Will the Arab Spring Reveal The City’s Dark Side

Elevator Magazine  –  March 2012

Just when bankers thought it was safe to return to polite society a new scandal is brewing. Many thought that Cityboys’ already besmirched reputation could fall no lower … but you underestimate those chaps at your peril! A recent damning report from the City regulator, the FSA, has revealed that the City is disregarding anti-money laundering rules and offering a warm welcome to corrupt tyrants’ cash. This detailed study shows that a third of our supposedly ‘reputable’ banks are willing to dismiss credible allegations of corruption whilst a quarter were happy to offer services to foreign politicians known to be corrupt merely because the law had yet to catch up with them.

This report could be the tip of the iceberg. I suspect that when the truth is revealed about how willing City firms have been to deal with the blood-thirsty despots who were deposed by the ‘Arab Spring’ that yet more questions will be asked about the Square Mile’s ‘moral compass’. Indeed, such is my conviction that money laundering will be the next big financial scandal that I have chosen to make it the subject of my new thriller ‘Just Business’.

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.” 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 $1.3 billion. A 2009 report from the campaigning anti-corruption organization Global Witness claimed 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 no doubt that much of the wealth that those charming tyrants who’ve been pillaging Egypt, Tunisia, Libya et al for decades ends up in London. The former Egyptian president Hosni Mubarak is believed to have invested many of the billions he’d stolen off his people into 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 because of our ‘uncomplicated tax system’ (according to Wikileaks). The government-run Libyan Investment Authority had an office in Mayfair and had invested up to £10bn of ‘state money’ (e.g. Gaddaffi’s) in British assets. Global Witness also claims to have seen a 2010 document that proves that British bank HSBC and Goldman Sachs (yes, those wonderful folk again) were holding $335m of Libya’s state oil money. Funnily enough, UK banking officials have described calls by Global Witness to “name and shame” those UK banks that have handled the North African dictators’ corruptly obtained billions as “unworkable” … yeah, right.

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 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 corrupt despots had squirreled away their blood money and that subsequently these ‘successes’ actually represent a huge failure of our theoretically strict money laundering rules. It is clear that our ‘law-abiding’ firms only get the willies about dealing with bloodthirsty tyrants when they cease to be on the winning side!

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’ 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 the royal wedding and David Cameron has been doing his best to help British companies sell ever more deadly weapons to Middle Eastern autocrats. It was when Blair called Mubarak “a force for good” in February of this year that I felt like reaching for my own gun.

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.

Thoughts ?

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