The latest revelation who really runs the world comes from BuzzFeed News, who have shared a series of suspicious activity reports (SARs) filed by financial institutions with the US Treasury Department’s Financial Crimes Enforcement Agency, (FinCEN), You may think this is dry stuff and of interest only to fiscal anoraks. The 2,000+ SARs do indeed make dry reading, but their implications are serious, because:
- They show money-laundering to be commonplace
- Many major banks are involved in such activity
- Crime syndicates, terrorist organisations and Russian oligarchs are all involved
- Offshore holding companies under British jurisdiction are a major compinent
- Virtually all the laundering activity passes through Britain at some point.
- Governments, financial regulators and serious crime units are failing to prevent this
In itself, this is appalling. But this is just the latest in a series of revelations about how rich people get richer, no matter how dire life gets for the rest of us. You may have missed or forgotten earlier chinks in the armour of secrecy that protects the very rich, such as:
- Paradise Papers (2017) were leaked documents, including corporate registries in 19 tax jurisdictions, revealing financial dealings of politicians, celebrities and business leaders.
- Panama Papers (2016) The German Süddeutsche Zeitung obtained encrypted documents from the Panamanian law firm Mossack Fonseca, selling anonymous offshore companies that help the owners hide their business dealings. There was so much data it took a year, until April 2016, to be published, with the database of documents going online a month later.
- Swiss leaks (2015) Investigation of HSBC Private Bank (Suisse) lifted the lid on dealings in a country where banking secrecy is taken for granted. More than 100,000 individuals and legal entities from more than 200 countries had used its services, including “those close to discredited regimes” and “clients unfavourably named by the United Nations”.
- Luxembourg leaks (2014) These centred on how professional services company PricewaterhouseCoopers helped multinational companies gain hundreds of favourable tax rulings in Luxembourg between 2002 and 2010.
- The Offshore Leaks (2012) Only a tenth the size of the Panama Papers but at the time, the biggest exposé of international tax fraud. 2.5 million files revealed the names of more than 120,000 companies and trusts in hideaways such as the British Virgin Islands.
With that kind of record, we should not be surprised that the brash “Loadsamoney” culture of Canary Wharf mught include operators to whom the hard task of turning a profit need not become even harder by becoming ensnared in morals. Those who have watched Leonardo diCaprio chew up the scenery in 2014’s Wolf of Wall Street or Michael Douglas define the ice-cold wheeler–dealer in 1987’s Wall Street should have little trouble imagining the people behind all this.
Those who pay their taxes, give way to other drivers and support deserving causes may have trouble grasping this mentality, let alone live it. But the fear is that such people are a dying breed and that Gordon Gekko is becoming the pin-up boy for those wanting to make their way in the world. Amnition is not, in itself, evil. But any sophisticated society relies on the huge majoroity of people to live by its standards, including morals, especially those of its leaders. Owen Jones’ 2015 book “The Establishment” gives a comorehesive, if left-wing, expose of how all this is perpetuated.
A century ago, society was hopelessly unequal but Edwardian Britain was a surprisingly cohesive society, because the vast majority believed in it, even those it disadvantaged. A similar attitude pervaded those caught up in the hardships and rationing of WW2. All that is now very much history. The more recent emergence of self has created a concomitant mistrust of those in charge which goes beyond the healthy questioning at the heart of democracy. The money-laundering ‘finocracy’ behind the most recent Buzzfeed News revelations are only one of the many examples of self-perpetuating oligarchies that undermine people’s belief in society and that it can be fair to them. Currently, Britain’s richest 1,000 are sitting on £512,000,000,000. Nice.
There is a dangerous assumption that Western Democracy, and the fiscal systems that are its life blood, is stable and can tolerate the abuses listed above. That it has survived and prospered through two world wars, one cold war and sundry financial panics shows it has strength and the ability to adapt. But how far?
Britain and America have led that society for two centuries. The Romans ruled an even more integrated society for twice that amount of time. A citizen could travel from the Tyne to the Tigris with no need of passport or currency exchange. An army of twenty legions and auxiliaries numbering 300,000 kept peace and held the frontiers. They could have done so indefinitely, had an internal decay of ambition and greed not turned it to fight internecine wars, letting floodgates that had held back Caledonii, Vandals and Visigoths creak and collapse.
We may be at that point. Despite worthy international efforts, Africa and South America, Central America and the Middle East remain a pig’s breakfast of despotism, corruption and inefficiencies. Where there was once Western unity, frmer leaders Britain and the US are in the hands of inward-looking administrations led by blustering egotists in search of lost glories.
While Russia and China are like wolves circling two stags, wounded by their own hubris, America claims tax cuts, tariffs and tough talk will make them great again and Britain deludes itself it can be a global powerhouse when it lets its supposed “world class” finance centre make its money through laundering dirty money through offshore tax havens under a government that declines to prevent it. Why should they? They set up those tax havens in the first place.
Like Caligula and his kind, Trump’s family businesses, the Fred Goodwins, the Phillip Greens, the Aaron Abramovitches, will all be too busy exploiting fuzzy morals to accumule and protect ever more proceeds to worry whether the ordinary punters who make Western democracy—and therefore their wealth— possible will put up with theur abuse, or turn into the Visigoths of the 21st centrury.