Last week, The Washington Post published a long, somewhat puzzling story on a small nonprofit group in the Washington, D.C., area that advocates against enacting onerous and unfair restrictions on the international financial industry.
Based on documents, including fundraising pitches and letters, culled from the “Panama Papers” data leak, the 4,000-word “investigation” into the Center for Freedom and Prosperity exposes the group’s (often successful) opposition to U.S. legislation designed to “crack down on offshore secrecy.”
The upshot of the narrative is that the center has done nothing illegal, or unsavory, or even secretive. Indeed, by the very nature of its mission, the center is extremely vocal about its positions on tax policy and U.S. treatment of international financial centers.
If the story were intended to be a “hit job” on the center and “tax havens,” and that’s what it certainly appears to be, The Post’s journalists are badly in need of target practice. And while The Post piece is merely the latest in a lengthening line of Panama Papers “exposés” – a common feature of which is to establish subjects’ “guilt by association” rather than actual guilt – we at the Compass take particular umbrage to this one rather personally, for multiple reasons. We’ll name two.
First, we do not appreciate the assertion by former (thankfully) U.S. Sen. Carl Levin that the center’s pro-international finance policies are equivalent to “trading with the enemy.” Excuse us … When did the Cayman Islands become America’s enemy? Politically, Cayman is an overseas territory of the United Kingdom, one of America’s oldest and most steadfast allies.
Several times a day, jets and cruise ships deposit visitors from the U.S. to our shores. Cayman regularly, and graciously, plays host to top U.S. officials, including on several occasions, former Presidents. Many thousands of Caymanians and Cayman residents happen to be American, and American taxpayers.
Sen. Levin dedicated much of his career in office to destroying places such as Cayman (and doing severe damage to the U.S. economy in the process), but we have enough perspective, and decorum, to refrain from labeling him and his ilk as “the enemy.”
Second, the chairman of the center targeted by The Post is none other than distinguished American economist Daniel J. Mitchell. He, along with economist Richard W. Rahn, who is also mentioned in The Post article, are members of the editorial board of the Compass’s sister publication, Cayman Financial Review. We are proud of that association.
Messrs. Mitchell and Rahn (and, of course, the inimitable Anthony Travers) consistently and courageously carry the banner for international financial centers, the communications and public relations mission that the Cayman Islands government and our financial services sector fail at so miserably.
We will not elaborate further on the specifics of The Post story. Instead, along with this editorial we have published thoughts from Mr. Mitchell, who as our readers can see is more than capable of explaining where Sen. Levin and The Post have erred.
If The Post’s investigative (and imaginative) journalists wish to delve into the practice of international finance and tax minimization, they needn’t sift through the trove of documents stolen from the Mossack Fonseca law firm.
Instead, they should interview their own owner Jeffrey Bezos, who purchased The Washington Post in 2013. As the founder of online retailer Amazon, whose billions of dollars in “tax disagreements” with government authorities have been well-documented, Mr. Bezos is a practical expert on the topic.
Consider this: As was reported by Reuters and others in 2012, Amazon used an arrangement in Luxembourg to avoid U.S. taxes amounting to more than US$700 million over a half-dozen years. $700 million! To put that dollar figure into perspective, the next year Mr. Bezos completed his purchase of The Post newspaper for about a third of those savings – US$250 million.
Since then, Mr. Bezos has invested heavily in The Post, including constructing a new headquarters and hiring dozens of newsroom staff.
Perhaps The Post’s journalists should consider congratulating, rather than castigating, Mr. Mitchell and thought leaders such as himself.
It’s not much of a stretch to suggest that Mr. Mitchell’s cause is paying their salaries.