‘Moneyland’ Has To Be Dismantled Before It Destroys Global Stability — Part II

Banuchandar Nagarajan

Jun 20, 2023, 05:35 PM | Updated 05:34 PM IST

Corruption affects society morally. (Unsplash/Sharon McCutcheon)
Corruption affects society morally. (Unsplash/Sharon McCutcheon)
  • The crooks washed in money are one of the main enablers of the “luxe boom”.
  • Given the complexity of regulations and privacy laws, even the toughest investigators manage to unearth only a tiny fraction of hidden wealth after many years of probing.
  • From Part I, readers I am sure did not conclude that only politicians from Tamil Nadu are venal. The menace is global.

    Aam Aadmi Party (AAP) leader Manish Sisodia is in jail for money laundering among other charges. In neighbouring Pakistan, Imran Khan is behind bars in the Al-Qadir Trust case with links to London, again.

    And of course, the “daddy” of all is Hunter Biden’s shenanigans with Burisma. Latest is the revelation of a bank account in Malta.

    Bullough says that this layering and routing of money have left investigators with spending most of their resources on locating shell entities, usually limited liability companies, rather than focussing on establishing the link between ill gotten money and the accused.

    Given the complexity of regulations and privacy laws, even the toughest investigators manage to unearth only a tiny fraction of hidden wealth after many years of probing.

    Financial Times columnist, Janan Ganesh, recently wrote that European luxury goods are Europe's “remunerative joke” on the world, and are valued less in their home markets.

    The crooks washed in money are one of the main enablers of the “luxe boom”.

    In Tamil Nadu (again), politicians shamelessly parade their unearned wealth by sporting watches worth many crores.

    Apparently, this is not the first time where watches-based power posing happened with politicians.

    In 2010, Financial Times quoted a Russian newspaper Vedomotsi, which published high level politicians sporting watches worth hundreds of thousands of dollars. But the pliant mainstream Tamil media has turned a blind eye to even the use of Range Rover cars by ministers of Tamil Nadu.

    Recently, media reports quoted numbers from the Henley Private Wealth migration report that 6,500 HNIs are sacrificing their Indian passports.

    Many emigrate due to family, education and other legitimate reasons. But, Henley also said that, "residence by investment", a euphemism for relocating to a low tax regime, was the main reason. 

    Just to put some numbers in perspective, there are around 3,200 billionaires in the world, with a cumulative net worth of $11.2 trillion, about 3x India's current GDP.

    For the rich, the borders have vanished. They can move their assets and families wherever they wish, "picking and choosing which countries’ laws they wish to live by".

    The toniest of addresses in New York such as 15, Central Park West, and many marquee places in Florida, UK, Singapore and Dubai (all black-money friendly locations) are filled with nouveau riche from developing countries, like India.

    Some like Mehul Choksi can even buy citizenship (and the legal systems) of tiny islands like Antigua.

    Among the tax havens, the most egregious is London. Bullough says, an enterprising travel agent once organised a kleptocracy tour of London, taking visitors to places such as Eaton Square and showing various properties owned by oligarchs through shell companies.

    In the UK, strict libel laws and a powerful PR industry along with law firms and consultancies work to polish reputations for the modern-day dacoits.

    The crazy part is that, though it has fallen a bit in recent times, Britain still ranks highly in the global Corruption Perception Index.

    Bullough also explains several creative ways by which rapacious rich people protect their wealth. One of them is by becoming diplomats of small countries by investing in them and thereby avoiding arrests anywhere in the world. But the funny story was from China.

    Apparently, wealthy Chinese have children through surrogacy in Japan, where the children are considered Japanese having been born to Japanese mothers.

    The kids’ bank accounts are then deposited with hundreds of millions of dollars as insurance for the parents to escape China when the time comes.

    The abuse of the global financial system is happening in our times right before our eyes. Behind all the sophistication it is medieval and basic thieving.

    It robs the government of precious resources in delivering public goods and also corrupts a society morally.

    Even powerful countries, which are democracies, have not been able to make global governance robust to end the pilferage of taxable money.

    One can only sympathise with the heroic efforts of law enforcement agencies in developing countries like ours in hunting these sophisticated crooks.

    I bet that the next generation would think of the majority of us as feeble simpletons who were unable to stop the unscrupulous elite.

    Banuchandar is a political and public policy advisor. He posts at @Banu4Bharat.

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