How Western Institutions Help To Hide Dirty Money
Corruption is everywhere. ‘It a global phenomenon’—the words of former prime minister Indira Gandhi. It could be by corrupting someone to part with an asset below fair price, or to be able to grab an asset in preference to someone else, or to snag some contract to make money. There are two parties in this: One, who gives a bribe to get something which is dispensed by someone who is in a position to do so; two, is the person who receives the bribe. Being in the government is a privileged position to abuse power and it is natural that a lot of corruption flows from the wielder of authority. 
Most of us are used to paying ‘speed money’. Whether it is to get a simple birth certificate or a driving licence. This is petty corruption. At the other end are folks who hand out national assets—coal mines, telecom licences or permits like banking licences. Others frame laws and rules designed to favour someone. 
And then we have businessmen who siphon off money from companies by billing personal expenses to the company’s account, routing sales proceeds elsewhere, writing off bad debts, etc. And then we have employees who take money because they are in a position to influence a business decision. Every sphere of life in India has the shadow of corruption over it. Then there is the irksome matter of ‘taxes’. Everyone wants to lower this burden as much as possible or totally evade it. There are petty evasions running into a few thousand rupees a year, to larger ones running to a few hundred crore rupees.
Corruption on a small scale is not noticeable or traceable. On the other hand, those who skim off crores of rupees need a safe haven as well as safe assets to park the money. If they do it within the home country, there is the risk of getting caught. Of course, India is safer than many other countries, because India itself offers a safe haven for a lot of ill-gotten assets, aided by a legal system that is managed by the ‘rich and powerful’. 
When the cop is corrupt, he will deal with corruption offences or complaints with kid gloves. All this helps the corrupt Indian to flaunt wealth within India itself. The legal experts and the accounting wizards help to launder a lot of money very easily. Plus, the well-designed loophole of tax-free agriculture income is another design in the legal architecture to help facilitate parking the dirty money.
Apparently, one side of corruption is carefully and deliberately hidden from debate. Moneyland, a delightful book by Oliver Bullough, rips the mask of the Western world which gives illicit money a haven. While they rail against corruption in other nations, their bankers, lawyers and governments are working overtime to ensure that crooks and their money have a safe haven in their own geographies. 
This is highly remunerative for their countries. This pool of external money also keeps the asset prices high, creating a sense of well-being among their citizens. Oliver Bullough has meticulously documented the efforts that UK, USA and a few other small and obscure countries like St Kitts, Nevis, Lichtenstein, etc, have done to facilitate global corruption. Cities, like London, are virtually owned by corrupt money from across the world.
As he says very tellingly, “Money flows across frontiers, but laws do not. The rich live globally, the rest of us have borders.” If India has to bring Vijay Mallya or Nirav Modi home, the Indian courts cannot do it. The rich and powerful are well protected by these havens which offer a cosy nest for their ill-gotten money and also the freedom to spend and buy assets in those nations.
So, who is more corrupt: The US, which now has the most liberal of laws to hide money from across the globe, or Ukraine or Nigeria? Ukraine cannot be corrupt without ample help from USA, UK and the Swiss. The US has played a clever game. It has unseated the holy Swiss bankers from their perch for being a haven for crooked money. And the legal framework it has thrust upon the Swiss is wonderful.  
The Swiss, and a few other countries, are signatory to a delightfully one-sided agreement that makes it compulsory for the Swiss and others to disclose full details of bank accounts, if the US asks. However, if you ask the same thing from a US banker, he is not obliged to do disclose the details. Each state in USA has its own additional attractions too. Nevada has ‘asset protection’ ordinances that give a law of limitation of two years to claw back any ill-gotten money. 
The author has also talked about ‘structures’ used to mask the ownership of assets; these structures are actively encouraged by the UK and the USA. Of course, the Swiss were the pioneers in the field; these two nations have taken it to a different league. The enablers (lawyers, accountants and bankers) are never harmed by these Western nations and have created an industry where they are ready to sell citizenships and passports at a price. Of course, no questions asked about the source of money. You read about how banks, like Citibank, have actively canvassed for such money without bothering about morals or legalities. And how the legal system lets them off with a token fee. 
So, how come on the Corruption Perception Index, the USA is 16th and India is 81st in the corruption ranking? Or how is Switzerland ranked 3rd and UK is ranked 8th? Clearly, the Westerners have manipulated perceptions of corruption and are past masters at making themselves look holy, argues the author. They have no morals but have given themselves the exclusive rights to preach to others. The author lays bare the double standards of the US and the UK in trying to tell the world to be honest. 
The book is fast-paced. There are a lot of examples from Ukraine, Russia and a few other countries. Some of them would probably make our politicians look like beggars. This book will make you angry. Of course, given the nature of humans, it may also be ‘inspirational’ for some.
Nasir Ahmed Rayadurg
5 years ago
The masters are now the manipulators and that too they perfected this art and makes them look saint in the eyes of other nations. Sophisticated hypocrisy
Nikhil Vadia
5 years ago
Wonderful review. Always felt that US and UK are not so honest as made out to be. Heard lot of stories from friends there. Though petty corruption is less there, high level (business and politicians) much more.
Anil Nagesh
5 years ago
Nice article sir! i ordered the book.
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