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Moneyland by Oliver Bullough
The Blurb On The Back:
These are the men who stole the world.
Investigative journalist Oliver Bullough reveals the obscene dark side of globalised finance, a shadow realm of oligarchs and gangsters, unimaginable power and zero accountability. It’s a place you are unlikely to visit, but you can see its effects everywhere. Just look around.
How did we get here? In the 1950s, a small group of bankers in London had a clever idea: ‘offshore’, an imaginary zone where money could flow free. Their breakthrough created a vast reservoir of secret wealth, one that bends the laws of every nation on Earth in order to protect its masters.
Thanks to offshore, for the first time thieves could dream big. They could take everything - which is exactly what they will do, unless we stop them.
Oliver Bullough is a journalist and writer specialising in Russian history and politics. In this well-researched, easy to follow book that left me incredulous and furious, he sets out how the international finance system (facilitated by Western bankers, accountants and lawyers) permits the rich and the crooked to hide their money while still benefitting from it. It’s jaw dropping stuff that makes you realise that money conquers all.
Bullough writes about this horrendously complicated subject in a way that’s easy for readers to understand. Essentially the book is about offshoring and the use of offshoring techniques by people (whether legitimately or illegitimately wealthy) to transfer their money out of their home nation to reduce their tax burden and, correspondingly, make it virtually untraceable by the authorities. Bullough stresses that not everyone who uses offshore techniques is dishonest or corrupt, using as an example an individual who had to flee a regime and therefore had a genuine reason for wanting a new passport and he also points out that there’s nothing illegal about using such arrangements to seek to minimise your tax liability. However, the majority of examples in this book are shonky as heck - whether that’s hiding illicit proceeds from criminal activity or deliberately hiding assets because you fear an expensive divorce. I also think that Bullough could have made more about the ethics of seeking to minimise tax liability on the part of people who are still very happy to take the benefits of living in their home nations.
Bullough starts by introducing the reader to the restrictions placed on international capital transfers under the post World War 2 Bretton Woods system and how this was gradually undermined thanks to the development of so-called Eurobonds by Siegmund Warburg in the 1960s in order to utilise money secreted in Switzerland, which separated the concepts of legal and beneficial ownership, and which could therefore be used to generate income. What comes through in the book is the concept of taking advantage of different regulatory systems for different purposes - something that’s hammered home again and again in the book, e.g. that’s taking the benefit of the legitimacy of having a UK registered company that’s owned by a more secretive Nevis limited liability partnership, which puts money in Switzerland to take advantage of Swiss secrecy laws.
Bullough then sets out how different nations (and, in the USA, different US states) are essentially then encouraged to compete against each other to produce regulatory regimes that facilitate such opaque methods of doing business. I hadn’t realised that the Nevis law on limited liability partnerships was written by a US lawyer and it’s absolutely horrifying to see how poorer countries are desperate to court the fees that come from those seeking to use these type of techniques such that it isn’t difficult to understand why they then move into other beneficial activities such as selling passports.
A lot of the book draws on the corruption uncovered in Ukraine after the fall of President Victor Yanukovich, with Bulloughs returning to it in order to illustrate a number of points - from the devastating effect that corruption has on everyday people (the example of Ukraine’s hospitals and the battle for drugs and treatment is particularly difficult to read) to the way in which those who are minded to can funnel their illicit gains through offshore companies and international property in order to hide it from the authorities. However, as a Westerner what really raised my blood pressure was how much Western accountants, bankers and lawyers are complicit in helping to people like Yanukovich to squirrel this money away. I had been aware of the way in which Russian oligarchs have been pumping money into luxury London property as it’s something that’s had some coverage in the UK press, but I hadn’t realised how the UK government has done so little to try and stop this and indeed some of their reforms (such as opening up Companies House to make company registration easier) has made it simpler to engage in illicit activity using the UK as cover.
Fundamentally depressing though is the fact that the system works in such a way that it’s incredibly difficult to hold people to account for their activities. Bullough sets out the factors at play in preventing this - from the need to demonstrate a crime in the individual’s home country (often impossible if the individual is a high ranking political figure and the nation riddled with corruption or lacking the resources/personnel to pursue a criminal case), to secrecy laws, to the way in which the rich can use UK defamation law to prevent journalists revealing what they’re up to. Even the occasional rays of light (such as the way the US government forced Swiss banks to give up information on individuals holding accounts with them) are dimmed when you realise that US efforts are very much a one-way street with no reciprocity. Certainly there seems to be little incentive for international cooperation in terms of tackling this international problem (although I would have liked to have seen some analysis from Bullough on EU efforts on this sector) and while Bullough prescribes accountability and transparency as a way of standing up to this system, given the international pressures at play here it’s difficult to see how that can happen.
Ultimately, I finished this book with a sense that the rules really don’t seem to apply to the rich and that the West might pay lip service to fighting corruption and crime, but it won’t do jack if it thinks its benefitting from it and as nations compete to give safe havens to this kind of money, it’s not difficult to see why public anger at such blatant inequality is on the rise. It’s a fascinating, illuminating and rage-inducing read and I’d recommend it to anyone who wants to understand what’s going on in the world around them.
The Verdict:
Oliver Bullough is a journalist and writer specialising in Russian history and politics. In this well-researched, easy to follow book that left me incredulous and furious, he sets out how the international finance system (facilitated by Western bankers, accountants and lawyers) permits the rich and the crooked to hide their money while still benefitting from it. It’s jaw dropping stuff that makes you realise that money conquers all.
Investigative journalist Oliver Bullough reveals the obscene dark side of globalised finance, a shadow realm of oligarchs and gangsters, unimaginable power and zero accountability. It’s a place you are unlikely to visit, but you can see its effects everywhere. Just look around.
How did we get here? In the 1950s, a small group of bankers in London had a clever idea: ‘offshore’, an imaginary zone where money could flow free. Their breakthrough created a vast reservoir of secret wealth, one that bends the laws of every nation on Earth in order to protect its masters.
Thanks to offshore, for the first time thieves could dream big. They could take everything - which is exactly what they will do, unless we stop them.
Oliver Bullough is a journalist and writer specialising in Russian history and politics. In this well-researched, easy to follow book that left me incredulous and furious, he sets out how the international finance system (facilitated by Western bankers, accountants and lawyers) permits the rich and the crooked to hide their money while still benefitting from it. It’s jaw dropping stuff that makes you realise that money conquers all.
Bullough writes about this horrendously complicated subject in a way that’s easy for readers to understand. Essentially the book is about offshoring and the use of offshoring techniques by people (whether legitimately or illegitimately wealthy) to transfer their money out of their home nation to reduce their tax burden and, correspondingly, make it virtually untraceable by the authorities. Bullough stresses that not everyone who uses offshore techniques is dishonest or corrupt, using as an example an individual who had to flee a regime and therefore had a genuine reason for wanting a new passport and he also points out that there’s nothing illegal about using such arrangements to seek to minimise your tax liability. However, the majority of examples in this book are shonky as heck - whether that’s hiding illicit proceeds from criminal activity or deliberately hiding assets because you fear an expensive divorce. I also think that Bullough could have made more about the ethics of seeking to minimise tax liability on the part of people who are still very happy to take the benefits of living in their home nations.
Bullough starts by introducing the reader to the restrictions placed on international capital transfers under the post World War 2 Bretton Woods system and how this was gradually undermined thanks to the development of so-called Eurobonds by Siegmund Warburg in the 1960s in order to utilise money secreted in Switzerland, which separated the concepts of legal and beneficial ownership, and which could therefore be used to generate income. What comes through in the book is the concept of taking advantage of different regulatory systems for different purposes - something that’s hammered home again and again in the book, e.g. that’s taking the benefit of the legitimacy of having a UK registered company that’s owned by a more secretive Nevis limited liability partnership, which puts money in Switzerland to take advantage of Swiss secrecy laws.
Bullough then sets out how different nations (and, in the USA, different US states) are essentially then encouraged to compete against each other to produce regulatory regimes that facilitate such opaque methods of doing business. I hadn’t realised that the Nevis law on limited liability partnerships was written by a US lawyer and it’s absolutely horrifying to see how poorer countries are desperate to court the fees that come from those seeking to use these type of techniques such that it isn’t difficult to understand why they then move into other beneficial activities such as selling passports.
A lot of the book draws on the corruption uncovered in Ukraine after the fall of President Victor Yanukovich, with Bulloughs returning to it in order to illustrate a number of points - from the devastating effect that corruption has on everyday people (the example of Ukraine’s hospitals and the battle for drugs and treatment is particularly difficult to read) to the way in which those who are minded to can funnel their illicit gains through offshore companies and international property in order to hide it from the authorities. However, as a Westerner what really raised my blood pressure was how much Western accountants, bankers and lawyers are complicit in helping to people like Yanukovich to squirrel this money away. I had been aware of the way in which Russian oligarchs have been pumping money into luxury London property as it’s something that’s had some coverage in the UK press, but I hadn’t realised how the UK government has done so little to try and stop this and indeed some of their reforms (such as opening up Companies House to make company registration easier) has made it simpler to engage in illicit activity using the UK as cover.
Fundamentally depressing though is the fact that the system works in such a way that it’s incredibly difficult to hold people to account for their activities. Bullough sets out the factors at play in preventing this - from the need to demonstrate a crime in the individual’s home country (often impossible if the individual is a high ranking political figure and the nation riddled with corruption or lacking the resources/personnel to pursue a criminal case), to secrecy laws, to the way in which the rich can use UK defamation law to prevent journalists revealing what they’re up to. Even the occasional rays of light (such as the way the US government forced Swiss banks to give up information on individuals holding accounts with them) are dimmed when you realise that US efforts are very much a one-way street with no reciprocity. Certainly there seems to be little incentive for international cooperation in terms of tackling this international problem (although I would have liked to have seen some analysis from Bullough on EU efforts on this sector) and while Bullough prescribes accountability and transparency as a way of standing up to this system, given the international pressures at play here it’s difficult to see how that can happen.
Ultimately, I finished this book with a sense that the rules really don’t seem to apply to the rich and that the West might pay lip service to fighting corruption and crime, but it won’t do jack if it thinks its benefitting from it and as nations compete to give safe havens to this kind of money, it’s not difficult to see why public anger at such blatant inequality is on the rise. It’s a fascinating, illuminating and rage-inducing read and I’d recommend it to anyone who wants to understand what’s going on in the world around them.
The Verdict:
Oliver Bullough is a journalist and writer specialising in Russian history and politics. In this well-researched, easy to follow book that left me incredulous and furious, he sets out how the international finance system (facilitated by Western bankers, accountants and lawyers) permits the rich and the crooked to hide their money while still benefitting from it. It’s jaw dropping stuff that makes you realise that money conquers all.