Category Archives: Banking and finance

Whistleblowers 11: the ones that got away?

In Britain whistleblowers are usually made to suffer, despite the nicknamed ‘Whistle-blowers Act’: There have been several general articles about whistleblowing on this site & others focussing on some brave individuals who suffered for revealing unwelcome truths. Before this site was set up there were health sector whistleblowers; Marta Andreasen & Paul van Buitenen also revealed shocking cases of EU financial mismanagement and suffered for it.

 Just for the record – covered profusely in MSM:

Professor Prem Sikka tweeted about a case involving Barclays chief executive Jes Staley, who started to work for Barclays in December 2015 and later recruited at least four senior executives who had worked with him at JPMorgan Chase. In June, when Barclays received two anonymous letters making allegations of what the bank describes as “a personal nature” about one of the investment bankers, Mr Staley asked Barclays’ security team to track down the author, though the bank’s compliance department had logged the letters as potential whistleblowing.

Barclays’ board only learnt of Mr Staley’s efforts to identify the tipster in January when a second whistleblower, this time a Barclays’ employee, came forward and directly contacted its outside directors.  In a letter, the Barclays employee pointed to flaws in the bank’s whistle-blower procedures and cited Mr. Staley’s attempts to unveil the anonymous critic.

The bank said it had instructed law firm Simmons & Simmons to conduct an investigation which found that Mr Staley erred in trying to identify the authors of the letters, who in the end were not unmasked. Barclays’ board also informed the FCA and PRA.  Barclays said it has given Staley a formal written warning and will slash his salary. The bank has promised to review its whistleblowing programme.

The Prudential Regulation Authority and the Financial Conduct Authority are now looking into the matter in Britain, while New York’s Department of Financial Services and the US Department of Justice are conducting investigations in the United States.

Paul Moore, a former HBOS banker, was dismissed from HBOS in the run-up to the financial crisis in 2004 for whistleblowing – warning that the bank was running risks it did not understand. He told The Mail on Sunday: ‘Staley should be fired. Trying to find out the identity of an anonymous whistleblower where the motivation is obviously to try to crush them is gross misconduct.’

It requires real courage for whistleblowers to act on what they see, especially in the UK. One FT article notes that a recent survey by the Ethics Resource Centre of employees in 13 countries found that 63% of British employees who reported wrongdoing experienced retaliation, second only to India and far worse than the 36 per cent global averageMore detail here:

 

 

 

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Murdoch press lists corporate spending on political and lobbying activities

Times journalists Alex Ralph, and Harry Wilson present and comment on material collected by the Times Data Team: Tom Wills, Ryan Watts, Kira Schacht. Links have been added by PCU’s editor to enable readers to learn more if they wish to do so.

“FTSE 100 groups, including banks, defence contractors, tobacco manufacturers and telecoms companies, have spent more than £24 million on lobbying in Brussels and about £335,000 funding all-party parliamentary groups in Westminster”.

They add: “There is no suggestion of any wrongdoing or rule-breaking by companies”.

FTSE 100 political spending (over the last two years)

The Times first focusses on All Party Parliamentary Groups (APPGs)

APPGs are run by and for Members of the Commons and Lords who join together to pursue a particular topic or interest. Many involve individuals and organisations from outside Parliament in their administration and activities – or as the journalists put it, “help to push industry agendas in parliament”. Read more here.

Unsurprisingly, BAE Systems, which spent £37,000 on a group “to promote better understanding of the Her Majesty’s armed forces in parliament”, is among the biggest backers of the parliamentary groups.

The writers comment that parliamentary groups have proved contentious because of the large amounts spent on reports that often support the views of industry and which grant access to parliament for companies and lobbyists.

BT’s £53,000 included backing the parliamentary internet, communications and technology forum, known as Pictfor, whose members include Tom Watson, the Labour deputy leader and Lord Birt, former Blair adviser and director-general of the BBC. A list of funders may be seen here.

Note: ’Donations to APPGs’ shows spending between Jan 2015 and Mar 2017 as declared on the Register of APPGs. ’Spend on EU lobbying’ shows companies’ minimum estimates for the most recent financial year declared on the EU Transparency Register at the time of research. Here is a snapshot taken from one of 10 pages listing donations/other spending and the companies’ rationales for these sums being given.

The Times’ second focus is on the denial of information to shareholders

Less than £10,000 of identified political and lobbying spending in the EU was disclosed to shareholders in the companies’ recent annual reports. ompanies are not required to disclose details to shareholders and little information on corporate political and lobbying activities is revealed in annual reports, which are published before shareholder meetings. The tens of millions of euros spent each year in the EU go largely undeclared to shareholders.

Corporate Europe, which campaigns for greater transparency in EU decision making, has spent years tracking how the business world moulds policy.

Vicky Cann, the group’s UK representative, said that the banking and energy industries were the most active lobbyists. “The financial services industry is a huge spender and even then we think the real scope of their spending is probably bigger than we can currently see,” she said. Her colleague gave the example of recent emissions legislation that was the subject of intense lobbying by BP and Shell.

As Peter van Veen, director of business integrity at Transparency International, said, “Corporate transparency over political activities is important to ensure the public can have the confidence that their politicians and industry leaders are conducting business ethically . . . If companies are not voluntarily willing to disclose their political activities and funding of these, then stronger legislation should be considered and a possible starting point may be to broaden the definition of political activities and expenditure in the Companies Act 2006.”

 

 

 

 

Media 68: social media militarising the young and pacifying the attacked: ‘a vital tool for the armed forces’

social-media-military-header

 

AKA Hell’s kitchen?

The blurb: “Social media has become an increasingly vital tool for the armed forces in the 21st Century.

“Not only in order to reach out to a wider and younger audience globally for recruitment and information purposes but as a new front in warfare. What soldiers, airmen and sailors post online can be crucial to winning the hearts and minds of local populations, weakening the enemy’s narrative and as an instrument in the proliferation of cyber warfare”.

The SMi PR group held its 6th Annual Social Media Within The Defence and Military Sector in the Holiday Inn, Bloomsbury earlier this week. 

Their programme:

  • to present the latest concepts and ideas on how to enhance the outreach of the military in the digital sphere,
  • the integration of social media activities within the whole spectrum of operations conducted by the military both at home and abroad,
  • to hear from some of the leading voices of social media within the industry and NATO and allied militaries,to focus on the effects of social media on and off the battlefield through training and application,
  • to learn from the commercial sector on how to create an effective social media strategy,
  • to learn from the military about how they are utilizing digital media channels to project their activities to a wider audience,
  • to discover how social media is intertwining with other aspects of warfare to create a multi-levelled war zone both in the real world and the virtual one
  • and to discover how popular social media brands operate with militaries in a defence environment

The only named sponsor: Thales, the French multinational company that designs and builds electrical systems and provides services for the aerospace, defence, ground transportation and security market.

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COMING SOON, SMi CONFERENCES ON MORE OPEN OPPRESSION

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Future armoured vehicles – used to quell dissident or invaded populations

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And military airlift and air to air refuelling – to facilitate bombing them

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Keep the engines of capitalism working? Or find a beneficial alternative?

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Following the summary of yesterday’s article by the Times’ Jenni Russell, a second analysis is made by John Wight in the Huffington Post article. He writes:

“The liberal order has collapsed and no one should mourn its demise, for on its tombstone is engraved the disaster of Afghanistan, the murder of Iraq and Libya, and the unleashing of an upsurge in global terrorism and religious fanaticism on the back of the destabilisation wrought across the Middle East in the wake of 9/11. Married to a refugee crisis of biblical dimension and the closest we have ever been to direct military confrontation with Russia since the Cold War, these are the fruits of this liberal order abroad.

“Meanwhile at home its moral and intellectual conceit has produced obscene levels of inequality, alienation, and poverty, exacerbated by the worst economic recession since the 1930s and the implementation of that mass experiment in human despair, otherwise known as austerity, in response.

adams-common-good“Tony Blair, Barack Obama, and Hillary Clinton epitomise this failed liberal order – leaders who perfected the art of speaking left while acting right, presenting themselves as champions of the masses, of ordinary working people, while worshipping at the altar of the free market, cosying up to the banks, corporations, and vested interests”.

  • Are Brexit and Donald Trump ‘unleashing the dogs of racism and bigotry’ as John Wight fears?
  • Is hope in Jeremy Corbyn lost? Wight thinks he failed to understand the danger posed by Brexit and mounted a dispassionate and lacklustre nature of the campaign.
  • Was the manner in which Bernie Sanders folded his tent after Hillary Clinton won the Democratic Party nomination in decidedly dubious circumstances was tantamount to a betrayal of the passion, commitment and hope that millions across America had placed in him?

He emphasises that politics is not a mere parlour game and says that both Jeremy Corbyn and Bernie Sanders are fully deserving of criticism for taking positions and an approach which has suggested that for them it is, continuing:

mlk-live-together-smaller“Demoralisation and defeatism is never an option”.

Agreed, but there are better prescriptions than those he outlines in his final paragraphs.

Jenni Russell sees ‘the anguished question’ as being how to remedy the acute problems of inequality, while keeping the engines of capitalism working.

Should we instead try the engines of co-operation, peacebuilding, mutuality and increasing self-provision?

 

 

 

 

Revolving door 37 – confession time?

Recently Patrick Jenkins, Financial Editor of the FT, explored the history of the revolving door, saying that the practice of former politicians and central bankers seeking high paid work in financial services has a long pedigree, particularly in the US.

With apparent surprise – though it has been established practice in Britain involving senior politicians and corporates – he says. “Now it seems to be an accelerating trend in Europe”.

revolving-door-largerYet for the last six years sites such as Spinwatch, less directly Corporate Watch and the Private Eye magazine (see this article) – have highlighted this phenomenon. This Political Concern website was set up in 2010 to raise awareness of the ‘revolving door’, rewards for failure, widespread behind-the-scene lobbying and party funding which corrupts the decision-making process. A ‘media’ category was added later.

Patrick Jenkins’ article prompted the writer to count the articles on this website which have ‘revolving door’ in the title; there were 37 – but many more had incidental references and others added the graphic on the right. Jenkins writes:

“News that Lord King, the former governor of the Bank of England, has taken a key advisory role at Citigroup follows only weeks after it was announced that former European Commission president José Manuel Barroso would chair Goldman Sachs International. Rumours are growing, too, that senior members of the last UK government may follow a similar path, following in the footsteps of the previous Labour administration”.

After citing Tony Blair as ‘one of the most famous examples of the phenomenon to date’ and listing the many roles he has taken on in his post-politics career, Jenkins moved on to focus on central bankers and policy-makers switching from public service into the private sector and vice versa.

He ends: “Defenders of the practice say it helps break down barriers between financial services companies and policymakers, but critics think it can leave an unpleasant taste. “The potential is certainly there for conflicts of interest — both real and perceived,” says Bob Jenkins, who has worked as an asset manager, regulator and market reformist”. 

Brandon Patty, a young American politician, gets nearer the truth

brandon-pattyHe wrote in the FT yesterday, with reference to America, that the general public has zero confidence in . . . career bureaucrats, professional politicians looking out for our best interests:

“From immigration and trade deals, to excess regulations and scandals at far too many government departments, there is a very real sense that (the public’s) concerns and priorities do not matter to decision makers” adding that a September 2015 poll found 75% perceived corruption as widespread in the country’s government.

But will the shameless in Britain and America take the slightest notice of these commentators?

 

 

 

Is anyone seriously contending that the UK is not corrupt?

Via John Wight’s Twitter account we saw a link to an article by Saurav Dutt, novelist, independent film producer, playwright, screenwriter, graphic design illustrator, accomplished author and writer. After James Landale, BBC diplomatic correspondent -amongst many others – reported David Cameron’s description of Afghanistan and Nigeria as corrupt, Saurav Dutt asked if anyone is contending that the UK is not corrupt?

”What the City and the tax havens are up to isn’t anything as morally defensible as corruption – it’s that good old fashioned criminal act of “receiving”. It gives corruption a bad name . . . There isn’t a lot of corruption in the UK, well, not in cash . . . “

india corruption demo

The well-filled envelope type of corruption is common in some countries. How people laughed at Neil Hamilton when it was alleged that he received money in this way – British corruption is less obvious but now well realised by the general public. When will we protest like the Indian people?

As noted in the earlier post, readers send many links to news about the revolving door, rewards for failure, the political influence wielded by the corporate world and lucrative appointments for the friends and family of those with political influence; this is the British way.

Dutt says that corruption comes from the ‘top’ down and is endemic in Western society: “In a fiscal sense it is the banks, financial institutions and ‘big business’ with acceptance from politicians (who also get their cut one way or another) and moves on to a more moral sense with the Police and the legal professions”.

anti corruption APPG header

An All-Party Parliamentary Group on Anti-Corruption was established in November 2011 to raise awareness of the impact of international corruption and to enhance and strengthen UK anti-corruption policies and mechanisms. Could they answer Dutt’s questions?

  • How many MPs voted for health legislation when they have interests in private health care?
  • Why does Cameron appoint Ministers to the education department who have a direct interest in academies that their companies are involved in?
  • Why does this government give honours to people who have given their party money?
  • Why does this government pass legislation that directly benefits their donors?

As Dutt says “The Transparency International corruption index shows we have some way to go before we reach the dizzy heights of Denmark, and a short stroll down the slippery path to the likes of Qatar and the UAE”.

 

 

 

Panama Papers: sad truth voiced by Slavoj Žižek is no surprise to readers of this website

Anne sends a link to the ‘shameful’ news that the 50 biggest US companies have more money stashed offshore than the entire GDP of Spain, Mexico or Australia, collectively keeping about $1.3trn (£0.91trn) in territories where the money does not count towards US tax, according to a new report by Oxfam.

panama papers

Several readers have sent material about the Panama Papers but until now they have not been mentioned on this site – because, as Žižek writes: “The only truly surprising thing about the Panama Papers leak is that there is no surprise in them:

“Didn’t we learn exactly what we expected to learn from them?”

He highlights the ‘shameless cynicism’ of the existing global order and our shame for tolerating their power. In Vox.Com Tara Goshan elaborates:

“Corruption is not a contingent deviation of the global capitalist system, it is part of its basic functioning . . . The papers demonstrate how wealthy people live in a separate world in which different rules apply, in which legal system and police authority are heavily twisted and not only protect the rich, but are even ready to systematically bend the rule of law to accommodate them”.

She points out that, after many years of pressure on Swiss banks to reveal information about rich Americans who hide their money offshore, the U.S. is resisting new global disclosure standards; wealth management experts are now helping the world’s rich move accounts from places like the Bahamas to Nevada, Wyoming, and South Dakota. Goshan quotes Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal:

“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour. That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”

The Labour Leader Jeremy Corbyn responded to the prime minister’s statement to the House of Commons about his tax affairs:

“I’m honestly not sure Mr Speaker that the Prime Minister fully appreciates the anger that is out there over this injustice.

“How can it be right that street cleaners, teaching assistants and nurses work and pay their taxes yet some of those at the top think the rules simply don’t apply to them.

“The truth is, is that the UK is at the heart of the global tax avoidance industry. It’s a national scandal and it’s got to end”.

99%-3

Anne comments on the focus away from this international scandal, sending a link to the news that today the Security Council holds an open debate on counter-terrorism.

Will the attention of the 99% once again be successfully distracted by the political-corporate alliance?


A Corbyn theme: austerity – aka spending cuts – would not be needed if big companies paid their tax

hmrc header

Parliament’s own website heads the summary of the Committee of Public Accounts report on Revenue and Customs: “HMRC still failing UK taxpayers”.

Its lamentable eprformance in simple tasks such as answering the telephone is on record and its failure to collect a reasonable amount of offshore tax evaded was published in November. It spoke of 11,000 job cuts since 2010 & 40,000 since 2004. Read the summary by the chair, MP Meg Hillier, here: http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/hmrc-performance-report-published-15-16/

“HMRC must do more to ensure all due tax is paid. The public purse is missing out and taxpayers expect and deserve better.

“We are deeply disappointed at the low number of prosecutions by HMRC for tax evasion. We believe it is important for HMRC to send a clear message to those who seek to evade tax that the penalties will be severe and public. It’s also important that the majority who play by the rules, paying their tax on time and in full, see that those who don’t will face the consequences.

“Tax avoidance also remains a serious concern. Too many avoidance schemes run rings around the taxman, operating legally but gaining advantages never intended by Parliament. If tax law is to be improved then HMRC must as a priority provide Parliament with comprehensive details of avoidance. HMRC must also rapidly improve its customer service, previously described by the PAC as abysmal and now even worse – to the extent it could be considered a genuine threat to tax collection.

“It beggars belief that, having made disappointing progress on tax evasion and avoidance, the taxman also seems incapable of running a satisfactory service for people trying to pay their fair share.”

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The FT reports that people of Crickhowell agree: the town’s traders have submitted tax plans to HMRC, using offshore arrangements favoured by multinationals. They hope that their ‘tax rebellion’ will spread to other towns forcing the Government to tackle how Amazon, for example, paid £11.9million tax last year on £5.3billion of UK sales. Their rationale: High street coffee shop owner Steve said: ‘I have always paid every penny of tax I owe, and I don’t object to that. What I object to is paying my full tax when my big name competitors are doing the damnedest to dodge theirs.’

This week’s PMQs: “quite possibly the day when Tories started taking Jeremy Corbyn seriously”

pmq cameron osborne

As Glasgow’s Daily Record put it: “Cameron had no good answers and looked like a PM finally being held to account for the all damage his policies are doing. It really was an absolutely terrible day at the office for David Cameron. And quite possibly the day when Tories started taking Jeremy Corbyn seriously”.

As even the right-wing press salutes Jeremy Corbyn’s questions in Wednesday’s PMQs, two of the Telegraph’s journalists – hopefully their worst – pounce.

  • One is Dan Hodges, who describes himself as a ‘tribal neo-Blairite’.

dan hodgesDan has been a parliamentary researcher, a Labour Party official, GMB official, and as director of communications for Transport for London under Ken Livingstone. He left the party in 2013 after the government lost a crucial vote in the House of Commons which was designed to pave the way for a military intervention in Syria. Nice guy.

He writes: “The Lords are in open revolt. Caesar has been brought low. Or George Osborne, who has a haircut remarkably similar to Caesar’s, has been brought low. The barbarians are at the gates. Jeremy Corbyn has finally had a decent PMQs, using the tax credits issue to back David Cameron into a corner”.

He later refers to “Jeremy Corbyn’s besting of David Cameron at PMQs”

Reading around one gathers his attempted ‘downing’ of Osborne and Cameron is due to his support for Boris Johnson, first shown when he voted for him in the London Mayoral elections.

  • The other is Angela Epstein, a columnist for the Jewish Chronicle and some right-wing British publications

angela epsteinUnder the title, ‘Jeremy Corbyn is too thick to be Prime Minister’, she focusses on his exam results and lack of what she calls ‘natural talent’. It appears that she is a person whose disapproval amounts to an accolade. Read this devastating analysis of her mindset by Kate Smurthwaite, comedian.

Attacks by such people only highlight Corbyn’s decency and the popular welcome for the Labour Party’s policies for building a fairer society and redeeming Britain’s besmirched international reputation.

Compare Jeremy Corbyn’s record with that of the many ‘highly educated’ psychopaths in and out of power. They have successfully connived at the deaths and destruction in so many countries of late – whilst increasing their fortunes by their alliance with subsidised arms traders, multinationals who have taken over most of Britain’s energy, health, water, financial, communications and transport services and those who periodically attempt to make the struggling taxpayer accept mass medication (fluoride, statins, the polypill) GM technology, nuclear power stations, polluting incinerators and fracking – totally disregarding the welfare of the 99%.

Financial Times: Corbyn’s decent idea, “effective monetary policy tools”

The title reference is to an article by Matthew C Klein, a contributor to the FT’s Alphaville: ‘daily news and commentary service giving finance professionals the information they need, when they need it’ – retweeted by Paul Gosling.

matthew kleinKlein (right) says that if Jeremy Corbyn becomes leader of the UK Labour Party, one positive consequence will be ‘the ensuing discussion of the monetary policy transmission mechanism’:

The existing monetary policy tools have the ‘unseemly property’ of appearing to work mainly by making the rich richer and hoping that some of the extra wealth gets spent.

To rebalance the economy, “moving towards the high-growth, sustainable sectors of the future, the Bank of England could be given a new mandate to upgrade the economy to invest in new large scale housing, energy, transport and digital projects”.

Quantitative easing for people instead of banks? The bulk of the British economics commentariat erupted but Klein deems the core idea sound, possessing ‘an impressive intellectual pedigree’.

adam posenCorbyn’s plan to have the Bank of England fund government-directed investment in infrastructure could work – in 2011, American economist Adam Posen (left) supported something similar when he was on the Monetary Policy Committee of the Bank of England, except that he focused on small businesses.

Posen thought that private lenders weren’t providing credit where he believed it was needed and recommended creating new public investment banks that could originate and secure loans into bonds that could then be purchased by the Bank of England, thereby funding new business investment.

Corbyn wants specialised “green” investment banks, housing authorities, and local governments to be able to finance infrastructure investment with funding support provided by the Bank of England. Klein comments on the Posen/Corbyn proposals: “We fail to see a significant difference”.

Nicholas Watts in the Guardian reports that Richard Murphy, Tax Research UK, who drew up the people’s quantitative easing plan for the Corbyn campaign, points out that we will get near the Bank of England’s inflation target of 2% only when we have established people with higher wages and increased productivity and the economy is “humming along nicely”. He adds that once you have people back in work on decent wages, you have to turn QE off because continuing at that point would be inflationary.

Quantitative easing for people instead of banks?

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Klein agrees that if Corbyn’s preferred investments prove to be productive, they would help to restore some lost ground and lead to higher real wages for Britons and goes further, predicting that the expanded capacity due to extra investment spending may avoid inflation.

Corbyn, also quoted in the Guardian article, “It is in the long-term interest of the UK to rebuild a resilient industrial base . . . with its people, energy, land and water . . . ”.