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Dirty Money in London event (2016)
- Transcript online translated by Claudia Colvin (May 31, 2016).
- If we were to ask which country is the most corrupt in the world, the first answer to come to mind would be dictated by the perceived level of corruption. Perhaps one might think of Mexico, of South American countries, of African countries, of the Middle East or Italy. But the most corrupt is the UK. It’s not a type of a corruption that concerns civil servants, policemen or mayors; it’s a type of a corruption that is consubstantial to economic system. The British economic system feeds itself on corruption. And in the midst of this, the British government and its citizens have not woken up to the plight that their country is going through. A plight greater than earthquakes, greater than terror attacks.
- A very interesting report on the London property market as a refuge for secret assets and dirty money – published in March 2015 by Transparency UK – spoke of money coming from corruption or corrupt individuals, without ever mentioning the word “Mafia”; nor did it ever mention “organised crime”. The reason is simple: with the exception of a few very rare cases, in the UK the mafia is not something that you can see or hear. There aren’t dead bodies on the streets, or shootings. In Mexico or in Italy, between corpses, blood and drug seizures it’s impossible to think that the Mafia doesn’t exist. In Italy and in Mexico Mafia is loud and it smells of blood. In London, as in Paris, it exists, but it’s quiet, it acts in the dark. And most of all it doesn’t have the pungent smell of blood, but the reassuring smell of money. It’s not true that money doesn’t smell, it does smell indeed, but you definitely can’t rely on your sense of smell to identify criminal money.
- Unlawful revenue which, after being conveniently cleaned, is then reinvested within the legal economy: polluting it, corrupting it, forging it, killing it. Whether it’s reinvested in the London property market, in Parisian restaurants, or in hostels on the French Riviera. Drug trafficking money will buy homes that honest folk can no longer afford; it will open shops that will sell at more competitive prices than legitimate shops; it will start businesses that can afford to be more competitive than clean businesses. But one thing must be clear: these businesses are not interested in being successful; the main purpose for which they were created was to launder money, turning money that shouldn’t even exist into clean and usable money. In silence, illegal assets are moving around and undermining our economy and our democracies. In silence. But it doesn’t stop here; organised crime is providing us with a winning economic model. Organised crime is the only segment of global economy to have not been affected by the financial crisis; to have profited from the crisis, to have fed on the crisis, to have contributed to the crisis. And it’s in the crisis that it finds its satellite activities, such as usury, gambling, counterfeiting. But the most important – and most alarming – aspect of this issue is that it’s exactly in times of crisis that criminal organisations find their safe haven in banks.
- The city of London, together with Wall Street, is the world’s biggest “launderette” of drug trafficking’s dirty money. It’s in British banks, or in British branches or foreign banks, that criminal money gets laundered. And banks, in turn, are profiting by moving around and investing these huge amounts of liquid assets. Liquidity is what they’re after, especially in times of crisis. And liquidity is what criminal organisations have. All banks need to do is to lower their monitoring standards, their anti-laundering standards, and the job is done. The scandals concerning the relationship between banks and drug trafficking that emerged in the past few years are a proof of this. The HSBC case is an example. Europe’s first credit institute in terms of market capitalisation, one of the biggest banking groups in the world, has laundered drug money. ... Most of the world’s money laundering would not exist without the support of banks, who, in order to hide their account holders’ and investors’ identity, exploit the Chinese boxes scheme: shell companies controlled by in turn by other shall companies based offshore, run by legal firms through trusts, in an infinite series of steps that make it impossible to track down the true account holder.
- The only company to have made a profit is the one in the tax haven, but because it’s in a tax haven, it doesn’t pay tax. This is how a company is able to generate revenue without having to pay tax anywhere. In tax havens, boundaries between what’s legal and illegal become very blurred. The recent leak on the Panama Papers revealed how international leaders, celebrities and businessmen from all over the world were using offshore companies to avoid making their assets public and, in some cases, potentially to dodge tax or hide illegal activities. Panama is where criminal capitalism and legal capitalism become one. ... Today in the heart of Panama you can still find the money of Mexican Narcos and major European businessmen. Different origin, same advantages.
- But the problem is that the boundaries of tax havens themselves can become very blurred. London is an international financial system that sees trillions of dollars from all over the world go through it each year, and that offers the most sought after financial services. This alone would be enough to make this city a desired anchorage for those looking to launder and reinvest unlawful funds. But there is more; besides this, the British capital is at the heart of the world’s most important offshore system.
- Have you ever asked yourselves why Mafias from all over the world are constantly opening restaurants, cafes or shops? Because this type of commercial activity has huge amounts of cash coming in. A Mafioso businessman’s number one priority is not to make money, but to hand out receipts in order to justify money that he already has. In Italy, where tax avoidance is extremely high, we know that when a shopkeeper is reluctant to give you a receipt he or she is almost definitely committing an offence, but almost definitely not a Mafioso. Businesses run by the Mafia will always give you a receipt. And the Russian Mafia, in the years of the wavering ruble, safely stored away its money in London’s luxury homes, fuelling London’s property bubble with dirty money. The fictitious buying and selling of property is one of organised crime’s favourite ways of laundering money. ... This is how entire neighbourhoods in London are becoming unoccupied, turning into investments’ empty spaces. Money moves in, and people move out.
- A fully-serviced tower block that is empty for most of the year, whilst most Londoners can barely find an affordable place to rent in London. Houses in London are not being used as homes, but as concrete safes, looking after (often laundered) money.
- Official website
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