Corruption – alive and well

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Max Hastings, a former editor of the Daily Telegraph wrote a thoughtful piece on corruption for the Guardian earlier this week. I recommend it. I applaud anyone who will say:

When the powerful can live beyond the law, corruption is never far away

and

[In Britain] we seem rashly acquiescent about the expatriate community in London. Few of the Russians who throng Bond Street and patronise the Gavroche restaurant have made their pile by anything we would call honest toil. Most are active participants in a gangster culture. Their cheques may not bounce, but many are drawn on accounts stuffed with stolen money - no matter that such thefts may have been authorised by the Kremlin. If we allow rich gangsters to locate here, their methods are likely, sooner or later, to infect our own society, in a fashion of which the Litvinenko murder provided a foretaste.

He was right to say:

that corruption will flourish until there is an international agreement on banking transparency.

But whilst he referred often to Transparency International's work he missed the point that they likewise overlook: that until the supply of corruption services is curtailed this practice will continue. I addressed this issue in a letter to the Guardian, published today:

Max Hastings rightly refers to the danger of endemic corruption. He misses one obvious point though. Apart from one mention of Switzerland, he does not refer to the role of tax havens in the corruption process. Worse, he does not mention that the offshore financial centres that exploit those tax havens are made up of accountants, lawyers and bankers, very often British-trained or -owned.

Corruption is a problem in many countries. But offshore financial centres provide the services that facilitate that corruption. The tax havens provide the secret spaces in which both can operate. The UK government, as sponsor and protector of about half the world's major tax havens, has a special responsibility for eliminating the corruption that takes place within its domain and influence.

Richard Murphy
Tax Justice Network

I make the point not to diminish what TI do. That would be foolhardy. But I do believe we need to go further. And that means we have to question the attitudes of the many within the financial establishment who are happy to service the gangster culture to which Max Hastings rightly refers.

And that means our banks, accountants and lawyers have to change their approach to corruption. And so does our government. Because let's be clear. The real issue in money laundering is not about catching the petty criminals. It's about stopping the looting of countries. And that happens with the support of the UK and its financial establishment.

It's a sobering thought for the New Year.