OFFSHORE

A glimpse inside the secretive world of offshore banking.

“I protect wealth from wives and spendthrift kids,” remarks one Canadian expatriate to the Cayman Islands to sometime BBC producer and debut author Brittain-Catlin. The sentiment holds, metaphorically, across the board—if, that is, one accepts that the internal-revenue services of the first world mean to soak those people who just happen to have done very well for themselves. The Caymans are something of an accidental trove; as Brittain-Catlin notes, in the mid-1960s the British crown colony was nearly bankrupt, for “there was no room in the modern world for an island that made rope and caught turtles and whose wetlands prevented any agriculture.” Yet today the islands, with a much-grown population, are the world’s fifth-largest banking center and hold assets of more than $700 billion, most from corporations and wealthy individuals who can enjoy both secrecy (the bankers would prefer to say “privacy”) and tax-free interest earnings. Brittain-Catlin traces the Caymans’ growth to U.S. economic policy in the Johnson and Nixon years, when the government attempted to keep control of the number of dollars exiting the country, and when Europeans hungry for the currency came to the nearby islands to acquire greenbacks. Now a state in which business and government are nearly one and the same, the Caymans and cousin money-laundering nations have proven highly useful to terrorists; the Saudi Arabian Bin Laden Corporation, source of the Al-Qaeda mastermind’s wealth, “is believed to operate through subsidiary holding companies in the Bahamas, the Virgin Islands, and Cayman.” The U.S. government, writes Brittain-Catlin, has done only a little to follow that money and stanch its flow, and “only when doing so suited its immediate objectives.” Nonetheless, even that little has caused some corporations to flee from Cayman to places that allow even more secrecy, such as “Hong Kong or Singapore, Bahamas or Bermuda.”

Brittain-Catlin’s musings on the meaning of capital are often off the point and distracting, but Offshore ought to raise hackles among those who wonder why the world belongs to the wealthy.