The Canyoneers 8 a.m., July 30
Wall Street Journal Puffs Up Sam Wyly, Ignoring Offshore Tax Shenanigans Uncovered by Congressional Investigators
In a book review Dec. 29, the Wall Street Journal gives a rave review to "1,000 Dollars and an Idea," a book by Texas billionaire Sam Wyly. James Freeman, an assistant editor of the Journal's editorial page, sings the Wyly song and guzzles the Wyly Kool-Aid. But Freeman should have at least mentioned "Tax Haven Abuses: The Enablers, the Tools & Secrecy," a report released in mid-2006 by the Senate Permanent Subcommittee on Investigations. It is a 370 page report on tax dodging via offshore maneuvers. The report devotes 257 of those 370 pages to the antics of Sam Wyly and his brother Charles. The report shows how the brothers "hide assets, shift income offshore, and dodge U.S. taxes," say investigators. The main Wyly offshore tax and secrecy havens are the Isle of Man and the Cayman Islands, which did not cooperate with the investigators. Between 1992 and 2002, the Wyly brothers shifted 17 million stock options and warrants worth $190 million offshore, resulting in "nonpayment of taxes on millions of dollars in capital gains held by the offshore trusts they [the brothers] directed." You can find the report various ways online. It will disabuse you of any notion that lawyers are reputable members of society. Ditto for Wall Street institutions, which used to be called investment banks, but recently changed their designations to be able to get their sticky fingers on federal largesse. The subcommittee report, about which shockingly little has been written in the mainstream press, is fascinating reading. The Journal's Freeman should at least have referenced it. Paradoxically, the embarrassing Wyly whitewash came on the same day that the Journal printed a brilliant piece of journalism, "The Weekend That Wall Street Died."