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How the UK evolved become a Global Money Laundromat

The book by Oliver Bullough provides a quick tour of the murky world of international finance, covering everything from tax law modifications to helping criminals flee with money from bank accounts.
Oliver Bullough is a passionate opponent of the global financial system’s complicity with criminal activity.

His debut book, Moneyland (2018), vehemently describes how kleptocrats amass illegitimate money using methods that appear to be legal.

The beginning of that book, which was foresighted, gave a description of Viktor Yanukovich’s palace, which the people of Ukraine captured after he left in 2014: Built when he was receiving a government income, it was described as “a temple of tastelessness, a cathedral of kitsch, the epitome of excess.”

After Russia’s invasion of Ukraine, Mr. Butler updates his 2022 book Butler to the World in a 2023 paperback edition to explain how Britain became into a global money laundering operation and purveyor of shady business methods in its drive for post-Empire domination.

The word “butler” is a play on a distinctly British institution made popular by another distinctly British author, P. G. Wodehouse.

Mr. Bullough sees parallels between the amoral role that a fading Britain has decided to play in international trade and the role that Jeeves, the slick and educated servant, plays to his upper class master, Bertie Wooster.

He argues, “Britain has changed itself into a global enabler of skulduggery, a servant to anyone who can afford the fees, over the last seventy years or so.”

“Just as Reginald Jeeves used his enormous intellect and vast experience to help dimwitted posho Bertie Wooster and his Drones Club friends avoid the consequences of their misdeeds in P G Wodehouse’s novels, Britain helps the world’s oligarchs, financial criminals, and tax dodgers conceal their wealth… and enjoy the fruits of their crimes free of scrutiny.”

In addition to earning rich gratuities for saving Wooster and his friends from sticky situations, Jeeves is more than just a butler.

The gist of the passage is that “Jeeves is someone who is ready to help anyone who can pay him,” despite his well-groomed demeanor.

If you take away his impeccable appearance, his well-educated dialect, and his capacity to recite Marcus Aurelius, you are left with a consigliere rather than a butler.

Although Mr. Bullough’s primary focus is on Britain—he gives “kleptocracy tours” in London—the book is more than just a narrow criticism of his home nation.

He demonstrates how Britain’s deliberate facilitation of this system has negative effects on the most vulnerable people in the globe.

With the 1956 Suez Crisis, the change got underway around the time of the empire’s demise.

After US President Dwight David Eisenhower resolutely declined to interfere in this Anglo-French misadventure, the value of the pound fell, and the incestuously upper class management of the Bank of England and British merchant banks needed a fresh source of funding to keep in operation.

An early instance of financial butlering, the Eurodollar, or US dollar-denominated deposits in foreign banks, was the solution they discovered.

A US dollar is and isn’t the Eurodollar.

If you wanted to benefit from the power and vibrancy of the US economy, as Mr. Bullough argues, “they were dollars; if you wanted to avoid restrictions imposed by the US government, they weren’t.”

Bankers were enticed to London by this offshore currency in order to escape US interest rate limits and British capital controls.

The Eurodollar constrained national governments’ capacity to act in the market to control interest rates, inflation, or defend its currency by connecting national money markets.

Exasperated Richard Nixon removed the currency from the gold standard as a result of the inflationary issues it exacerbated in the US.

The US and Britain began a race to the bottom in terms of competitive deregulation once the US dollar resembled the Eurodollar in that its value was determined by the market and headed wherever it earned the highest returns. A Eurodollar historian referred to this as a “transatlantic regulatory feedback loop.”

The welfare State is being dismantled as a result of this unconstrained capital movement, which Mr. Bullough refers to as “footloose capital,” with governments having fewer alternatives for increasing taxes to pay for social spending.

All of this occurred before the Reagan-Thatcher deregulations.
The opaque shell business networks operating off of remote islands that were originally a part of the empire were the most well-known kind of financial butlering that Britain invented.

According to Mr. Bullough, the British Virgin Islands (BVI), where Mossack Fonseca, of the “Panama Papers” infamy, resided, are where it all began.

Today, BVI is one of many outposts that offers “discreet and affordable asset protection services, all guaranteed by the pleasant and reassuring solid presence of the British flag” to Russian kleptocrats, corrupt Afghan officials, North Korean arms smugglers, and US tax evaders.

In one of its initial applications, British defense company BAE Systems used a network of BVI shell corporations to provide Tanzania, one of the world’s poorest nations, with an unnecessary and expensive radar installation.

Investigations discovered that Shailesh Vithlani, an Indian middleman, routed large sums from this inflated order to his BVI shell company for “technical services,” which were actually a massive tax evasion.

Mr. Bullough takes us on a thrilling journey through the murky side of global finance, covering topics like changing tax laws to encourage gambling revenues, which leads to an addiction crisis, and a mysterious partnership law from Scotland’s 19th century that allows East European criminals to flee with money from bank accounts. He writes with panache and an amusing attention to detail.

The most recent edition, however, would have been more thorough if the author had discussed how regulations requiring greater ownership disclosures of real estate assets and post-Brexit changes to banks’ and financial institutions’ passporting rights to conduct business in the EU have affected — or not — the butlering industry.

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