Butler to the World by Oliver Bullough

Butler to the World begins with an American academic paying a visit to Oliver Bullough. Leading up to the publication of Moneyland, and even more since, Bullough has been writing about financial corruption, and particularly the ways that advanced, rule-of-law democracies have been helping corrupt rich people around the world keep and protect their ill-gotten gains. Andrew, as Bullough says the academic was named, “wanted to hear about Chinese-owned assets in London and what the British government was doing to ensure their owners had earned their wealth legally.” (p. 1)

What followed was initially an exercise in frustration that turned into understanding followed by an insight on Bullough’s part, one that sets the tone for the book.

Andrew had come well prepared for the meeting and had a checklist to work through … Which law enforcement agency was doing the most to tackle the threat of Chinese money laundering? Who was the best person to talk to at that agency? Which prosecutors had brought the best cases? … Which politicians were most alert to the question, and how did they organise themselves?
Because of the shared language, Americans and Brits often think their countries are more similar than they actually are, which is something I am as guilty of as anyone. When I do research in the United States, I am consistently amazed by the willingness of officials to sit down with me and talk through their work. I call them without an introduction, and yet time and again they trust me to keep specific details of our discussions off the record. Court documents are easy to obtain, and prosecutors willing to talk about them. Politicians meanwhile seem to have a genuine belief in the importance of communicating their work to a wider public, which means they’re happy to talk to writers like me. …
Andrew, however, was discovering that the pleasant surprise sadly does not work in the opposite direction. I think he had been hoping that I would share a few contacts … It’s possible that he was concerned I would refuse to open my address book to him, but it seemed not to have occurred to him that I would have no address book to open; that essentially the people he was looking for would not exist.
There was no concerted law enforcement effort against Chinese money laundering, I told him, so there was no investigator who could talk to him about it. There have been essentially no prosecutions so none for him to look into, and there is almost no research into where the money has been going, how it’s been getting there, or indeed how much of it there is.
He kept coming at the questions from different angles, almost as if he thought that he just needed to find the right password to unlock the door hiding Britain’s enforcement mechanism. Where was the equivalent of the Federal Bureau of Investigation’s International Corruption Squad … What about Homeland Security Investigations; did Britain have something like them? … Which parliamentary commissions were probing this? Surely, someone was? As he talked, I began to see the situation through his eyes, which gave me a perspective I’d never had before.
The problem was that he could keep trying different passwords until the rocks rotted away, but it wouldn’t help: there was no cave of treasures for him to open. … Andrew had come to London to discover how Britain was fighting illicit finance, but he was discovering that this was not happening at all. Quite the reverse, in fact. (pp. 1–3)

Britain is not the only country that’s losing out to Moneyland, but in Bullough’s telling it not only isn’t fighting, it’s enabling.

Moving and investing their money is of course central to what the UK does, but that’s only the start: it’s also educating their children, solving their legal disputes, easing their passage into global high society, hiding their crimes and generally letting them dodge the consequences of their actions. I had known this before, but I had never thought of it as a single phenomenon. It was Andrew’s questions that crystallised the matter in my mind. (p. 4)

What, precisely, is going on?

“Britain is like a butler,” I said at last, as I tried to explain to both of us what was going on. “If someone’s rich, whether they’re Chinese or Russian or whatever, and they need something done, or something hidden, or something bought, then Britain sorts that out for them. We’re not policemen, like you guys, we’re a butler, the butler to the world. That’s why we don’t investigate the issues that you’re talking about — that’s not what a butler does.” …
Our conversation didn’t last much longer, and he walked off towards Parliament perhaps hoping to find someone less depressing to speak to.” (pp. 4–5)

The rest of the book is filling in the details of that insight. From the obvious yet amusing — Bullough visits a butler school and things are going swimmingly until “…the manager of the training centre appears to have googled me and discovered that I write about financial crime rather than domestic employment … and my access to real-life butlers dried up” (p. 6) — to many of the angles that have been worked out to help the extremely, and often extremely corruptly, wealthy stay that way. Butler to the World is, of necessity, a survey rather than an exhaustive treatise. The way to serve the world’s oligarchs are constantly multiplying; after all, it is a very lucrative set of businesses. As he writes, “In telling the story of Butler Britain, I have chosen to focus on certain details and describe them closely. The accounts of specific aspects of Britain’s behaviour over the last seventy years are representative of a far larger whole.” (p. 12)

Bullough begins with a look at the last gasp of imperial Britain: the Suez canal, whose nationalization by Egypt in 1956 prompted an attempt by France and Britain to retake it. Forced to back down by the United States, Britain, as the saying goes, lost an empire and without finding a role in the world. That isn’t quite right, Bullough writes, as the seeds of butlerism were being sown even then.

In subsequent chapters, Bullough details how the combination of Britain’s general reputation for discretion and fair play have meshed with the prejudices of its ruling classes and its collection of historical oddities in its legal system to produce an approach to law and money that runs from appalling to frightening. For example, quite a bit of Britain’s experience shell companies came from helping Europeans in its former colonies keep their savings from taxation by the newly independent governments. That expertise has metastasized into the abuses described in Moneyland, where shell after shell can prevent an outsider, say, a fraud investigator, from linking certain wealth to actual humans. The chapter on Gibraltar details how offshore betting has become the tail that wags the dog, or rather the Rock. It’s a lovely example of path dependence, how seemingly innocuous decisions can lead to unwanted outcomes. It’s also an example of how the many odd jurisdictions that adhere to Britain offer opportunities to leverage one legal code against another, for the private benefit of people who already have a great deal of private benefits. (Bullough mentions an oil tanker that Iran wanted to seize in 2019 but was discouraged by the intervention of a Royal Navy frigate. “The tanker was identified in the media as British but was actually flying the flag of the Isle of Man, one of the many semi-detached bits of Britain. By sailing under the Manx flag, the tanker’s owners could avoid paying a hefty tax bill or abiding by EU regulations [this was pre-Brexit]. So the tanker was British enough to be protected by the UK’s navy, but not so much that its owners needed to pay UK taxes to support the frigate.” (p. 243))

If not for the chapter on private prosecutions, the one on Scottish limited partnerships (SLPs) would probably be the most appalling in the book. An 1890 quirk in law makes limited partnerships in Scotland particularly opaque.

Like all partnerships, SLPs had no obligation to publish the kind of financial accounts that companies have to, and were not themselves taxed; any money flowed through to the partners, who paid tax as individuals. Unlike partnerships elsewhere in the United Kingdom, however — thanks to [the 1890 quirk] — SLPs could own property, enter into contracts, sue or be sued and generally behave like a company. … No disclosure, no taxes, no drawbacks, no risks: this gave SLPs the “Heads I win, tails you lose” quality so appreciated by very wealthy people looking to structure their business affairs in the most profitable way. And the qualities that appealed to Scotland’s largest landowners [in the early 20th century] also, as it turned out, appealed to Eastern Europe’s most sophisticated money launderers. (p. 133)

Once the advantages became more widely known, SLPs became very popular, very fast. “More [SLPs] were registered in 2016 than in the entire century that followed their creation in 1907, and more than two thirds of them at just ten addresses.” (p. 134) An attempt by Parliament to tighten regulations on SLPs, something favored across the board among anti-corruption advocates, was shut down by the UK Treasury.

Butler to the World‘s penultimate chapter lays out how an anachronism in British law may be opening the door to some very dangerous precedents. “It is also a founding principle of common law that anyone can bring a prosecution for a criminal offence and thereby act on behalf of the Crown.” (p. 216) After professional police and prosecution departments were set up in the 19th century, prosecution became public, a matter for the state. But Britain never abolished the old system, and private prosecutions remained possible. Bullough notes that “a small number continued, often brought by charities like the Royal Society for the Protection of Animals or the National Society for the Prevention of Cruelty to Children.” (p. 217) No longer. Because of the rules of compensation for a successful private prosecution, they are “a one-way bet. As long as you can afford the upfront cost of bankrolling the case, you’ll get your money back because under common law you are acting on behalf of the Crown.” (p. 223) The opportunities for weaponizing these provisions are obvious, not least because a private prosecution may also accompany a civil suit, forcing a defendant to fight, and spend, on two fronts at once. A deep-pocketed and vindictive person bringing private prosecution could effectively buy justice from butler Britain.

The last chapter offers potential remedies, but it will be a tough slog, with a great deal of money and power arrayed against any reform. Andrew’s questions prompted a fascinating and alarming book. It would be nice if readers could also walk towards Parliament in hope of finding a less depressing situation, but Britain is as Bullough describes it, butler to the world.