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Adventures in Paradise… A trip to Bermuda draws an odd call from the government

December 12, 2017 - Author: bdadmin

by Will Fitzgibbon | source

Will found taxi drivers were proud promoters of Bermuda’s offshore industry.

Will found taxi drivers were proud promoters of Bermuda’s offshore industry.

Having said cheerio a few days earlier to Bermuda and its sparkling pink beaches, immaculate streets, potent rum Swizzle cocktails, colorful shorts and dark kneesocks, I was back at my grey desk in Washington grinding through some incorporation records and bank statements when the phone rang.

Bermuda’s Department of Immigration calling.

“Someone” had handed over my business card, an agent said by way of explanation for the call.

What was the purpose of my recent trip to Bermuda? an agent asked, more or less out of nowhere. What had I done in there?

A bit of a swim, I replied. A little tourism. Some…research. In a flash, the call was over.

“Well, that felt like a warning,” I decided after hanging up.

The unexpected phone call was one of the odder moments in reporting on the Paradise Papers, an investigation into the offshore financial secrets of politicians, moguls, and some of the world’s most profitable companies.

A large chunk of the 13.4 million files that make up the Paradise Papers came from Appleby, a global offshore firm founded in Bermuda.

Understanding Appleby, one of the world’s most prestigious offshore legal advisors, would be key, I thought, to understanding the offshore sector, which has drawn increasing attention from governments, asset recovery lawyers, activists, and average Joes and Janes.

I had spent the previous 10 months at my desk in ICIJ’s Farragut Square offices reading spreadsheets, bank statements, emails and other documents.

In doing so, I had learned a lot about Appleby and where it fit into this global system of secrecy and tax avoidance: how much money it made (more than $100 million a year), how it fought off lawsuits (“hope that the plaintiffs could run out of gas,” lawyers discussed in one case), and how it interacted with government officials (a former BVI minister, while accusing the firm of hiring foreigners over BVI citizens, once told an Appleby lawyer to “Go home tonight and be a human!”).

But obviously there was a lot I didn’t know, and I thought a trip to Appleby’s office and one of the islands it calls home could help. Old-fashioned shoe-leather reporting, we call it (or, in this case, perhaps “sandal-rubber reporting”). Anything could be valuable, from speaking to locals to seeing where the rich and the other half, including the (few) homeless, live.

Once on the ground in Bermuda, it didn’t take long to realize how small the island’s financial beating heart was.
Will Fitzgibbon

Visiting a place can be a reminder for journalists that what we are writing about is real, that the people are just not names and addresses on an invoice. It puts abstract matters into sharper focus.

For months, for example, I had been reading up on the Bermuda office of Glencore Plc, the Anglo-Swiss commodities trading giant. A major Appleby client, Glencore for years had used a small office space within the law firm’s premises. The “Glencore Room,” Appleby employees called it.

I knew from the Paradise Papers that Glencore’s Bermuda companies were behind some mind-bogglingly large transactions. Multi-billion dollar loans passed through the Bermuda room — at least on paper.
The profile of Major Appleby found in the local library.
Reginald Woodifield founded Appleby

In reality, I had learned from Appleby’s files that no full-time Glencore employee worked there and the room rarely housed more than a checkbook, a fax machine and a computer server that occasionally broke down. This was a purported nerve center one of the world’s largest and most profitable companies. I ached to see what the room actually looked like.

The trip was coordinated with reporting teams from Japan, Australia, Denmark and the U.S. and took weeks of planning over email, the secure messaging service Signal, and ICIJ’s collaboration space, known as Global I-Hub. All of us planned to converge on the island at the same time for extra digging and to meet Appleby if we could.

After a six-hour flight from Washington through New York, I arrived at the airport to meet the team from Vice News Tonight on HBO. Vice had been following ICIJ and the “making of” the Paradise Papers for months.

Once on the ground in Bermuda, it didn’t take long to realize how small the island’s financial beating heart was.

Appleby’s office, for example, is a few doors down from the Bermuda Monetary Authority, the regulator that had fined the firm’s subsidiary in a 2015 confidential settlement for failing compliance tests.

No organization thrills at the idea of an unplanned visit by 20 journalists. Especially not a law firm that sells discretion and confidentiality.

During the day, reporters scoured the island for interviews with locals, experts, politicians past and present in an effort to get a feel for the place. Australian reporters spoke with Jamaican restaurant cooks about Bermuda’s high cost of living. Japanese reporters zigzagged across main thoroughfares, stopping pedestrians to canvass Bermudians on their views, if any, on the offshore financial industry in their midst.

In search of more information on Major Reginald Appleby, the law firm’s founder, I made my way to Bermuda’s National Archives and dug through 60-year old newspaper clippings and parliamentary debates.

Eventually, a helpful librarian at Bermuda’s National Library tracked down a colorful profile and photo portrait of the major. Another reminder that in journalism, as in many things, librarians can be your best friend.

Locals were uniformly among some of the friendliest I’ve ever met. Taxi drivers were eloquent and proud promoters of the island’s offshore industry. That said, the fares cost a small fortune.

One evening, all the journalists who weren’t filming Bermudian sunsets for their Paradise Papers documentaries gathered in my hotel room to plan the next day.

The main topic: how to approach Appleby in the most professional manner possible and with the greatest chance of being granted an interview.

No organization thrills at the idea of an unplanned visit by 20 journalists. Especially not a law firm that sells discretion and confidentiality. But our job as journalists is to seek answers and to offer as many chances as possible for a response.

The Appleby receptionist, a true Bermudian, was polite and helpful. “Take a seat,” she said. I think the day we arrived was her birthday. Balloons bobbed by her desk.

We saw the visit as an opportunity for Appleby and ICIJ to have a conversation. It had been nearly two weeks since ICIJ sent our first list of questions to the company. We knew that our questions had been received but had received no word on whether the company would grant an on-camera interview. As we waited, we wondered what was happening in the offices above our heads.

After 30 minutes or so on the couch, Appleby dispatched an employee from the facilities department. Blood-orange red Bermuda shorts and all.

He wouldn’t give his name, answer questions or accept a letter with some questions for Appleby’s attention.

He did, however, thank me for my business card.

No Comments - Categories: Bermuda Business, Bermuda Crime, Bermuda Employment, Bermuda EU, Bermuda Government, Bermuda News, Bermuda Politics, Bermuda Travel

Opposition’s plan: play the blame game

March 4, 2016 - Author: bdadmin
Bermuda Shadow Finance Minister - MP

Astonishing claim: Shadow finance minister David Burt’s “great Bermuda exodus” comment defied belief.

“This government has failed to produce the jobs promised; they have failed to improve education; they have failed at tourism; they have failed in providing hope and opportunity to Bermudians. Their term in office will be remembered as the great Bermuda exodus, where Bermudians were forced to flee their homeland to search for opportunities elsewhere.”

— Shadow Minister of Finance David Burt, PLP Reply to the Budget 2016

Part one of this column gave consideration to where the Bermuda economy would be had the Progressive Labour Party been re-elected. Part two questions where the PLP may take us, and we’ll look to the Opposition’s 2016 Budget reply for an answer.

When I read Mr Burt’s claim that the One Bermuda Alliance’s term in office shall be known as “the great Bermuda exodus”, I was floored by disbelief. Why? Because it’s commonly understood that any time you have a new government, there will be a hangover from the former administration.

It takes time to put in new policies and it takes time to rebuild investor confidence. Therefore, if a significant number of Bermudians departed at the end of a protracted recession, common sense dictates that it would be because of the hangover effect from the former administration, instead of owing to the handful of policy changes that the OBA has made during its short 3¼ years in power.

But let’s not rely exclusively on common sense. The 2016 Budget statement contains data that sheds some light on our population trends. If you read the section on demographics, you will find Chart 9, which shows the ratio of births to deaths. The chart quite clearly shows the ratio falling dramatically from 2004 through 2014. In other words, fewer babies were being born in Bermuda during that ten-year period.

One likely contributing factor is that emigration had already begun, and this was confirmed by the Department of Statistics’ January 2013 Report on Emigration. There, you will learn that 1,121 persons actually emigrated from Bermuda between 2000 and 2010. You will also learn that detailed information was collected for 974 persons who emigrated, of which 70 per cent were Bermudian. The report also states that “emigration flows were highest (41 per cent) during the period 2007 to 2009”.

We can also refer to the Department of Statistics’ February 2014 report on population projections from 2010 to 2020. This report shows that the annual growth rate for the population was projected to show greater declines in years 2010, 2011 and 2012.

More relevant to Burt’s remarks, the report shows projected net migration numbers of -1,190 for 2010, -1,216 for 2011, -822 for 2012, -484 for 2013, -196 for 2014 and -180 for 2015. Yes, the projected emigration numbers were greater under the PLP.

Perhaps this data explains what Burt was really talking about during his first Budget reply in March 2013. Hardly three months into the OBA’s term, he had this to say: “Mr Speaker, also key to expanding our Bermudian labour force is luring Bermudians who are throughout the diaspora back to our shores. Our country needs this lost talent; this is a national economic imperative.

“We can bring them home to a Bermuda that provides secure employment, a high standard of living, safe streets, affordable housing, an excellent public school system, and wages and costs that allow our citizens to invest and save for retirement.”

Burt’s 2013 comment suggests that the PLP already knew what was going on. So if one was inclined to accept a gentrification conspiracy theory, they should reflect on the data and accuse the PLP of trying to drive Bermudians out.

And what about the rest of the PLP’s Budget reply? For me, the most interesting thing is that the PLP has stopped promoting cannabis tourism as a diversification strategy. Beyond that, the reply is once again little more than a long list of things that it thinks we need or want, but nevertheless can’t afford because of our compromised circumstances.

Even more troubling: the Budget reply seeks to malign revenue targeting projects such as the America’s Cup; it speaks to increasing efficiencies in the Civil Service while sidestepping the need to reduce headcount; and it also pretends that we can just snap our fingers and create competitive new industries such as FinTech and online gambling.

Whereas the OBA’s Budget statement presents a thorough, sober discussion on where we are, where we need to go and how we will get there, the PLP’s “vision” is unrealistic and completely lacking in substance. As a consequence of not having a viable strategy of its own, it is attempting to blame the OBA for its fiscal track record.

Let’s not kid ourselves. The PLP is a heavily divided, antagonistic party with an atrocious track record. It is a party that can’t even bring order and stability to Alaska Hall, so how could it possibly fix something as complex as Bermuda’s struggling economy? The lack of practical, well thought-out solutions in the Budget reply demonstrates that it cannot. And given this painful fact, it has little option but to try to mislead the electorate on highly sensitive topics such as emigration.

• To reach out to Bryant Trew, e-mail: bryanttrew@mac.com

source: royalgazette.com

No Comments - Categories: Bermuda Government, Bermuda News, Bermuda Politics, David Burt