Here's the latest from Cityboy.
Just when bankers thought it was safe to return to polite society, a new scandal is brewing.
Many thought that the City's already besmirched reputation could fall no lower … but it seems you underestimate bankers at your peril! A recent damning report from City regulator the Financial Services Authority (FSA) has revealed that some elements in the City appear to be disregarding anti-money laundering rules, and have been offering a warm welcome to corrupt tyrants’ cash.
The FSA's detailed study shows that a third of our supposedly ‘reputable’ banks are willing to dismiss credible allegations of corruption, while a quarter were seemingly happy to offer services to foreign politicians generally believed to be corrupt - merely because the law had yet to catch up with them.
This report could, of course, be the tip of an iceberg. I suspect that, when the truth is revealed about how willing City firms have been to deal with these (often) blood-thirsty despots, yet more questions will be asked about the Square Mile’s ‘moral compass’.
In my view, London has always been the destination of choice for the cash that corrupt dictators have looted from their country. In 1999 French MP Arnaud Montebourg introduced to his parliament an investigative report that concluded 'even the Swiss co-operate more than the English'. And that's saying something!
London’s reputation as the ‘money laundering capital of the World’ was cemented in 2001, when the FSA announced that UK banks had helped the former Nigerian head of state, the late Sanni Abacha, and his family to launder $1.3bn. A 2009 report from the campaigning anti-corruption organization Global Witness alleged that Barclays kept open an account for the son of the dictator of oil-rich Equatorial Guinea, despite very strong evidence that his family had looted their country's oil revenues.
There is also little doubt that much of the wealth that the leaders of Egypt, Tunisia, Libya et al have been amassing for decades ends up in London. The former Egyptian president Hosni Mubarak is believed to have invested many billions in banks, investments and properties in our great City. Likewise, Libyan leader Gaddafi’s family has apparently always favoured London because of the ‘ease of doing business’ here and our ‘uncomplicated tax system’ (according to Wikileaks). The government-run Libyan Investment Authority had an office in Mayfair, and is believed to have invested up to £10bn of ‘state money’ in British assets too.
Bank apologists may point to the estimated $40bn in worldwide assets connected to Gaddafi, Mubarak and the former Tunisian leader Ben Ali that have apparently been frozen since the Arab uprisings as 'great achievements'. However, I would argue that the very fact that officials have so easily frozen these assets shows that there were a lot of people who knew exactly where these leaders had squirreled away their nations' cash in the first place!
I’d love to pretend that bankers are working in isolation, but in fact they’re merely following the example set by our magnificent political leaders. Britain preaches democracy whilst arming and doing business with murderous dictators. Despite his supposedly ‘ethical foreign policy’ former British PM Tony Blair stayed with Mubarak in 2001, and hugged Gadaffi like a long-lost brother in 2007. The King of Bahrain, who had been violently suppressing peaceful demonstrations, was invited to last Royal Wedding, and David Cameron seems to have been doing his best to help British companies sell ever more deadly weapons to Middle Eastern autocrats.
We in Britain like to believe that we’re stand-up guys who do the right thing, but I’m afraid that when it comes to bankers and their mates in government, commercial interests supersede ethical ones every time. Our attitude helps perpetuate tyrannical regimes whilst also ensuring the continued impoverishment of millions of already destitute people.
Perhaps it’s time we had our own revolution.
‘Just Business’, Geraint Anderson’s debut novel, was published last month.