Moneyland: Why Thieves and Crooks Rule the World and How to Take it Back, by Oliver Bullough, Profile Books, £9.99, ISBN: 978-1781257937
In his most poetic lyric “It’s Alright Ma”, Bob Dylan wrote that “money doesn’t talk, it swears obscenity”. That phrase summarises much of what Oliver Bullough narrates in Moneyland. Bullough details how kleptocrats in Russia, Ukraine, Africa and the former Soviet republics of Central Asia loot their countries’ treasuries and natural resources and, with the enthusiastic co-operation of financial institutions and lawyers in the developed countries, hide their ill-gotten wealth.
The opening chapter, “Aladdin’s Cave”, describes the vast palace which Victor Yanukovich, the Russian-backed president of Ukraine who was overthrown in 2014, built for himself on the proceeds of corruption. After Yanukovich fled to Russia, his palace was opened to the public, who saw a kitsch paradise with fountains, waterfalls, peacocks, a zoo, collections of weapons, portraits of Yanukovich in amber and, most ironically, a steel hammer and sickle which was a present from the Ukrainian communist party to Joseph Stalin. Yanukovich had come to power by accusing his rival, Yulia Tymoshenko, of corruption as she had become the richest woman in Ukraine when she controlled its gas industry. Yanukovich’s election was orchestrated by Paul Manafort, who was chairman of Donald Trump’s election campaign and who is now serving a prison sentence for multiple crimes, having been prosecuted as a result of Robert Mueller’s investigations.
Yanukovich had to get himself elected in order to loot his country’s wealth but the African kleptocrats Teodorin Obiang, president of Equatorial Guinea, and Ali Bongo of Gabon were gifted their presidencies by their fathers and continued their fathers’ successful policies of stealing their country’s natural resources and plunging their impoverished people’s into deeper poverty. As Bongo became one of the richest men in the world, Gabon’s infant mortality rose to one of the highest in the world. (Bongo’s father, Omar, gave large sums of money to fund the election of Jacques Chirac who showed his appreciation by increasing French aid to Gabon, some of which was used to buy a private jet for Bongo Senior). Both Bongo and Obiang were supported in their theft by a phalanx of Western lawyers and financial advisers. Bullough argues that the indices of corruption which place European countries including the UK and Luxembourg, near the (virtuous) top while Uzbekistan and South Sudan are at the bottom are misleading because the financial and legal systems of the UK and Luxembourg facilitate the kleptocrats in Uzbekistan and South Sudan in hiding the money they have stolen from their impoverished peoples.
Bullough shows that Yanukovich’s vast web of corruption included coal mines owned by a shell company in the Caribbean, a company stealing money from Ukraine’s health budget based in Cyprus and a company engaged in illegal arms trading which could be traced back to Scotland. Some countries, such as the Caribbean island of Saint Kitts and Nevis and Malta, specialise in selling passports to wealthy foreigners, regardless of the source of their wealth. But the UK, Switzerland, Luxembourg and the Netherlands have also enthusiastically enabled the creation of a maze of shell companies and tax avoidance schemes which make them complicit in hiding the wealth of the kleptocrats and offering them opportunities to increase it. Bullough reveals that the US government does not know who owns one-third of the buildings it leases for high-security purposes. In Eaton Square in London, eighty-six houses are owned through “anonymous structures”.
Moneyland is a book based on impressive research, concisely summarised. Bullough shows how the anarchic “robber baron” capitalism of the early twentieth century collapsed with the Great Depression and the rise of fascism. After the Second World War a system of global regulation was put in place which led to thirty years (1945 to 1975) of economic growth, low unemployment and low inflation. This golden era ended with the oil crisis of 1973 and the collapse of the Bretton Woods system of regulated exchange rates. But bankers in Switzerland and the City of London had already begun to destabilise the regulated systems through offshore accounts and shell companies set up for the super-rich. The cure for the recessions of the 1970s and early 1980s was “deregulation”, or a return to the unfettered markets of the early twentieth century. Capital controls were abolished in most Western countries, allowing money, whatever its source, to flow to where it could be most safely held and earn the highest return.
While Bullough’s research is impressive, Moneyland has rather too many accounts of the obscene spending habits of the kleptocracy. We are told how the daughter of an Angolan government minister spent $200,000 on a wedding trousseau in Kleinfelder Bridal, the wedding dress shop in New York featured in Say Yes to the Dress. The bride’s father was a minister in the government of Jose Eduardo Dos Santos, who created one of the most corrupt regimes in Africa while president from 1979 to 2017. Bullough points out that the $200,000 spent on the bride’s trousseau would buy anti-retroviral drugs for 166 people for a year, but he does not mention the connivance of Western oil companies in enriching Dos Santos and his cronies, including the bride’s father, nor why Western governments continue to give aid to the government of Angola when much of it is stolen. He does mention how, when the World Bank tried to restore the cocoa industry in Equatorial Guinea, ruled by the notorious kleptocrat Teodorin Obiang, his ministers “nationalised”, that is confiscated, the best farms and when Western donors tried to establish a programme to supply eggs to undernourished people, politicians stole so many of the chickens the programme collapsed.
Ireland is not mentioned in Moneyland, perhaps because the country’s role in sheltering the wealth of the one per cent, whatever its source, is not big enough to attract attention. But a significant amount of money flowing into institutions in the Irish Financial Services Centre (IFSC) is of dubious origin. Dr Jim Stewart and Cillian Doyle of Trinity College, in a study published in 2018, showed that €100 billion of Russian funds had passed through the IFSC using a tax provision designed to entice financial services companies to set up in Ireland. The IFSC was the brainchild of Charles Haughey, advised by Dermot Desmond, whose companies are based there to minimise their tax burden. Des Traynor, who was financial adviser to Haughey, set up accounts in Ansbacher Bank, domiciled in the tax haven of the Cayman Islands for Haughey and several other Fianna Fáil politicians (and one Fine Gael former minister, the late Hugh Coveney) which enabled them to evade tax.
Moneyland is concerned with “why thieves and crooks rule now rule the world” and does not look at how the most powerful global corporations are as reluctant as Ukrainian and African kleptocrats to pay tax on their vast legitimate profits. Ireland has used its low corporate tax rate to attract foreign investment and is adamantly resisting efforts by the EU to harmonise taxes on corporations, arguing that “tax competition” is a vital policy instrument for governments. The Irish government is contesting the ruling by the EU Commission that allowing Apple to book all the profits it earned in the EU in Ireland constituted state aid to the value of €14.3 billion and that this must be repaid to the Irish government. The EU is also pursuing Luxembourg for failing to apply rules on money-laundering. It was recently revealed that Larry Goodman, Ireland’s leading” beef baron”, had channelled €170 million in profits of his companies through Luxembourg to minimise tax payments. A tribunal of inquiry into irregularities in the beef industry found that Goodman’s companies had engaged in systematic tax evasion and large-scale abuse of the EU’s price support system for beef and of export credit insurance. (The Goodman companies’ abuse of the export credit insurance scheme was facilitated by Goodman’s close friend Albert Reynolds). In his eagerness to avoid paying tax in Ireland, Goodman appears to have forgotten that his companies had to be rescued by the government with taxpayers’ money when they faced bankruptcy in the 1990s.
While Moneyland is a masterful account of “why thieves and crooks now rule the world” it does not fulfil the promise in the subtitle that it will tell us how to regain control of the world. Moneyland exists because, as Bullough argues, money flows across borders while laws do not. But Western governments show little enthusiasm for tightening the laws that allow it to flourish. Angela Merkel, to her credit, has insisted that the EU impose sanctions against Russian oligarchs but the UK government, in the wake of the poisoning in the UK of Sergei Skripal by Russian agents did not even consider sanctions against Putin’s oligarch supporters, most of whose wealth is safely deposited in London.
The funnelling of most of the benefits of economic growth to the top one per cent of wealth-holders is the most significant economic phenomenon in the developed world. In the USA the discontents of the workers whose living standards are falling while the wealth of the super-rich increases led to the election of Donald Trump. In a classic case of what Marxists describe as false consciousness, the poor elected one of the super-rich, believing that his policies would make them better off, not understanding that the problems Trump attributes to liberal elites and immigrants are actually created by the Western financial system and the governments which support it. The “thieves and crooks” of Moneyland’s title can only thrive undisturbed because the measures that would threaten them would also threaten capital mobility and tax competition, which are fundamental to the survival of the global financial system.
Sean Byrne lectured in economics at the Dublin Institute of Technology. His main areas of interest are international economics and globalisation.