Trail of loot from £1bn heist led to door of Scots shell firms
THERE had been a £1 billion bank heist. The loot could be traced to a flat in Edinburgh and there was nothing the Scottish police could do.
It is nearly three years since a friend in law enforcement first whispered the words “Scottish limited partnerships” or “SLPS” in my ear.
Three financial institutions in the former Soviet republic of Moldova had been emptied, he said.
Money had been pumped out of the banks through anonymously owned shell firms – SLPS – with accounts in the Baltic state. But there was no crime to investigate in Scotland. Just the metaphorical getaway cars.
The Conservatives – who, rather than the SNP in Holyrood are responsible for Scots corporate law – have now signalled they will take these (tax) vehicles off the roads.
Their decision, long and much awaited, comes after a major commitment of investigative journalism from The Herald and Sunday Herald and painstaking, clever and – in my view – noble cross-party campaigning by politicians and civic groups on both sides of the Border.
It is no coincidence the Tories are acting now. The poisonings in Salisbury have re-ignited concerns about Russian dirty money. And SLPS, as The Herald has reported, played a key role in the biggest laundering scheme ever uncovered, the Russian Laundromat. They help moved billions. Yes, billions.
Yet as the Tories moot a full ban – the details are yet to emerge – it is worth reminding ourselves of just why my police friend was just so worked up about SLPS three years ago.
It is an astonishing story of how Scotland’s good reputation for business and the rule of law has been used against us – and helped to rob the treasuries of countries around the world.
How? Essentially, some smart whitecollar professionals in Edinburgh have turned an obscure kind of firm into an alternative to Switzerland’s now closing secret bank accounts.
Their owners, anonymous shell firms in traditional tax havens, were secret. And as SLPS, they did not need to file accounts or pay tax, at least if they did not operate in the UK. Worse, such firms were being marketed across the world as “zero-tax Scottish offshore companies”. They were trading on this country’s clean image.
Even now SLPS are sold online, for as little as £1,600, complete with a bank account in the Baltic states in their name. That’s anonymous banking, on the cheap.
Scotland, we found, was exporting whisky, beef, and what amounted to moneylaundering kits. In some places, such as Ukraine, the words “Scottish firm” now have a whiff of sleaze.
The Herald, backed by shell firm expert and researcher Richard Smith, has by no means worked alone. Criminals and money-laundering despots do not respect borders. Nor should journalism.
For example, The Organised Crime and Corruption Reporting Project in Bosnia provided the raw data we were able to use to show SLPS and other Scottish shell firms were used to launder out of Russia and Azerbaijan. And we worked with Al Jazeera to identify shell firms doing the same for the circle of former Ukrainian President Viktor Yanukovych. Politicians too have put aside narrow partisanship to campaign for SLPS.
Former Labour MSP Hugh Henry was the first to spot the issue here. Former MP Roger Mullin helped this paper take our evidence to Westminster as he sought to convince UK ministers to act. His SNP colleague Alison Thewliss took up the cause, working across parties to seek a fix.
All five Scottish parties support SLP reform thanks to a campaign by Oxfam. Why did the aid charity care? For the same reason we all should. SLPS help criminals and despots make poor countries poorer.