2007 - 2022

Pecunia non olet


The Conservative Party quite obviously has not fully, and genuinely embraced devolution. Particularly in the current political expression of devolution represented by Holyrood and the democratically elected Government there, with the generosity of spirit we are entitled to expect of fellow partners in a close Union carefully serving everyone. Instead Scottish Conservatives, who have not been able to command a democratic majority in Scotland, in Westminster since 1955 or in Holyrood since the first elections there in 1999; are reduced to glossing every failure, while recalibrating and inflating every minor, partial, transient and unreliable electoral recovery, typically in limited geographical areas as exceptional triumphs, and somehow representing overall decisive defeat as a victory over Scottish public opinion; when clearly it is nothing of the kind.
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The Scottish Conservatives are invariably bad losers, and in rare successes, like the 2016 Referendum, with its appeal to the unshakeable value of the EU, did not produce in them the wisdom or grace of magnanimity; but the grim sneer of bad winners. It is as well to remember that accepting political loss in any election or referendum cannot require the loser to accept the result, but to give up the political case; any more than the opponents of the EU in the Conservative Party were required to give up the vision of Brexit no matter how often they were defeated, or how long they had to fight. Ironically, the Brexit Conservative Party has acted far more ruthlessly to dispose of the Remainers from Parliament, than ever the Remainers treated them.
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Instead of embracing the bracing political realities of a Scotland devolved, and face the weaknesses in the Scottish Conservative ranks; the quite obvious lack of talent or ideas from the thin gruel of the membership or elected politicians, Scottish Conservatives spend their efforts now carefully circumnavigating the cataclysmic disaster zone that is Boris Johnson in all his shifty charm; of the dysfunctional disarray in Downing Street and Whitehall, the Brexit NI Protocol blunder, the PPE scandal, and now the Money Laundering disaster that has spilled out of the financial sector to expose our Foreign Policy to public international embarrassment. Scottish Conservatives are to be found instead, focusing on a homegrown paranoid critique of the Scottish Government that is obviously, so exaggeratedly ‘over-the-top’ the hysteria is obviously artificial; a desperate tactic grasped only because it has to be angrily apocalyptic merely to stand any comparison with the lunacy that everyone can see has infected Conservative politics in Westminster. This is the atmosphere in which our politics is being conducted.
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Meanwhile, one of the few things the British Government seemed to have found acceptable in Scotland, at least until quite recently, is something that was invented around 1907: Scottish Limited Partnerships (SLPs). The Scottish Conservatives had little to say about them over almost the last century. Indeed Conservative Governments have long implied approval of them until very recently, not least by doing nothing about features of SLPs that in modern conditions had notably proved disturbing. Three years ago, according to a report in ‘The Times’: “Foreign criminals were able to launder billions of pounds of dirty money through the UK because of a failure to close a business loophole, investigative reporters have claimed. Last year the UK government announced plans to clamp down on Scottish Limited Partnerships (SLPs), which were set up in 1907 to assist agricultural businesses. They became popular with organised criminals in the former Soviet Union because, unlike limited companies, owners’ identities did not have to be revealed in official paperwork.” (The Times, 4th October, 2019: ‘Criminals used Scottish Limited Partnerships’ loophole to launder billions’.)
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The British Government were warned about the SLP loop-hole, and this leads us to a wider problem of the British Government having failed adequately to act against money-laundering in London. Indeed it is no accident that Britain, and notably London is known throughout the world as the Londongrad Laundromat. The US ABC News titled a report, 14th January 2019 “’Londongrad’: The real-life fight against dirty money flowing into London from foreign countries”. The core of this report was headed ‘All roads lead to London’, and explained: “The National Crime Agency (NCA) estimates that billions of dollars of dirty money are moved through or into Britain each year, according to the UK’s government’s own national risk assessment of money laundering. The NCA itself said: ‘The U.K. is an international financial center, processing trillions of pounds of transactions every year.’ ‘Together with the presence of a highly developed professional services industry,’ the agency said, ‘this increases the attractiveness and vulnerability of the UK’s financial system to exploitation by those engaged in money laundering.’ Anti-corruption campaigners and financial experts argue that London has served as a hub for this illicit activity for too long.”
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One of the subtle ways in which this failure of government to act is effected, is by claiming that there is sound  regulation or legislation already. The problem here is that the supervision and implementation of the regulations, from company formation onward is simply inadequate; bereft of teeth, or effect. Transparency International reported 3rd May, 2018 (four years ago) in a report on SLP’s and UK money laundering that: “HMRC – has a poor record on enforcement against money laundering failings. In 2016/17 HMRC issued just 895 penalties across all the sectors it supervises amounting to just over £1 million – equating to an average fine of around £1,300 – providing little disincentive to formation agents considering lucrative clients which are nonetheless suspicious and constitute a high money laundering risk.”; which provides an illustration of the inadequacy of resources the UK has applied to the problem of backing-up regulations with the action required to execute them. This cannot be an accident. Actions require matching resources.
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The provision of resources to investigate or prosecute; in scale, level of investment and political priority is a matter of Government policy. If the resources are spread too thin, or are overwhelmed by the scale of the problem, or of insufficient quality, no matter the strength of the regulations of legislation; they will fail. At the same time British regulators have a long, long history of abject failure, and of being hastily and breezily discarded. Most notably in recent years the unlamented Financial Services Authority (FSA) 2001-2013, which was notably almost the only institution that paid the full price for its failures in the Financial Crash, 2007-8. It was replaced.
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The alternative to serious investment in real, functioning regulation that works, and of prioritising outcomes over mere (supposed) ’intentions’: is to ‘regulate’, or ‘legislate’, then simply expect or wish for the end to happen of its own accord, but apply neither the resources or effort to achieve the sought outcomes (or review and audit the effects). The failure to prosecute implementation of regulations or legislation is, as a matter of fact, rarely ever publicly noticed or becomes a political issue, save through the intervention of a sudden, unexpected scandal or crisis, and even then the political interest is typically brief and ephemeral. The failure to prosecute the implementation of legislation or regulations thus invariably allows nothing productive to be done or achieved by Governments, while allowing the politician publicly to point virtuously at the existence of the regulations or legislation as proof of the virtue of the Government’s high-minded ‘intentions’.
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Frequently, when challenged over the lack of prosecution of a law, or implementation of regulations, politicians in power become even more haughtily virtuous; demanding that if critics have any evidence of wrongdoing, it is incumbent on them to produce it immediately. This is a device to pass responsibility from the executive to the public; as usual, the public is on its own, typically without the capacity to help itself. It suggests that we have a form of drive-through, self-service legal enforcement (perhaps increasingly offered as the next step on the small-government, DIY neo-liberalising of absolutely everything). Thus are we governed. Neoliberal Governments ‘pass the buck’ to the individual, floundering on his or her own, as a matter of political convenience and policy. It is as simple as that.
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The NCA describes itself as leading “the UK’s fight to cut serious and organised crime.” The NCA, however has one hand tied behind its back. UK Government, especially (but not exclusively) under the Conservatives, has followed a narrow political, ideological reluctance to act wherever the magic word “market” is incanted, with pious religiosity, by the Conservative neoliberal priesthood; a neat solution which always produces a guarantee of Government paralysis, wherever substantial resources and commitment to implement any legislation that exists is required. The magic incantation, used by Conservative acolytes in the tabloids as the terror that threatens free markets, liberty and prosperity whenever Government is under criticism of its indifference to regulatory failure, short, simple and reduced to two words replete in popular tabloid contempt: ‘Red Tape’. When these two words are uttered in public, law and regulations immediately wither and die on the vine. The result can be seen in everything from our Building Regulations (from Grenfell to the tens-of-thousands of apartment mortgagees trapped in high-risk homes and near bankruptcy by the lack of rigorously applied ‘Red Tape’ that was in our building regulations for the cladding of apartment blocks); but equally to be seen in the sixteen year British open-door policy on the immigration of dirty money into the British economy and the open door we provided to any of the world’s kleptocrats rich enough to step through it, and into British society.
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The absurdity of the British position was revealed only by the Ukraine crisis, when the PM suddenly found that the biggest threat Britain could offer Putin and Russia was financial sanctions in the City of London: over ten years too late, in order to introduce with any effect. All that matters to Johnson is the sound-bite: but let us look briefly at the context of this abhorrent failure of the British Government to act, since at least 2006; sixteen years ago, and the Conservatives have been in power for twelve of these years; and achieved precisely nothing. We know that because if they had done anything, Johnson would not now be scrabbling around in this grubby mire, protesting what he is going to do now; over a decade too late, and only faced with the abyss of War in Europe, to find himself feeling obliged say or do anything at all.
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In 2006 the Russian dissident Alexander Litvinenko was poisoned by means of polonium in his tea, administered by assassins in the genteel setting of the public lounge of a Mayfair hotel. It is possible Livinenko worked for MI6. The British Government in the Litvinenko scandal played much the part of Renault (Claude Rains) in ‘Casablanca’ (1942); whom, after every crime filmgoers may remember, gave the risible order, ‘round up the usual suspects’; knowingly confident it would make no difference to anything, save a public appearance of vigorous action, without doing anything. In the Litvinenko assassination, the British Government expelled a few Russian diplomats (the classic minimum diplomatic gesture, with the ‘usual suspects’). At the end of the film, Renault redeems himself; but sixteen years of dither, and of dubious (nobody knows how many) financial transactions, or how much illicit money has passed through Britain; is all a little late for the redemption of this, or previous Britsh Government’s reputations now.
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The Golden Visa scheme (a fast-track visa for the very wealthy, much used by Russian oligarchs, and in principle an open invitation to kleptocrats and dirty money) was actually set-up only two years after the Litvinenko assassination; in 2008, and the PM and Home Secretary are still; still (!) threatening to end them; and only because of a Putin threat to invade Ukraine. Fourteen years too late; a mere fourteen. If there were any kleptocrats among the Golden Visa applicants, most would now be British citizens; thus acting now is far too late! We can put some figures on the scale of this problem. Recent press estimates suggest there have been 13,000 Golden Visas issued since 2008; 2,581 (20%) to Russians, and 55 to Russians as late as 2021. The anti-corruption critic ‘Spotlight’ has suggested 50% of Golden Visas could be classified as being risky.
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Our Home Secretary, the Rip Van Winkle of the Golden Visa fiasco; waking up after the revolution is all over, has now decided: “I want to ensure the British people have confidence in the system, including stopping corrupt elites who threaten our national security and push dirty money around our cities” (The Independent, 18th February, 2022). Sixteen years after the Litvinenko assassination, the horse we might think had bolted. It didn’t need to; kleptocracy was given all the privileges it could ever imagine; most securely of all, citizenship. We have potentially integrated the kleptocrats. Who knows? The horse didn’t bolt. We invited the horse to take over our home, while we move into the stable. Priti Patel has reduced British immigration policy to Whitehall farce. Contrast her complete failure to act on Golden Visas throughout her whole period in office, with her populist obsession with stopping desperate migrants sinking in dinghies in the Channel landing on our shores. Meanwhile, by her own admission British society, economy and its politics has long been first infiltrated, and now may have been overrun and undermined with dirty money; for all she is in any position to know, or could tell. For example does the Home Secretary even know, after fourteen years of unmonitored Golden Visas, consequently – the number of potential awards of British citizenship to kleptocrats?
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Here is the comic response to a sixteen year disaster for Britain  from a slapstick PM currently and simultaneously posturing abroad as Statesman and skulking in Downing Street, filling up police forms (as the man who has uniquely perfected the shifty swagger), audaciously providing this Daily Mail report, 15th February, 2022: “Boris Johnson today promised to strengthen the Government’s crackdown on ‘dirty’ Russian cash as MPs said more action should have been taken long before the current Ukraine crisis.
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The Prime Minister rejected claims that the Government had not done enough to address the issue in the past and said the UK has ‘done a huge amount on dirty money’.”
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Or to translate that Johnsonism into modern English we can all understand, ‘the British Government has as yet done nothing to stop the activities of the Londongrad Laundromat’. In the very same article, the Conservative MP Bob Seely MP, a member of the Foreign Affairs Select Committee provides the real explanation of the problem, and the failure: “’On Russia, we have known about this problem for years. The problem is that the front line with Ukraine is the border, the front line with Germany is the gas pipeline – and the front line with the UK is the City of London. We need to be wiser about how the Putin regime acts and the potential threat to our institutions and values, and how we can protect them against a potential tsunami of questionable money.” The reference to being “wiser” rather limply gives the game away to the implicit lack of adequate action (as if this was somehow a minor breach of a technical error); this is far, far worse, and it is jaw-dropping in its implications, because it has been obvious to critics outside the Conservative party for years what was wrong; from the death of Livtinenko, if no earlier, neoliberal ‘free-market’ obsession has left Britain open to gross infiltration and undermining of its institutions.

Confirmation that all this is far too late is provided by the Parliamentary Select Committee for Foreign Affairs, Chaired by the Conservative Tom Tugendhat MP, which reported 21st May, 2018; almost four years ago. The Report, titled ‘Moscow’s Gold: Russian Corruption in the UK’, could scarcely be more explicit about the problem. Here is a frank excerpt from the Summary: “Turning a blind eye to London’s role in hiding the proceeds of Kremlin-connected corruption risks signalling that the UK is not serious about confronting the full spectrum of President Putin’s offensive measures. We therefore call on the Government to sanction more Kremlin-connected individuals, including by using the powers outlined in the Sanctions and Anti-Money Laundering Bill, once available, to sanction individuals responsible for gross human rights violations. We also ask the Government to work with the EU, US and G7 to tighten loopholes in the sanctions regime that allow Russia to issue new sovereign debt with the assistance of sanctioned entities such as VTB Bank.
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The Government must show stronger political leadership in ending the flow of dirty money into the UK. This should include allocating sufficient resources and capacity to the relevant law enforcement agencies, and improving mechanisms for information- sharing. The scale of the problem and its implications for the UK’s security also demand a greater response from the Overseas Territories and Crown Dependencies, through which some of this money enters the UK. We therefore welcome the Government’s commitment to assist the Overseas Territories in establishing publicly accessible registers of beneficial ownership. We urge the Government to do everything in its power to enable the Overseas Territories to put these registers in place voluntarily, before the end of 2020, and to set out clear plans for supporting the economies of the Overseas Territories as they do so.” (House of Commons, Foreign Affairs Committee, HC932; Summary, p.3)

The PM considers there is something to do now, four years later and only under the duress of crisis at home, a threat to his position and of war in Europe; but at the same time he claims the Government has already done a great deal; we just don’t know what it is.You will never find out. It is just another puff piece. The proof of the matter’s critical importance here is that a Russian threat to invade Ukraine now (a “quarrel in a far away country, between people of whom we know nothing”, if I may quote from another out-of-touch, out-of-his-depth Conservative PM), suddenly produces a reaction by the British Government regarding access to Visas and to a threat of money laundering that has long been known as matters of profound concern, and ignored for fourteen years. Acting to close that problem off would have worked best fourteen years ago; acting now, under these conditions is a salutary lesson that neither this PM, nor this Government is fit for office.
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What is the test of Conservative Party or Government standards in public life, that Conservative politicians consider to be in the national interest? We now know. There is only one.  Finance, money and money markets together trump everything: ‘Pecunia non olet’ (attributed to Vespasian) – ‘the money doesn’t smell’.

Comments (5)

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  1. James Mills says:

    It’s good to know that Putin will never invade the UK – he controls it already !

    1. Tom Ultuous says:

      I was just thinking that James. He might threaten to undo Brexit if the Tories go too far.

      A good read John.

  2. Wul says:

    Good article. Thank you Mr Warren. Brings together the utter mess we are in.

    HMRC employs many more people investigating and prosecuting benefit fraud (which is always less than benefits unclaimed anyway) than it does investigating billion-pound, organised tax evasion. “First we make our habits and then our habits make us” as my Granny used to say.

  3. gavinochiltree says:

    We have a government (or regime) consisting of crooks, dupes, casino capitalists, insider traders (posing as Ministers of State), asset strippers, profiteers, del-boys and other grubby pick-pocket types.
    Politics for them is an opportunity, not a calling. Electors are a hindrance until they get kicked “upstairs”.

    They are led by a man whose faults, traits and personal flaws are the stuff of a psychiatrist couch.
    Bye the bye, he is also a “King Midas by proxy”——when he sees gold, he wants to touch and own it.

  4. Craig P says:

    I didn’t know about the ‘golden visas’ – eye opening.

    Especially as people were threatened with deportation to a land they hadn’t seen in decades in the Windrush scandal – though at least that was swiftly resolved.

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