The previous episode of this story outlined Oliver Bullough’s concept of Moneyland, which he reports on in his latest book and explained to the Co-operative Congress in Manchester. It describes a complex Steal-Hide-Spend system used by affluent people across the world, often in positions of power, who by corruption or other illegal activities steal huge amounts of wealth from their countries.

Moneylander’s use the tangled and secretive web of offshore jurisdictions (aka tax havens or secrecy jurisdictions) to hide this wealth and simultaneously remove the stain of the original corrupt activity from the money and its owner.

This episode highlights the UK’s central role, and discusses how Moneyland suppresses freedom of the press and subverts our democracy. The implications for the citizens of the UK, with a particular focus on Manchester, of allowing the excesses of Moneyland to continue are covered. Bullough explains what we need to do to take the world back from the thieves and crooks who now rule it:

Flaws in theTransparency International Corruption Perception Index

Most people in the UK perceive corruption as a problem for overseas developing countries or less well-established democracies. This viewpoint is corroborated by the Corruption Perception Index (CPI) released every year by Transparency International. The index ranks 180 countries by their perceived levels of public sector corruption according to businesspeople and experts. They have a scoring system from 0 (highly corrupt) to 100 (very clean). In the 2018 CPI, Denmark scores highest of the 180 countries at 88. The United Kingdom comes in at 11th place with 80, Russia is 138th with 28 and Ukraine is 120th with 32.

From this index you might think that the UK is little affected by corruption, and indeed within this country our institutions are pretty resistant to corruption. However, Bullough believes that the index fails to take into account the major role of the UK, the City of London and its spiderwebs of offshore secrecy jurisdictions in facilitating corruption across the globe:

“Saying Nigeria is corrupt, and Britain isn’t corrupt just misunderstands corruption. Because Nigerian corruption is British corruption, it is the same money. So just saying ‘well, that corruption only belongs in Nigeria and isn’t anything to do with Britain’ is perverse.

“In the latest Transparency International Corruption Perceptions Index the cleanest country in the world is Denmark, and yet in September the biggest money laundering scandal in history was revealed and it was run by Danske Bank, Denmark’s biggest bank.  OK, the money didn’t come from Denmark but it went via a Danish institution, so how does it make sense to say Denmark is clean and yet Russia and Azerbaijan, where the money came from, are dirty.”

Oliver Bullough, author of Moneyland, speaking at the Co-op Congress. Photo: Co-op News


Tax havens, secrecy jurisdictions and offshore finance are generally terms that overlap, and can be applied interchangeably to a jurisdiction (a country or a region of a country, and its laws) depending on what you are trying to emphasise.

So for example the British Overseas Territory of the British Virgin Islands (BVI) can be described as a tax haven, because a company registered there will pay no corporations tax or any other kind of tax there. It will also pay no tax on profits transferred to this company by companies or individuals in other countries such as the UK. In 2017 research showed that BVI companies control $1.5 trillion in assets. The BVI comes top of the 2019 Corporate Tax Haven Index, complied by the Tax Justice Network (TJN).

The BVI can also be described as a secrecy jurisdiction, according to the TJN, due to:

“the BVI’s lax, flexible, ask-no-questions, see-no-evil company incorporation regime, which allows owners of companies to hide behind ‘nominees’ to achieve strong secrecy, and to set up companies quickly and at low cost.  This supposed ‘efficiency’ of incorporation has translated into carte blanche for BVI companies to hide and facilitate all manner of crimes and abuses worldwide.”

The secrecy provided to the ultimate owners of companies registered in the BVI has led to it becoming the world’s leading centre for company incorporation with over a million companies incorporated since 1984. In 2017, there were 417,000 companies incorporated in the BVI, two-thirds of them corporate subsidiaries.The British Virgin Islands comes in at 16 (out of 112 jurisdictions listed) in the 2018 Financial Secrecy Index compiled by TJN.

Offshore finance applies to the BVI because it is an island in the Caribbean, offshore from the UK and the many other countries where people and corporations have decided to incorporate a company or trust in the BVI. The term “offshore financial centre” (OFC) is one that the BVI uses to describe itself as it doesn’t hold the negative connotations of tax havens and secrecy jurisdiction. However many jurisdictions, such as Luxembourg and Hong Kong, that offer OFC perks such as tax avoidance and secrecy are not located on islands, although the largest users of these centres are usually from overseas, so the OFC is “offshore” to them. [/expand]

Much of Moneyland’s looted wealth ends up in the UK, particularly London, where many of the accountants, bankers and other Moneyland support services operate from. One of these support services that Bullough investigates in London is a company formation agent called Formation House at 29 Harley St in London, a stone fronted terraced house five stories high. The house acts as a post box for 2,159 companies, and has incorporated more than 10 million companies in Britain and overseas in the last sixteen years. It turns out that Yanukovich’s sumptuous palace in Ukraine is registered as belonging to a company registered at 49 Harley St, and this company in turn was owned by a company registered in the tax haven/secrecy jurisdiction of Lichtenstein. The palace was eventually returned to the ownership of the Ukranian state by a court order in 2015.

Bullough explained that everything we think we know about corruption, as exemplified by the CPI, is wrong as it doesn’t take into account the globalisation of corruption. He believes that Transparency International should stop publishing the CPI as it stands, as it does far more harm than good in explaining the situation.

Freedom of the press curtailed

Bullough has had personal experience of how money from corrupt sources undermines a cornerstone of a well-functioning democracy, the freedom of the press. He spent years investigating a story involving an oligarch from a post-Soviet state, obtaining convincing evidence that the oligarch had stolen a highly profitable company and stashed it offshore; the oligarch’s family had then enjoyed the profits from this corruption in Western countries. Just days before the article was to be printed in a British publication, a lawyer at the publication decided the legal risk was too high, and the story was pulled.

A documentary film Bullough worked on called Bloody Money, concerning Nina and Nonna [see pt. 1] and the corruption present in the Ukraine health service, was also scuppered by a legal challenge. Prior to it’s premiere in London the film’s producers received a letter from a London law firm threatening defamation proceedings on behalf of their client, a Ukrainian businessman and ex-government minister named in the film.

Read: ‘There are no co-ops in Moneyland’- author Oliver Bullough at the Co-op Congress in Manchester (pt. 1)

Bullough described this suppression of his work as “annoying, upsetting, frustrating and also very stressful” and thinks that this kind of libel tourism that is particularly prevalent in the UK is having a chilling effect on freedom of the press in this country and across the globe:

“It is a massive problem. For example, 1MDB is a massive Malaysian corruption scandal, in which a huge amount of money was essentially stolen from the Malaysian people and then spent on all sorts of luxuries including property in London and on things like producing the film The Wolf of Wall Street. A friend of mine Bradley Hope wrote a very good book about that called Billion Dollar Whale. That hasn’t been published in the UK because of legal threats.

“This is a Malaysian crook who can exploit British libel law in order to prevent the truth about what he did to be published in this country. Journalists who write about these things are self-censoring essentially, because you can’t afford to go head to head with these people. They are incredibly rich and to be honest also kind of scary so yes, it is a really alarming thing.”

London services Moneyland, while undermining democracy

There is a vast network of Moneyland support services in London which thrive on the illicit wealth undermining our democracy, Bullough says:

“There are lawyers and accountants who do well out of this, but the vast majority of us we don’t, it is actively harmful to us… the effect it has on corrupting our politics… All citizens of a democracy have rights and responsibilities, they balance each other out: that’s how democracies work.

“What Moneyland gives you is just the rights and you don’t have the responsibilities any more. You get to pick all the good bits and you don’t have to worry about the bad bits. That is why it’s so harmful, because you have a whole class of people, very wealthy people at the top of society who are essentially just taking all the time, they are not giving back.”

Why should Manchester worry?

But is this just a problem for London? Not according to Bullough, who talked of the problems people in London have faced with this stolen wealth buying up property in London and forcing prices up so ordinary people cannot afford them. But the amount of illicit wealth flooding into Britain is huge: Bullough cites a 2015 Deutsche Bank report called Dark Matter which recorded £133 billion entering the British economy since the mid 70’s which had avoided official detection. While this represents an average of £3.3 billion/year over the forty years till 2015, Bullough believes that the current inflow of dark money into the UK is around £12 billion/year, and he thinks it is overflowing the usual sites:

“There is a huge amount of money being stolen every year and it is looking for somewhere to go. That money has started to arrive in Manchester, it’s started to arrive in Liverpool, Edinburgh, Leeds, Cardiff; it is buying up the world…

“So if there are people in Manchester who don’t want to pay high rents or want to have the chance of owning their own house… You’ve all seen house prices rising faster than earnings, one of the reasons for that is that all this money is coming into the UK and buying up this property, so that I think is a clear demonstration of how harmful this is to ordinary British people.”

Meteor graphic: total number of Land Registry Titles per indicated district in England with percent change over last eight months indicated. Previously published by The Meteor here.  Source: Land Registry

Indeed The Meteor’s investigation last year, Selling Manchester by the Offshore Pound, showed a large rise in overseas companies buying property in Manchester. The data showed that the growth of overseas company ownership of property was increasing at a faster rate in Manchester than it was for the London boroughs typically known for overseas ownership of property such as Westminster and Kensington & Chelsea. The majority of these companies were registered in tax havens/secrecy jurisdictions, and data on these tax havens and companies using them owning property in Manchester can be found in The Meteor’s previously published investigation.

Video above illustrates the growth of overseas ownership from January 1998 to June 2018. Land Registry data from July 2018 on overseas ownership of property in Manchester was used and only land registry titles with a postcode (1180 of 1736) were used to make the video. Previously published by The Meteor here.

Despite this our investigation managed to track down the ultimate owner of one company, Emarati Holdings Limited, which owned 22 homes in Manchester with an estimated value of £4.3 million. This Guernsey registered company was owned by an Islamic investment company called AREF Investment Group, registered in Kuwait. AREF were involved in business dealings with Sudan during the Darfur crisis where over 300,000 were killed and 2.5 million people were forced to leave their homes. These business dealings undermined international economic sanctions that had been placed on Sudan in an attempt to stop the atrocities. The company that owned AREF was the Kuwaiti state owned bank Kuwait Finance House. KFH has also been subject to numerous allegations by US officials linking cash-flows through KFH and its subsidiaries to Islamic fundamentalist terrorist organisations.

Thieves and crooks rule the world, how do we take it back?

Bullough’s account of the scale of the corruption present in Moneyland and the countries full of people it grinds down and degrades is a damning indictment of our global economy and the many governments that are willing to turn a blind eye to the corruption inherent in the offshore financial system. Their wish to keep the wheels of commerce grinding at an ever increasing rate comes at a very high cost to the people of the countries most affected by this corruption.

Perhaps even more worrying is that although the problem is becoming increasingly visible due to investigations by Bullough and others, the scale of the problem also continues to increase. But as the subtitle of Moneyland suggests “Why Thieves & Crooks Now Rule the World & How to Take it Back”, Bullough still has hope that this can be turned around:

“We haven’t lost, the fight isn’t lost yet: there is still time to prevent this whole world being swallowed up by Moneyland. We need to get ahead of it.”

With Brexit looming, Bullough hopes that whatever happens, the UK remains embedded in the EU anti-money laundering architecture as this reduces the kind of loopholes between jurisdictions that get exploited by crooks. He also believes that greater co-ordination is needed between countries to close down these legislative loopholes and that there has to be a much more concerted campaign attacking this globalised corruption when it occurs in the UK:

“We need the police, National Crime Agency, the Serious Fraud Office and so on. They need proper resources to fight this scourge. At the moment they are forced to fight with both hands tied behind their back. The bad guys have got all this money and all these resources and all these amazing lawyers and the people who we task with combating them are just hilariously under-resourced.”

Praising the UK government’s recent announcement that the UK Crown dependencies (Jersey, Guernsey and the Isle of Man) will be obliged to publish registers of company ownership in their jursidcitions, although this won’t happen till 2023 and the agreement doesn’t include trusts, Bullough emphasised the importance of “proper transparency over the ownership of property” in combatting corruption.

Co-operative’s role in tackling the globalised corruption of Moneyalnd

“There are no co-ops in Moneyland” was the opening line of the talk on creating an ethical economy at the Co-op Congress. This is most likely due to Moneylanders being driven by greed, whereas, as the maxim suggests, “co-ops are based on human need, not human greed”. Bullough believes co-ops and other structures with inbuilt ethical values and principles have a role to play:

“I think co-op structures and that form of ownership, it embeds values, other than just maximising profit, at the very beginning of a concern. People who are enabling Moneyland, they know this is wrong, they know what is happening is wrong, they are not psychopaths, but they just want to make money. Right, that’s their business… they don’t care about moral values… If instead of banks we had more building societies again, then these kinds of tricks just wouldn’t happen, this kind of financialised nonsense just wouldn’t exist, there would be a much smaller space for it.

“It’s not a coincidence that these crooks go and buy their stuff at Harrods and they don’t buy it at say John Lewis. Because Harrods exists to make a profit for its owners, there are no other values embedded in its set up.”

“So absolutely, forms of co-op ownership and forms of trying to restore accountability to something other than the profit motive in terms of how we do things… to restore a form of responsibility to corporate concerns – it’s crucial, really crucial.”

The oligarchs and tin-pot despots that inhabit Moneyland are allowed to suck out the resources of a country and pay nothing back in the way of taxes or other investments. Moneylanders enrich themselves at the immense cost to resources and human suffering of their compatriots. They are the bastard offspring of the geo-political couplings of the laissez faire economics champions Margaret Thatcher and Ronald Reagan; the two people that ensured “greed is good” became the mantra for the eighties. Moneyland and its nomadic responsibility free inhabitants are the antithesis of the co-operative movement.

The battle is on, and we cannot leave the fight to our politicians alone if we want to tackle global corruption and build a fairer economy. Our new Prime Minister Boris Johnson has promised a boost to the Moneylander’s domain by pledging to provide “free port” status to up to ten shipping ports and airports across the UK. Professor Richard Murphy, a co-founder of the Tax Justice Network (TJN), has described freeports as a “boon for money launderers and tax evaders”.

Co-operators and the many others who support the development of a fairer economy need to throw their support behind organisations like the TJN and be vocal in their opposition to the immoral operations of the offshore financial world, if the scourge of globalised corruption is to be defeated.


Conrad Bower

This article is part of the ‘Co-operative Manchester‘ series. Exploring the past present and future of co-ops in the city

Feature image: Composite with cover of Moneyland central

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  • Conrad Bower

    Reporting interests include social justice, the environment, and human rights. A staunch advocate for the scientific method and rational debate for understanding the world - he believes only greater public understanding and engagement with the problems affecting society, can produce the progressive change we need. Co-founder of The Meteor.

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