Wealth concealment enters an era of geographical ubiquity

Oliver Bullough



I have just been for a fortnight’s jaunt to the Pacific, in which I sought stories I can tell in the new book I am researching. It was by turns fascinating, fun and frustrating, and I look forward to sharing some of the tales with you. I spent a week in the Commonwealth of the Northern Mariana Islands, a little bit of America that feels extremely far from the United States, and a week in the Marshall Islands, which feels extremely far from anywhere.

The journey back was delayed by United Airlines, which cost me a couple of days and resulted in my jetlag colliding with a long-scheduled, weekend-long party at my house, and I am feeling more than a little vague. Apologies therefore in advance that this newsletter is shorter than normal (and if it doesn’t make much sense).


Around 2 a.m. on Saturday, while sitting around a fire, I had a conversation with some friends about dodgy money and, specifically, about the best place to stash it. And, yes, this is the kind of thing I talk about at parties. (I’m pretty sure they were asking my opinion just for interest’s sake rather than because they wanted investment advice, since if any of them were a billionaire, they’d probably be at a more glamorous venue than my garden, but for the avoidance of doubt, seek advice from a regulated professional, etc., etc., rather than from a scurrilous muckraker like me.)

I thought about it for a while and said that the answer was probably South Dakota, thanks to the state’s trust legislation, which creates an unrivaled shield around money placed therein, protecting it from governments looking to tax it, creditors looking to confiscate it and journalists looking to scrutinize it — the three threats to a billionaire’s peace of mind.

However, on sober reflection and in the cold light of a new week, I think I should have pointed out that the question is based on a misleading premise, which is that money is located somewhere concrete rather than just suspended in the glittering cloud that is the offshore financial system — nowhere and everywhere at the same time.

And, on that note, I was interested to see while I was away a merger between a star of the old-fashioned British offshore wealth management setup and a leader in the new/thrusting U.S. equivalent, with Jersey’s JTC buying the South Dakota Trust Company, which did more than anyone to create the South Dakotan industry.

The names quoted in the press release alone — JTC’s Nigel Le Quesne, with his English first name/French surname combination, and SDTC’s Pierce H. McDowell III and Al W. King III, with their middle initial/terminal numeral combination — are almost ludicrously stereotypical as representatives of Jersey and South Dakota.

But don’t be distracted by that. The important bit, in my opinion, is at the bottom, with the list of jurisdictions that JTC is now regulated in: British Virgin Islands, Cayman Islands, Guernsey, Jersey, Luxembourg, Mauritius, the Netherlands, South Africa, Switzerland, the Isle of Man, Abu Dhabi, The Bahamas, Dubai, the United States (as well as, separately, Delaware and South Dakota), the Republic of Ireland and the United Kingdom.

This is not unusual. All major wealth management companies will have a similar global presence. But what does it mean?

Well, while on the plane between Seoul and London, I watched last year’s Oscar winner “Everything Everywhere All At Once,” which features Michelle Yeoh as a (literal, rather than metaphorical) laundromat operator who learns how to tap into the skills of herself in millions of parallel universes, so she can suddenly do kung fu, sing or wave signs around, in the service of saving the multiverse and getting on better with her daughter.

In the more far-fetched realm of wealth management, having a presence in dozens of jurisdictions does a similar job. The moneymen at major companies have a complete overview of what’s possible all over the world so that when laws or political circumstances change, they can pick up skills from parallel jurisdictions as quickly as Yeoh can learn to play the piano with her feet and move their clients’ money accordingly. They slip it out of Switzerland ahead of a regulatory change, adding a BVI company here, an Irish/Dutch combination there, all of it reducing the chance of the cash being taxed, confiscated or scrutinized. In fact, “Everything Everywhere All At Once” would be an excellent mission statement for a billionaire’s private office. 

This interesting bit of analysis from Ruchir Sharma, based on this year’s Forbes Rich List, shows the consequences of a world where — no matter what kind of government you live in, whether it’s “big” like in France or “small” like in the U.S. — the rich always come out on top.

  • “Socialist tendencies may backfire by concentrating rather than spreading wealth. Increasing regulation favors big tycoons, who have the lobbyists and money to navigate an expanding thicket of rules. And since 2000, while governments have pumped money into their economies to keep growth alive, much of it wound up fueling the rise in financial markets instead,” Sharma notes.

If billionaires’ wealth can be kept safe from predation, it will compound in perpetuity, meaning that the rich will get richer and the poor will become more numerous, giving the rich greater lobbying power and thus more sway over the regulation of their wealth.

For those of us who think this is a recipe for defunded governments, denuded democracy and — with time — a creeping return to feudalism, what can we do? It’s easy to see this as too hard a problem and to focus on something more straightforward like nuclear fission. But that would be foolish, there are good ideas out there if you look carefully.

The U.K. Parliament is currently debating a law to properly regulate Britain’s fetid swamp of a corporate registry, which has long provided structures used in fraud, tax evasion and kleptocracy. Under a new amendment proposed by a former government minister in the House of Lords, the transparency rules would also apply to trusts, meaning trustees would have to reveal who benefits from the wealth they look after, thus closing crucial loopholes. Ministers are pushing back, by claiming that the proposal would be costly for the British economy, but that is an illogical permission.

  • “That should be put against the cost to the economy of the fraud and economic crime that is happening at the moment at an increasing rate. We have endlessly reminded ourselves that 40% of all crime in this country is now economic crime. I know from my time in government that the loss to fraud in government alone each year — this is the bottom-end estimate by the National Audit Office — is 30 billion pounds, and a lot of that is facilitated through the holes in the Companies House structure,” Lord Agnew said.

That is the right way of looking at the problem. Yes, tackling the hydra-headed wealth management industry would be expensive, but doing nothing has a cost too because we can be sure that the wealth management industry is very active indeed. Pleasingly, most trusts will be covered by the U.S. Corporate Transparency Act when it comes into effect next year. Although the information will not be public, at least it will be collected, meaning the authorities will know who stands behind the swelling volume of wealth hidden behind legal structures.

While on the subject of the Forbes Rich List: As of the moment of writing, the world is only $100 million away from gaining a 10th centibillionaire, since Larry Page — the founder of Google and the 10th richest man on the list — has a personal fortune of $99.9 billion. That is just a small stock price movement away from membership in the world’s most exclusive club. And, just think, it was only in September 2020 that I marveled in this newsletter about a second person’s net worth coming with eleven zeros. Now that seems positively old hat.

How long until we gain a trillionaire? Less time than I’d like.


I had a lot of time to read while on the many flights I took to the Pacific, around the Pacific and back from the Pacific, of which I think the highlight was Jonathan Eig’s biography of Martin Luther King Jr. By stripping away much of the hagiography around Dr. King, it made him — for me anyway — somehow more admirable. And by situating him in the context of the short generations that separated him from slavery, it made him all the more extraordinary.

Struck by Eig’s prose style and looking for other good books to read, I then read his biography of Mohammed Ali, which is written in a similarly engaging way and has a postscript so touching it made me cry. Finally, I completed an Eig trilogy by reading his history of the development of the contraceptive pill, which is also remarkable.

Tracking how the super rich are changing the world for the rest of us

More Coda Newsletters