Oliver Bullough: What is Britain's Role in the Global Dirty Money Crisis?

Summary

In this thought-provoking discussion, Oliver Bullough joins Andrew Kelly to delve into the intricacies of Britain's transformation into a 'butler' to the world's tycoons, tax dodgers, kleptocrats, and criminals. Drawing on his new book, Bullough explores how the UK's financial industry has facilitated the movement and obfuscation of illicit wealth, often at the expense of transparency and ethical standards. He discusses the historical context, from the post-Empire era to the modern-day implications on global politics and society, including the impact of the Suez Crisis and the rise of offshore financial centers. Bullough also highlights the need for increased resources for law enforcement and a cultural shift in attitudes towards the origins of wealth, advocating for a more proactive approach in combatting financial crime and corruption.

Takeaways

• 📖 The book 'Butler to the World' by Oliver Bullough discusses Britain's role in facilitating financial crimes and the global elite's exploitation of the UK's financial system.
• 🏰 London's property market and other UK territories provide a gateway for foreign wealth, often obtained through dubious means, to be laundered and legitimized.
• 🚌 The 'kleptocracy tour' highlights the ownership of London properties by foreign oligarchs and corrupt politicians, emphasizing the need for transparency in property ownership.
• 🎩 The concept of 'butlering' is introduced as a metaphor for Britain's service to the global elite, mirroring the role of Jeeves in P.G. Wodehouse's stories, but with a darker, real-world implication.
• 💼 The British Virgin Islands (BVI) and other overseas territories have become hubs for shell companies and financial secrecy, aiding in global corruption and tax evasion.
• 🇺🇲 The US lawyers' exploitation of the BVI for tax avoidance demonstrates the global nature of financial crime and the ease with which regulatory loopholes can be exploited.
• 🇪🇺 The Eurodollar market and the City of London's regulatory environment have been pivotal in the transformation of financial services post-World War II.
• 🤝 The relationship between the UK and Russia, particularly through individuals like Dmitry Firtash, showcases the UK's complicity in the enablement of kleptocratic wealth.
• 🚨 The discussion underscores the importance of resourcing and empowering law enforcement and investigative bodies to tackle financial crimes effectively.
• 📚 The book calls for a reevaluation of Britain's historical role as an empire and its current role as a 'butler', suggesting a need for a more critical approach to understanding the UK's global impact.
• 🌍 The invasion of Ukraine serves as a potential catalyst for change in the UK's approach to financial crimes, with increased recognition of the country's role in global corruption networks.

Q & A

What is the main theme of Oliver Bullough's book, 'Butler to the World'?

The main theme of Oliver Bullough's book is how Britain has become a service provider to wealthy individuals, including tycoons, tax dodgers, kleptocrats, and criminals, by facilitating financial crimes and hiding the ownership of assets through complex financial structures and offshore entities.

How does the kleptocracy tour in London work?

The kleptocracy tour in London is a guided bus tour that aims to expose the properties in the city owned by wealthy individuals with questionable wealth sources. The tour starts near Portcullis House, passing by various properties owned by figures such as Russian oligarchs and Ukrainian businessmen, highlighting how these individuals use London real estate to hide their wealth.

What is the significance of the term 'butlering' in the context of Oliver Bullough's argument?

In the context of Oliver Bullough's argument, 'butlering' refers to the services provided by Britain to facilitate financial crimes and help wealthy individuals hide their assets and avoid taxes. The term is used as an analogy to describe Britain's role in catering to the needs of these clients, much like a butler serves their master.

How did the concept of 'offshore' originate?

The concept of 'offshore' originated when the Soviet Union decided not to keep their dollars in New York due to fears of asset freezing by the US authorities. Instead, they chose to keep their dollars in London, which led to the discovery of a loophole where using dollars outside the US provided all the benefits of the currency without the restrictions, thus creating a 'law-free space' or 'offshore' territory.

What role did the Suez Crisis play in the transformation of the City of London?

The Suez Crisis led to a moment of humiliation for Britain as it attempted to assert its power and failed. During this crisis, the British Treasury imposed strict restrictions on the use of pounds, which forced the City of London's merchant banks to find alternative financing methods. They discovered that by using dollars, they could bypass these restrictions and thus the City of London was reborn as the financial hub serving the global financial elite.

How did Gibraltar become a major center for online gambling?

Gibraltar became a major center for online gambling after realizing that it could offer a tax-free and regulation-free environment for betting companies. This attracted major British-based bookies to move their telephone betting operations to Gibraltar, which in turn led to a significant change in how gambling was taxed and regulated in the UK, leading to the explosion of online gambling.

What is the impact of the British Virgin Islands (BVI) shell companies on global wealth hiding?

The BVI shell companies have had a significant impact on global wealth hiding by providing an opaque legal structure that allows individuals and entities to hide their wealth and financial activities from scrutiny. This has been used by various groups, including drug smugglers, businesspeople fearing political changes, and corrupt politicians, to hide their assets and evade taxes.

What is the significance of the Scottish limited partnership (SLP) in money laundering?

The Scottish limited partnership (SLP) is a legal entity that has been exploited for money laundering due to its opacity, tax-free nature, and ability to own property and move money. It has been used in major financial scandals, including defrauding Moldova of a significant portion of its GDP and facilitating large-scale money laundering through Baltic banks.

What are the consequences of Britain's role as a 'butler' to the global financial elite?

The consequences of Britain's role as a 'butler' include facilitating corruption, tax evasion, and wealth inequality. It has also contributed to the rise of kleptocratic regimes, such as Russia's, by integrating stolen wealth into the global financial system. This has led to significant social and political issues, including the invasion of Ukraine and the empowerment of corrupt leaders.

What measures can be taken to address the issues highlighted in Oliver Bullough's book?

To address the issues highlighted in the book, measures such as resourcing and empowering law enforcement agencies to investigate financial crimes, implementing anti-SLAPP laws to protect journalists and civil society organizations from abusive litigation, and promoting a culture of moral responsibility among private sector organizations and academia are necessary. Additionally, there should be a shift in focus towards understanding and confronting the history of empire and its impact on the current financial systems.

How does Oliver Bullough view the potential for change following the invasion of Ukraine?

Oliver Bullough believes that there will be change as a result of the invasion of Ukraine, but he views it as an incremental process. He highlights the importance of taking small steps towards improvement, such as better protections for journalists, regulation of Companies House, and increased debate about the Empire and Britain's role as a 'butler'. He emphasizes the need for optimism and the use of knowledge to expose and combat money laundering.