Moneyland by Oliver Bullough

If for some reason your blood pressure is too low, this book will raise it as surely as any medicine. In Moneyland, Oliver Bullough describes in gut-wrenching detail the power of corruption in the contemporary world, how much the rich powerful and corrupt are continuously stealing from normal and law-abiding people, how thoroughly they have bent laws and public institutions to their will, and how difficult it is to fight back. Moneyland is not completely bleak, because there are ways to fight back, and because might does not always make right, but the book describes infuriating practices that are either legal or so difficult to counter that they might as well be, especially when major parts of major powers don’t care to push back. Bullough shows scheme after nefarious scheme, and all of them together are not even the tip of the iceberg.

Bullough begins, not at the beginning, but with an excellent example: Paul Manafort, one of Donald Fucking Trump’s several campaign managers in his 2016 presidential effort. “According to the indictment prepared by the Office of Special Counsel, Robert Mueller, Manafort … moved some $75 million through various offshore bank accounts, much of which he used to buy high-end properties and luxury goods. He earned this money working in Ukraine, primarily for thuggish ex-president Viktor Yanukovich, and was found guilty of hiting it from the Internal Revenue Service, as well as assorted other crimes.” (p. 1) From the indictment Bullough finds out, for example, that a company Manafort controlled was based in a nondescript office in northwest London. That company controlled a bank account that paid close to $200,000 to two other businesses on the same day in 2013, and may never have done anything else. “[The company] had been created just three months earlier, and was dissolved by the UK’s Companies House a year later, something that happens automatically if companies do not file the necessary paperwork. I had come to 2 Woodberry Grover to look at the street address that was Pompolo Ltd’s supposed based of operations.” (p. 2)

It is not a productive visit. The boss is unavailable and his eventual e-mail reply is an exasperated blanket denial of any wrongdoing. What then?

There are two places to go next with this story. The first would be to give up on Pompolo as a dead end and instead focus on Manafort, on his sordid client base, his amoral manoeuvring and his remarkable appetite for luxury goods. The second would be to look back at 2 Woodberry Grove, and to ask why Pompolo — a company with access to significant amounts of cash — would base itself in an unglamourous part of an unfashionable corner of London.
It’s understandable that most journalists would prefer the first approach. It makes a more compelling story to write about ostrich-skin jackets and luxury condominiums, about the way Manafort laundered the reputations of dozens of unlovely politicians and oligarchs, than it does to describe ugly British institutional architecture. But the second approach is the more rewarding, because if we can understand what links Manafort to Woodberry Grove, we gain a glimpse behind the personalities into the hidden workings of the financial system, into the secret country that I call Moneyland. (pp. 2–3)

Bullough is off on a nearly global journey to follow the money, to find owners, to seek out new laws and new organizations, to boldly go where the über-wealthy want no reporter to go. Manafort’s indictment revealed not just the London company, but companies in the Caribbean, on Cyprus and in four different American states. The companies had bank accounts and were supposedly independent, but “in reality connected by their shared — and hidden — owners.” (p. 3) They moved money around in deliberately complex and opaque ways to make tracing cash and ownership difficult and time-consuming. “Manafort … exploited this system for a decade or more but [he] didn’t create it. Nor did [he] seek out 2 Woodberry Grove and decide to make it [his] base of operations. That was done for [him] by an entire industry of people that enable the crimes of people like [him], people with money to hide. The real tenant of the office building in Finchley is A1 Company Services, which creates companies for its customers and gives them a postal address. A1 Company Services is emblematic of something far greater than a political scandal, even one as big as [Manafort]. It represents a system that is beggaring the world, by hiding the secrets of the rich and powerful.”

Shell companies, specialized trusts, overlapping ownership, anonymous company owners, all running toward jurisdictions — in rich countries as well as poor — that stonewall any efforts at discovery have helped the super-rich vacuum up increasing shares of the world’s wealth and keep it for themselves. Bullough shows how plans to extend citizenship to people making major investments in a country transform into simply buying passports and buying one’s way out of having to obey laws. Russians of questionable background become Maltese or Cypriot citizens, gaining all the benefits of EU citizenship along the way. He even describes one scheme in which a person attempted to avoid a London court judgement by becoming a diplomat for a small nation, in exchange for a generous investment. In that case, the technicalities of diplomatic accreditation worked on the side of justice, but in some circles, actual immunity to laws of major nations is effectively for sale.

Corruption is by no means limited to the former Soviet Union or resource-rich states of the Third World. Bullough shows how countries with relatively clean reputations are homes to the law and consulting companies that set up the corrupt schemes. He shows how competition among regulatory regimes, even among American states, becomes a race to the bottom, a race to see who can offer the rich the easiest way to hide their money and the best way to escape any sort of oversight. Property in, for example, New York and London are prime locations for laundering money through intransparent transactions with little official scrutiny. And it goes well beyond private transactions: “In 2017, [the US Government Accountability Office] concluded that the US government had no idea who owned fully one-third of the buildings leased by the General Services Administration for high security purposes.” (p. 98) And of course it makes tracing stolen money laundered through property purchases very difficult. “What is most remarkable about this is that the companies that are protecting the stolen property and shielding it from [the FBI’s Karen] Greenaway’s investigations are entirely fictional, figments of lawyers’ imaginations. You can wrap a paper chain of paper people around the world in an afternoon, but it will take investigators years of patient detective work to unpick it, and years more to prosecute.” (p. 99)

After his introductory chapter, Bullough does get back to the beginning, tracing how the concepts of “offshore” accounts, companies and ownership arose in the 1960s as a world of capital controls in the West and planned economies in the East gave rise to some anomalies, and those anomalies opened up opportunities. Like cracks in a dike, those trickles of 1960s offshore money led to great waves of money now washing around the world, accessible to people who already have enormous amounts of it, and leaving the various burdens to everyone else. If Moneyland has a flaw, apart from raising blood pressure, it is shorting the real benefits that an efficient and liquid financial system, including offshore finance, have brought to the industrialized economies. Occasionally he writes as if the Bretton Woods system of fixed exchange rates and capital controls could be reconstructed — I don’t think that clock can be turned back — and as if that system were not also rife with inequalities. That discussion, though, is beyond the remit of Moneyland and Bullough’s book benefits from its tight focus.

Bullough’s biggest example of reasserting the rule of law over the flow of cash comes in the chapter “Breaking Switzerland,” which is exactly what the title describes. Swiss banking secrecy was the stuff of legend, and it had some legitimate benefits. In the end, though, regulators (mostly American) with enough power, interest and endurance saw how much illegality was being assisted by Swiss secrecy, and they used the power of the dollar and the reach of American courts to force the system open. Bullough’s chapter on Switzerland follows fraud cases that were revealed in the wake of a 2007 informant providing inside information to the US Department of Justice. Another significant crack in the Swiss edifice had come about a decade earlier, with the settlement of Jewish claims against Swiss banks for accounts and insurance funds never paid out to Holocaust survivors and their heirs. Successful action in getting the banks to own up to a dark chapter in their history helped the future changes to come about.

For all that it is telling an infuriating story, Moneyland is engrossing and engaging to read. Bullough goes to see many key players in person. He lets the stonewallers try to make the case, even though a retelling of the action and recounting the circumstances strengthens Moneyland‘s thesis. This is a terrific book; it’s just a shame that it has to exist at all.