Friday, April 15, 2011

Our heroic bankers take on the evil dictators

According to the March 2011 edition of Private Banker International, 'at least $235 billion of illegal assets are held in offshore accounts opened by the wealthy, including those taking advantage of their government positions in the Middle East and North Africa. That is equivalent to 15 percent of the total $1.5 trillion held offshore by individuals from Arab and African states…', as 'over past decades these regimes have grown an entire ruling class consisting of family, friends, businesses, security forces and secret service that have transferred significant wealth out of their home countries.'

Bizarrely, the same article (aptly entitled 'Private banking’s ticking bomb'), having noted that 'The family of deposed Egyptian president Hosni Mubarak is estimated to have as much as $70 billion of assets. Tunisia’s ex-president Ben Ali is said to have up to $10 billion and Libyan leader Muammar Gadaffi and his family have an estimated $20 billion offshore', suggests that 'One big problem comes from trying to assess which assets originating from the region are legitimate and which are suspect'.

Really? How could any of these groups conceivably have acquired such staggering sums by legal means?

Equally bizarrely, a leading baker is quoted as saying that 'Your private bankers should be close enough to their clients to have alarm bells start to ring if what they are being offered, say £5 million, looks unusual in size and timing”. Well, they scored well on that one too: what 'timing' could possibly explain away wealth on such a gargantuan scale? Gadaffi has been in power for 42 years so, with $20 billion between them, his family must have deposited an average of $500,000,000 each year for decades on end. That’s the £5 million deposit our eager banker suggests might be a tell-tale sign of corrupt dealing every 5 days. But only when the people of Libya say that enough is enough do the Gadaffis' bankers wonder whether there might be something doubtful about this.

So when the previous article in the same journal celebrates how heroically Swiss bankers shut down the tyrants' assets in record time, we are entitled to ask, how did you manage not to notice the staggering scale of looting while it was happening?

Incidentally, the reported figures surely understate the problem. As reported, the amounts stolen by Ben Ali, Mubarak and the Gadaffis come to $100 billion. If the total of illegal assets is only $235 billion, then these three groups account for 40% of the total. Surely that cannot be correct - not with all the other dictators, their families and their cronies, all the corrupt generals and arms dealers, and all the rest. What if this little groups represents only 5% of the whole - which I find quite believable, given the nature of these regimes - then the offshore stolen money comes to $2 trillion - that’s $2,000,000,000,000, or a little under $6,000 for every single Arab man, woman and child.

Perhaps our upright bankers can redeem themselves a little and tell us how much Mugabe and his grubby pals have stashed away? Or exactly how many of the 400,000 millionaires in the Middle East and North Africa did not acquire their riches by raping their countries? Given that 'Banks in Europe, the US, Switzerland and most other developed countries have to do background checks on so-called PEPs (politically exposed persons)', they surely know more than they are telling.

Conversely, what do they plan doing about it? Or do they just smugly assume that the new regimes will be as corrupt as their predecessors and be happy to let bygones be bygones? Perhaps the millions of poor in Arab countries can help them make up their minds, or at the very least make sure they not only get the money back but also demand that these shabby crooks (and no, I don't mean the dictators this time) are made to pay for the part they played in robbing some of the poorest people on earth.

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