Brexit to bust as the corrupt go scot free

Ithink David Cameron was the worst prime minister Britain has had in the 40 years I’ve been alive, but his replacement, Theresa May, is competing hard for the title. She has jettisoned the strategic sense that was Cameron’s only worthwhile talent, and has scrapped his best initiative: fighting corruption and tax evasion with financial transparency. Files from HSBC leaked in 2015 showed how years earlier Swiss bankers had conspired with wealthy Westerners to help them dodge taxes. Last year, the Panama Papers revealed the use of shell companies to help corrupt officials hide their money.

This month, journalists in a dozen countries uncovered how officials in Azerbaijan had laundered billions of dollars through companies in Britain with accounts at a Danish bank in Estonia, for the benefit of people in Germany, France, Iran, Kazakhstan, Britain and elsewhere. Similar scams have involved officials throughout the world, from Chile to China.

The charge sheet against Cameron is common knowledge. It was he who gave us Brexit, by promising a referendum demanded primarily by a few dozen golf-club bores in his own party. It was he who, more than anyone, messed up the “remain” campaign and as soon as it failed fled politics for lucrative speaking fees. But as Britain finally starts considering the detailed legislation needed to remove us from the European Union, it is becoming clear that Cameron understood the reasons why so many voters across the West feel alienated from their governments, and he attempted to tackle the root causes, in a way that May does not.

In the decade since the financial crisis, public anger has simmered over the way rich individuals and corporations game the international financial system to avoid paying their fair share. In Britain, those ploys include the tax-minimisation schemes of companies like Starbucks and Amazon and are symbolised by the corrupt officials — Nigerian ministers, ex-Soviet insiders, deposed Middle Eastern politicians — who launder their stolen cash and besmirched reputations through British institutions, spending their dirty money on high-end real estate in London.

Hundreds of billions of pounds of illicit money pass through British banks every year, and the National Crime Agency has called money laundering “a strategic threat to the United Kingdom’s economy and reputation.” Billions more are said to transit through Britain’s overseas territories and dependencies — the Cayman and British Virgin Islands, Bermuda, Gibraltar, the Channel Islands and the Isle of Man — all of which make a lucrative living by undercutting onshore economies.

All this dirty money is indeed a threat, but its concentration in Britain is also an opportunity. If Britain cleaned itself up, it would deny tax cheats, criminals, kleptocrats and terrorists access to one of the world’s largest financial centres, and severely restrict their room for manoeuver.

If democracies don’t rein in the world’s richest citizens and restrain the widening gap between the 0.1 per cent and the rest, they will not stay democratic for long. And since today money flows seamlessly through the globalised financial system, stopping it requires international cooperation.

This is why the Cameron government put joint efforts against tax avoidance and corruption at the top of the agenda when it chaired the Group of 8 summit meeting back in 2013. Even the watered-down final declaration still looks groundbreaking. Information about company ownership should be made available to the authorities (hello, Delaware and the British Virgin Islands!). Companies should stop shifting money across borders to minimise their tax bills (Apple beware).

The hope was that tackling the misuse of the financial system and corruption in developing nations would help solve many of the world’s most pressing problems: poverty, economic stagnation, illegal immigration, even terrorism. “Corruption adds 10 per cent to business costs globally,” Cameron said in a speech in Singapore in July 2015, and “cutting corruption by just 10 per cent could benefit the global economy by $380 billion every year.”

Even while the referendum loomed, and Britain’s fate teetered on the thin margins of opinion polls, Cameron maintained his focus on this global problem. In May last year, the month before the Brexit tsunami capsized his

Cameron’s anti-corruption campaign was supposed to help improve these immigrants’ home countries so that they could stay put

premiership, he hosted an anti-corruption summit in London and won commitments from dozens of countries to do more to open up their economies and combat financial crime.

But then the Brexit referendum happened, Britain turned inward and all that stopped. The Cameron government had promised to publish its anti-corruption strategy by the end of 2016. No strategy has yet emerged. Brexit didn’t just doom the prime minister’s career, it also doomed the campaign he was leading to improve the world. The irony here is that the very problems Cameron was seeking to cure helped drive the movement that dethroned him.

Cameron’s anti-corruption campaign was supposed to help improve immigrants’ home countries so that they could stay put. Instead, anti-immigrant sentiment and public distrust of politicians’ financial integrity won the day. A populist insurgency delivered Brexit, and that is now scuttling efforts to clean up Britain’s tax havens, perhaps indefinitely.

I never voted for Cameron, nor did I support him while he was in office. But we shouldn’t let his mistake destroy his best initiative. —NYT Syndicate Oliver Bullough is the author of the forthcoming book “Moneyland,” an

investigation into kleptocracy, tax avoidance and money laundering