I bet you thought people banked in the Cayman Islands because they serve fruity cocktails with tiny parasols in them while you're waiting for your checks to clear. Well, you're only partly right. The other reason people keep accounts in the Caymans is to avoid paying taxes and/or to launder their ill-gotten gains.
For many of us this is not news -- or at least it wouldn't be, if not for the brain-dead actions of one such bank and the magistrate they duped into being their monkey.
Swiss Bank Julius Baer used its legal muscle to convince a U.S. judge to close down the WikiLeaks.org domain, because the site contains documents that allegedly show Baer is exchanging its clients' dirty old dineros for fresh clean ones with just a hint of mint.
Some background: WikiLeaks.org exists so anonymous whistle blowers around the globe can document human rights offenses, corporate malfeasance, nuclear accidents, and the like. The world gets to see what nasty things those in power have been up to, while the leakers get to live their lives without being waterboarded (or worse).
Because WikiLeaks operates anonymously across several jurisdictions, Julius Baer couldn't figure out how to sue the site directly for copyright infringement. So last Friday the bank found a friendly judge, who ordered the site's California hosting company (Dynadot) to turn off the WikiLeaks.org domain. According to Wired News, WikiLeaks was only notified of the hearing by e-mail a few hours before it was scheduled to happen, and didn't have time to muster its squad of pro bono attorneys.
Personally, I don't think Baer was overly concerned the world would know its Cayman branch (allegedly) exists to launder money and avoid taxes. I think the bank didn't want its rich, extremely powerful, allegedly money laundering/tax evading clientele to be exposed. Bad for business, you know.
But the bank's solution is so mind-bogglingly stupid, you have to wonder if these guys need help getting their pants on each morning.
First, this is exactly the kind of story bloggers and Net-centric journos crave. Big nasty corporation stomps all over plucky public-serving underdog. Who can resist that plot line?
Second, the equation Bank Julius Baer = Money Laundering is now firmly cemented in the minds of everyone who has encountered this story, regardless of whether it's true.