April 2011 - Centre for Civil Society - University of KwaZulu-Natal

is not being used to push for financial regulations, transparency in the
financial sector, the closing of tax havens or a rethinking of the raison
d’être behind the global financial system that so favours HNWIs and
UHNWIs.
Goldman Sachs is just one such investment bank. There are many, many
others up to the same games.
‘GROW YOUR MONEY TAX-FREE’[25]
Another valuable term in the vocabularies of those wishing to make sure
that their immense wealth doesn’t have to be shared with the unwashed
masses is ‘cloud banking’. This is a ‘new and innovative concept’ that
offers tax avoiders and evaders ‘additional layers of privacy’ for their
financial information.[26] Privacy is crucial for those wishing to continue
to enjoy the benefits of tax havens around the world where wealth is
socked away in layers and layers of secrecy in dummy companies, shell
banks, hedge and private equity funds, and trusts.
Cloud banking is offered by people such as R. David Finzer, an American
now living in Uruguay, a country he chose ‘because of its long-standing
investment friendly climate including no taxation on non-local income and
very strong bank secrecy laws’.[27] Finzer has a long history of
‘international corporate planning’ and has been chair of the Conservative
Action Foundation in Washington DC and on the executive of the World
Anti-Communist League.
His Capital Conservator Group helps HNWIs get around regulations that the
US Patriot Act and the G20’s ‘targeting of tax havens’ have put in their
tax-free way.[28] These include Tax Information Exchange Agreements
(TIEAs) that the Organisation for Economic Cooperation and Development
(OECD) countries have been bringing in to try to reduce privacy so that two
jurisdictions agree to share financial information on individuals they would
like to tax. A TIEA can ‘blast a hole in the confidentiality of the
jurisdiction where your assets are stored,’ says Capital Conservator. Hence
the advent of cloud banking – banking without borders – that hides the
information about where assets are stored. Capital Conservator does this
by ‘spreading it around the World Wide Web in a disconnected way,’ so
vast amounts of money can be rapidly moved to another jurisdiction at the
slightest whiff of a TIEA, to another ‘node’. A ‘node’ is a nifty euphemism
for tax haven.
Inviting clients to ‘grow your money tax-free’, Capital Conservator explains
how it works: ‘To further ensure your privacy, we chose to locate our
offices in various countries in the Americas and Europe outside both the
USA and the EU. Further, all client records are held in a third country with
very strong secrecy laws in trust by a law firm. As such, this private
information enjoys a double layer of privacy: strong privacy laws and
attorney-client privilege. This privacy can only be pierced if a client is
involved in a real, non-tax crime.’[29] So tax crimes are, well, legal?
FANNING THE FLAMES FOR PROFIT
A final important term is that coined by Naomi Klein, ‘disaster capitalism’,
to describe the men and women who may help create disasters, often
through neoliberal economic policies and the political turmoil that ensues
and then profit from the ‘opportunities’ the disasters offer them.[30]
Disaster capitalism nicely captures the business of alternative investment
firms such as Emergent Asset Management,[31] ‘which offers hedge fund
and private equity strategies.’ [32] In his book ‘Breaking the Code of
History’, Emergent’s chief investment officer David Murrin analyses geo-