Treasure Islands - Nicholas Shaxson [92]
Still, Mitchell decided to write a couple of things on it for the Heritage Foundation and began to see that this mattered. And the OECD’s follow-up report in 2000 contained a primed bomb: a blacklist of 35 secrecy jurisdictions, and a threat of “defensive measures” against havens that did not shape up. More alarming for Mitchell, it was not only the “European collectivists” who backed the OECD, but the Clinton administration too.
“Our side was caught with our pants down,” Mitchell said in an interview in Washington, D.C. “Heritage, a big full-service think tank, doesn’t focus on just one thing. I thought we ought to have a group to have a go at this.” So he got together with Andrew Quinlan, a friend from college, and Veronique de Rugy, a Paris- educated libertarian academic, to create a small outfit called the Center for Freedom and Prosperity (CF&P) with a subgroup, the Coalition for Tax Competition, whose aim was to protect “the cause of tax competition.” They lodged it at the Cato Institute, a well-funded free-market think tank in Washington.
The antitax atmosphere in Washington in those days was poisonous. A Delaware senator, William Roth, had been whipping up a hate storm against the U.S. Internal Revenue Service under a declared Republican strategy to “pull the current income tax code out by its roots and throw it away so it can never grow back.”5 In an effective piece of political theater, Roth, a manic supporter of tax cuts for the wealthy, got IRS agents to testify at hearings behind screens like mobsters, with their voices electronically distorted. His people regaled the hearings with stories about IRS agents in flak jackets storming houses and forcing teenage girls to change clothes at gunpoint—and the IRS had no right of reply. No matter that most of these claims were untrue.6
Mitchell began to bombard politicians with emails about the OECD reports, to write scary op-eds in national newspapers with headlines such as “Global Tax Police,” and to insult the OECD publicly. Hostilities had begun in the offshore world’s first big battle of ideas.
To understand the intellectual underpinnings of offshore finance, it seems appropriate to start with Mitchell, one of the secrecy jurisdictions’ noisiest and most active defenders.
He is a man of striking warmth and great personal charm. In his blog “International Liberty: Restraining Government in America and around the World,” he declares, “I’m a passionate Georgia Bulldog,” in reference to the mascot of the University of Georgia’s gridiron team, “so much so that I would have trouble choosing between a low-rate flat tax for America and a national title for the Dawgs. I’m not kidding.” In his blog he notes that Britain’s left-of-center Observer newspaper called him a “high priest of light tax, small state libertarianism” and that this was “the nicest thing anyone’s ever said about me.”
Mitchell began to take a serious interest in politics in the Reagan era, emerging from George Mason University fascinated by conservative economists such as James Buchanan and Vernon Smith, who explored a branch of economics known as Public Choice Theory, which rejects notions that politicians act on behalf of people or societies and instead looks at them as self-interested individuals. Its followers’ distaste for government dovetailed with Mitchell’s budding libertarian outlook and his love for Reagan. He worked with Republican Senator Bob Packwood, then for the Bush/Quayle transition team, before joining Heritage.
His libertarian vision is of a world where government is pared back to just a few core roles, such as providing security, leaving the rest to the market. “Some people fantasize