A lot of people claim that there’s a fine line between corporate entertainment and bribery. I disagree – they are indisputably one and the same thing. That’s why my ex-colleagues still in banking breathed a collective sigh of relief a few weeks ago when the Government once again delayed the implementation of the Bribery Act that was due to come into effect this month.
This act was passed last year by a Labour government painfully aware that the UK had slipped down the global corruption index from the eleventh least corrupt country to the twentieth. It was designed to reinstate Blighty’s clean credentials by punishing with up to ten years in prison those who secure international contracts with ‘facilitation payments’ or perpetrate some similar skulduggery. City types are already complaining that this will adversely effect UK plc’s competitive position but it is the potential impact on corporate entertainment that has really got their knickers in a twist.
The first problem is that this act recognises the uncomfortable truth that ‘lavish corporate entertainment’ is nothing less than legalized bribery. The second problem is that the Square Mile runs on lavish corporate entertainment and, what’s more, everyone’s at it! Equity salesmen sup champers in sumptuous boxes at Lords with fund managers whilst inter-dealer brokers force feed £5 punnets of strawberries to traders at Wimbledon and listed companies show research analysts how to lose money at Ascot. God’s Teeth, even financial journalists are occasionally taken out! It is one of the main perks of a City career and, funnily enough, no-one involved wants it to end.
Admittedly, this agreeable aspect of the job had its wings clipped in the aftermath of the financial crisis. But things were definitely getting a little bit silly before then. Apparently, London banks bought 70% of the corporate packages (some costing €300,000) at the 2006 German World Cup. Around that time I heard about a client trip in a private jet to the Monaco Grand Prix that included a ‘meet and greet’ with the drivers and must have cost £25,000 a head. And I’m sorry to admit that I was one of the biggest offenders at a time when the competition was pretty stiff. At the peak of the bubble, hardly a week went by when I didn’t watch a geriatric Madonna gyrate the night away, admire John Terry’s ball control or race a Formula 3 car down at Silverstone. I once spent ten thousand dollars clubbing with clients in Las Vegas and by the end of my twelve year career was on first name terms with the waiters at Petrus and Le Gavroche. No client’s lower intestine and liver were safe when I was in entertaining mode!
And why did I endure these tiresome ordeals? Well, I have to admit that I found washing down another lump of foie gras with a few bottles of Dom Perignon marginally more fun than composing spreadsheets. Being a decadent, feckless degenerate may explain my involvement but why was my bank willing to spend so much cash financing my premature coronary embolism? The answer is simple – it was worth every goddamn penny! Some of my hedge fund boys threw around commission like a pissed-up auntie chucking confetti at a wedding. Hence, a legal bribe of a few grand was a price worth paying when the client, feeling that he owed you, bunged several million quids worth of commission your way every year.
So, I got a fat bonus, the bank made vast profits and the client got to check out lots of Eastern European chicks disrobing – everyone’s a winner, aren’t they?
Well no, actually, there is a loser … and I’m afraid it’s you. That’s because all the extra costs related to corporate entertainment are factored into the commission rate investment banks charge and hence the fees fund managers demand. This means that ultimately it’s your pension fund that paid for my visits to Spearmint Rhino and that each mouthful of Lobster Thermidor cut into your granny’s weekly bingo allowance!
The Bribery Act recognises the simple truth that there is no such thing as a free lunch and, in so doing, could theoretically herald an end to lavish City entertainment. Since we all ultimately pay for this legalized bribery this could mean we’ll all be a bit better off.
So, in the unlikely event that the City’s powerful lobbying machine doesn’t succeed in getting this act watered down, it will be you, and not the bankers, who come out on top. Now that’s got to be a first.