Treasure Islands - Nicholas Shaxson [15]
A small, opaque tax haven also grew alongside the Marshall Islands shipping registry, which the GAO reckoned was being used by ConocoPhilips, Morgan Stanley, and News Corp. When Khadija Sharife, a South African journalist, posed as a shipping client pretending to be worried about disclosure, she was told that forming a Marshall Islands company could be done in a day for an initial filing fee of $650 plus annual fees of $450, and
If the authorities . . . come to our Registry and Jurisdiction and ask to disclose more information, regarding shareholders, directors of the company etc.… we are not privy to that information anyway, since all the business organization and conduct of the entity is performed by the entity’s lawyers and directors directly. Unless the name of directors and shareholders are filed in the Marshall Islands and become a public record (which is NOT mandatory), we are not in a position to disclose that information.33
In Africa, Liberia was set up in 1948 as a “flag of convenience” by Edward Stettinius Jr., a former U.S. secretary of state, and its maritime code was “read, amended, and approved by officials of Standard Oil,” according to the historian Rodney Carlisle. Its sovereign shipping registry is now run by another private U.S. corporation out of Vienna, Virginia, about five miles from the Marshall Islands registry.34 Sovereignty is, literally, available for sale or rent in such places.
The biggest tax haven in the U.S. zone of influence is Panama. It began registering foreign ships from 1919 to help Standard Oil escape U.S. taxes and regulations, and offshore finance followed: Wall Street interests helped Panama introduce lax company incorporation laws in 1927, which let anyone open tax-free, anonymous, unregulated Panama corporations with few questions asked. “The country is filled with dishonest lawyers, dishonest bankers, dishonest company formation agents and dishonest companies,” one U.S. Customs official noted. “The Free Trade Zone is the black hole through which Panama has become one of the filthiest money laundering sinks in the world.”35
This strange and little-known U.S.-centered pattern, echoing the neocolonial role of the secrecy jurisdictions in the British zone, provides a pointer to the fact that the secrecy jurisdictions have for years quietly been at the heart of neoconservative schemes to project U.S. power around the globe. And almost nobody has noticed.
It should be clear by now that the offshore world is not a bunch of independent states exercising their sovereign rights to set their laws and tax systems as they see fit. It is a set of networks of influence controlled by the world’s major powers, notably Britain, the United States, and some jurisdictions in Europe. Each network is deeply interconnected with, and warmly welcomes offshore business from, the others. Wealthy U.S. individuals and corporations use the British spiderweb extensively: Enron, for example, had 881 offshore subsidiaries before it went bust, of which 692 were in the Cayman Islands, 119 in the Turks and Caicos, 43 in Mauritius, and 8 in Bermuda, all in the British spiderweb. The United States returns the favor to wealthy British interests investing tax-free, in secrecy, via Wall Street.
Not only that, but the world’s most important tax havens in their own right are not exotic palm-fringed islands but some of the world’s most powerful countries themselves. Marshall Langer, a prominent supporter of secrecy jurisdictions, neatly describes the misperceptions that have