Alan Grayson says he has closed his Caymans hedge funds
Democratic U.S. Senate candidate Alan Grayson says he has closed down hedge funds that he set up in the notorious offshore tax haven of the Cayman Islands, which have proven to be a considerable political headache for the populist congressman from Orlando. The moves comes on the heels of the millionaire Democrat recently changing the name of his hedge management company -- from Grayson Fund to Sibylline Fund - afer critics filed official House complaints against him for allegedly violating House rules for improperly using his name in the investment vehicles.
Grayson says that the Cayman funds were set up in 2011 at the advice of a lawyer he declined to name. Though his hedge funds were structured so that all trading would be done through an entity based in the Caymans, Grayson insisted the Cayman funds were never used.
"Until this year, the expense of the empty separate, segregated account (which was situated in the Caymans) was minor, i.e., less than $1000 in annual filing fees. This year, the expense would have increased substantially, so both the empty account and the corresponding legal entities have been closed," said an email from his office, adding that Grayson would not provide documentation for the funds' closings.
For a candidate who often complains about income inequality and companies evading taxes, setting up his own company in an offshore tax haven created, at the very least, a perception problem. The listed address of Grayson's Caymans-based hedge fund was the Ugland House in Grand Cayman, where nearly 20,000 companies list their address in order to minimize their taxes.
"Either this is the largest building in the world or the largest tax scam in the world," Barack Obama said of Ugland House in 2009.