Macdonald

“I guess I have been spoiled by “Seven Mile Beach” read the email my son sent me this morning. He is vacationing in Cuba and finds the sands of that island’s beaches less “fine” than those he remembers to have played on when he was a young boy visiting Grand Cayman.

His note triggered a thousand memories.

The Cayman Islands, a British Overseas Territory, encompasses 3 islands in the western Caribbean Sea. Grand Cayman, the largest of them, is known for its beach resorts and varied scuba diving and snorkeling sites.

The first recorded permanent inhabitant, Isaac Bodden, was born on Grand Cayman around 1661. He was the grandson of an original settler named Bodden, probably one of Oliver Cromwell’s soldiers involved in the capture of Jamaica from Spain in 1655.

In the 1950s the place called itself The Islands Time Forgot. Today the Cayman Islands have a population of over 82,000 and are one of the world’ s finest – and probably the most expensive – Tax Havens.

How come?

In 1960 James Macdonald, a Canadian attorney, came to live in Cayman. In December of that year the Hansard of the Legislative Assembly records appreciation for his assistance in drafting Cayman’s first Companies Law, the bedrock of the financial services industry. Macdonald then formed a law firm in partnership with John Maples (now Lord Maples).

Macdonald withdrew and Douglas Calder joined as a partner, resulting in the name of the firm being changed to Maples and Calder. Today it is referred to simply as Maples – a huge international legal consultancy.

Macdonald continued lawyering and, with Marshall Langer the Florida tax expert, published a book about Cayman tax law, a best-seller for tax-dodgers world-wide.

Although very busy, he found time to create a restaurant which he named Macdonald’s. At that point of time, there were no hamburger joints called by that name in Cayman.

Scandals began to surface. A Canadian banker, Jean Doucet, set up the International Bank and began mailing out pamphlets about Cayman to tens of thousands of prospective clients worldwide. Doucet became the largest employer on the islands, threw lavish parties and felt untouchable. When his financial empire collapsed in 1974, three Official Liquidators (I was one of them) were appointed by the Cayman government. The Liquidators needed legal counsel to be able to function, but not a single lawyer on the island would work for them, claiming ‘conflict of interest’ on the basis of having been retained to work by Doucet or creditors of the bankrupt banks at one time or other. (The Liquidation was extremely unpopular among the people of the island. Twenty-five per cent of Caymanians – then numbering about 12,000 – were directly affected negatively including members of the police force whose personal bank accounts were with Doucet’s bank.)

The Liquidators had no choice but to turn for help to the Cayman Law Society’s president who happened to be Macdonald.

He appointed himself as the Liquidators’ Legal Counsel.

The bankrupt Group had substantial real estate holdings on the island itself and in Haiti, Canada, the UK and Mexico. It took the Liquidators and Jim Macdonald half-a-dozen years to wind it up. By then, direct flights to and from Houston, Miami, and London by LACSA, BWIA and the Government-owned Cayman Airways provided a flow of tourists (vacationers and tax-dodgers) that propelled the islands’ economy into overdrive.

James Macdonald died in 1995. The restaurant he owned is still operating under its original name.