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Sunny Delight When the Livingston Group, Patton Boggs, and Fleishman-Hillard go to the Hill to talk up the interests of their Caribbean island clients, the discussion won’t focus on tourism or time shares. Within the span of a week, all three have disclosed contracts to represent the central banks or finance arms of Bermuda (Patton Boggs, at hourly rates), the Netherlands Antilles (the Livingston Group, at $40,000 a month), and the Cayman Islands (Fleishman-Hillard, at $500,000 a year). What does this picturesque trio of clients have in common besides pristine beaches and umbrella drinks? A brisk business in tax shelters, for one. The disclosures come at a time when Congress is percolating with proposals to restrict the use of offshore tax shelters. Earlier this month, Rep. Sander Levin (D-Mich.) introduced legislation allowing nonprofits such as universities to keep hedge fund investments onshore without suffering tax penalties, and Rep. Rahm Emanuel (D-Ill.) intends to author a bill preventing hedge fund managers from dodging taxes by keeping their earnings offshore. In the Senate, Sen. Carl Levin (D-Mich.) is looking to force greater disclosure of offshore tax havens, and the Senate Finance Committee has asked the Government Accountability Office to investigate the Ugland House, the Cayman Islands address of thousands of registered corporations with billions of dollars in assets. “There’s a lot of interest in this,” says Bob McIntyre, director of Citizens for Tax Justice, a nonprofit that opposes what it sees as unfair tax policies. “[Congress is] looking for a way to raise some money that won’t make the American public angry.” Ted Bravakis, the public relations director of the Cayman Islands’ Portfolio of Finance and Economics, concedes that it’s been a busy year. Bravakis says most of Fleishman-Hillard’s lobbying work is done on Cayman-specific issues. It’s the sort of work that the Caymans’ diplomatic corps might do, he says, if the islands, with a population of 42,000, had one. The lobbyists will no doubt remind legislators that many of the islands’ tax provisions are explicitly recognized under the Internal Revenue Service code and that the Caymans are a key port of call for international business. “We are a services jurisdiction,” Bravakis says. “It could be a Japanese company investing in a pipeline in South America that is being promoted by a New York investment bank.” The GAO’s review of the Ugland House is also a concern. “We are being singled out,” Bravakis says. “Delaware has hundreds of millions of registered offices. We have not nearly as much.” — Jeff Horwitz
Whale Tale Neah Bay, home to the Makah Indian tribe, sits on the northwest tip of Washington state’s Olympic Peninsula. After five tribe members were charged with illegally harpooning and shooting a gray whale there earlier this month, Makah leaders knew a cross-country call to their lobbyist was in order. Rick Marks, a principal in the Arlington, Va., office of Robertson, Monagle & Eastaugh, has handled whaling issues for the tribe for about two years. His work now involves convincing Congress and the National Marine Fisheries Service that the rogue actions of a few should not tarnish the efforts of the tribe to get permission to hunt whales. “They want to make sure that people are educated about what the incident was and how they have acted to handle it,” Marks says. In 2004, a federal appeals court ruled that the tribe would have to obtain a waiver to circumvent the Marine Mammal Protection Act before it could resume whale hunting. Marks notes that since the law was passed in 1972, no exemptions have been granted. He also notes that an 1855 treaty reserved the tribe’s right to hunt whales. The tribe has a waiver pending, but it fears the recent incident will block its approval. Marks says he is calling on everyone in Congress sympathetic to Native American issues. “Hopefully, they will stand by their constituents and by the treaty. A deal’s a deal,” he says. — Marisa McQuilken
Second Story When Linden Lab hired Patton Boggs in July, a virtual world acquired an emissary to Washington. Partner Jeffrey Turner, who handles technology and intellectual property issues, will represent the makers of online world Second Life. Neither Turner nor Linden Lab’s PR firm would say what gave rise to the hire, but Temple University law professor David Post, who tracks legal issues relating to Second Life, believes one goal might be to persuade the feds to allow Linden to reinstate some actual gambling in their simulated world. (This summer, Second Life reluctantly pulled the plug on virtual casinos and card rooms.) But there are plenty of other unsettled questions, such as virtual trademark infringement and Linden Lab’s liability for Second Lifers’ actions. As the online world matures, Post believes other virtual communities will begin to lobby as well. “My personal viewpoint is that it’s a sad but perhaps necessary step when these companies put on their suits and come to Washington,” he says. — Jeff Horwitz

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