Cruising Fiscal Cliff Protestors Take Aim at the Cayman Islands
Thousands of U.S. corporations hide taxable dollars in the Cayman Islands -- as many as 80,000, says Code Pink -- making the Caribbean tourist destination the second most popular tax shelter behind Switzerland. According to the U.S. Government Accountability Office, 83 of the top 100 publicly traded companies in the U.S. shelter income. Added to that, Caribbean banking centers -- including the Caymans -- held close to $2 trillion in U.S. debt as of 2011.
Code Pink's protest came during an annual fundraiser for The Nation magazine on a Carnival cruise ship. When the itinerary put the travelers on the Caymans, Code Pink decided to take action. Some 100 American protesters marched to the Ugland House -- an address that an estimated 18,000 corporations use to shelter their money -- and sang a parody of Harry Belafonte's "Day-O" with the chorus, "Tax evaders, time to bring the money home."
"The local police didn't quite know what to do," said Code Pink co-founder Medea Benjamin. "They were pretty much shocked. They had never experienced this before -- certainly not from people coming from a cruise."
Benjamin, an economist who used to work for the United Nations, and Jodie Evans, an environmental activist who also ran California Gov. Jerry Brown's 1992 presidential campaign, founded Code Pink as an anti-war group 10 years ago. Then, they were pushing for the reallocation of Department of Defense spending, but their movement has taken a broader scope.
"Part of our mission is to redirect money from the Pentagon to what we call life-affirming activities," Benjamin told DailyFinance, noting that Code Pink wants government money spent more intelligently on health care, education and green jobs.
But Code Pink's current focus is the negotiations over the fiscal cliff. The group fears that the talks toward solving the U.S. budget deficit might result it an additional burden for less-affluent Americans. This week Benjamin attended an AFL-CIO rally in Washington, D.C., to demonstrate against cuts to Social Security and Medicare.
"We're supportive of the groups right now that are saying, 'Don't cut our social safety net. Don't balance the budget on the backs of the poor,' " Benjamin said.
Offshore banking in particular came under added scrutiny during Mitt Romney's recent presidential campaign. The 2012 Republican nominee's exotic financial portfolio includes $30 million in Bain Funds in the Cayman Islands. The territory, of course, long has been a favorite of hedge-funders and private equity managers looking to attract foreign investors while dodging U.S. taxes. That's to say nothing of Romney's Swiss bank account.
Code Pink believes that if the U.S. took stronger measures to close tax loopholes that allowed such safe havens, America could solve its deficit crisis. Recouping this $150 billion lost to offshore tax loopholes would prevent the $109 billion in spending cuts set for 2013 if Congress cannot avoid the fiscal cliff, according to the U.S. Public Interest Research Group.
There's a little twist to the whole Cayman Islands narrative, though.
After the trip, Code Pink leaders discovered that Carnival, the operator of the excursion's cruise ship, is one of the largest corporate tax evaders.
"Unwittingly we had a prime target right onboard," Benjamin said. "Had we known, we could have protested on the boat."