Treasure Islands - Nicholas Shaxson [55]
London did nothing. Two years later, a “Dear Rickett” memo5 from M. H. Parsons, a colonial administrator, to Sir Dennis Rickett, K.C.M.G., C.B., warned that the Bahamas’s white, racist6 finance minister Stafford Sands, who had recently taken a $1.8 million bribe from Lansky7 mobsters, wanted to make it a criminal offense to break bank secrecy, and warned that this might annoy the United States. The proposed new legislation “will surely bring protests by the U.S. Government to Her Majesty’s Government,” Parsons wrote. “We would look pretty feeble if we had to say that we could do nothing to influence the course of offensive legislation in a territory for which we still have outward responsibility. I admit the point is a ticklish one.”
Stafford Sands had estimated that there was a billion dollars or more of dirty money to be tapped by reinforcing bank secrecy, and he was prepared to anger the United States to get it. It was, as the memo put it, “a calculated risk he was prepared to take.” London gave the go-ahead, and Lansky built his new criminal empire.
Some locals in the Bahamas were unhappy about what was going on. In 1965 Lynden Pindling, a populist Bahamas politician, threw the ceremonial Speaker’s Mace out of a parliament window to a prepared crowd, in a dramatic power-to-the-people gesture. Pindling was elected prime minister in 1967, ending white minority rule, on a platform that had included railing against the gambling, the corruption, and the ruling elites’ mob connections, though several accounts say Lansky—astutely assessing the political winds—backed Pindling too.8 The casinos, the gambling, and above all the Mob-infested offshore industry continued to boom. But when Pindling led the Bahamas to full independence in 1973, skittish offshore players fled in streams. The veteran lawyer Milton Grundy put his finger on what was going on. “It wasn’t that Pindling said or did anything to damage the banks,” Grundy said.9 “It was just that he was black.”
It so happened that there was a reassuringly British place, just next door to the Bahamas, where the locals were far more friendly, the British were still in control, criminals and bankers were being warmly welcomed, and offshore finance had recently started up: the Cayman Islands. In 1966, when the Caymans’ first trust law was written, cows were still wandering through the town center of the capital, George Town, Grand Cayman. The town had one bank, one paved road, and no telephone system. The year afterward, Grand Cayman was connected to the international phone network and the airport was expanded to take jet aircraft. Money began to pour in.
In 1969 a British government team flew to the Cayman Islands to check on progress. The report notes a “frightening absence of certain types of expertise,”10 adding that “the civil service still reflects in structure and staffing the out-moded pattern of a bygone age.”
The report continued, “The flood of private sector activities, progressively drowning basic government functions, has placed an unsupportable burden on senior staff.” Flocks of developers were arriving, “usually backed by glossy lay-outs and declaimed by a team of business-men supported by consultants of all sorts. On the other side of the table—the Administrator and his civil servants. No business expertise, no consultants, no economists, no statisticians, no specialists in any of the fields. Gentlemen vs. Players—with the Gentlemen unskilled in the game and unversed in its rules. It is hardly surprising that the professionals are winning, hands down.”
At around this time, the archives show two sets of opinions on Britain’s offshore hatchlings starting to emerge within the British Civil Service. On one side sat the British Treasury, and especially its tax collectors,