Bahamas Offshore Industry Exposed

Tuesday 11th, January 2011 / 17:04 Published by

The Guardian, a top newspaper in the U.K., has published scathing articles that expose the “secrecy, corruption and intimidation” of the Bahamas offshore financial services industry.

The articles were extracts from a new book entitled ‘Treasure Islands: Tax Havens and the Men Who Stole the World’ by author Nicholas Shaxson.

The articles accurately expose the corrupt secretive practices of the banking elite in tax havens like the Bahamas, suggesting that illicit money can be deposited in those jurisdictions, even by anonymous sources, despite a supposed tightening of regulations over the last decade.

After exhaustive research and interviews with people working in the banking sectors in tax havens, such as the Bahamas, Jersey and the Cayman Islands, Mr Shaxson has discovered that secrecy and the potential for money laundering remains rife.

The author says he was hoping to explore “a question that had been nagging me: How do bankers who shelter the wealth of gangsters and corrupt politicians justify what they do?”

One of the people interviewed by Mr Shaxson is a banker who formerly worked in the Bahamas. She told the author that although “laws were tightened a little” in The Bahamas, after the blacklisting by the OECD and the global crackdown on money laundering, this did little to curtail questionable banking practices.

“These days, offshore bankers make a big show of their Know-Your-Customer rules to keep out the bad money… That, at least, is the theory. But there are many ways around the restrictions,” the banker said.

“One Swiss-based trust that had a relationship with her bank displayed almost nothing on its website, bar some photos of a nice fountain in Geneva. ‘The crap they brought to us was unbelievable. There is no way a responsible trustee should take this on. You have no idea who the trust settlors were, what the assets were or where they came from. I objected strongly but the bank took them on’,” the banker is quoted as saying.

The book alludes to a corrupt Bahamian society where bankers and lawyers “stifle dissent” and “suppress troublemakers”, ensuring that local politics do not “interfere in the business of making money”.

The author admits that he was told by a banker in the Cayman islands that if he was to probe such allegations in the Bahamas he would need to be careful of his “personal safety”.

The accusations in the Guradian articles were, of course, refuted by Brian Moree QC, offshore banking cheerleader and senior partner at the Bahamas law firm, McKinney, Bancroft and Hughes.

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