Inside the Secretive World of Tax-Avoidance Experts

.. when Oxfam estimates that just 1 percent of the world’s population will own more than 50 percent of the world’s wealth by 2016, it’s important to realize that such a state of affairs doesn’t just happen by itself, or even through the actions of individual wealthy people. For the most part, the wealthy are busy enjoying their wealth or making more of it; keeping those personal fortunes out of the hands of governments (along with creditors, litigants, divorced spouses, and disgruntled heirs) is the job of wealth managers.

..  In designing my own research strategy, I was particularly inspired by the work of John van Maanen—now a professor at MIT’s Sloan School of Management—who famously did his doctoral research on a California police department in the early 1970s, not long after the Watts riots.  In this period of heightened anti-police sentiment, van Maanen found himself shut out: He received over 20 rejections to his requests to study police departments as an outsider looking in. But rather than giving up and picking another subject for his research, van Maanen did something extraordinary: He enrolled in the police academy and underwent the full training process to become a police officer, including going out on armed patrols. Only then did he build enough trust and cooperation with fellow officers to conduct his research.

.. The credential I earned after two years was also my entry ticket to professional society meetings for wealth managers—more places where I could observe and recruit interview participants. Only by having the TEP credential in hand, or by showing I was enrolled in courses to obtain the credential, was I allowed to attend those meetings.

.. Like van Maanen, I disclosed my real name, institutional affiliation, and research aims throughout the research process; I did not, that is, go “undercover.” Whether I was attending classes or professional society meetings, I always wore a name tag that included my place of work, so it was clear that I was a scholar linked to a research institution.

.. Finally, people in a technically complex profession—especially one that carries some degree of social stigma—don’t have many opportunities to vent about their work lives with anyone: Their family and friends are unlikely to understand the nature of the work

.. There was also something bigger, and even more disturbing: a domain of libertarian fantasy made real, in which professional intervention made it possible for the world’s wealthiest people to be free not only of tax obligations but of any laws they found inconvenient.

Looking at a costly divorce? No problem—just hire a wealth manager to put your assets in an offshore trust. Then the assets are no longer in your name, and can’t be attached in a judgment.

.. Vulnerable to lawsuits? Have a wealth manager put your fortune into a Cook Islands asset-protection trust, as the Rothschilds and the less well-known wealthy families of the world have done. In effect, such trusts make these fortunes essentially immune from the application of inconvenient national laws. No litigant on earth has been able to break a Cook Islands trust, including the U.S. government, which has repeatedly been unable to collect on multi-million-dollar judgments against fraudsters convicted in federal court.

.. So at the airport, I discovered I didn’t have my passport and told the CEO I had to go home to get it. He said, “Don’t worry about it.” I said, “But we’re leaving Europe; I need my passport.” And he said, “Really, you don’t need it; you don’t need to go home.” So I figured okay, if the CEO tells me twice not to go get my passport, I won’t press the issue, and if I get detained and stuck at the airport, so be it. So we get on the plane in Zurich, and no one checked our documents. And then when we arrived at the client’s location, and there was just a limo waiting to take us directly to him. Nobody asked for our passports, even when we returned to Switzerland on the client’s jet. The CEO was right. These people, our wealthiest clients, are above the law…It’s potentially very dangerous.

.. The story was reminiscent of Joan Didion’s observation that “The secret point of money and power is neither the things that money can buy nor power for power’s sake…but absolute personal freedom, mobility, privacy.”

.. What these professionals most emphatically did not look like is people with control over millions in global capital flows. And yet that is exactly what they were. Call it the “banality of professional power”—the cultivation of a useful obscurity, which allows the very wealthy to exist in a realm of freedom verging on lawlessness.

.. It may be more productive to turn the spotlight away from the rich themselves, and instead focus on the professionals who—in their quiet, discreet, and extremely effective way—make it possible for the wealthiest people in the world to gain all the benefits of society, while flouting its laws. Rather than asking whether the distribution of economic resources is fair, perhaps the more compelling question lies upstream, in the way that distribution is created in the first place: by a kind of shell game played with international law. Most people have little tolerance for such shenanigans on the street corner. What about on a global scale?

 

Review: ‘Notorious RBG: The Life and Times of Ruth Bader Ginsburg’

Ms. Carmon does a fine job of showing how shrewd Justice Ginsburg was as a women’s rights lawyer, deliberately taking on male plaintiffs who had been disenfranchised in their caregiver roles. Through a discreet back door, she established a meaningful body of law that said neither men’s nor women’s rights should be determined or limited by sex.

.. In 1993, she gave a famous(one might say notorious) lecture that decried Roe v. Wade because the decision “invited no dialogue with legislators,” but wiped out, in a single stroke, every state’s abortion law.

Ms. Carmon mentions this lecture. But as the book winds down, she does not so much as remark upon — much less reckon with — the idea that Justice Ginsburg’s belief in incrementalism might live in tension with her recent votes on marriage equality, which invalidated many state laws and made no overtures to state legislatures at all.

Justice Ginsburg’s Cautious Radicalism

“My advice is fight for the things that you care about,” Justice Ginsburg said. Fair enough — banal enough, really. Then she added, “But do it in a way that will lead others to join you.”

It was Ruth Bader Ginsburg’s vision, distilled: Have a radical aim, but proceed with caution.

.. Over the course of Justice Ginsburg’s career, she often had no choice but to be the first, but she never wanted to be the only. That meant, as a co-founder of the A.C.L.U. Women’s Rights Project, bringing cases that would persuade an all-male Supreme Court that women were equal under the law.

.. “Anger, resentment, envy and self-pity are wasteful reactions,” she has written. “They greatly drain one’s time. They sap energy better devoted to productive endeavors.”

.. “I think had she not had this persona as this very soft-spoken, neat, and tidy person, with a conventional life, she would have been considered a flaming radical,” her friend Cynthia Fuchs Epstein said. She used those relative privileges to work on behalf of others.

.. The first time Justice Ginsburg argued a case before the Supreme Court, in 1973, she was handed a bar admissions card that read, “Mrs. Ruth Ginsburg.” She had gone by Ms. ever since there was a Ms. designation to be used. Her law students, who had helped radicalize their teacher with their refusal to accept gender discrimination, promptly protested. But Professor Ginsburg shrugged it off. She was there to win the case of an Air Force lieutenant whose husband had been denied equal benefits, not to make a fuss over a name card.

.. “She insisted that we attempt to develop the law one step at a time,” a fellow A.C.L.U. lawyer, Kathleen Peratis, testified at Justice Ginsburg’s confirmation hearings in 1993. “ ‘Present the court with the next logical step,’ she urged us, and then the next and then the next. ‘Don’t ask them to go too far too fast, or you’ll lose what you might have won.’ She often said, ‘It’s not time for that case.’ We usually followed her advice, and when we didn’t, we invariably lost.”

.. She would rather win cases than go out dissenting in glory, which means, she said in a 2012 talk, “an opinion of the court very often reflects views that are not 100 percent what the opinion author would do, were she writing for herself.”