There are no doubt many fine people in the Cayman Islands, and we hear it’s a pretty place with a pleasant climate, but the only reason this tiny British territory ever seems to appear in the news is its rich folk-friendly banking system. The now infamous tax haven showed up yet again in reports about the confirmation hearings for Treasury Secretary nominee Jack Lew, who once parked a portion of his sizeable fortune there, and even the Washington Post could not resist quoting Sen. Charles Grassley’s astute observation that “the irony is thick.”
We have no objections to anyone availing himself of the legal advantages of the Cayman Islands’ financial rules, and would be reluctant to entrust the Treasury to anyone who isn’t savvy enough to do so, but the hypocrisy of Lew’s nomination is galling nonetheless. He’s being appointed by a president who has long railed offshore tax shelters, singling out the very Ugland House institution Lew used as “the largest building in the world or the largest tax scam in the world,” and who pilloried his Republican opponent in the past election for once holding a Cayman Islands account. Obama is clearly eager to keep American money in America, where the government can more easily help itself to an ever-increasing share, but he seems to have a more cosmopolitan attitude about the money of well-connected Democrats.
Asked by the Post to explain such a blatant double standard, White House spokesman Eric Schultz strained to say that “Jack Lew paid all of his taxes and reported all of the income, gains and losses from the investment on his tax returns. He played no role in creating, managing or operating the fund, and he sold his investment in 2010 at a net loss.” The first part of this apologia could just as easily have been said about the much-maligned Mitt Romney, who also paid all of his taxes and fully reported all the relevant details of his Cayman Islands dealings, so we assume it is only the second part that actually absolves Lew of his financial sins. It is entirely consistent with the economic philosophy of the Obama administration that having no role in a business and winding up with a financial loss is considered an essential qualification for a post such as Secretary of the Treasury.
— Bud Norman