Reply #10: Raising Their Ugland House: Cayman Islands Lobbies to Keep Haven Safe

[Shallah Kali]

http://reporting.sunlightfoundation.com/2009/raising-their-ugland-house-cayman-islands-lobbies-to-keep-haven

When President Barack Obama promised in May to raise an additional $210 billion in taxes a year by closing corporate loopholes and cracking down on individual tax cheats, he pointed to an address in the Cayman Islands listed by 12,000 corporations as the kind of abuse his proposals would shut down. "Either this is the largest building in the world or the largest tax scam in the world," the President said.

The line, recycled from his stump speech, was one that the Caribbean jurisdiction had responded to many times before. They have defended Ugland House, the building Obama referred to, and argued that the Cayman Islands are well regulated and transparent, to presidential candidates, executive branch officials, members of Congress and their staffs. In a revenue starved Washington, they're not the only tax haven lobbying.


Disclosures filed in 2008 show that six governments--Aruba, Bermuda, the Cayman Islands, the Isle of Man, Liechtenstein and the States of Jersey--and the Bank of the Netherlands Antilles employed U.S. lobbyists, paying a total of $2.3 million in fees. Those lobbyists had at least 222 contacts with members of Congress, their staff and executive branch officials in which they discussed tax laws, legislation aimed at tax havens like the Stop Tax Haven Abuse bill http://www.opencongress.org/bill/110-s681/show , or efforts to negotiate tax exchange information agreements with the United States and other countries, a review of data in Foreign Lobbying Influence Tracker (online at http://www.foreignlobbying.org) shows.

Signing or even committing to sign such agreements earns tax havens a stamp of approval from the Organization of Economic Cooperation and Development, an international body of developed countries that promotes policies that will spur development elsewhere. In 1998, the OECD launched an initiative aimed at shutting down tax havens; by 2001, the effort had fallen apart, and the body turned instead to encouraging havens to agree to exchange information on their offshore clients with foreign governments on request.