, 111, 113, 133, 236n31

  Paris, 1–3, 5, 9–10, 44–7, 70, 150, 161, 233n1

  Parmalat, 132, 166

  Parsons, M. H., 89

  Pasqua, Charles, 4

  Patnaik, Prabhat, 56

  PATRIOT Act, 225

  patriotism, 39–43

  Peck, Polly, 204

  Peron, Juan, 35

  Picciotto, Sol, 42, 147, 239n13

  Pindling, Lynden, 90, 98

  Ping, Jean, 2

  Pinochet, Augusto, 179

  Pitman, Shona, 190

  Pitman, Trevor, 188 “plausible deniability,” 166–7

  political power, 7, 13, 31, 65, 151–3, 178–82

  post-colonial: See Omar Bongo

  political theory, 86, 151

  Portillo, José Lopez, 143

  Portugal, 17, 206

  poverty, 1–2, 9, 16, 20, 28–9, 34, 57, 73, 104, 126, 131, 140, 143–4, 164, 175, 189, 192, 223–4, 229, 231

  power distribution, 8–10, 86

  PricewaterhouseCoopers (PWC), 25, 202, 209

  private equity, 103, 132, 216, 230

  Privy Council in London, 18, 94, 103, 148

  progressive taxation, 162–3

  Public Choice Theory, 151

  Putin, Vladimir, 156

  Qualified Intermediary Program, 119–20

  Queen Victoria of England, 104

  Quinlan, Andrew, 150, 162

  Rahn, Richard, 163–4

  Rally for the Republic (RPR), 4

  Ramsay, Robin, 69–70

  Raw, Charles, 96, 98

  Rawls, John, 86

  Reagan, Ronald, 32, 84, 113–14, 116–17, 151, 195, 197–8, 204

  redistribution, and taxation, 164

  reform, 221–31

  Reinhardt, Carmen, 60

  Repo 105, 67–8

  representation, and taxation, 145, 164

  Republican party, 31, 54, 58, 121, 123, 140, 150–1, 159, 195, 254n4 “rehypothecation,” 68

  reinvoicing, 25, 182–3

  repricing, and taxation, 164

  reserve currency, 83–4

  reserves, banking, 98

  revenue, and taxation, 164

  revocable trusts, 46

  Ricardo, David, 16

  the rich: See elites; les grandes

  Ridley, Tim, 181

  Riggs Bank, 179 “ring-fence,” 12, 199, 250n25 The Rise and Fall of the House of Vestey (Knightley), 35

  Robbins, Lionel, 59

  Roberston, James, 79

  Robinson, Jeffrey, 79, 88–9

  Rockefeller, David, 107–8

  Rodrik, Dani, 59–60, 165, 240n22

  Rogoff, Kenneth, 60

  Roosa, Robert, 80

  Roosevelt, Franklin Delano, 31, 54, 97, 239n9

  Roosevelt, James, 97

  Rosenbloom, David, 117–18, 120, 148

  Roth, William, 150


  Rothwell, John, 207–8

  “round-tripping,” 148

  Routier, Airy, 4 “Rs” of taxation, 164

  Rubin, Robert, 119

  Rushdie, Salman, 178–9

  Russell, Bertrand, 51

  Russia, 27, 36–7, 58, 68–9, 99, 104, 111, 120, 131, 137–9, 199, 206, 217, 225, 249n18, 250n21

  Sampson, Anthony, 64

  Sands, Stafford, 89–90

  Sarbanes-Oxley, 68

  Sarkozy, Nicolas, 5, 24–5

  Saudi Arabia, 10, 69, 131, 133, 157, 217

  saucissonage, 27–8

  Savimbi, Jonas, 136

  Scriven, Martyn, 104–5

  secrecy jurisdictions: See tax havens

  securitization, 26, 70, 125, 200–1, 209

  September 11, 2001, 167, 173, 225

  Sharife, Khadija, 22, 236n31

  Sharman, Jason, 24, 162

  shell banks/companies, 29, 111, 120–1, 172–3, 225–6

  Sikka, Prem, 204–5, 207–9

  Silverstein, Ken, 255n18

  Singapore, 19, 27, 33, 106, 116, 121, 209, 234n12

  Skidelsky, Robert, 49–50, 54

  small business, 15, 38–9

  Smith, Adam, 162, 165

  Smith, Vernon, 151

  social capital, 164

  socialism, 4, 51, 150, 163

  Salomon Brothers, 82

  Snow, John, 140

  Somalia, 16

  South Africa, 19, 22, 37, 105, 147, 165, 183–4, 209

  South Korea, 17, 85, 147, 251n37

  Southern, Geoff, 188, 191, 206

  sovereign debt funds, 143–4

  sovereignty, 23, 84, 161, 196, 228

  Soviet Union, 33, 49, 51, 75, 120, 131, 137, 206

  Special Purpose Entities (SPEs), 125, 212, 256n40

  Special Purpose Vehicles (SPVs), 26, 178, 180

  Spencer, David, 8–9

  Standard Oil, 23, 36, 39, 108

  Stanford, Sir Allen, 218

  Stanford Bank, 218

  Sterling Area, 92–3

  Stettinius, Jr., Edward, 23

  Stop Tax Haven Abuse Act, 110

  Strahm, Rudolf, 226

  Subramanian, Arvind, 59–60, 240n22

  Summers, Larry, 160

  Suez Crisis (1956), 65–6, 86

  Swayze, David, 194, 196–7, 199, 201

  Swinging London, 80

  Switzerland, 3, 4, 16, 24, 26, 33, 38, 43, 69, 80, 84, 88, 97–9, 109, 114, 117, 119, 122, 127–8, 129, 138–40, 143, 156–7, 161–2, 165, 169, 174, 176–8, 180, 191–2, 203, 212, 214–15, 226, 234n12,13, 236n23, 247n31, 250n20, 252n18

  clients of, 26

  secrecy law (1934), 16

  See Geneva

  Sylla, Richard, 80

  Syvret, Stuart, 187–8, 205, 207–8

  Taliban, 121

  Tavakoli, Janet, 125

  Tax Analysts, 17, 161–2

  tax/taxation, 144–56

  capital gains tax, 155, 162–3

  competition, 149–56

  corporate tax, 155

  deferrals, 112–13

  four “Rs” of, 164

  incentives, 156

  income tax, 155, 162–3

 

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