Above: Grand Cayman (CJ Photo)
By the Caribbean Journal staff
The Cayman Islands, which ultimately played a significant part in the US Presidential campaign last fall, is once again at the centre of Washington politics over US Treasury Secretary Nominee Jack Lew’s investments in the territory.
Lew, a Democrat, faced grilling from the Senate Finance Committee during his confirmation hearing this week over his investments in funds in the Cayman Islands, much like US Republican candidate Mitt Romney faced heat over his managed investments in Cayman funds.
Now Cayman Finance, the leading association for the Cayman Islands’ financial services industry, says it is time that Cayman’s “important role in the global economy and capital markets is better understood by policy makers,” it said in a statement Monday.
“At this juncture, it is perhaps worth asking why people are still surprised that Americans including both Republicans and Democrats have money invested in Cayman investment funds, when it is certainly the case that all Americans who have a pension fund will likely have their money indirectly invested in a Cayman private equity or hedge fund,” Cayman Finance said. “There is nothing wrong with that at all — as the 2008 Government Accountability Office’s Report attests, Cayman is the domicile of choice and a centre of excellence for some of the world’s leading international investment funds.”
Lew was asked about his investment in a Cayman fund domiciled at Ugland House, which made famous by President Barack Obama in 2008, when he called the building “either the biggest building or the biggest tax scam in the world.”
Ugland House is an office that simply acts as an address for a number of companies domiciled in the British Overseas Territory.
In the summer of 2012, Cayman Finance Chairman Richard Coles talked to Caribbean Journal about the coverage Romney’s investments had been receiving in the US media.
“Cayman investment funds are an important part of helping to solve the pension funds’ need for investment diversification and the global allocation of capital,” the association said. “Some of this capital is, for example, invested in important infrastructure projects in emerging market countries. As a consequence, Cayman helps US fund managers manage money for foreign investors, thus supporting jobs and service providers based in the US.”