Since becoming an offshore financial center in the 1960s, the Cayman Islands has suffered severe reputational setbacks because of proven, alleged, or fictional criminal conduct.
There was the failure of Sterling Bank and Trust and the rest of Jean Doucet’s banking empire in the Cayman Islands in 1974; there was the 1991 collapse of BCCI and its international network of banks being used to launder drug money; and there were the scandals involving Enron (2001) and Parmalat (2003), both of which used Cayman Islands companies to conceal their nefarious activities.
Then of course there was the 1993 movie “The Firm,” which portrayed the Cayman Islands as a money laundering haven. The fictional Hollywood perceptions have lingered, and the Cayman Islands has become synonymous in film and fiction with offshore financial shenanigans.
Now, with the arrest in Switzerland of Caymanian Jeffrey Webb and six others on corruption and racketeering charges on FIFA-related matters, the Cayman Islands faces reputational damage which may exceed anything the country has experienced to date.
For the record, according to the 47-count indictment, FIFA officials, including Mr. Webb, used their positions to solicit more than $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
We should point out that Mr. Webb and his colleagues are, at this point, only accused of wrongdoing. If they are successfully extradited, they will face trial for their alleged crimes in the United States.
But regardless of the outcome of that trial, the damage done to the reputation of the Cayman Islands has already begun.
Almost instantaneously, news of Mr. Webb’s arrest in a dawn raid at a posh hotel in Zurich, Switzerland, appeared in more than 3,000 stories on the Internet. Non-stop coverage on the world’s leading television networks, including CBS, NBC, ABC, and the BBC, highlighted Mr. Webb’s role and prominently identified him with the Cayman Islands.
Likewise, The New York Times, The Washington Post, The Wall Street Journal, the Financial Times, and literally hundreds of other newspapers are leading the news with the scandal. The Cayman Compass has already been contacted by multiple international news organizations seeking photos and background information on Mr. Webb.
At a Wednesday morning press conference convened by U.S. Attorney General Loretta Lynch and televised around the world, Mr. Webb took top billing.
Precisely because football is the world’s sport, the eyes of the entire world are on this scandal and, to some degree, on the Cayman Islands. Unlike the cases of BCCI, Enron and Parmalat, which were of interest primarily to those in international finance, the FIFA scandal has far greater interest.
As president of CONCACAF, vice president of FIFA, and, locally, as president of the Cayman Islands Football Association, there is no doubt that Jeff Webb has brought much attention (up to this point favorable) and considerable largesse to the Cayman Islands.
Now that his name and nationality have been associated with high-level corruption and racketeering charges involving the world’s most popular sport, there is no doubt that the Cayman Islands, unfair though it may be, will pay a considerable reputational price as this legal battle continues to unfold.