Jersey has been dragged into the international spotlight once more after it emerged that Jersey Finance paid for research for a paper arguing that the island, and Guernsey, are not “hotbeds of tax evasion”. It was authored by a right-wing think-tank who are now being accused of offering donors the opportunity to influence their reports.
The Institute of Economic Affairs (IEA) is facing two investigations - by the UK Charities Commission, and the lobbying 'tsar' - after joint work by the Guardian and Greenpeace alleged that it had offered access to senior politicians and ministers and giving prominence to certain issues within their research papers, in return for donations.
Follow-up reports have now revealed a Jersey link, with Jersey Finance revealed to have paid for research that was later used as “ammunition” to persuade a cabinet minister that Jersey and Guernsey shouldn’t face tougher regulation.
But the organisation, which aims to promote the island as an international finance centre, denied having any editorial say in the publication, simply stating that it was keen to invest in research that "helps develop conversations around international finance centres (IFCs) and their role in global finance.”
Amy Bryant, Deputy CEO, Jersey Finance, commented: “The IEA issued a proposal open to anyone wanting to support their research. Jersey Finance felt that the project would be helpful in advancing conversations around international finance centres and decided to support the project, partly financially and partly by providing access to relevant materials and data. To be clear, Jersey Finance had no editorial control."
Entitled ‘Offshore Bet: the benefits of capital mobility’, the report concluded that shutting down offshore finance centres like Jersey and Guernsey would do little to curb tax evasion, money laundering and terrorist financing.
It was published just one month after Jersey narrowly avoided a cross-party bid to force public beneficial ownership registers on Jersey and less than a year after European Finance Ministers placed the island on watch until it enhances its transparency.
Pictured: Amy Bryant, Deputy CEO of Jersey Finance.
Calling for such jurisdictions to be protected, the report added that tax-dodging claims were simply a “useful narrative” constructed by “an ominous alliance of revenue-greedy” politicians keen to damage them.
“The attacks on them by European politicians are little more than demagoguery and a desire to eliminate tax competition,” Jamie Whyte, IEA Director of Research, said.
Commenting at the time, Jersey Finance said the paper was produced with its “support”and aimed to “reframe” debate around Jersey’s financial services and place focus on its positive aspects.
That “support” has now been revealed as an undisclosed financial sum.
Jersey Finance confirmed that it paid the IEA for the research. A spokesperson said that it merely fact-checked the report, but could not amend its content. IEA also denied that funding could influence the conclusions of their reports.
However, in a video recorded in IEA offices by an undercover reporter, Director General Mark Littlewood (pictured, main photo) explained, using the Jersey report as an example, that he didn’t “mind our donors affecting us on salience” and that they could shape “substantial content”.
Video: Mr Littlewood, Director General of the IEA, said donors were offered the opportunity to influence "substantial content."
In the same meeting, he used the ‘Offshore Bet’ report as an example of this, stating: “So we’re not lobbyists so we will tend to frame the argument and then say you know, so here is our paper on X and then we promulgate that argument endlessly and repetitively I think I’ve given you the, the paper on offshore tax havens that, that will then frame every debate and discussion we go to about why we shouldn’t be shutting down Jersey and Guernsey as offshore centres, how valuable they are so that provides the ammunition.”
“Some of it went straight to cabinet minister, if you can sit down with a cabinet minister and persuade him over the table to change policy immediately hoorah but a lot of it is longer term informing of SpAds, getting it in the media you know, big article in the Daily Telegraph saying why don’t we do X,” Mr Littlewood said.
Guernsey funded its own report on offshore financial services and paid Legatum to host an event on the island with its author, Shanker Singham.
Video: Mr Littlewood explains Mr Singham's "strong A" political contacts within the Conservative Party.
Dubbed ‘The IEA Tapes’, the undercover videos also featured Mr Littlewood commenting on how Mr Singham was a “strong A” on access to senior Conservative ministers, while he was a “good B minus.”
So close was Mr Singham’s relationship with Michael Gove and Boris Johnson, that he was referred to the standards commission for drafting letters for them to the Prime Minister.
MEP Molly Cato hit out at the news, telling Greenpeace publication ‘Unearthed’: “It’s shocking that the IEA was given money to produce a report arguing in favour of tax havens by banks headquartered in tax havens. Such reports are cited in support of low-tax policies by many who fail to understand their true source.”
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