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Democracy in Focus: Follow the dark money…

Originally published: Red Pepper on January 10, 2020 by Adam Ramsay (more by Red Pepper)  | (Posted Feb 19, 2020)
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Greater Britain, as we might call it, has over the past 70 years transformed itself from the largest-ever land empire to a sprawling financial one: a network of tax havens and money laundries stashing cash for the world’s oligarchs, mafiosi, gangsters and hedge funds. It has done this by taking advantage of the gaping loopholes in the UK’s uncodified and decomposing constitution, by taking advantage of the fact that we let them make up the rules as they go along.

Anyone on the left looking towards taking power at Westminster needs to give serious consideration to the threats–and opportunities–from the fringes of Greater Britain. This is one of the conclusions of the investigations that I and my colleagues at openDemocracy have carried out over the past three years into the dark money behind the Brexit campaign and right-wing think tanks and politicians in the UK. Almost invariably, we found ourselves following the money into tax havens and secrecy–along the same hidden pathways used by tax dodgers and money launderers–where it is almost impossible to trace what they are up to.

The threads all led through the City of London, which is used to laundering the cash of crooks from across the world unfettered by serious controls or policing of such operations. Test your knowledge of how this money is protected by the Greater British state and what would face any attempt to catch up with the tax dodgers (answers below).

Quiz!

  1. Which hemisphere contains most British land?
  2. What is the title of the constitutionally mandated lobbyist for the City of London in the Houses of Parliament?
  3. In what year was the UK famously described as ‘the most corrupt country on earth’?
  4. By whom?
  5. In the notorious ‘justification’ for the Iraq war, Saddam Hussein was supposed to be able to deploy weapons of mass destruction within 45 minutes of an order to do so. Against which targets?
  6. The UK and its overseas territories were the most common jurisdiction of companies revealed in which major leak in 2016?
  7. What, in a recent study for the Transnational Institute, did academics Reijer Hendrikse and Rodrigo Fernandez argue constitutes the backbone of contemporary global capitalism?
  8. Which major Tory donor is based in the tax haven and quasi-British colony of Belize?
  9. Sultan Qaboos was installed in power by an MI6 coup in 1970 and still rules over his country to this day. Which country?
  10. How many legislatures are there under Westminster’s power or formal protection?
  11. Can you list them?
  12. What is the oldest continuously sitting parliament in the world?
  13. Roughly how many companies are registered in Ugland House, one relatively small, five-storey building in the Cayman Islands?
  14. According to local legend, who is said to have granted the Cayman Islands its status as a tax-free English colony, and when?
  15. What were the top three countries by total quantity of external loans and deposits of all reporting banks in 2015?
  16. What is the global jurisdiction of choice for hedge funds?
  17.  Which three jurisdictions have the highest ratios of foreign assets to domestic GDP, and what do they have in common?
  18. Which country has the most private mercenary companies?
  19. Which country was considered Europe’s last feudal state, and in what year did it introduce democracy?
  20. What’s the smallest self-governing jurisdiction by population and who do its residents descend from?
  21. How many companies are registered in the British Virgin Islands?
  22. How many companies were subject to on-site inspections by the authorities in the British Virgin Islands last year?
  23. In 2016, how much money did the home affairs select committee estimate to be the minimum laundered through the UK each year?

In summary, then, the UK has jurisdiction over much of the offshore space to which wealth is transferred to evade tax–as it would be to evade a serious wealth tax of the kind proposed by John McDonnell before the recent election.

The majority of companies mentioned in the Panama papers were listed in the UK or its territories. When companies and politicians around the world rob money from the poorest people on the planet, it is in Britain’s territories that they tend to stash their cash. When billionaires decide they don’t want to pay taxes anymore, it is often to British territories that they turn.

Granted autonomy over tax rates and company transparency, but the full military protection and reputation that comes with being British, these territories have managed to turn themselves into a key corner of the UK’s vulture economy–key nodes in a network that centres on the City of London itself.

If you turn your country into a major money laundry, you shouldn’t be surprised if questionable cash washes up in your politics. We’ve turned our post-empire into a world wide web of offshore havens, and it’s no wonder that the same oligarchs, gangsters and disaster capitalists who take advantage of it are taking an interest in our politics, fighting to ensure that we don’t regulate them.

Answers

  1. The southern hemisphere
  2. The remembrancer
  3. 2016
  4. Roberto Saviano, the prominent mafia expert
  5. Akrotiri and Dhekelia, the British overseas territories on Cyrpus
  6. The ‘Panama papers’, revealing companies involved in dodging tax (the most common jurisdiction after Britain and its overseas territories was the former British territory of Hong Kong)
  7. Offshore finance and the wealth of billionaires
  8. Michael Ashcroft
  9. Oman
  10. Eighteen
  11. The devolved parliaments and assemblies (Scotland, Wales, Northern Ireland); the crown dependencies (Mann, Jersey, Guernsey, Sark, Alderney); and nine of the 14 overseas territories (Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat, Saint Helena, Ascension and Tristan da Cunha, Turks and Caicos Islands. The Pitcairn, Henderson, Ducie and Oeno Islands council can issue ordinances along with the governor. The British Indian Ocean Territory has no citizens living there, as the people of the Chagos Islands were forcibly deported at the request of the U.S. military in the 1960s. The Cypriot citizens of Akrotiri and Dhekelia live under British military dictatorship, and South Georgia and the South Sandwich Islands and the British Antarctic Territory have no permanent residents.)
  12. The Tynwald on the Isle of Man
  13. 18,000
  14. King George III of England, in 1794
  15. 1) The USA 2) The UK 3) The Cayman Islands
  16. The Cayman Islands
  17. 1) Cayman Islands, 2) British Virgin Islands, 3) Bermuda. All of them are British overseas territories
  18. The UK
  19. The crown dependency Sark, which is part of the Bailiwick of Guernsey; 2008
  20. Pitcairn, Henderson, Ducie and Oeno Islands; the mutineers of HMS Bounty and the women they kidnapped and raped
  21. 400,000
  22. Four
  23. £100 billion (the equivalent of the GDP of Ukraine)

Adam Ramsay is investigating dark money and industry influence at OpenDemocracy.

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