Cayman-flagged ship hosts Romney donor party

ABC news reports on one hell of a bad optics moment in Florida — a party for top Romney fundraisers held on board a 150-foot yacht flying a Cayman Islands flag:

The event, attended by no more than 50 people, along with Romney relatives, including older brother Scott, appeared on no public calendars. ABC News obtained a schedule of the Romney campaign’s "Victory Council" and waited dockside to speak with members.

"It was a really nice event. These are good supporters," said billionaire Wilbur Ross, an energy industry executive.

Virginia Gov. Bob McDonnell was scheduled to speak.

Registered in the Caymans, and flying a version of the Caymans’ "civil ensign" or merchant flag, the Cracker Bay has an impressive art collection and can seat 30 for dinner.

The Cracker Bay is owned by Gary Morse, developer of the Villages retirement community. Companies controlled by Morse gave nearly $1 million to the pro-Romney Restore Our Future superPAC.

Romney has, of course, attracted some unwanted attention for his holdings in investment funds based in the Caymans. I wrote in January about the advantages of setting up a corporation in the Caymans, but it turns out the British protectorate a pretty good place to register your boat as well. A 2009 article in the Cayman Financial Review explained: 

Although it is generally recommended to use a Cayman Islands vehicle for ownership purposes, it is, in fact, possible for any corporate body to own a Cayman Islands registered yacht or ship either by appointing a representative person or registering as a foreign company under Part IX of the Cayman Islands Companies Law. This allows owners the flexibility to use a foreign corporate vehicle where there are taxation benefits or other reasons for doing so. Using a corporate body to own a vessel has the important benefit of limiting the liability of the owner if a collision or other event incurring liability should occur. However, in practice, usually a new Cayman Islands company limited by shares is incorporated to own each vessel as this is generally simpler administratively and less likely to result in delay.

The Cayman Islands is renowned as a leading offshore jurisdiction with a tax neutral environment. It has a solid political, legal and fiscal environment with a stable parliamentary democracy since 1831. There are no income, capital gains or other taxes imposed by the Cayman Islands on vessel owning companies. With the Privy Council in England being the ultimate court of appeal, the CISR operates within a stable British based legal system which is a compelling reason to choose the CISR for the registration of vessels and any associated loan financing and security.

While there are no restrictions on the nationality of the owner or crew, ships flying the Union Jack-ed flag of the Caymans are entitled to the protection of the British Navy. According to the Cayman Islands Chamber of Commerce, "About 20% of the world’s yachts over 50m were registered in the Cayman Islands by 1999."