Treasure Islands - Nicholas Shaxson [110]
“The very difficult part of this,” The Devil continued, “is that a few people here—those people who have committed what the international community would consider unlawful acts—they get the CBEs, the OBEs [British royal decorations] . . . they sit on boards, they have high status, and they are looked on as statesmen.”
He described another avenue around the legislation. Cayman boasts of its intrusive Know-Your-Customer laws, which are fairly strong—on paper. Yet it was just as Krall had found it in the Bahamas: The rules fall away if you are a trusted part of the network. “If I do not have a relationship [with an institution] they will want to know even my underwear size,” The Devil said. “But if you have an established relationship with a bank over time, the rules don’t apply to you. If you are established as a well-to-do person, your credibility isn’t questioned.” His words remind me of an internal memo at the Riggs Bank brought to light in 2004 by the U.S. Permanent Committee on Investigation. “Client is a private investment company domiciled in the Bahamas,” it said, “used as a vehicle to manage the investment needs of beneficial owner, now a retired professional who achieved much success in his career and accumulated wealth during his lifetime for retirement in an orderly way.” The “retired professional” was the Chilean torturer-in-chief and former dictator Augusto Pinochet.
Beneath the Caymans’ standard official line that it is a “transparent, well- regulated and co-operative jurisdiction” lies a more fiendish reality.
Later I recounted my “Devil” story and Krall’s tale to an accountant who had worked in the Caymans, who nodded fiercely when I mentioned the reference to Salman Rushdie. “Yes, yes, it’s serious,” he said. “It’s not naive to take these threats seriously. You will be the first to go to prison if something goes wrong.” He told me about several mysterious offshore deaths, including that of a Swiss banker, Frederick Bise, who was found dead in 2008 in the hatchback of a burning car in Grand Bay, on the Caymans, with blunt force injuries to his head.
My interlocutor, a former hedge fund administrator, compliance officer, and chief accountant, described how he slowly grew to see what was going on.
“I started feeling bad three or four years after I arrived,” he said. “We ran business through the accounts, which was kind of dubious: you’d get information here and there and put it together—but you could not ask questions. Even if you had indications, you could not speak up. I did speak up, and the result was that I got less information at meetings. Information was sort of prediscussed: I felt that a kind of show was going on.”
He came under suspicion and was overloaded with work: twelve hundred hours of overtime in a year, with no compensation. “The CEO said, ‘This is part of your job.’”
“We replaced 40 to 50 percent of our staff within two years: people who do not fit into the system for any reason are pushed out. Ask questions, and you can get fired, or given so much work [that] you [eventually] resign. It is not done obviously: they won’t call you into meetings and say, ‘Stop asking questions.’ These are highly intellectual, well-educated people: they have their own way of communicating. You learn to read between the lines. They will not say, ‘I am threatening you.’ They will say, ‘This person does not fit into the picture.’ I have been in the business for years, and I know what they mean.”
Most people working offshore only see fragments of the big picture, so cannot understand what is going on. “For example, if there is a trust set up in the Caymans, and the securities portfolio is in Switzerland,