You wouldn’t normally expect disgraced Tyco chief Dennis Kozlowski and international terrorist supremo Osama bin Laden to be sharing a spotlight on the same stage.
After all, sticky-fingered Kozlowski came from a modest background and made his billions through patching together a dazzling number of deals that, for a time, made him the darling of Wall Street and created the wealth for a fabulously opulent lifestyle.
By contrast, bin Laden inherited his money but renounced all the trappings of affluence to channel his energies into creating a global terror network that the western world is attempting to disentangle.
So while you would be as likely to find a bomb-making manual on Kozlowski’s bedroom side-table as a $6,000 (£3,800) shower curtain in bin Laden’s cave, both are currently contributing to a renewed push in the US to shut down offshore tax shelters.
According to Robert Morgenthau, the 80-year old district attorney of Manhattan, the pair have exploited the loopholes provided by tax-free havens or buried their business in a maze of companies and accounts.
Morgenthau is one of the nation’s foremost prosecutors and a high profile critic of the use of offshore centres to deposit vast sums of money beyond the reach of supervisors, regulators, tax collectors and law enforcers.
He estimates it takes around $30m a year to run Al Qaida and that the money is pumped through a network of offshore financial centres. That’s pin money for Kozlowski and the two other former high level Tyco officers indicted for allegedly treating their company as a $600m ‘personal piggy bank’ after locating it offshore and allegedly looting its coffers.
It is believed around $120bn a year is deposited in the Cayman Islands, taking the total held there to more than $800bn – more than twice the amount on deposit in all New York banks.
It’s also home to some 600 banks and trust companies, including 47 of the world’s largest 50. And that’s just the Caymans. There are countless other offshore shelters to choose from.
The fortunes of Morgenthau and other US lawmakers, who for decades have fought a long and fruitless battle to have many of these shelters ruled out of bounds, have recently been given a boost.
Both Democrats and Republicans are looking at ways to halt the corporate flight to tax havens where a number of companies have set up corporate addresses but keep most of their operations in the US.
Some in Congress are proposing that they should be hit where it hurts, by banning them from lucrative contracts for business with the federal government.
Two of the biggest companies that have relocated to Bermuda did more than $1bn in business with the federal government in the 2001 fiscal year.
And around three-quarters of the value of the contracts was in defence or security work.
In a separate move, some of the US’s major pension funds, Calpers and TIAA-CREFF, said they would stop investing in US corporations that relocate offshore to avoid taxes.
This is a rocky road to reform and is littered with the wrecks of many failed initiatives. But this time, public outrage at egregious greed and the fear of more terrorist attacks could make the difference.
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