Nick Shaxson ■ Big Newsweek exposé on human rights abuses in tax haven Jersey


From the Treasure Islands blog:


I’ve just had an email from Stuart Syvret, a dissident former health minister in the British tax haven of Jersey, who has just got out of prison after challenging the island’s financially-dominated oligarchy. The email was in his characteristically forthright style:

“I and many of my former constituents have had our human rights monstrously abused in Jersey by corrupt Crown Officer holders. These facts are massively evidenced. The island is simply not a democracy. Its legislature and its judiciary are a Potemkin village. This is an actual feudal realm – not metaphorically – but literally – hiding in plain sight – in Western Europe – in the 21st century.”

Well, one might say: this is just carping  and hyperbole from someone who has come up against the system and lost. Back in September, just before he went to prison, Syvret had emailed me to say:

“Things are simply utterly desperate here in Jersey – the place is an undisguised corrupted police-state. . . . It is as though there’s some kind of “omerta” in Britain’s media when it comes to the Jersey rackets, and the liminal, quasi-legal terra incognita the place provides.”

It’s true that the shocking corruption and venality I’ve encountered in Jersey is woefully, shamefully under-reported by the British media. The Guardian has done a bit: but even then, it’s not a whole huge amount.

But thankfully an American news organisation has now started getting the word out. And it’s a humdinger. Newsweek journalist Leah McGrath Goodman, who’s spent months in Jersey, has spilled some serious beans.

The strapline for the opening photo has quite a good summary:

“The island of Jersey is a law until itself, from helping dodge the taxman to failing to properly investigate child rape.”

Through and through, the article confirms our Finance Curse analysis, quoting Robert Whitley, a Professor at McGill University who grew up there:

“Our global reputation and financial stability seems to offset the search for justice and need for proper checks and balances that are crucial to any civil society. It is a consequence of a concentration of too much power in too few hands, and no authority that ever cares to intervene.”

That’s the “state capture” by Big Finance, once again, right there. Newsweek continues, providing further confirmation:

“An absence of controls” and “absence of accountability” have left “the ordinary, decent people of Jersey helpless,” stated Jersey’s former deputy chief of police Lenny Harper in an affidavit he submitted before he retired in 2008. This came amid a wave of blistering criticism over his aggressive handling of one of the island’s worst-ever scandals: the systemic abuse of children that went largely ignored by his predecessors for decades.

“Local politicians expected a degree of control over day-to-day operations which no police force in the United Kingdom would have tolerated,” Harper stated. “Intentionally or not, the system has allowed corruption to flourish to such an extent that those seeking to combat it are the ones open to scorn.”

There’s a nasty child abuse angle to this story, including regular visits from now disgraced British entertainer Jimmy Savile, which is not really a Treasure Islands theme, but the way it was handled does confirm the overall analysis of impunity and state ‘capture.’ There’s the story of the two deputies, Shona and Trevor Pitman, who have been fighting for social justice and have just been bankrupted in a defamation case.

There’s the appalling yet crucial statistic that amid that swirling ocean of money, a full 45 percent of the islanders have difficulty paying their bills. That aspect of Finance Curse – check.

And there’s another fascinating angle to all this: the importance of reputation to a tax haven.

Said one London-based money manager who opted to base his hedge fund in the Caymans instead of Jersey, “All it takes is a couple hours, some legal fees and the stroke of a pen to move your money from one tax-efficient domain to another. I can’t even imagine having a conversation with investors about basing our operations on an island with serious concerns about child abuse.”

It is a fine example to illustrate the accuracy of this remarkable research about how tax havens strenuously fight to wash their image: this strenuous display of rectitude, the theatre of probity to persuade outsiders that their jurisdiction is clean.

And the article finishes, with a little note.

“Leah McGrath Goodman was banned from the United Kingdom and the island of Jersey while conducting interviews for this piece. Her ban was lifted in 2012.”

Newsweek is now promising another instalment in the next edition.

If you want to know more, please take a look at this history of how Jersey became a tax haven, from the Financial Secrecy Index.

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