US tax reform debate over, but firm still representing Cayman

Government has spent $37K on policy advocate

Leading up to last year’s debate in the U.S. over federal tax reform, government hired the multinational law firm Baker Botts to advocate for Cayman’s financial sector in Congress.

U.S. legislators passed tax reform in late December – President Donald Trump called the tax cuts a “big, beautiful Christmas present” for Americans – but government has continued to have Baker Botts represent its interests in Washington D.C.

According to filings with the U.S. Justice Department, government has paid Baker Botts $37,000 as of the end of March, with $25,000 of those payments coming in 2018.

The Ministry of Financial Services did not respond to Cayman Compass inquiries before this article’s press deadline about what government hopes to achieve through its continued relationship with Baker Botts, but Justice Department filings list some of the work the firm has been doing.

Last year, the firm circulated a three-page document touting the fact that Cayman is a tax-neutral jurisdiction, that it has information exchange agreements with 112 other jurisdictions, and that it plays an important role in the global economy. The filings show that Baker Botts amended that document in April to reflect the European Union’s decision last December to not include Cayman on its blacklist of non-cooperative tax jurisdictions. The territory was instead put on a gray list of jurisdictions that have promised to address certain deficiencies by the end of 2018.

“Cayman hopes that in the debate over U.S. tax reform in Congress, this point is acknowledged without unnecessary criticism of Cayman, and legitimate international business transactions undertaken there, by U.S. persons and others,” the letter states.

Filings also show that Baker Botts spent $1,585 to travel to Grand Cayman to attend the Maples Investment Funds Forum conference and meet with government and Maples officials.

Additionally, Baker Botts has continued a series of meetings with U.S. policymakers that began last September, when Department of Financial Services Senior Legislative Policy Advisor André Ebanks and Policy Officer Wilbur Welcome had meetings with several senators and congressmen on Sept. 25-26 in Washington, D.C.

Other meetings on April 10-11 included officials for the Office of Threat Reduction, the U.S. Treasury, the Committee on Ways and Means, the Internal Revenue Service, the International Tax Counsel and the Senate Finance Committee, as well as the legislative aide for Congressman Lacy Clay (Democrat-Missouri).

After government hired Baker Botts last year, the Ministry of Financial Services said in October that the firm was hired to assist “with engagement to develop mutual understanding between Cayman and key audiences about our respective regimes on tax transparency.”

Government also disputed an Oct. 13 article in Politico, which reported that government hired Baker Botts to lobby Congress.

“In fact,” the Ministry of Financial Services stated, “the Ministry’s representatives specifically told U.S. officials that Cayman had no lobby-type ‘ask,’ but that our goal was to provide them with facts about our regulatory and tax transparency regimes which, among other things, would help them to assess the accuracy of any commentary about Cayman.”

Baker Botts attorney Jeff Munk, who is the firm’s official advocate for Cayman, has served as legislative counsel to a U.S. senator, as a law clerk for the U.S. Tax Court, and as counsel to a presidential election campaign.

He also made a presentation to the Cayman Islands Law Society in January 2017 on how the Trump administration was likely to address tax policies and anti-money laundering rules, according to the law society’s website.