Britain’s money laundering scandal goes back a long way

The war in Ukraine has turned a lot of people’s attention to oligarchs in the UK. How did these guys all end up in London, seemingly owning half of Belgravia? In Butler to the World, Oliver Bullough offers an answer.

I read his earlier work Moneyland slack-jawed at the blatant – and mundane – techniques employed to register UK Ltd companies through frontmen and use them to launder money. I thought the middle men would be glamorous and slick, not running a website from an office above a chip shop.

In this work Bullough looks at the bigger picture: the way Britain became the destination of choice for so many who don’t want questions asked about their wealth. He argues that Britain has pursued an attitude of light regulation at the political level, and keen enabling among financial institutions, to allow the world’s oligarchs, despots and mobsters to safely park their cash in London. He traces this situation to Britain’s need to find a new role in the world after the Suez crisis. Becoming banker (or, as he puts it, butler) to the world was a nice consolation prize after half the map ceased to be pink.

Other places, notably Switzerland, had long offered banking secrecy. What they didn’t have was the flexible and easy means to form corporations (and as Bullough describes here, Scottish Limited Partnerships) and use these to shuffle funds and disguise ownership.

It’s not clear that it was a conscious strategy at all levels so much as an absence of mind: the lack of desire to shut down Eurodollar trade or to later close offshore loopholes in British dependencies such as the Caymans and the British Virgin Islands. Partly this is due to the confusing nature of some of these angles: your average legislator’s eyes glaze over when reading about corporate structures (much like the credit-default swaps which led us to the 2008 crash).