Kleptopia: how dirty money is conquering the world
by Tom Burgis
Harper Collins, £9.99

THIS is a very vividly written account of by far the largest financial crime on record. Burgis is an investigations correspondent at the Financial Times. He shows that corruption is not in the system; it is the system. Capitalism and criminality are indivisibly one.

After the destruction of the Soviet Union, those who seized power privatised (aka, stole) its huge natural assets. Kazakhstan’s ruler Nursultan Nazarbayev seized control of the country’s vast haul of commodities by creating the Eurasian Natural Resources Corporation (ENRC).
 
Burgis explains: “ENRC was a dual corporation … there was ENRC plc, a corporation with shares traded on the London market, bound by laws and regulations, producing accounts, making presentations to investors about its exciting prospects, and enjoying the protection of the law. Then there was its doppelganger. Its purpose was not to dig ore from the earth, but … to shift money from the open books of a public corporation to the closed ledgers of the financial secrecy system.” 

In Russia, “there were two crowds you needed if you were going to retain your influence through the coming transformation: the spooks and the crooks. … Gorbachev gave orders that the Party work out how to turn power into money before the former ran out. ‘The top priority’ … [KGB head Vladimir] Kryuchkov decreeing, ‘should be developing the KGB banking and business empire.’” No wonder the West’s leaders love Gorbachev, though the Russian people do not.

After Nazarbayev’s forces massacred strikers in Zhanaozen in December 2011, Tony Blair suggested that Nazarbayev’s speech in Cambridge should claim that “these events, tragic as they were, should not obscure the enormous progress that Kazakhstan has made.” Blair receives an estimated $13 million a year for his services to the dictator. He has done similar “consultancy work” for JP Morgan, the government of Kuwait, and Abu Dhabi’s investment fund. By 2017, he was worth an estimated $90 million.

The Swiss bank BSI was part of an enormous inversion of the rule of law. Nigel Wilkins, who investigated BSI, wrote, “The scale of the money laundering and tax evasion facilitated by the Swiss banks globally makes this activity the largest financial crime on record — and by a very wide margin.” 

But he was, as he wrote, up against “those factions of the FCA [Financial Conduct Authority] who are apologists for the industry — irrespective of how it behaves.

“The City’s regulator, Nigel believed, should be ‘a global policeman to stop people using institutions in London to plunder their fellow countrymen and women back home’. Instead, he concluded, it was ‘on the side of the crooks’.”

In 2015, Chancellor George Osborne called for an end to “banker-bashing” and for a “new settlement” with the City. Burgis comments: “He demonstrated what that meant by removing the head of the FCA, Martin Wheatley, whom bankers had deemed excessively keen to actually regulate them. A signal that the UK remained open to dirty money, regardless of the ultimate cost …” As Burgis notes, “inflows of dirty money from around the world were just another source of investment into otherwise declining economies.”

Burgis notes that “When Putin annexed Crimea, David Cameron summoned senior ministers in his government to formulate the British response to the first seizure of European territory since the world wars. One of the officials striding up Downing Street failed to shield his briefing memo from the photographers. It stated that, whatever else the UK did, the City must stay open to Russian money.” 

He claims that Xi Jinping’s “relatives, not the general secretary himself, held the business interests amassed as he rose through the Chinese Communist Party. At the time he took over the Party in 2012 they held stakes, hidden under layers of financial camouflage, in companies with assets of $376 million, as well as $50 million in Hong Kong real estate.”

Huge sums evade and avoid tax via the global strings of tax havens, half of which are British-run, linked to the City and defended by successive governments — Conservative, Labour, coalition, it makes no difference. 

As Burgis observes, “the amount of money stashed ‘offshore’ grew to $7.6 trillion. That was, at least, the best guess, because a guess was all anyone was allowed to make. … The offshore bounty was double the single biggest reserves — China’s — and more than half the global total.” 

Ever-lengthening chains of shell companies ensure the ill-gotten wealth never trickles down, never gets checked by national exchequers, but surges through discreet channels into the hands of the very, very few. Xi, Trump, Johnson, Putin, Zelensky, all figure in this book: it seems there is hardly a leader who is not on the take. 

They all tell us how good globalisation is. Well, it is good for them. Global finance capital is unbridled finance capital, secret finance capital. Globalisation is all about maintaining this global financial secrecy system.