Is it a bird? Is it a plane? No, it’s Lord Agnew
“Not all heroes wear capes” is a term regularly used on social media when an ordinary person does something marvelous. It’s a term I slightly struggle with, thanks to The Incredibles, where Edna eloquently explains why superheroes shouldn’t wear capes at all. Anyway, it did seem to apply to Lord Theodore Agnew this week after he, wearing the distinctly non-superheroic outfit of a grey suit, white shirt, heavy-rimmed glasses and a yellow, red and blue tie, spectacularly quit his job as a UK government minister live in the House of Lords in protest at Britain’s failure to do anything at all about financial crime.
- “If my departure and bid for pariah status moves the machine to action, it will have been worth it,” he wrote (this link is one of those “gift links” so if you don’t subscribe to the FT and can open it, you’re one of the first three people to read the newsletter this week, for which thank you. If you can’t open it, I recommend subscribing to the FT, it’s great.).
I sincerely hope that he does not become a pariah because of his actions. He is sacrificing a career in government, because of his concerns about what that government is allowing to happen, and that is what every honorable public servant should do. And his concerns are not idle. It is no exaggeration to say that the U.K. is absolutely central to how international financial crime works. Decades of strategic under-regulation helped secure London’s centrality to how money moves, with knock-on effects elsewhere, since other countries had to weaken their rules to prevent all the business flowing to the U.K. Meanwhile, British offshore territories went further still, enabling everything from shell companies in the British Virgin Islands to gambling operators in Gibraltar.
By law enforcement agencies’ own estimates, hundreds of billions of pounds are now laundered through the City of London every year. That is money stolen from the citizens of developing nations, earned by drug cartels, embezzled by fraudsters, and Britain’s failure to stop that is having a devastating cost on the victims of criminals, kleptocrats and Mafiosi everywhere. There’s a great insight into how this works from this Moscow Times article, which explained why Russia’s business elite is keeping quiet about the Kremlin’s sabre-flapping on the Ukrainian border.
- “After a couple of conversations with the guys directly involved in the Donbas, I transferred all my assets to dollars and sold my Russian stocks,” one official at a Moscow government department told The Moscow Times. “This was back in December when nobody expected anything.”
That is not a one off. More than half of Russia’s national wealth is owned offshore, and the entire ruling class has been doing what that official did and has been doing it for years. Why would anyone keep his wealth in a country that can be upended at any time because Vladimir Putin likes to get his gun off? It makes perfect sense for the officials, but it’s disastrous for Russia as a whole, as well as for the rest of the world, because it means Putin can indulge his three-quarter-life crisis without costing anyone with any clout any money. Government officials and business leaders aren’t worried about suffering personal loss, which removes one of the most important limits there is on an autocrat’s behavior. War is a spectator sport for Russia’s ruling class.