Hello, everyone. Welcome to the Oxford Martin School.
My name is Charles Godfrey. I want to do nothing more than to welcome you to this building.
The wonderful old India Institute and saying what the marvellous school does is where we bring together programmes which tend to be interdisciplinary,
looking at major problems of the 21st century. And one of the problems we're most proud of is on African governance and I say nothing over.
Pass on to Stephan Durcan. And quickly, just just say a few words for the Africa conference programme here, based at Oxford Martin School.
It's called, it's biocartis was already there who will convene, who will moderate the panel today on my cell from the icon.
So it's actually meant to bring different disciplines, especially more from economics and politics together,
to actually studying issues to do with Africa and its governance.
And of course, the topic of today really matters a lot in the way economics and politics comes together,
so it's very opportune to have a partner like this. Thank you.
Thank you, Stephanie. Well, well, a warm welcome to all in person here at the Martin School in Oxford and also for those of you joining us online.
We have a very large audience online today. The subject of today's event is the role of professional facilitators in the
United Kingdom in enabling money laundering and also reputation laundering.
Russia's invasion of Ukraine and the resulting sanctions regime has shed light on the UK's harbouring of illicit wealth from around the world.
It has also revealed the centrality of enablers in the legal and financial sectors in laundering oligarchs money and reputations.
This was, of course, an open secret for the better part of the last decade.
A small number of brave journalists think tankers, law enforcement officials, academics and politicians have been denouncing this.
Despite the UK's crippling libel laws.
Data leaks such as the Panama Papers, the FinCEN Files, the Panama Papers have also shown this in a very meticulous way.
But the current circumstances have galvanised public interest and created the best prospect yet for meaningful policy change.
In today's event, we will be discussing past attempts at kerbing, professional facilitators,
the inadequacy of present regulations and the prospect of improvement through the upcoming Economic Crime Bill, amongst other ongoing efforts.
Most pressingly, we will be asking after a decade of signalling reform intent, is change really about to happen?
To discuss these matters today, we have invited Dame Margaret Hodge and Andrew Mitchell,
two of the foremost actors in this effort at tackling illicit money in the UK today.
They Margaret Hodge is has been MP for Barking and Dagenham since 1994.
She previously served as leader of Islington London Borough Council from 1982 to 1992.
She served as the first female chair of the Public Accounts Committee from 2010 to 2015 and held
several government positions in the last Labour government holding portfolios across education,
work, pensions and other business culture. Many other dimensions.
Most recently, Margaret's interest in combating illicit finance has dominated her time as a backbench MP in her
role as co-chair of the UK's All-Party Parliamentary Group on Anti-Corruption and Responsible Tax.
On my left, I have Andrew Mitchell, who has been MP for Sutton Coldfield since 2001 and was previously MP for Gedling from 1987 to 1997.
He served in cabinet as Secretary of State for International Development from
2010 to 2012 and subsequently as government chief whip in the House of Commons.
In 2017, he became as senior adviser to the African Development Bank.
Andrew has extensive experience on development issues and as co-chair with Margaret of
the UK's All-Party Parliamentary Group on Anti-Corruption and Responsible Tax of both.
Margaret and Andrew have worked cross-party and tirelessly to deliver on numerous policy initiatives which clamp down on dirty money,
illicit finance and money laundering. Thank you both for joining us.
We are delighted to have you here today and as discussed, Andrew and Margaret will make very quick introductory remarks.
We will then have a brief conversation about 12 20, 25 minutes, during which I'll ask some some lead questions to get the conversation going.
John Heather Shaw, who's professor of politics and international relations at the University of Exeter and one of the foremost experts in this field,
has led many large research projects in this field and is also the author of several books,
including Dictators Without Borders,
which I think is one of the landmark books in this field will be providing us with brief comments on the discussion,
and at that stage, we will open the floor to your comments and your questions.
There will also be engagement with the questions from the online audience and through Claire Boyer,
who somewhere in the audience and who's responsible for organising for managing the event.
So without further ado, Andrew, if you'd like to start the conversation with some introductory remarks, then has to work through Margaret.
Well, thank you. Thank you very much indeed for your very kind introduction and for the opportunity to discuss these important matters.
Afternoon. I want to just make some general comments on why this area is so important.
And then Margaret, who is the real expert on all this stuff, will will will say something.
I think about the very specific subtext of this afternoon's discussion,
but I am very conscious that this is part of an overall rapport about African governance and the challenges and whether the UK is finally changing.
So I just want to make a. Three points about why this is so important,
and the first is that although we focus most recently on Russia and Russian oligarchs money stolen by that route,
there is a most enormous amount of money that is stolen from the developing world.
And there's pretty credible research work done, including by the World Bank,
which suggests that the amount of money that is stolen from the developing world is something of the order of a trillion dollars a year.
And it is, you know, the failures of governance above all, which mean that politicians,
corrupt warlords and business people are able to steal from states which don't have the right structures,
the rule of law, the correct procedures to defend that innate wealth from being removed.
And anyone who wants to understand the importance of all this should read Stefan Duckhorn,
whom I had the pleasure of working with at Defend his book about governance with which effectively says it's about leadership.
So where you have really good leadership, then you do build up these structures, which stop this sort of thing from happening.
So with this enormous amount of money that is stolen from Africa, particularly Africa, but other parts of the developing world,
the UK, we now know, is hugely exposed as an inadvertent or adverse enabler because we have a rule of law here.
We also have overseas territories which come under the British flag and come under our queen and
therefore have a quote unquote rule of law where illicit funds can be deposited and where they are,
quote unquote safe. And these tax havens grant anonymity,
and it's why Margaret Hodge and I across party have tried to make sure that there's much more transparency
injected and that we have structures which are far more open and open registers of beneficial ownership.
And the proof of the fact that we were quite effective at this is that in the British Virgin Islands some time ago,
there was a demonstration, a mass demonstration where I believe there were placards saying Hang Hodge and Mitchell.
So that suggests the way we have. We have had got that right.
So, so the the answer to this afternoon's specific subject, given this enormous amount of stolen money from one form or another, the enablers of that,
the accountants and the lies,
the baddies will always be able to pay more and get the the good and the bad as well to get the best advice from his neighbours.
And we've seen it too. We've seen the British anti-crime agencies without enough budget to worried that if they lose,
what will the effect be on their reputations and they just can't performance?
One of the big, big problems and the extent of all of this so clearly demonstrated by the Panama Papers,
is very difficult to get the Treasury to make sure there's enough money, the structures of maybe what they used to do in the old days.
In the city where the the takeover code was run by lawyers who was part of their career structure would
go and work for the government service and Freshfields and letters and so on with top of their salaries.
And it was part of the way in which you got to the top in those professions.
Well, you know, the government doesn't operate like that in the policing and anti-crime stuff.
And the second point on this is the difficulty of getting change through Parliament.
And that is because when Margaret and I hove into view, civil servants have two reactions.
The first is I've already created a perfect bill. So why are these ghastly backbenchers coming and telling me it can be improved?
And the second is the not invented here syndrome, which means that if it was possible to improve it,
you'd already have thought that we don't need irritating backbenchers like Margaret Hodge and Andrew Mitchell to tell us what to do.
And and so getting change is very hard. I asked Mrs May whether she would implement the Magnitsky Regulations,
which are visa bans and currency money freezing and also the question of especially, she said no.
Then the Russians used biological weapons on the streets of the British city and a few weeks later asked the same question.
She said Yes. So, you know, that shows you that engaging with the issue about whether it's a good thing to do
or not is is if it comes from the backbenches is not often very well received.
And the final point I wanted to give you as an example was we were hoping for another crime bill.
Margaret may say something about in the moment, but if you look at companies house,
you realise I mean, it's the best possible example of all these difficulties. So companies house.
If you want to set up a company, Britain very proudly says we're the best country in the world.
Set up a company because it takes you six minutes to register your company at Companies House.
And everyone says, Goodness me as Britain got capitalism. Well, solve that.
But in fact, if I register companies, how? The company might say my name is Michael Mouse or Mickey Mouse.
It will go through so companies house is a is a library is not.
It doesn't investigate anything. And for a long time, Margaret may have been banging on.
You've got to give companies house powers. You've got to ensure the Treasury from them to have those powers.
And then you and you and companies house, which in 2016, at least in theory, you had to say who you were if you registered.
Of course, if you had a company in the British Virgin Islands,
you would register in the name of the ABC Corporation rather than who you actually were.
So it just I'm really just showing the huge difficulties.
The new companies bill will apparently have a go at sorting out companies as it will deal with information sharing the powers to seise crypto assets,
and it will set up a new kleptocracy cell in the National Crime Agency.
But all those things require money. Immense focus from government ministers with other things to do and an unremitting commitment.
I go back to my first point, which is the reason the commitment is so important is if we don't help these states preserve
their assets so they can build up education and health services and a rule of law.
The golden thread of international development, as David Cameron used to call it.
Then they will go backwards. They will be engulfed in conflict and poverty and all of those things for reasons everyone in this room understand,
threaten our way of life in this country, as well as the way of life of the poor people who are caught up in these circumstances.
Thank you, Andrew. We had a question later on about this, specifically the African dimension, but you beat me to it.
Obviously, the reason why we're convening this event is that we we feel that the issues that are normally
discussed as pertaining exclusively to Africa are actually part of a much wider global story.
And one of the concerns that I'll return to is that even as we are having a conversation that seems to have a reformist bent to it,
it tends to be a conversation about Russia very targeted at Russia, not at systemic reform.
But we'll come back to that can. Exactly. So thank you very much.
Thank you very much. Martin, probably three brief points as well.
The first is to put this into context.
I mean, I started on this journey when I chaired the Public Accounts Committee, and Andrew's friend David Davis,
came up to me and he'd he'd chatted before me and said, I'll help you, Margaret.
So I said, Thank you, very grateful and deeply what I was doing. And he said, Vodafone, you've got to look at Vodafone's tax affairs.
And I said, Look the world and thinking what the tax office of a private company got to do
with a parliamentary committee that is supposed to oversee value for money.
And then it came to me that, of course it was. It came to the heart of whether HMRC as efficient as to whether or not they collect the money.
And then we started the first thing. This is a slight digression.
The first thing was we had a really boring session with Vodafone, with HMRC,
and I was sitting there reading the papers on Sunday night thinking this is so tedious and have to pick up private.
I am private.
I was running a story about Goldman Sachs sweetheart deal and I thought, Oh, I'll ask them that tomorrow and I won't go into the whole story.
It was a very funny story, but the getting onto Goldman Sachs is a sweetheart deal started this whole journey.
That brings me to the main point, which is it is part of a spectrum. So I saucy economic crime.
If it starts with, you know, we all buy an ice, it then goes to do you pay your cleaner by cash,
it then goes to you, be a builder by cash and it again gets into economic roll.
It then gets into aggressive tax avoidance, economic crime.
And I would argue that that the real danger to the UK is not just that we are a jurisdiction of choice today for dirty money,
with estimates of about nearly 300 billion pounds of dirty money reaching our shores each year.
And that's if you put it into context.
A quarter of total public expenditure is a lot of money, but that has started to infect the public domain and politics.
And you see that a little bit with the Russian funding of a Polish of conservative politicians,
the Chinese funding of Labour politicians and you see it in contracts and things like that.
So I see this as a big spectrum. And if we don't call a halt,
actually Britain's reputation and our success in the financial services sector is in jeopardy because in the end, people won't.
You can't get rich on dirty money, sustainably rich on dirty money,
and there's plenty of good money around the world desperate to invest and we would actually grow our financial services sector on that.
So the first thing is the spectrum. The second thing is, you're right, we're using Ukraine.
I mean, we've been I've been banging on about these issues. Over a decade we've had we have had some great successes and rely on the transparency
with overseas territories and crown dependencies was a moment of success.
But if we can use Ukraine to tackle the challenge, other apologise for it.
And of course, the challenge goes well beyond that. And you only have to look at the great leaks.
Every leak that came up from the Panama Papers through to the Pandora papers demonstrates how many world leaders were engaged in hiding their money,
maybe legally, but often illicitly.
It's a massive, massive issue, so let's use Ukraine and the moment at the moment that could do to try and tackle that.
And what I was going to say is we have published and my committee together with another parliamentary committee on banking.
So we're making common cause across parliament. A published a manifesto last week to 10 days ago where we talk about tackling this on four fronts.
So we have to look at regulation. We have deregulated the financial services sector, started under Thatcher,
continued under Blair and Brown to such an extent that it's become very easy to use all our corporate
structures and our infrastructure to create avenues to bring illicit wealth into the legitimate system.
So we have to look at regulation and one of the issues. One of the arms I took about four arms of reform.
One of the areas is companies has just to add what Andrew said cost you 12 quid to set up a company in Britain is completely crazy.
It cost you one thousand two hundred and twenty pounds to get a visa for us and for a for a skilled worker.
Just put that into its context completely potty. We could quadruple the amount of money that you just set up.
A company that would give you plenty of resources to equip companies has to do a proper job
and unique identifying the beneficial owners and then in also doing some red flag raising.
So regulation is one issue. Enforcement is another.
We are pathetic and enforcement. The Americans are slightly better.
We, the Americans, have just increased their budgets in enforcement for 30 by 30 percent cent.
They see it as a security threat as well as a threat to standards of living and all that sort of stuff.
We've cut ours by four percent. You look at the number of cases that have been taken around money laundering, it's declined by 35 percent.
You look at the agencies, they're hardly doing anything. This is serious.
Fraud office is more than a cut by over 50 percent, the number of cases that they're taking at the moment.
So enforcement is the second arm, and we think that's partly through funding.
But we and again, you could fund it by giving the enforcement agencies a percentage of the fines and assets that they seise in pursuing dirty money.
The third one is transparency, which Andrew and I have done work around,
and there is further work that the government brought in this first economic crime bill.
Just just at the beginning of the Ukraine crisis, where property is used, UK property is a key way in which dirty money is laundered,
literally laundered around jurisdictions worldwide and brought in buying property here in the UK.
We reckon 1.5 billion tons of Russian property here in the UK at the moment.
And I mean the figures, nobody has an accurate figure, but you're talking about billions of billions, as you say, elsewhere.
So I think transparency still issue and we've got some issues there which are difficult to tackle.
So Usmanov, who is one of the Russian oligarchs who owned Arsenal and is not another football come from a football club,
which I don't support, so I can't remember the name.
But anyway, he has transferred all his assets when they were supposedly frozen, he's transferred them into a trust.
So how we actually get transparency around trusts without interfering in the right of individuals
to set a grandparent trust for their children's expensive fees here at Oxford or whatever it is,
that's that's that is a very difficult issue that we have still to crack.
And if you could help us with, that would be great. But transparency third and the fourth one is accountability.
At the moment, there is absolutely zero accountability for all the activities that takes place in this space through parliament
to the public and to to campaigners and academics and and all those that have an interest in the area.
We have a proposition there where we should set up a joint committee of the two houses, a select committee of the two houses that.
Meet on the Privy Council terms, so it would meet in confidence that could look at all these issues,
look at individual cases and then do systemic reports that would reach the public domain.
Finally, two enablers enablers. This is a difficult issue on which to build cross-party support.
Some of these issues, it's easy,
but enablers is tough on financial services sector has enjoyed massive growth through the deregulation that the gates had.
But they are at the heart of facilitating dirty money, and we have to, and they are never held to account.
They always get away scot free, and you just look at all the the all the leaks.
All of them are about enablers,
whether it's Mossack Fonseca or whether it's Applebee's or whether it's actually the Pandora papers were really interesting
because that went across the face of all enablers to to to to see where they are to show how they facility in some tight.
Some places they collude. In other instances they really do facilitate.
And I learnt about this early on in my journey when PricewaterhouseCoopers,
for whom I worked for a couple of years before I became an MP, I hasten to add.
Literally, they were selling. They were mass marketing, tax avoidance schemes,
aggressive tax avoidance schemes from by getting companies to take money out of the UK into Luxembourg,
and they completely denied that they were doing that. It was seen as cool and good to do that and that cool, you know it was yours.
You were a cool, cool sort of person or a company or a financial advisor if you help people avoid evade tax.
And that, I think, has infected everything. But it is really important that we bring those enablers to account and the difficulty is one.
There are big sector and it will cause a little bit of a ripple in that sector and in the post-Brexit time when
the economy is also feeling the shoulders of Brexit on the shoulders of COVID on the shoulders of Ukraine.
There will be a reluctance on government side to do anything that destabilises even the slightest the financial services sector.
Secondly, they are very, very close to government. And you know, there's nothing wrong with government talking to stakeholders,
but there is something wrong when government takes that beyond that to allow undue influence on regulation
or allows revolving door appointments over large contracts or allows public appointments to enter the fray.
And they are very, very there are very, very, very powerful lobby and you see that all the time.
And the third thing I have to say with this particular government,
and I don't hold Andrew in any way as part of this, but with this particular government,
there is a very close sort of financial relationship between a Conservative Party at the moment and the financial services sector,
which is deeply unhealthy and chose Britain using its moral compass.
So we're in a difficult time of tackling the very, very vested and powerful interest and and and holding them to account.
But we see that as absolutely crucial. We have got a number of ideas in our manifesto as to how you start down that road.
I'd be interested to hear from you if you've got other ideas because we're in the market for those at the moment.
And the only interesting thing finally to say is this has been a real for me, an interesting journey.
You know, I'm a sort of Labour politician through and through tribal labour, but I guess anything will get we will get this.
Anything done in this space at this point is by working across parties.
And I've talked to conservatives one to one in my room, lots and lots and lots of them from right across the spectrum of the Conservative Party.
And there really is people come from a different, different to view to the same conclusion.
But there really is very little resistance to regulating to getting better enforcement,
getting stronger transparency and to getting better accountability, to getting those four things implemented.
So this is a moment in time when I think we could achieve change and we've just got to grasp it.
Thank you, Margaret. Let me start with a question with a quote from you.
You said and I quote, we have become we the UK have become the jurisdiction of choice for every kleptocrats,
criminal and money launderer in the world and the quote to give our audience a sense of diagnostic.
How did we get here? What happened over the last 30 years?
I fully agree with your with your statement. How did we get it?
Well, I think I think it's it's partly the deregulation.
So it's OK with the Thatcher Big Bang. It then was the.
Regulation Brown Gordon Brown carried the breadth of the Blair Brown years,
so I think that deregulation made it that coupled with UK has always been a trusted jurisdiction.
So, you know, if you can get something done here, that was one aspect of it.
I think our relationship with our overseas territories and crown dependencies meant we had the secrecy jurisdiction linked to us,
and that was really that helped us a lot too.
I think there's you know and also we got the biggest financial services sector.
So when you're trying to, it's I think somebody talked about borderless money in border states.
I think it's all of a value bullet use that phrase.
So if you're trying to shift money across jurisdictions, we've got a very big financial services set.
You know, the biggest us in America, that's that was hugely important.
We speak English, all those sort of things. I think that helps animals and our enforcement is pathetic.
So even where we do have rules, we completely fail to enforce them of companies house being the classic example that Andrew talked about.
You know, you can set up a company and force law office, National Crime Agency, they're woefully under their ban.
And then we did things like golden visas. You know that that brought more, you know, that helped.
And that was brought in by the Labour government in 2008.
So there's a whole raft of things that that brought in billions of money, lots and lots of Russian money, not elsewhere as well, but lots of it.
Andrew, what is the articulation between the city of London and the Crown dependencies in the British Overseas Territories?
You and Margaret mentioned some notable successes that you've both jointly achieved in this regard, but the limits of those successes,
the autonomy of these jurisdictions, as we can see from the British Virgin Islands pushing back over the last two weeks.
What can be done? And first, how does it work? And second, what can the House of Commons?
What can Westminster do to it? That hasn't been done yet?
Well, just just sort of sliding from your first question to Margaret.
I mean, the the fact is, the city of London is the top or one of the top three financial centres in the world.
Plus you've had the deregulation, plus you have the rule of law.
So, you know, if you are a villain and you've got a lot of money and you're going to put it in London,
you know that there are rules of ownership that are property rights and so on.
And you're going to sleep much better when you put it in a lesser jurisdiction. So that is the pull factor.
And then it's been very difficult for the government, for example, on the British Virgin Islands,
because the British Virgin Islands and the other Caribbean dependencies are a relic of empire.
They were not big enough to stand on their own two feet when Empire came to an end.
So they've remained in this rather sort of odd relationship where they share our crown, the Queen,
and they have appeals to British courts and the Privy Council in certain circumstances.
They have secrecy and this is a toxic combination.
And so, for example, in the early days when Margaret and I were trying to make the case for open registers of beneficial ownership,
and this got a real lift in 2016 and under the Cameron Osborne G8,
where Britain declared that we would now have open registers, beneficial ownership and the EU said that they would sign up to it in due course.
But it all took a very long time and it did not penetrate through to the overseas territories.
And in that classic British way, what they said was look open registers where journalists and others can come along and can see who owns something.
This is just a busybodies charter.
What we will do is we will have closed registers, but we will ensure that any law enforcement agency in Britain or indeed America,
anywhere else can come to us and get the answer to a question.
And if it's to do with terrorism, we will answer that question within an hour and on anything else to do with
the law will answer within 24 hours and everyone thought that's a great idea.
And then you've got the Pandora and the Panama Papers published and you saw why that doesn't work, because you don't know the questions to ask.
You can't join up the dots on all this dirty money moving around the world, and you have to have experts,
busybodies, civil society, journalists, investigators able to see what those dots are.
And that's the Panama Papers blew away any credible argument from government in Britain to avoid having overseas having these open registers.
And so we were able to impose it because the government didn't have a majority and Margaret.
Explained to the government they would lose a vote, so they caved in, and the way these things work, it was so obviously the right thing to do.
And of course, what happens when Dominic Raab was a foreign secretary,
he issued a written statement saying it was government policy to have all these overseas territories having open registers.
And I sent him a note saying whichever official draughted that written ministerial statement
should be promoted and has got a brass neck to do so because you have this force down your throat.
And he said me back on WhatsApp saying, Actually, I draughted it myself. Margaret, I want to get to the heart of something,
which is implicitly why some people who understand these practises to be moral nonetheless are reluctant to go against him, which is, is it?
Is it in the British self-interest to regulate these practises?
Or will that be economically negative because it will chase away some forms of business, which are dubious but are lucrative?
We see, for instance, what's happening with Russian sanctions.
Dubai is, which is already a very dubious jurisdiction, is benefiting massively from financial, Russian financial financial flows?
Or is it alternatively that the the the reputational impact in on the UK is harbouring of these practises?
Is that going to be more significant in the long run? In other words, what is the hard edged business case for cleaning up?
Well, you know, clearly I'd like to hear Andrew on that as well.
OK, sorry.
Clearly, the business community will argue that it would be deeply damaging to the financial services sector, and we would argue back, I would argue.
I'm sure Andrew would argue that we both argue back that you will not get sustained prosperity on the back of dirty money.
You will if you lose your reputation, if you look at all the indices after the FinCEN Papers, I think it was one of them.
America has now downgraded us as a trusted jurisdiction sees us like Cyprus and that, you know, we're now on that trajectory going down.
And if you're not trusted, clean money won't want to come here.
And there is so much clean money floating around the world that we can,
we can and should take advantage of our historic reputation as a trusted jurisdiction to build on that.
But it is. It's in all sorts of ways. They are making a fool.
I mean, FinCEN can't remember which leaks it was, but one of them with the banks, the banks in particular.
I think it was the FinCEN Papers. They fill in. You can just see anybody who has anything to do with any of us having any background.
You answer a party in the checks they do. I chaired I chair a charity at the moment chair and I need they need my signature.
I can't tell you the hurdles I'm going through most customarily fortune to a picnic because on the politically exposed persons.
So they're probably doing it. I am. Yeah, I'm a really good person.
But and then you see the FinCEN leaks, which were these leaks of papers.
They what they were were documents. The banks have to fill in this suspicious activity report and give it to the to the enforcement agencies.
And this is the American. FinCEN is the American enforcement agency. And what they clearly do is they fill it in in their bureaucratic way,
but they don't then do the checks that they do on the likes of me and my charity.
They then carry on. They just carry on taking money because it's easy money to make and it makes them lots and lots of money.
And the other the other leaks we saw was actually this was perhaps one of the most shocking was an early lesson for me.
I don't know if any of you remember the HSBC leaks from Switzerland, known as the false Hirani leaks.
And out of that it was, I mean, we were in the heart of that.
This was this was the Swiss branch of HSBC, and anybody with any business would see it was making much greater profits than any other bit of HSBC.
But nobody thought why they were making it because they were encouraging their
clients to do tax evasion and they were using it to launder money through.
And the only response of it's a very good example of the spectrum as well.
The response of the head of SBC to all this was to go after the whistleblower.
They they weren't interested in what the whistleblower had found.
They just wanted to get the whistleblower and they tried to pursue him to court and get and get him done.
And then the woman who was, I'm sorry to say this, the woman who was in charge, she she ran the audit committee for HSBC,
Rona Fairhead went on to become a Tory minister, a conservative minister for trade, and she had evidence when she came to the public accountability.
It was purely shocking.
You know, she she should have said of the audit committee, this should have been the sort of red flags that she'd been looking for.
Totally failed. And she really talked about the whistleblowers as the thief.
And then the only other thing I would say about all this is the lawyers who were now who are suddenly coming lawfare,
which, you know, you're all hearing about a bit more and a lot of what you're subject to, a bit of that.
A lot of the investigative journalists who have written brilliant books as a brilliant book on Fusion's people by unaccountable.
Yeah, yeah. There's a load of really, really brilliant stuff. Tom Bergin has written a book and he works at the FBI.
They are not pursued by the oligarchs with lawsuits which are again the leading law firms are making zillions out of.
And if you're an oligarch spending for 10 million quid on just a legal case is nothing.
If you've got 12 to 20 billion pounds as your as your wealth that you've stolen from the Russian people.
And that's another aspect which we have simply got to bear down on, you know,
which is in our manifesto to stop this litigation being used and lawyers in
the UK using it for them to make money and to stop short stories being told.
The basic problem is that the baddies run rings around the goodies.
And so what we have to do is we have to try and even it up. That's the basic problem.
The baddies have the money they can. They can buy the best lawyers.
And it's it's. We've got to we've got to make it budget for.
That's not just about tightening the law, it's also about a whole series of things.
When I got back into the House of Commons and in 2001, having had a Foya enforced sabbatical following the Blair landslide of Nice 1997,
so gone back to the city and was earning my living at Lazard and in a Lazard.
And in those days, I had a rule which no Russians and I can remember going to the greybeards in the in the bank and saying,
I call this deal and it's got X, Y and Z.
And the director would say to me, Andrew, we have a rule here, no Russians, and there's a Russian element to this.
You can't do it. And that was sort of quality of judgement, which I think they deserve very high credit for.
Now, when I got back in 2001,
the Labour Party was in power and they were introducing a series of restrictions to address the issue of money laundering.
And I haven't come out of the city was very conscious of the fact that these changes and
restrictions were in danger of impeding the good guys without actually filtering the bad guys.
And I remember asking the hapless labour minister how much money laundering is there in London.
And they said, Well, a lot.
And I said, but not, you know, if there's a billion of money laundering, then these restrictions are probably massively excessive.
And if it's 40 billion, they're probably nowhere near enough. And how can you bring in these regulations if you don't know what you're dealing with?
Now, the reality remains that those regulations stopped good guys from practising their business and
carrying out their business and loaded costs onto the consumers and didn't really stop the bad guys.
And then the banks realised that the thing to do was to report everything and swamp
the swamp the regulatory authorities and report anything at all with a red flag.
And then they're swamped. So you can't you can't do anything about it. And this is the problem.
We need to we need to change the dynamics of a system where the bad is always likely to to succeed.
And what I said before I was trying to demonstrate that even when we tried to support the
good is the system actually is quite inert in the way it handles it and are not also less.
I'm much more wary of the Americans than I think Margaret is because I mean,
I think American justice means you either say you're guilty or you go to prison, you know, you have to plea bargain.
The case of Mike Lynch at the moment. So I'm extremely perturbed by the very certainty because he if he doesn't,
because he has resisted being sent to America, extradited to America, he is by definition of flight risk.
So he goes to Americans, plead his case. He will be inside on the moment he lands in America in a horrible penitentiary.
They will take two to three years to decide what charge, whether they will turn up on day one and say If you plead guilty,
then you will go to prison for 18 months in the rather pleasant place.
And if you and if you don't plead guilty, we'll have you for 30 years and I don't think we want to go down anywhere near that route.
And the other thing is that partly because the president comes from Delaware, where there's an awful lot of dirty money in any way.
You know, they're not in, they're not in the business of introducing open registers of beneficial ownership,
but they are moving towards having closed registers of beneficial ownership.
And in the case of America, that is a big deal. And, you know, maybe we'll get them to open registers in due course.
But getting the American system to move to even closed registers would be a big bonus.
If I may, two very brief questions to both, and then we'll go to John Heather.
So who who have some, some common sense and some questions? The question I have for for Andrew relates to what we discussed earlier.
Some fear that this belated effort is still to Russia centric and misses out on real structural reform.
My own expertise is on Africa, and what I'm struck is that when you're dealing with Nigeria or Kenya or Angola or South Africa,
the London names that crop up, we're talking about lawyers,
bankers, management consultants, PR experts, in some cases,
even the sort of people that is and philanthropic donations to universities and think tanks and all of that.
They're exactly the same individuals and firms. And there's no Africa pipeline.
They're the ones we've all been dealing with in the sort of Eurasia context.
And yet they don't make the news or.
In the current context, there doesn't seem to be appetite for action against old dirty money and not just Russia's.
Am I too pessimistic here or do you think that we're turning a corner here?
Well, I think that Russia is the, you know, the crime of the moment.
I think I'm not as pessimistic as you. I think we've been very we supported President Buhari, who go back a lot of dirty money from London.
He did deals with people. I mean, he managed to get a lot of money back.
We were cooperative in that the case of James Ibori was was,
which happened on my watch or the work to get him up and on my watch was quite quite well done.
Not not perfect, but made some progress I think were very conscious. And that's the reason why I opened with this development thing,
because the stolen money is estimated to be about four times the total flows of development money that goes into Africa.
And that sort of that sort of puts it in context.
And I think Jason Sharman, who like me is from Cambridge and who is sitting in the audience,
he's done a lot of work on this stuff from from Kings and Cambridge, and it's the whole waterfront we're going after.
And I think the focus, of course, on Russia and Ukraine is is is has grown.
It was pretty weak until the Salisbury biological weapons attack then got a lot stronger and now it's getting stronger again.
But never underestimate the inadequacy of the British authorities charged with clamping down on this.
They are short of money. They are short of expertise. And this is not police work.
You know, this is the work for the top accountants and lawyers and and tracking these people and the police tend to think it's the Al Capone theory,
which is you can't do it on the on the on the complex stuff.
So you do them for tax evasion, tax evasion and parking tickets that you can't do it like that you've got to have you've
got to get the best people going after the baddies are not working with the baddies.
Margaret following from their of your cross-party work has been exemplary, their real achievements to it.
Yet successive governments have failed to regulate in particular the facilitators is the moment now.
Is it different now and why is that? Well, we're going to push it. This is why grasp Ukraine to look at the larger tapestry.
That's sort of my message. You're I never thought this would happen and it has happened.
So we're going to grasp it. And I think on the record, I think it's a it is the toughest of the issues that we're confronting.
So stuff you can do from here to create a sort of environment in which it becomes inevitable is really important.
You've got to look at how they all supervise themselves.
So all these all these advisers have a professional bodies that are supposed to regulate them and also actually do work,
promote on their behalf, you know, lobby on their behalf. They're absolutely hopeless at the moment.
So we have got we've got propositions in our so-called in our manifesto to toughen up supervision and the regulation,
either by toughening up the government agency that oversees the supervisors or the various ways you could do it.
That's that's the first thing. The second thing is we are we want to introduce the law.
Commissioners is looking at it a a new offence.
It's very, very difficult to get it.
The facilitators at the moment, because the whole of the law around liability for giving wrong advice or giving
advice that leads to wrong action was based on sort of 19th century businesses,
small single person businesses.
So what we're trying to put in a thing of particular failure to prevent offence and that is being looked at by the royal commission.
I'm really worried that the law commission won't report in time to feed it into the economic crime bill,
but it's another area that is hugely important. That's the second thing.
So we've got a proposition around supervision, a proper proposition around introducing new offences.
The third thing is the accountability framework, an enforcement framework.
So if you get tougher accountability enforcement, that opens it to public account.
And if you can open your public account that, you know, embarrasses some of these, you know,
household names in the finance and financial sector and in the law that you want to get solid with dirty money at the moment.
And then the full thing which is coming from somebody in the Labour Party, I think is very important.
I think we should use their expertise. I've always felt that. So I think you're a poacher turned good.
Keep a little beach in this area wouldn't be a bad thing because we saw it in the ways that you did all the work on that.
There just is not the expertise within government that can stand up to the professional expertise,
such as at the moment exploiting and creating this environment where, you know, with the jurisdiction of choice for dirty money.
So I would bring him in and I would make them or I would use them on a what's it called?
No pay, no fee. No, no, no, no, not pro bono.
They won't do it on that basis, but no one, no fee, no or a no win, no fee basis and get a few poachers turned gamekeeper.
And that, I think, would strengthen our enforcement.
It's I don't think all my political colleagues would agree with it, but I think it's one of the ways through it.
Thank you, Margaret. We're going to hear some comments from John Heather, so.
We will then give Andrew and Margaret the opportunity to respond briefly to them.
And then hopefully we shall have about half an hour's interaction with the audience.
And I know there's amazing expertise in this audience. It's really I'm looking forward to your comments and questions.
John, thank you, Ricardo. So six months ago, almost six months ago, Ricardo and I with colleagues in this room from next Oxford and Cambridge,
Tom 09:10 and Jason Sharman and also colleagues in the US published a report called The UK's
Kleptocracy Problem How Servicing the post-Soviet Elites Damages the Rule of Law with Chatham House,
the Royal Institute of International Affairs in London.
A great deal has happened since then, and even before Russia's invasion of Ukraine, the Kazakhstan crisis brought this issue to the fore.
I will just reflect on this in light of the comments Andrew and Margaret have made and finish each of those comments with.
We have a question for the for the two of you. So what my action, what form my action in this area take?
We've heard a great deal and a lot of what I will say will sort of really just highlight or emphasise again the points that Andrew Margaret have made.
But I think first of all, this is requires long term, but also short term action.
So in the sense that the deregulation of financial services created these problems,
actually prior to that, the creation of the offshore system from about the 1960s.
This is an historical evolution, a change in the nature of global political economy,
of which London and the UK is at the centre, which has emerged over decades. It's going to take a long time to regulate that effectively.
But there is this moment right now to do something about this, which is about recreating state capacity in this area.
When the offshore system was created, the Foreign Office and Treasury basically said to the overseas territories,
We've just mentioned you write your own rules and we'll go along with those.
What we need is a new state capacity to deal with this and a members like Andrew and Margaret at the forefront in pressing government to do that.
I was struck in the Queen's Speech recently how kleptocracy was mentioned.
This word was used in the guidance notes that the government issued and I did a little check of Hansard and
found that kleptocracy or kleptocrats had been mentioned one hundred and eighty times since eighteen hundred.
The most interesting thing about that was about one hundred and forty of those mentions were in the last five years,
and about half of all mentions were since January of 2022.
Since January of this year, a number of them would, of course, been by Andrew and Margaret.
And my question to you is, does this matter if we establish kleptocracy?
This is not a new fangled term. It's a classical term as a principle in UK law that if you're enabler handling
funds from a politically exposed person from a kleptocracy which we can identify,
we can designate we can put on a risk of a list of High-Risk third countries.
Is that something that can be established as a principle in UK law that we should press for and push for?
Is should there be a UK list of High-Risk third countries,
which might be a great deal better than that of the Financial or Financial Action Task Force list or the EEAS list that we follow previously.
Secondly, it seems to me the action in this area must be moral, but also in our interests,
and it is very often the moral value for and against attempts to regulate.
Is privacy so great virtue in Britain.
I sort of feel it should be one of those national values we teach to our kids in primary school because privacy is often put out
there against actually some of the Nolan principles that should and indeed we hold out as those things governing public life,
which include integrity, openness and accountability. If you push back with privacy as a personal virtue, you're often pushed.
Back against those Nolan principles,
we see this in the universities world where the failure to establish clear ethics of self regulation about donations means
that some of us have felt the need to push for a change in the law to force universities to publish their donations.
And that's an amendment proposed by Jesse Norman for the to the higher education bill going through Parliament now.
But that failure of morality, which can be pointed out,
also needs to be accompanied by a recognition that is actually in our interests
in the way that Margaret discussed and also in her losing moral compass.
Losing our moral compass paper was King's College in March. To to address this,
because the research actually shows that the net value to the UK economy of a great deal of this activity is is either negligible or negative.
If it has a value, it might be free tax avoidance schemes,
which obviously take from the public purse if it's something like the Tier one investor scheme that's been mentioned.
The research on that should be comparative across Europe shows that it has very little negligible effects, which is when it was ended.
Current scheme was ended early this year. Part of the reason for that, of course, was that many dubious individuals, including sanctioned individuals,
had been let into the country and got residency and then citizenship through that route.
But there was also no real economic value to it. So the question that comes out of that really is how do we convince the government of that?
How do we convince the government that this is an economic interest,
that that there's a there's a slice of financial services that's that serves high risk, very wealthy individuals that may lose out.
But the broader UK economy, very often in most of these occurrences of regulation, will not.
Thirdly, it's political and requires political will.
That's come very clearly from Andrew and Margaret's comments, and Margaret mentioned unexplained wealth orders.
It's a classic story, as I think of what often happens in this area.
There's an initial surge by the government's big announcement David Cameron in 2016.
We're going to do this, drawing partly on reports that time and Global Witness had at work time.
Then the loopholes get built in as there's a certain amount of lobbying by the industry.
But the key step is the third one underresourced.
Make sure the whole system is sufficiently under-resourced and National Crime Agency that it can't work and then you don't use it.
And that's what happens. Boris Johnson's government has not used an unexplained wealth order.
It's been reformed now, but it's only fixed some of the problems and we will see what happens.
So how do we break that cycle? Because it seems to be. It does involve cross-party pressure, but it's soon.
If you're involved in a how do we how do we break that typical cycle?
I've just outlined that. And finally, action in this area is international or should be international.
But in the sense of transnational, so it involves by partnership with other countries, but also with the private sector.
Some of our researchers come up with relatively shocking findings.
Maybe if you've worked in this business long enough, it's entirely what you would expect.
But. For example,
U.K. measures on freezing property and doing those unexplained wealth orders or going into the houses of some of these elites in the U.K.,
what we know is if you are in exile, you may well lose your property.
But if you're an incumbent in a kleptocratic state, particularly a kleptocratic state, which has good relations with the UK, you will keep it.
And the reasons for that are not the exiles are fundamentally more dubious, quite the opposite very often.
And if we consider for a moment what that really means,
that means that British law in this area is being driven by power relations in kleptocracy, power relations that exist internationally.
So that needs to be, as has been discussed, a a way of recruiting the private sector to a set of standards to prevent that's happening.
And I think that actual enablers, which has been touched upon, is something which seems to be at the top of the agenda.
It may be that something we come back to, but I'll stop now. Thank you.
These are four extremely rich questions. So in the interest of time, I would ask you to either choose a couple of the questions or give doubters very
concise answers to those complicated questions so that we can only look at.
I mean, I agree it's long term. The UK listed as having a list of kleptocrats.
Interesting idea, but you touched on something there, John,
which is a real problem that we haven't we haven't found a solution to, and I don't think your views are either.
So we have frozen all these assets or all these kleptocrats around in Russia.
We haven't sees them with the water in Ukraine to stop tomorrow.
Arguably, they'd all go back and we can't think through so again, your help and support,
no, in general, it's getting to an answer that would be really, really helpful.
How do we convince the government that it's in the UK's interest?
This is this is it is really, really, really, really hard because of the power of the enablers in in politics and in our politics.
Today is just really, really hard. They're the only ones.
I mean, I bet you never brought in to talk to Treasury officials all you talked about.
Across Whitehall, Illicit Finance Group actually has invited us and Treasury US Open to a degree,
but it's in the last few months when they know the problem.
So we go all out for meeting. I think Treasury's key to this because I think, you know, I think you will probably find empathy in the Home Office.
You'll find these business departments as well so that they're OK.
But it's Treasury that is key and you've just got to think of the part of the financial services sector.
It's just incredibly powerful. So all I can tell you is I'm having these amazing conversations with individual conservative MP,
some of whom I look at their CV and they come up and they are sort of pro-Brexit, anti-abortion,
anti-gay marriage and everything that sort of, I hope, dear on Flipboard,
I'm going to talk to this person about and then they walk into the room and we start talking about Russia.
We find those. We can find some common ground.
And by the end of the conversation, they say they will support our proposals. So there's no I think we can build a majority.
I'm pretty sure we can build a majority in parliament.
I really do believe that whether you can overcome the power of financial services sector in government, I think is the big challenge.
And international, I couldn't agree with you more. We did.
We haven't talked enough about that, but I think Andrew's has a really good answer to this.
Maybe you should get on, but I think, you know, we've got to change nationally, but that doesn't stop us acting nationally and.
Also briefly, I want to make three general points, but your very interesting and expert.
The first is that I mean, I agree with you about the privacy argument because that was what we heard about the open registers that,
well, people in Mexico will be kidnapped and so on. But actually don't say privacy.
Talk about transparency because at the root of this debate is sunlight is the best
disinfectant you want to have transparency and on the political corruption point?
Well, all I would say is this I mean, I think my own party, which raises a lot of money for the private sector,
there is clearly too much Russian engagement there, and it's just doesn't feel right that we now have a lord, somebody of Kensington, Siberia.
I mean, it just you just sort of know that something is not quite right about.
So that's the first point. And it's not the same point is this it's not about geographies, actually.
It's because, you know, if you say that there are these six countries, the bad is or just go out for another one.
So it's not about geographies on the international point.
I mean, you start from the basis. Of course, what you need is an international convention,
a sort of U.N. on financial crime so that we can all sign up to the same standards and then you can really crack down.
I mean, it won't work. You will never, ever get agreement.
The French will be perceived and probably actually truthfully going after the British on financial services.
So they want particular things that I think will bear down on Britain's financial services.
Other countries under the under the broad heading of internationalism will pursue narrow national objectives.
And remember at the moment what operating, I mean, is obviously devastating for for.
I find it devastating that since the war, we've been building more international agreement consensus, whether it's on trade or justice.
The International Criminal Court building building up on the whole thing's been smashed to smithereens.
That but what has happened in Russia and Ukraine and the international system is really on the
back foot at a time when you need internationalism to tackle all the major problems of the world.
So I don't think the international thing really works on the final point I wanted to make,
which was trying to rewrite the private sector and dealing with the under-resourcing,
which is all about the bad is always winning, you know, recreating state capacity, you know, in in in the city there used to be the takeover panel.
Maybe that still is the takeover panel of the takeover panel regulated takeovers.
It stopped it being the Wild West when it came to a big company taking over another country and it dealt with the code.
Now it's very close to the point we are discussing because the government could never
afford to have the best lawyers and the best accountants to go on to the takeover panel.
So the takeover code was administered by the takeover panel and the people on the takeover
panel were very senior lawyers and accountants who did it partly for the prestige,
partly for their company and partly because the governor of the Bank of England said, You Freshfields, you Linklaters.
You will allocate serious resources to put them that senior partner onto the takeover panel.
And from the point of view of the individual, it was about their career progress and for the point of view of the city,
it was getting very expensive, very good people at no cost.
And I'm not. I mean, we require you brilliant academics to work out how we we do this,
but I think there may be something there about how you even up the odds because everything we've come up with.
So for far, the baddies have got the best guys. Thank you, Andrew.
Margaret, and thank you, John. And we're going to open the panel to two discussions from the floor.
I would ask you two things. First, please introduce yourselves and keep the second one is keep the question relatively brief so
that we can have as many questions as possible during the next twenty five twenty five minutes.
I'm sorry, we have this gentleman over there, Professor Carlos Lopez, I thank you.
Hi, my name is Carlos Lopez. I'm a visiting fellow at the Oxford Martin School right now.
There was a lot of emphasis on the personal individual type of situation.
I'm more concerned from an African perspective with what corporations do and beyond BEPS,
how you can use current accounts in corporations to basically do all sorts of illicit flows become possible.
And how the absence of regulation makes it extremely easy for the companies to just do that.
And on the other hand, almost at the other extreme, how that is overregulation in terms of due diligence by the banks,
not very effective in terms of stemming the problem, but creating the opportunities for big large banks to justify withdrawing from African markets.
Because, you know, the costs, the transaction costs of that regulation becoming prohibitive and therefore facilitating even further
this facility of corporations using the current accounts to basically transfer their moneys illicitly.
I should I should add that. Professor Lopez is the former executive secretary of the United Nations Economic Commission for
Africa and played a leading role in pushing the illicit financial flows agenda back in the days,
although the African Union has since not really been a great actor in this regard.
Andrew, perhaps you could take this question. I don't really have very much to add to what the professor has said.
I mean, he's sketched out the the problem, and it is, as you said, it is that a lot of very complex regulation is ineffective.
What you want to achieve. But if you don't have regulation at all, then you you have an open door for kleptocrats.
And that is that is a real dilemma. Next question.
Was there was sorry, the lady in the back? Hi, my name is Fikayo.
I'm on the Contemporary China programme. I'm doing my master's.
So this is a question I've asked every British politician and or diplomat, should I probably stand?
This is a question about every British politician and or diplomat that has come to Oxford since February.
And I'll be honest, no one has quite answered the question honestly or directly, but I keep asking, so here goes.
Illicit money has been flowing into the UK since like 1990, when a bachelor was president of Nigeria,
but it's only recently become news when Russia has invaded Ukraine.
And my question is, what exactly is the message to African dictators?
Is the message that, you know,
you can basically put all your money in London and it'll be fine as long as you don't invade another country because we like the Pandora.
Papers reveal that at least 40 Nigerian politicians have property in London worth at least 200 of 50 million pounds, and nobody did anything.
But now that Russia has invaded Ukraine, we're going to change the laws. So is the message.
Basically, do whatever you want at home, but don't invade another country?
Thank you. Thank you for calling Margaret. Well, I think we have answered it, but I'll answer to getting.
The message is mixed at the moment because we have a system in the UK that allows all that to happen.
But what we are doing is using Ukraine to bear down not just on Russian oligarchs,
but also to bear down on on whether it's from, you know, illicit body from wherever it comes, they're not going to.
Just as I've done two debates is his part of the Russian and Azerbaijan and Kazakhstan, both of which are so corrupt.
And there's so much money that they've stolen from their people is come here so you can find endless examples if you look at all the leaks.
It's full of money coming out of sometimes actually quite jurisdictions that you don't expect it to come out of.
What I hear, what I will come back to your thing. I'm often asked to speak at Commonwealth Parliamentary Association events where
they bring people over to just to discuss how you should look after public money,
how you prevent corruption. And I felt really comfortable doing that 10 years ago.
You know, I talk about the systems we had in place when we had very little corruption.
Today, I feel embarrassed because I think that we have so opened our doors to it that we can no
longer hold our head up and say we're a trusted jurisdiction that lives by the rule of law.
I'm not even sure we don't do that as we see with our wonderful prime minister, if I can just have a little aside on that one.
So it's so it's I think it's a mixed message, but let's use this.
Nobody is saying nobody is saying that it's just the most egregious case of where I know this is a little bit of a minute,
but most egregious case I've come across where Britain has facilitating wrongdoing.
The world was actually the Lebanese, the the explosion in the Lebanon for the ammonium nitrate, which was supposed to be going to Mozambique.
It was supposed to be sort of fertiliser for Mozambique and sort of a couple of months after it happened.
One of the very great investigative journalists who worked for Reuters rang me up and said, Do you realise Margaret?
It's a British company that owns that owns that ammonium nitrate in the warehouse in Lebanon.
So I did my usual thing about, you know, typical bloody, you know, we got it absolutely hopeless regulatory framework didn't think twice about it.
And then about a month after that, we got we got overwhelmed with, you know,
the Lebanese Bar Association, various investigators in Lebanon coming to us.
And what emerged in the end there were it was a British company.
It was set up by a company services provider in Cyprus.
She put herself down as the beneficial owner. She wasn't, and she didn't.
She told HMRC that it was a dormant company. It wasn't because it was trading this ammonium nitrate and that it then emerged that it
was sort of Ukrainian Syrians who actually owned this with a real beneficial owners.
It wasn't going anywhere close to Mozambique, it was going to Assad, and it was being used for barrel bombs to drop on his civilian population.
And that is, for me, the most appalling,
egregious example of where up a dreadful regulatory framework are useless enforcement and lack of accountability.
And our failure to have transparency leads to terrible things happening right across the world.
So I mean, it's a really, really good question. I mean, I would just say to you that it goes back to Stephan Deacon's book that, you know,
if Nigeria has a leader who is shamelessly plugging the book and I'm not, I'm not plugging my book.
My book, which is which is available in all good bookshops, can't cope beyond the French tales from a reformed establishment lackey.
But anyway, so but the point is it's about the quality of leadership.
So when I was when Stephane and I were differed, you know, differed its main work was trying to bring James Ibori is money,
which would be distributed amongst his doctor, his wife and his mistress trying to get hold of that money.
And the department did a lot of good in that respect. But you need a leader in Nigeria like Buhari now who who is intent on recovering stolen funds.
And then you got something to work with.
And indeed, on my watch, we saw the people in the city of London police who are most engaged in this sort of work.
And I utter the immortal words never heard by being uttered by any minister in any other government.
You can have as much money as you can spend well to prosecute these causes.
So. So I mean, although you're right in saying that there's been a very narrow emphasis now on old Soviet Union Russia,
the people who Margaret's done so much work to track down that actually the work of government was
and was in Africa and Nigeria being the place where there were the richest pickings as it were.
We focussed on them very much in answer to your second point about about identifying these properties in London.
You know, that's why open registers are about and what we want. We require.
You know, the name attached to the property. Andrew Mitchell Sani Abacha So that there's transparency and we know who it is.
And you can't just say it's the ABC brackets, BVI close brackets business.
Next question, we have a question here. Can introduce yourself.
I just for the people online, so they. I'm then I'm a master's student in international relations here at Oxford.
I have a quick question. Thank you for your fantastic remarks and all the work you do.
A quick question to Mr. Andrew Mitchell, but please feel free to comment as well.
Just picking on up on the terminology you use and I've noticed words like villain Goodbody.
I'm quite fascinated by kind of the dichotomous terms of use, and I want to maybe pick up on that and say,
you know, is there an intention to to try and just change the public discourse around that?
We've heard from Prof. How Kleptocrats has suddenly become a very much used word in the past few months.
And what more could we be doing to change the public discourse to bring awareness around around this particularly pressing issue?
So all I'm trying to do is to use a neutral word that is not, is not capable, is not capable of being passed.
So I'm talking about baddies and goodies.
And I mean, I'm inviting you to assume that the technical term is correct because I think I think that makes it easier to to go down,
go down this route in a way that is reasonably easy to comprehend.
Other questions, Professor Chris Adam there. Professor, thank you, and thank you very much for the presentation and the discussion, I think is great.
I want to take you back to this issue about transparency and accountability and ask for your reflections on whether you feel that effect.
It's voluntary mechanisms such as the ITII Extractive Industries Transparency Initiative have proven effective.
You're talking about the need to put in place better mechanisms to drive both transparency and accountability.
And this is not what maybe 20 years old it was a Blair government initiative.
It was taken on, I think, with a fair degree of enthusiasm by the Conservative government that followed.
And I'm just interested in your reflections on taking stock. Is this is this a model that that helps us?
Is it a model that has run its course? Are there lessons to be learnt from the successes and or failures of It--i to hold
parties to a higher level of transparency and accountability in illicit transactions?
Either, first of all, when I first went to see the OCD in 2010 12 roundabout, that they've been working on this since 1980.
You know, it's crazy how long it takes. So that's the first observation, it's not it's not even as recent as you said.
The second is that the transfer in theory works if all the other bits are in place.
So you know the quality of the data. I mean, it just 40 companies house is is just completely so full of terrible, terrible data.
It's not worth which is why we need the reforms, because you've got to you've got to keep revisiting these things and then that data has to be used.
And that means your enforcement agencies have to use it.
You have to have accountability to the public through parliament and to all of you doing work around it.
All those, that's what I talk about is always talk about these four pillars, which I think are a way of looking at it.
So I think transparency is a key ingredient, but it has failed us to date because actually,
you know, money laundering, dirty money has grown during the period that we've had it.
And ironically, I would say Cameron and Osborne sort of got it.
And I think if they'd been around for longer, we'd have made much greater progress.
But they then disappeared. Theresa May came in obsessed with Brexit, didn't have.
I think she just generally genuinely didn't have a space to think about anything else.
And I don't think honesty and transparency is top of Boris Johnson's agenda.
And Margaret have been specifically beneficial. Ownership was a priority late in the Cameron.
Yeah, I think I think they completely got it. I think they really did get it.
I mean, when we first saw light on it,
they would say what they were there with us and whether there was always the ambivalence with the powerful financial enablers.
They've always been very popular, but they just got it. So.
So it's absolutely brilliant. This is the extractive industry transparency initiative.
And what it says is if you are a poor country and you have resources that, first of all,
an unscrupulous international business or company that comes in and knows the value of those those resources and the country doesn't know them.
You have you have unequal transparency that so so the guy says you must you must be completely open about the value.
And then it talks about the cost of exploitation,
who whether it's the people taking the stuff out of the ground to make the profits or the country, which is the host to that asset makes a profit.
What happens to it?
And then extractive industry transparency means also that you try to see that the profit goes to the country actually goes through public services.
I mean, that, in a nutshell, is what the EIA promotes, and it takes money off businesses who think as part of their ESG and social responsibility.
They are absolutely brilliant and works quite well.
My predecessor, Clare Short, a politician of totally different colour to me.
But but on this issue, we are upset once she run it and run it very well lived on a plane for three years,
reading and driving these important points in places where it matters.
A really good example of how you even up the odds in the area we're talking about.
Thank you. Adrienne Fireboy has a question from our online audience.
So picture has asked few policymakers and academics from the issue of capital flight and if f as a violation of human rights there.
Clearly there are all kinds of human rights groups. We thank you very well.
Sorry, OK, sorry. A few policymakers and academics framed the issue of capital flight and IMF as a violation of human rights.
They clearly there are all kinds of human rights abuses being committed,
but framing the issue in this way be a means of pursuing more trans and cross-national solutions to the problem.
We would walk away human rights, freezing human rights contract.
So that's Magnitsky. I mean, that's what essentially a Magnitsky does that.
And I think if you had Bill Browder here, he'd say every time I put a case to any of the enforcement authorities, it goes into a big black hole.
But I mean, you know, clearly, if you can link human rights to illicit wealth, this is a good thing.
Yeah, I mean, I completely agree.
And actually it's even worse because with Bill Browder of Magnitsky, he's got a file of he's written to eight British law enforcement agencies to say,
here is an issue involving of this person and this money will investigate.
And all eight of them have come back and said, No, it's not for us, it's for someone else.
And it's part of what Margaret was saying about the ineffectiveness of the regulatory and enforcement structure which exists in Britain
and why I'm beginning to think that the we need more academic work on whether the takeover panel model might be a better way of of of,
you know, putting some red blood corpuscles into this. Thank you, Andrew.
We're to get to the end of our of our week.
We have a question here from tenant privilege. If we can, we can still accommodate accommodate one.
Thank you. Hello, I'm Dan accredits, I'm a research associate here at the Department of Politics, International Relations.
Thank you very much for the fascinating panel.
So we heard very rightly about calls for reform and empowerment of the companies house system reform of companies.
So, yeah, we heard from from Andrew about how important it is to be in power companies house.
So it's not just the library, but actually provides an effective check to it for the system.
I was wondering whether the charity commission is also part of these to the charity commission is also part of these discussions and if not, why not?
So why did you invite comments from Margaret on how exactly this process works?
Because from the perspective of US researchers working on these topics, it's not very effective at all.
So let me just share one example.
So there was a multimillion dollar donation coming from a hypocrisy on on whose board of this charity there was a very clear idea,
but couldn't be more clear.
And there was no information on the Charity Commission's website about about the financials or anything about this company.
We contacted it and we got something in response. We got the documents.
That said, financial report zero pounds for the same years when a 10 billion pounds donation was made very, very publicly.
So it appears that this might also be a library rather than, you know, an effective system providing checks and balances.
So thoughts about how it works now and what would be necessary to do to empower it.
I think you immediately got a reaction here with the words Charity Commission.
We're concerned. Both speakers somehow jumped forward, but my favourite thing that we when I chair the Public Accounts Committee,
we looked at the charity commission and its effectiveness or otherwise in regulating the charity sector.
And again, they too have been starved of resources.
So you, you know, they haven't got the capability and capacity to do it,
and they too are very much a library that just sort of takes in the information and doesn't look at it intelligently or even check that it's accurate.
And therefore they too fail to work with other regulatory bodies.
So they should have a relationship with HMRC, for example, which is quite critical relationship beyond where the where the donations come from.
And they just, you know,
we came across terrible examples of where they just didn't talk to each other and therefore charities were being used for to bring in illicit wealth.
I mean, they were bringing you really being used to to launder it, to launder money.
So but there is a new chairman, so I'm going to meet other doctors better yet.
But he's written to me, so I'm going to meet him. So we'll see whether he can make a difference.
But I don't think there is a precedent for us. Are you looking forward to meeting the new chairman?
I'm not. I can't immediately think who the person is.
I mean, I think I think the answer is the Charge Commission has a whole series of its own problems, but it does do more investigation.
Companies have to do any investigation really at all. Thank you, Andy.
And we're getting to the end of our session. I have a final question for both speakers to bring the question closer to us here at
University of the Oxford Martin School is a very special venue in the university,
but also aloof from some of the university realities.
But the question I have to ask you is much of what we discussed here today had to do with illicit financial flows,
with money laundering and with the metropolitan service providers that that due to these that facilitate this process.
But at the end of that spectrum, after the money has been laundered and rendered legitimate,
there is a process of reputation laundering, which is embodied in many forms.
I mentioned earlier philanthropy to museums, cultural institutions,
but also knowledge production institutions and universities obviously loom large until 15 years ago.
This would have little much larger in the US context than in the UK context.
But in recent years, this has become a question that we, as academics,
also have to tackle as it were at the end of that spectrum that you've been discussing throughout this event.
You're looking at us from the outside, you're looking at us from from Westminster.
What thoughts do you have about that, that dimension in the cultural and education sectors?
I think there is a real.
I think the academic academia has to think very carefully and we know actually we know it, you know, it goes into the school sector.
There are a lot of schools that are accepting illicit finance. It goes, it goes into the arts.
It's all over as they try and accuse a lot of this.
The the purveyors of illicit finance trying get credibility and influence goes into our football clubs.
You know, it goes all over the place. So I think I think the university sector has got to think hard.
You've got to think hard. You have a moral duty and academic freedom ought to be something that you hold dear.
And my experience has not been an easy one.
So, so male college Cambridge, where I'm a fellow, has taken money from Chinese private sector interests and has got into Charles.
Moore writes about it every week in The Spectator, and it's sort of got a life lesson.
And the college never concealed anything, really.
So I think it's all a bit unfair. But the answer to your question seems to me to be again, once again, transparency and openness and being a Tory.
I want to impose that judgement on the on the educational entity receiving the money that it should be
open and they must then decide whether they're happy to defend it to all their different stakeholders.
And that seems to me that's the way. Can I just end with one story which I think just brings together the complexity of all of this?
It's my favourite story on this, on this thing. And I was told about a very senior American expert in tackling corruption who
was persuaded to come and speak to the most senior people in Afghanistan.
This is obviously before the Taliban took over, and he was persuaded to go because he was told that all the people there who were law enforcers
would be there and they want him to come and give a lecture to them on how to tackle corruption.
And he he agreed to do it. No fee flew to Afghanistan,
went to Kabul magnificent theatre with all these people there who turned up to hear him tell them how to tackle corruption.
And as he was delivering his talk, he looked on the front row and he realised almost everyone had a large Rolex watch.
And he looked around and saw what point they were taking notes about what he was saying.
And suddenly, to his horror, he realised that he fled halfway around the world to brief the people on what they had
to combat and get run from those who were enforcing law and order on anti-corruption.
And I think it's a I think it's such an interesting story. It shows you are really difficult and complex.
All this stuff is. Margaret Hodge Andrew Mitchell, Thanks so much for this brilliant event.
Please join me in thanking our.