Another massive leak #FinCENFiles by @ICIJorg & @buzzfeednews: Big banks taking dirty money
Nothing is new here
Not that it isn’t, in journo terms, a good story, well told.
It is.
I know because I wrote my version of it 11 yrs ago at @Global_Witness
Here’s some perspective 1/21

Here was my account of how banks cause poverty: http://bit.ly/UndueDiligence 
And so many others:
@nickshaxson’s version, Treasure Islands (rather more widely read than my efforts) in 2011
Ditto @OliverBullough’s Moneyland in 2018
@submergingmkt’s, The Blood Bankers, in 2003
2/21

Prof Jason Sharman @Dept_of_POLIS has written multiple books, including a cracking investigation into the global shell co industry.
And Elise Bean’s account of her years running Senator Carl Levin’s investigations https://bit.ly/2FG9HCP  3/21

Plus all the leaks: Offshore Leaks, #PanamaPapers, Paradise Papers..
At @Global_Witness we had no data dump to work from. That’s not a brag: our stories were limited in scope by comparison
But it was – still is – v hard to get info from behind the wall of banking secrecy
4/21

Sometimes I’d be in a country and would be told that xyz corrupt government minister banks with xyz British bank – and the sources might be reliable. But without docs, of course we couldn’t publish.
5/21

Still, at @Global_Witness we were investigating corruption in the oil, mining & logging industries, and that would sometimes throw up docs.
Or bank account numbers.
We showed Barclays, Citibank, Deutsche Bank, HSBC, dealing with corruptly-acquired funds.
6/21

Then I went on the road, campaigning for proper controls on the flow of dirty money so that banks couldn’t fuel grand corruption.
And I was repeatedly gaslighted: by banks, by banking regulators, by the IMF, World Bank, OECD, by the Treasury here in the UK and in DC. 7/21

Nothing to see here, they said. We’ve got laws in place/we follow the laws, look at how much we spend on regulation/compliance.
You can’t be right.
Your examples are outliers. They’re Bad Apples.

So we published more reports with more banks.

Same response. 8/21

11yrs on, the banks are saying the same things about #FinCENFiles:
We can’t legally discuss our clients.
We comply with the relevant legislation.
In fact we’re fucking world-beating at complying; also here are all the shiny initiatives we’re engaged in as PR cover. 9/21

Occasionally a senior compliance person falls on their sword (see: David Bagley quitting at the US Senate committee hearing on the occasion of HSBC’s nearly $2bn fine for drug $ laundering in 2012.)
But it’s not meaningful.
10/21

US lawyer Jack Blum, who started chasing this shit decades before I did, calls it the ‘compliance dance’. The banks that have been named in #FinCENFiles are doing the dance again now.
11/21

But it didn’t stop them taking the dirty money when they were already on probation for the PREVIOUS time they did it (see the new @ICIJ and @buzzfeednews stories on the transactions at HSBC after the nearly 2bn fine for drug$ laundering in 2012)
12/21

And that’s the problem: the banks ARE complying - with a law requiring them to file a suspicious activity report and only desist from the business if asked to (nobody does).
Meanwhile nobody is willing to prosecute them for any actual criminal offences of laundering money
13/21

I was repeatedly told more than a decade ago by sources who worked there that FinCEN, and the law enforcement agencies that make information requests of it, treat the suspicious activity reports it receives from banks as a passive database. 14/21

So: not real-time information passed on to stop bad transactions or prevent bad things happening. Just info that sits there in case there’s a law enforcement query at some point, which there invariably isn’t. 15/21

Dr Mary Alice Young and Dr Michael Woodiwiss at @UWEBristol have published the evidence for the corrupt underpinnings of this whole tottering pile of shit that passes for a regulatory regime. It was in documents that emerged in 2017 under the UK’s 30-year rule. 16/21

In the UK in the 80s, civil servants had connived with the banking industry to create a system that protected the banks while making it look as if something useful was being done to stop the dirty money. Their paper is here https://bit.ly/2EpRw3A  17/21

This was what we had always suspected. It’s hard to look closely at how this system works without coming to the conclusion that it’s set up to appear good but actually achieve very little in terms of stopping dirty money flows. 18/21

Hard to avoid that conclusion… unless, of course, you’re benefitting from the system as it is. 19/21

Not just the banks and their clients benefit. Vast amounts are spent on legal costs; a whole industry of ‘compliance’ professsionals is trained and employed.
I appreciate that this creates jobs, but the cost for everyone else is too high.
These laws are beyond reform. 20/21

The financial sector is a criminogenic environment.
We need to start again.
Transnational dirty money flows enable tax evasion and state looting. They worsen poverty, undermine the public realm and widen the gap between rich and poor. And that matters for all of us.
21/21