Two senior Conservative MPs vowed to defend the Cayman Islands' company ownership battle with the UK — while on a free trip to the Caribbean tax haven last month worth nearly £17,000.
Tory grandees Sir Graham Brady and Sir Michael Fallon travelled to the islands for five days at the end of June on a lavish junket paid for by the Cayman government.
The tax haven, along with other British overseas territories such as the British Virgin Islands, has been at the centre of a major transparency row over company rules which allow the superrich to conceal their assets behind shell corporations registered there. Transparency campaigners say these jurisdictions play a key role in facilitating corruption, money laundering, tax evasion, and other illicit financial activities.
Theresa May’s government had sought to force overseas territories to publish unprecedented levels of information about who owns companies in their jurisdictions, but delayed the attempted crackdown following opposition from places such as the Caymans.
Last year, the UK’s National Crime Agency warned that its efforts to combat money laundering on the islands were being frustrated by the Cayman government. "We can generally get from them clear, unambiguous beneficial-ownership information,” the agency’s director, Donald Toon, said in relation to overseas territories, “but we are having a difficulty with Cayman.”
The Cayman government is concerned that the new UK government, led by Boris Johnson, may impose more transparent beneficial-ownership registers on its overseas territories in order to make it harder for the ultimate controllers of offshore assets to keep their identities hidden.
On June 27, Brady, who until recently was chair of the powerful 1922 Committee of backbench Tories, and Fallon, the former defence secretary, flew to the territory in their roles as members of the All-Party Parliamentary Group for the Cayman Islands.
The trip was ostensibly organised to mark the 60th anniversary of the Cayman Constitution, with the itinerary including meetings with the Cayman Islands’ governor, as well as with government ministers and members of the opposition.
Brady’s wife also made the trip, with the couple’s flights and accommodation, worth £10,459, provided by the Cayman Islands Government Office. The Cayman government paid £4,241 so the Bradys’ flights could be rearranged, according to the register of members’ interests.
Fallon declared travel and accommodation worth £6,217.99, paid for by the Cayman government.
But both Brady and Fallon did more than celebrate the happy occasion on behalf of the UK, BuzzFeed News can reveal.
In a televised interview with local TV station Cayman 27, Brady defended the territory’s position on beneficial-ownership registers, claiming that open public registers could leave those who own assets in the Caymans “exposed to danger”.
Under the headline “UK MPs Pledge to Keep Up Fight on Beneficial Ownership Registries”, Cayman 27 reported: “Those representing Cayman in London said they will continue to press for fairness in the push for access to information on those who own assets here.”
Brady told the channel: “I think it is important we continue to make the case for a sensible balance that protects the rights and the safety of the some of the individuals who might be exposed to danger from completely open public registers.”
Speaking in front of a banner emblazoned with the words “Celebrate Cayman”, the senior Tory MP added that the UK should “recognise the great steps forward and the very genuine spirit of engagement shown by Cayman”.
Fallon was quoted by Cayman 27 as saying the issue of beneficial ownership was a matter of securing the Cayman Islands’ future.
“There’s a success story here, an enormous success story that helps add value to Britain, adds value to British pensions, and is a well-regulated financial centre for the rest of the world. There is a success story here and we should not jeopardise that,” the former defence secretary said.
Brady told BuzzFeed News: “The Cayman government rightly makes all this information freely available to tax authorities and law enforcement agencies around the world.”
Fallon did not respond to a request for comment.
Eric Bush, the Cayman representative in London, has previously spoken about the territory’s efforts lobbying the All-Party Parliamentary Group on the Cayman Islands.
“Visits to the UK by the Cayman Islands premier and ministers have proved invaluable in reestablishing ourselves in a positive manner within Westminster and with parliamentarians,” he has said.
“Having an active and engaging All-Party Parliamentary Group is very beneficial for the Cayman Islands. As matters arise within the UK or European Union, generally, or specifically in Parliament or in Brussels, we now have a core group of UK parliamentarians that will fight our cause with relevant, up-to-date information to ward off opposition, or those who would intend us ill will.”
Labour MP Margaret Hodge, the former chair of the Public Accounts Committee who has campaigned for greater transparency in British overseas territories, told BuzzFeed News:
“Most people will be shocked that two senior members of Parliament accepted expensive free trips to a British tax haven. The only reason for giving these MPs a free trip was to encourage them to thwart and oppose the will of Parliament where there is a strong majority in favour of open registers of beneficial ownership.
“There is a simple reason for our wanting this transparency: Transparency is a powerful tool in stopping money laundering and tax evasion. All UK MPs should support this move.”