TAMPA — The tiny Caribbean island of Nevis is probably best know as the birthplace of Alexander Hamilton, one of America's Founding Fathers and inspiration for the award-winning musical based on his life.
But Nevis (pronounced Knee-vis) also has an unlikely connection to the Tampa mayor's race.
David Straz, or more precisely, his self-funded charitable foundation, owns a $3.1 million stake in the Bank of Nevis Limited, something noted recently by the campaign of his opponent, Jane Castor.
Why would Straz's stake in a foreign bank with about $214 million in assets be an issue?
Because Nevis, population 11,000, is considered an offshore tax haven — the "world's most-secretive,'' the Guardian newspaper said last year.
In 2017, the U.S. government named it a country of primary concern, stating "the growth of its offshore sector coupled with unusually strong bank secrecy laws also remains problematic." (Nevis was one of about 90 countries named in the State Department report, including the United Kingdom and Canada.)
The European Union added Nevis to its "blacklist" of tax avoidance countries in 2018. It eventually removed it after Nevis officials agreed to revise their tax rules and practices.
So why would Straz, whose net worth exceeds $400 million, have his foundation invest in a bank located in a country that has come under international scrutiny for money laundering and tax evasion?
"The motivating purpose of the investment is to provide meaningful support to the developing island's population and help the people there, while providing an investment return,'' according to a statement from the Straz campaign. "Nevis is also the ancestral home of part of the Lowry family, and the Straz family owns a rental property there."
Straz is married to Catherine Lowry Straz. The rental home is worth $1.9 million, according to a financial disclosure that Straz was required to file with the Hillsborough County Supervisor of Elections in January.
Straz did not respond directly to questions posed by the Times about Nevis' reputation as an offshore tax haven. His campaign declined an interview, instead releasing a statement saying the David Straz Foundation owns a 9.64 percent stake in the bank, which the campaign characterized as being a local bank serving residents and businesses of Nevis. The largest shareholder is the Nevis government.
University of South Carolina law professor Clinton G. Wallace, an expert in "secrecy jurisdictions" in the financial world, doesn't have any specific knowledge about the Bank of Nevis. But he said Straz's investment there "is not enough to say that there's anything untoward going on.''
"Especially given that this is someone who owned banks," Wallace said.
Straz's statement also said the bank "is not an international institution." When asked to clarify, Straz spokesman Jarrod Holbrook said, "You'll have to ask them."
When contacted by the Times, a bank official declined comment.
The bank's most recent annual report states that the bank's international wing contributed $2.3 million of the bank's $3.1 million profit in 2017, "continuing the trend of BONI (Bank of Nevis International) being the larger contributor to profits."
But Wallace said just because a bank has international in its name doesn't mean the bulk of its deposits are of foreign origin.
The financial filings for the Straz Foundation show the investment has remained steady since 2015. The foundation, which has $68 million in assets, invested because it made financial sense, the campaign release stated.
"There's nothing unique about a not-for-profit organization investing in a bank. Almost all 501c3's invest their funds in equities and fixed-income securities in order to grow their principal," the statement read.
Straz told a local television station recently that he started the foundation to support the arts and for tax-planning purposes. He declined to answer questions about its origins.
Straz does have a small personal stake in the Bank of Nevis. His financial disclosure listed stock in the bank worth $1,053.
Contact Charlie Frago at email@example.com or (727)893-8459. Follow@CharlieFrago.