Monday, October 11, 2010

International Thief Thief: British banks in Nigeria

The UK-based campaign group Global Witness, a good friend of TJN's, has launched a new report entitled International Thief Thief: How British Banks are Complicit in Nigerian Corruption. This report underlines everything we have been saying about tax haven UK and the City of London: how it has sought to build up the UK financial centre by attracting dirty money from overseas, in large measure by being laxer than everyone else on its standards (see the bit highlighted in bold text, below.) Jersey and other secrecy jurisdictions, of course, are complicit too.

They don't mention it in the report, but the headline International Thief Thief (I.T.T.) is undoubtedly drawn from an album and song called I.T.T. by the astoundingly (and justly) successful Nigerian musical crusader, the late Fela Kuti, whose lyrics, mixing nostalgia for old traditions with horror at what has replaced them, along with a jab at then ruler Ibrahim Babangida (popularly known as I.B.B) are well, well worth reading. A short section is reproduced at the bottom of the blog.

The Global Witness report is so important with respect to the Secrecy Jurisdiction UK connection that we will reproduce the introduction in full.
British banks have accepted millions of pounds from corrupt Nigerian politicians, raising serious questions about their commitment to tackling financial crime. Our high street banks are quick to penalise everyday customers who become overdrawn, or to block credit cards at any hint of unusual activity. But Global Witness’s research suggests that the same banks are much less concerned about large amounts of corrupt money passing through their accounts.

Without access to the international financial system it would be much harder for corrupt politicians from the developing world to loot their national treasuries or accept bribes. By taking money from such customers, British banks are fuelling corruption, entrenching poverty and undermining international development assistance.

Global Witness has found that Barclays, HSBC, RBS, NatWest and UBS held accounts for two former Nigerian state governors, Diepreye Alamieyeseigha of Bayelsa State and Joshua Dariye of Plateau State. These men funnelled dirty money into the UK, spending their ill-gotten gains on sustaining a luxury lifestyle, in stark contrast to the poverty of ordinary Nigerians.

The Nigerian government took the governors to court in London to recover their illicit assets. The cases were successful and British judges ordered their UK assets to be returned. Drawing on court documents, this report examines for the first time in detail the roles played by the British banks which took money from these two corrupt politicians.

A particularly disturbing aspect of this story is that Barclays, NatWest, UBS, and HSBC reportedly took money from the former Nigerian dictator, Sani Abacha, during the late 1990s. They are supposed to have tightened up their procedures since then but our investigation suggests they have not done enough.

The UK regulator, the Financial Services Authority (FSA) needs to do much more to prevent banks from facilitating corruption. As yet no British bank has been publically fined, or even named, by the regulator for taking corrupt funds, whether willingly or through negligence. This is in stark contrast to the U.S., where banks have been fined hundreds of millions of dollars for handling dirty money.

The FSA is due to be abolished next year. Whichever organisation takes over regulating the banking sector must take corruption seriously. Banks that accept corrupt funds should be named, and if it is found that they acted negligently, heavily fined. Banks also needed to be provided with more information about how to spot corrupt money.

The UK’s aid to poor countries has been ring fenced against budget cuts. Meanwhile, banks - themselves propped up by taxpayer’s money - are getting away with practices that fundamentally undermine the effect of aid. This is not just illogical, it is immoral; our financial system is morally complicit in Nigerian corruption. The government must send a clear signal to the financial sector: corrupt money is not welcome. And the banks themselves must demonstrate much more clearly the steps they are taking to stop dirty money entering the financial system.
We won't reproduce any more of the report here - but it contains much to make Britain ashamed. As the report also notes:
"It is not just those countries traditionally thought of as tax havens that peddle corporate secrecy. The UK and US are both popular destinations for individuals who want to hide their identity behind a combination of companies and trusts."
A few last words from the Nigerian music legend Fela Kuti:
"During the time dem come colonize us
Dem come teach us to carry shit
. . .
Many foreign companies dey Africa carry all our money go
Chorus - Say am, say am, after each line)
Many foreign companies dey Africa carry all our money go
Dem go write big English for newspaper, Dabaru we Africans
Dem go write big English for newspaper, Dabaru we Africans
I read about one of them inside book like that- Them call him name na I.T.T

Them go dey cause confusion
Cause corruption
Cause oppression"

For more on the colonial aspects of all this, click here.

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