We arrived at the High Country Club condo in Providenciales, Turks and Caicos, today. The days between Christmas and New Years of course are prime, peak season -- the anomalies of the Destination Club booking systems mean this is either a great bargain, or a great waste (depending on whether High Country Club can survive the real estate implosion/recession.)
Nevertheless, this Caribbean Island is close to our hearts -- we celebrated our honeymoon here 15 years ago, and visited again five years later, when Eric was a little less than two years old. (Now he is a strapping 11-year-old.)
I chose Provo for our honeymoon in part because of its obscurity -- and decided to use the visit to research the offshore financial industry. A Canadian tax lawyer, then associated with the Greater Ottawa Home Builders' Association, referred me to Richard Hape at British West Indies Trust to learn how offshore financial centres work. At the time, I published a general business newspaper for Ottawa, and figured the story about offshore finance would make good reading.
While we stayed at the Club Med on Provo, Hape's office was on one of the other islands, the capital, Grand Turk, requiring a local flight in a small plane. Hape, knowing my business is publishing but perhaps not appreciating I was there as a journalist rather than business owner wishing to dodge taxes, proceeded to explain things to me in a surprisingly candid interview.
"What we say on this island doesn't go outside," he said. "So, we'll prepare financial reports showing you are receiving a three per cent return on your investment, when you are really earning 15 per cent. You would declare your tax on the three per cent." In other words, Hape told me he would co-operate in cooking the books.
I wrote the story about the offshore financial industry and its shady practices for my business publication and enjoyed the sweet irony of claiming half the cost of my honeymoon as a legitimate business expense (after all, this is a story I could not get by phone -- and the primary costs of getting to and from Turks and Caicos, plus at least a couple nights accommodation, would be deductible expenses.)
Five years later, Vivian and I decided to return to the Turks, and I thought of looking up Richard Hape. He didn't return my phone calls. Perhaps this is because he was in Canada at the time, about to be captured in a sting operation by the Royal Canadian Mounted Police. With the co-operation of BWI police, his trust company offices were raided and information dug up to lay charges of drug and money laundering.
Hape took the case all the way to the Supreme Court of Canada (probably using some of his ill-gotten gains to pay for the lawyers). The judges ruled his conviction would stick, but declined the government's bid to seize further assets. I'm not sure how much time in jail he served.
There are ironies in life. When I married Vivian, the North American economy was digging out of a major recession. A couple of years before we married, I thought my then new business would fail; but had a moment of insight. "I'm responsible for myself, have my health, and will do whatever I can to make it right," I thought to myself. And with that attitude, i set out to do what needed to be done to restore the business. The maturity in solving the business issues also indicated to Vivian that indeed I was ready for marriage.
Now, another major recession is in the early stages. It may end in months, but more likely will last years. Crooks and con artists who lived high during the good times are discovering they can't hide any more -- as (alas) new con games are in the works; exploiting desperate people wondering how they will keep their businesses alive. Some people who had played tax dodging games during the good times are experiencing the double whammy -- their income has dried up as authorities are coming at them for back taxes. These stories happen again and again.
Life goes on. We'll retrace old steps, remember shared experiences, and discover new things during our week here. The basic rules of business (and life) are consistent, however.
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