Why Is a Secretive Billionaire Buying Up the Cayman Islands?


After the 2008 financial crisis, the political will to reform systems that facilitate tax avoidance reached a high. In 2010, the United States passed the Foreign Account Tax Compliance Act, which requires foreign financial institutions to identify American citizens who are account holders and report that to the Treasury. Since 2013, the Organization for Economic Cooperation and Development has been creating an international framework that aims to reduce corporate tax avoidance, particularly for large multinational and Internet-based firms.

Meanwhile, Britain has promised to adopt a set of stringent European Union policies designed to combat money laundering and terrorism. If fully implemented, protectorates like Cayman would be expected to create public registers of company owners and provide access to the names of the beneficiaries of trusts. The registers could be accessible not only to law enforcement but also to those with “legitimate interest,” including investigative journalists and nongovernmental organizations. “What’s in the wind now is potentially existential for the financial services industry in Cayman,” said Alex Cobham, chief executive of the Tax Justice Network, a watchdog group. “I think it does start to look like it could be a perfect storm for Cayman.”

If the colonial period was Cayman’s opening act, and financial services its middle, it seemed to me that Mr. Dart was quietly preparing for Cayman’s possible finale: as an upscale tax domicile and tourist attraction for the global ultra-wealthy who could afford to come and go from an existentially imperiled island.

Justin Howe, a Dart group executive vice president, talked up the proposed skyscraper’s benefits at a recent economic forum. “We’re looking to bring in more high net worth, ultrahigh net worth, potentially even more billionaires,” he said during a question-and-answer session. “They take virtually nothing out of the economy and they put massive amounts into the economy, so we think that’s what a five-, five-plus-star resort has the potential to do.”

The plan is to build the tower set back from Seven Mile Beach, in the middle of the Camana Bay development. Whatever might happen with international tax legislation or volatile financial markets, the building would be a hedge of sorts, positioned to bring in capital and withstand the rising ocean.

“Is everything he does great? I won’t say everything he does is great,” Mr. Whittaker said of Mr. Dart, after showing me a map of Hurricane Ivan’s devastation. “I think in overall net benefit, yes, he’s been a net benefit to the island. We need to get one or two more like him, and we’ll be insulated from world shocks.”



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