Treasure Islands - Nicholas Shaxson [108]
“These banks are competing with each other, but they also scratch each others’ backs,” Krall said. “The heads of these banks are part of a circle of friends and business associates, where the whole social circle revolves around it: a social structure intertwined with a business relationship. They will pass business between each other.”
“The law says you must report suspicious activity to the Financial Intelligence Unit [FIU] or the police,” she continued. “But in a very small place, everyone knows everyone and their cousin. I couldn’t trust a report being handled confidentially or through proper channels. There is a huge chance that someone in the FIU or the police will be close to people in the bank where you work . . . and this could cause me harm for raising the issue.”
Krall was supposed to check for suspicious movements through the accounts—of which there were plenty. She raised many red flags. Her managers “would say, ‘This was a commission’ [on a contract].” Were these bribes? Commissions on what?
“I went back, and never got an answer.”
One Swiss-based trust company that had a relationship with her bank displayed almost no information on their website, bar some photos of a nice fountain in Geneva. “The crap they brought to us was unbelievable—there is no way a responsible trustee should take this on. You would have no idea who the trust settlors were; what the assets were or where they came from. I objected strongly—but the bank took them on.”
Over time her qualms grew, and she began to find herself in a very lonely place. “I couldn’t even tell my boyfriend. I was supposed to abide by bank secrecy,” she remembered. “It wasn’t easy for him, with someone walking through the door at the end of the day, pale, drained, and sick, with stuff going on he can never know about.” Other compliance officers whom she chatted with also felt their powerlessness. “There was a fear abroad,” she remembered. “You have this dilemma: the difficult news you will give to directors may not be appreciated. Most people want to do their job, protecting the bank and country from the taint, as well as doing their ethical, moral, and legal duty. You go into the job with that mind-set.”
I chatted to Krall about my own recent experiences in the Cayman Islands: about what happened when I revealed to one of my first interviewees in the Caymans that I had links to an organization that had been critical of tax havens. That meeting ended in minutes. I had been referred to this interviewee by a mutual friend, and after our meeting my friend got emails stressing how “uncomfortable” she felt, and requesting promises on promises that I would never identify her.
People I met in the Caymans almost always seemed to find it distasteful, or changed the subject, when I asked questions such as whether or not one might balance the prosperity of the fifty thousand–odd islanders against the interests of 350 million North Americans, 600 million Latin Americans, and the same number again in Africa. Even more surprising to me was that despite the confidence with which I hold my own views, I found myself feeling shy, almost ashamed, expressing them on the Cayman Islands, from the first day.
Krall recognized this shifty feeling immediately. “When I was planning to leave the Bahamas friends were kindly introducing me to other private banking opportunities,” she said. “The thought of continuing in that profession made me feel disgusted to the point of being physically nauseous, yet here were my dear friends, working in exactly the same industry, being helpful. How could I say to them directly there was no way I could do that work anymore, while they were still in it?”
“I felt that ‘unclean’ feeling from every direction: unclean for having done that kind of work and yet unclean with feeling as though I was being, somehow, not truly and openly honest with my friends.”
Stephanie Padilla-Kaltenborn, an American mother of two and an old friend of mine who lived until recently in the Cayman Islands, recalled soon becoming