Your Money or Your Life!

78/YOUR MONEY OR YOUR LIFE!

BOX 1 NICHOLAS BRADY PICKS UP A PERUVIAN

COMPANY FOR A SONG

A Former US Secretary of the Treasury Goes Offshore

Former US Secretary of the Treasury Nicholas Brady authored the

Brady Plan for putting a lid on the Latin American debt crisis

(Bournay, 1994). Did he deserve his early retirement? How can

someone with such business acumen remain on the sidelines? As

one of the most powerful officials in the US administration in the

1980s, he shone in his job as defender of the interests of the US and

the capital-holding sectors of the population. Yet now, unabashed,

he has turned to defending his own personal affairs. In 1994, with

the money set aside from a generous and well-earned government

salary, he created (with his own private company, Darby Overseas,

set up a year before with his main adviser at the US Treasury, Hollis

McLoughling) an international holding society in one of the most

well-known offshore tax havens in the world, the Cayman Islands

(just a stone's throw from the American coast). The Cayman

Islands are home to only 30,000 inhabitants; yet curiously

enough, there are 20,000 businesses registered there. Apparently,

Brady is not exactly tripping over himself to ensure that the US

Treasury receives its due in taxes!

Brady's company is called International Financial Holding

(IFH). Soon after its creation, IFH took over the fourth biggest

Peruvian bank, Interbank - which, until then, had been state-run.

Interbank was privatised in the final phase of the aptly named

Brady Plan. As if this were not enough to set the scandal mill

turning, the bank is apparently implicated in laundering proceeds

from the cocaine trade. Among the other illustrious figures at

Darby Overseas can be found one D. Marx, Argentinian Finance

Under-Secretary between 1976 and 1981. Marx was implicated in

the scandal over debt contracted by the Argentinian dictatorship

(Olmos, 1990). Another heavyweight at Darby Overseas is the

former Peruvian Minister of the Economy, who heads the private

Mexican-Peruvian consortium that snapped up Aeroperu.

When he conducted American financial policy in the 1980s,

Brady gave his name to the plan that led to the signing of a number

of bilateral agreements between US authorities and Latin

American governments on debt rescheduling and reduction. The

privatisation of state-owned firms was one of the central