WTF is wrong with rich people?

The rich are greedy and selfish, and offshore schemes make them even richer

Published November 11, 2017 8:00AM (EST)

 (Salon/Ilana Lidagoster)
(Salon/Ilana Lidagoster)

I live in Sag Harbor, New York, out on the East End of Long Island in the Hamptons. The village of Sag Harbor was founded in 1707, and the house I rent is a Saltbox built in 1703. Just down the street is the Egyptian Revival Old Whaler’s Church, built in 1844. It’s a beautiful wood-frame clapboard structure. Hell, everything is beautiful out here — East Hampton, Bridgehampton, Southampton, Amagansett, the potato fields and beaches of Sagaponack — driving around here, you can’t go around a bend without seeing something that takes your breath away.

So naturally, the Hamptons have attracted a lot of rich people. The place is lousy with them. Hedge funders behind 15-foot-high hedges. Billionaires in their Spaceship-Modern architectural wonders along the ocean. Plain-ass old millionaires just down the street in mini-McMansions created by obnoxiously adding onto little houses like the one I live in. Fortune 500 presidents and directors striding around the links out at The National, the oldest golf course in America. Just a couple of months ago, they  were cheek by jowl in their mega-yachts tethered to the docks down in the harbor along Bay Street.

Come summertime, you’ve got to watch out that at 9 a.m. you don’t get stabbed in your instep by a spike heel sported by some babe strutting down the street wearing enough Prada to pay for your car. Rich people pack themselves into the restaurants, pecking at their Dover sole and quinoa like chickens in a feed-house in Tennessee, unable to move more than an inch or two without brushing up against glove leather from Gucci or flowing silk from Hermes. It’s hard being rich out here. You might see someone at the American Hotel wearing the exact same outfit you’re wearing! You might pass the same year, model and color Aston Martin as yours! You might be on your way to the beach and drive past a taller hedge than yours, surrounding a mansion bigger than yours! Indeed, it’s inevitable that in the Hamptons, you will run into someone richer than you are.

Friends of mine who have had a passing familiarity with this world over the years have told me stuff like, “money is the way they keep score.” Well, usually you “keep score” in games that have a beginning and a middle and an end, but this goddamn game they’re playing doesn’t have an end. It just keeps going and going and going, and they keep accumulating more and more millions and billions, and they keep buying shit with it — Gin Lane estates, $1.5 million Ferraris, Gulfstream 550s, 220-foot-long mega-yachts. I have a friend who takes care of a boat for a billionaire who owns a very well-known sports team. Every year, that boat — it’s about 32 feet and it cost a couple million — is put on a trailer down in Palm Beach and it’s driven up here for the summer. Last couple of years, the billionaire sports team owner hasn’t taken the boat out on the water for even one hour. It’s so underused that my friend has to “exercise” the boat every couple of weeks to keep the engines in good shape, so we take it out and zoom around — it will do 35 knots; it’s a hell of a lot of fun — and then we tie it up in an expensive marina. When September rolls around, the boat is put on a trailer and hauled back down to Palm Beach, where it goes back in the water and then . . . who knows? It probably just sits there.

Which brings us to the question raised in the title. I have to say, I don’t have a clue what’s up with rich people. I mean, I’ve got friends here in Sag Harbor who do stuff like building teak decks and painting houses and plumbing and electrical work, and every single one of them has trouble getting paid when it comes to summer people, which is to say, when it comes to rich people. Working for locals isn’t a problem. But rich people? They don’t pay on time and they fight over the bill. I don’t remember asking for that concrete, they’ll say, pointing to the bill. Well, sir, you can’t put posts in the ground for your deck if you don’t sink them in concrete, so that’s why the eight sacks of concrete are on the bill. Or they’ll complain about paying two or three grand for pipe and have to be reminded that’s the stuff the water goes through, and building codes say it has to be copper, and copper costs money. The thing is, none of them — not a single one of them — will just take the damn bill and pay it. They have to nitpick things to death before they write a check on an account that’s linked to some offshore trust in the Caymans.

This week we all learned a little more not about what makes rich people tick, but what they do to get rich and stay rich. The leak of 13.4 million documents known as the Paradise Papers has exposed a network of offshore law firms and corporate registries that enable wealthy people to avoid paying taxes. Named in the documents are more than a dozen Trump cabinet members, advisers and wealthy donors, including Commerce Secretary Wilbur Ross, White House economic adviser Gary Cohn, billionaire investor and major Republican donor Carl Icahn, and a Russian tech investor tied to Trump son-in-law Jared Kushner. Also swept up in the revelations from the Paradise Papers are pop-stars Madonna, who invested in an offshore fund with shares in a medical supply company, and Bono, who invested in a Malta-based fund that owned shares in a Lithuanian shopping center. The Bermuda-based law firm at the center of the Paradise Papers, Appleby, was also used by billionaire Microsoft co-founder Paul Allen to legally avoid taxes by using offshore registries for his yacht and submarine (!), and Ebay founder Pierre Omidyar who made use of an investment fund based in the Cayman Islands.

So at least some of the rich people out here in the Hamptons — we know that among them is former Trump campaign manager Paul Manafort — get rich and stay rich using these offshore financial scams. It’s mind-numbing trying to get through the investigative stuff published in stateside and U.K. papers, but the real scandal is that all of it is entirely legal. All you’ve got to do is be rich enough to hire these hustlers, and they do it all for you. It’s the Appleby law firm, and firms like it, that enabled Apple to squirrel billions of its profits away in Ireland, and when that shelter ran its course, to move its profits to another offshore haven on the British island of Jersey. A law professor quoted by the Times estimated that the transfer of wealth by Apple from Ireland to Jersey could be worth as much as $200 billion.

Everything done by rich people and billion-dollar corporations using the Appleby Bermuda law firm appears to be to arrange ways to accrue profits offshore and keep them there, away from the U.S. tax man. Which raises the question, what’s the purpose of lowering taxes, corporate and otherwise, if all these people have ways of sheltering their money from taxes anyway? The only answer I can come up with is, they’ll be avoiding paying a lower rate than they avoided paying before. What a deal, huh?

Meanwhile, back here on planet Earth, you and I and all of the other middle-class schmucks are stuck with paying taxes that finance — or are supposed to finance — our schools, and roads, and bridges, and airports, and municipal buildings, not to mention paying for all of the troops we’ve got overseas fighting terrorism or whatever else they’re doing over there, or paying for medical research into cancer and heart disease and diabetes and fighting the scourge of opioid addiction that’s ravaging the countryside, and helping rebuild Puerto Rico and all of the cities slammed by the worst hurricane season in ages.

It isn’t enough that rich people are different from you and me. They want us to pay for the roads they drive their Ferraris down, for the schools that educate the people they hire to work in their companies, for the armies that protect their investments here and abroad; and they want your kids to join the Army and fight their wars, so their kids don’t have to, and they want you to pay your taxes, so they don’t have to.

It would be easy to blame the advantages enjoyed by the rich on the capitalist system, but it’s their capitalist system. Rich people built it. It operates by their rules. All of these offshore accounts and limited trusts and pass-through corporate taxes and hedge-funder-carried interest dodges are completely legal because rich people bought and paid for the congress that wrote the laws that created the ways to avoid taxes. What the Paradise Papers show us are the details of the way the system works in this country, and who it works for. It would work for you, too, if you were rich.  


By Lucian k. Truscott

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