Moneyland: The Inside Story of the Crooks and Kleptocrats Who Rule the World

by Oliver Bullough

Estimates for the total amount stolen each year from the developing world range from a massive $20 billion to an almost unimaginable trillion dollars. And this money makes its way, via the offshore secrecy jurisdictions, into a handful of Western cities: Miami, New York, Los Angeles, London, Monaco, Geneva.

Money flows across frontiers, but laws do not. The rich live globally; the rest of us have borders.

Stable government aligns the interests of the strong and the weak, since they both want to see everyone get wealthy. The weak want to be wealthy for their own sake, while the strong want the weak to be wealthy so they can take more from them as taxes. Olson used the parallel of a mafia protection racket. If the mafia’s grip on a community is complete there will essentially be no crime, since it is in the boss’ interests for local businesses to make as much money as possible, so the amount of it he extorts will be greater. Crime is, for a society, an unproductive activity that forces people to spend money on guards and fences and locks, rather than on things that lead somewhere useful. It is therefore in all our interests to be governed.

And, if it were possible to abolish shell companies, what difference would that make? Could he imagine what his job would be like if he could easily find out who owned all the property he ended up investigating? “It would probably cut the investigative time by half, which is huge,” he said. “We would be able to concentrate our efforts on putting the pieces together, rather than trying to find the pieces. Right now, we spend most of our time trying to find the pieces. By the time we’re ready to put the pieces together, all sorts of things happen. Sometimes, by the time we get the information, the statute of limitations has gone, you’re done … In that respect, it would do a world of good.”

The crucial attribute of corporate vehicles is that they are legally separate from their owners and their owners’ liability for their debts is limited. What that means in practice is that, if you operate through a company, society as a whole is taking responsibility for your debts. It’s a kind of insurance. If your business fails, only the assets of the limited liability company will be at risk, not those of its owner. This is an exceptionally powerful tool, and one whose power is seldom appreciated. Imagine if it was as easy to register people as it is to register companies—you could go online, fill in a form, pay £13, and have proof of a person’s identity within a couple of days at most—the opportunities for fraud would be virtually unlimited. Your “person” could claim benefits, enter business agreements, open bank accounts, and then you could kill them off when they got in trouble, leaving the whole mess behind you.

It had taken a whole year for a revolutionary government to fire one doctor.

Ukraine

It is impossible to build a thriving economy, or a healthy democracy, without a society whose members fundamentally trust each other. If you take that away, you are left with something far darker and more mercenary.

In 2000, Oxfam published a ground-breaking report saying that $50 billion was being embezzled each year from the world’s poorest countries—a sum then roughly equivalent to the entire aid budget of rich countries sending cash the other way.

They're stealing from our taxes then.

And then, just days before it was due to be printed and two years of work would pay off, came a highly unwelcome email: “the editor considers the piece, even with legal changes along the lines the lawyer is suggesting, too high a legal risk to publish at the moment.” The words “at the moment” were unnecessary. That email meant the story was dead. I was free, of course, to take it to other publications, and I approached a succession of editors with whom I had previously worked and who I knew would trust the quality of my work. Sadly, however, trying to interest a new editor in a story that has been killed by a lawyer is like trying to interest someone in a dog that has killed its owner. I received a series of polite and sympathetic refusals, until finally I gave up. The story really was dead; the oligarch had got away with it. He and his family had almost no connection to the United Kingdom, yet the simple fear of being sued by them in the British courts led the publication (quite a prestigious one) to jettison a story that revealed how offshore finance and all the Moneyland paraphernalia were neutering Western attempts to impose sanctions

Although Zlochevsky had no reputation in the UK to defend, and his claim should have been inadmissible under the revised 2013 law on defamation, it would still prove expensive to fight. The Frontline Club is a charity and, although it is committed to free speech as part of its mission, it cannot afford to get into protracted legal battles with multimillionaires. The club would have won, but that victory would have been worse than Pyrrhic; long before legal vindication arrived, the club would have run out of money and been forced to shut down. The screening was canceled and, as it turned out, the letter terrified pretty much everyone else, too: the film has never been shown.

Nevada’s state motto is “Battle Born,” which reflects the fact that it gained statehood during the American Civil War, as part of a rushed effort by the Union to conjure new states into existence and thus gain extra votes for Abraham Lincoln.

There are rules against deliberately falsifying information, but enforcement is weak or non-existent: the only man who has ever been convicted of this crime—a company formation agent named Kevin Brewer—created two companies in politicians’ names, specifically to alert them to how easy it was for fraudsters to abuse British corporations. It was a publicity stunt, designed to shock them into action, but it achieved the opposite response. When he told them what he had done, he was prosecuted himself, and in March 2018 was fined £22,800, in a farcical legal proceeding that the British government’s own anti-corruption coordinator, an MP named John Penrose, called “a bone-headed exercise in shooting the messenger.”

We need to shine light onto this dark side of globalization, impose transparency on the ownership of wealth and property and find out who really owns what. Once we have done that, the Moneyland pathway will collapse, and we’ll be able to prosecute the corrupt and identify them as the thieves that they are.