This film made me think of Schumann’s description of Chopin’s music – “cannons hidden among flowers”. Sumptuous images of tropical islands and pomp and ceremony in the City of London, and the calm, reassuring delivery of the financial experts lulls you into a sense of shock and helplessness. As John Christensen says, the offshore tax jurisdictions are Frankensteins created by the City of London. Up to half of the world’s offshore wealth is hidden in Britain’s secrecy jurisdictions.
It is a film by Michael Oswald about how the British Empire of colonial power transformed into an empire of financial power. As the British Empire declined, so did the City of London.
“Treasure Islands” author Nicholas Shaxson explains how the Cayman islands were a backwater in the 1960s until the accountants and lawyers descended and created secrecy jurisdictions, and straightforward illegality. And so the last remnants of the British Empire became tax havens. By 1997 nearly all international loans were made through the offshore market.
The film proceeds to describe what a weird creature the City of London is, with images of pomp and ceremony, brass bands, and ermine. The Lord Mayor’s Show is the world’s oldest civic procession. We learn that the City was the only part of Britain that William the Conqueror didn’t actually conquer; he allowed it to remain separate. Its practices remain stuck in the Middle Ages.
However many times the culture of the City is portrayed it remains a curious throwback and the film expertly depicts this anachronism, without, inevitably, being able to reveal its secret workings, but creating an appropriate sense of disbelief.
Then comes the BCCI scandal, a bank nurtured in the City and steeped in financial fraud, money laundering, terrorist financing and collaboration with the world’s intelligence services. Much like the still thriving HSBC today. Many whistleblowers contacted the Bank of England, the regulator at the time, warning of BCCI practices, but the Bank did nothing. Professor of Accounting Prem Sikka explains how regulation worked then, as today, by having a chat over lunch.
The film discloses quite shocking evidence of the impunity granted to the City, which will no doubt be brushed off by the grandees who benefit. As Nicholas Shaxson says, in Britain, bankers don’t go to jail, they are a protected species. Shaxson goes on to calmly explain trusts, which derived from the time of the crusades and how simple it is to set one up. Investigative economist John Christensen explains how trusts are “invisible arrangements” with trillions of dollars of capital, which “apparently belong to nobody”. Trusts are key to the whole offshore tax avoidance machinery. As MEP Eva Joly explains, we know what is going on because of leaks like the Panama Papers (and now the Paradise Papers) but we are “not able to act upon it” because the system protects powerful people who benefit from it.
With appropriate patriotic imagery the film explains the Panama Papers and how other countries’ exasperation at British connivance is brushed off because “we don’t have the powers to intervene”. As John Christensen says, this is a lie. He was economic adviser to Jersey and explains how British officials subtly told him to mind his own business when suggesting reform.
At the end of 2008 sub-Sahara Africa’s debt was $177bn – but between 1970 and 2008 the wealth moved offshore by the elite is estimated at $944bn. The UK and the US have blocked attempts to set up a world tax organisation. The looting of resources continues unabated.
There is a (for me) complex explanation of capital inflow and outflow, euphemistically termed “errors and omissions” by the IMF, but I hung on to the prominent word criminal to help me make sense of the economics. The effect though is that the British economy is no longer based on production, it is propped up by “hot money” – from drug and criminal money and tax evasion, from around the world.
John Christensen’s insider knowledge from working at Deloittes is truly shocking but is surely representative of the business of all the big 4 accountancy firms. Without comment the film includes clips of officials from tax havens explaining how transparent and well regulated they are. The surrounding context helps you to put those statements into context. According to sleazy sounding Cayman Finance Chairman Tony Travers, Nicholas Shaxson is an imbecile who doesn’t know what he’s talking about. You decide.
The testimony from Stuart Syvret, whistleblower and former Jersey senator , punctuated by a helpful police officer’s input, of his persecution and gagging in Jersey is chilling, and likely to deter anyone from blowing the whistle on criminality.
Of course, a documentary about tax avoidance has to mention David Cameron and his father. Spider’s Web includes him as a exemplar of the old boy network’s sense of entitlement to do as they please with their money.
The final coup de grace is an exposure of how the banks, law firms and accountants have penetrated the establishment and politicians have become their spokespersons. Activists drawing attention to tax avoidance are described as scum by the elite’s henchmen. One of them, campaigner Joel Benjamin explains the accountancy scam of PFI (private finance initiative, now also being promoted in Africa), the tax avoidance involved and the unusual accommodation arrangements of the UK’s tax authority, HMRC.
This film is not a thriller. There are no crimes, murders, war or rape. But it deals with the consequences of such acts, metaphorical or real, and you need a strong constitution to watch it, if you care about the state of capital. It is calm, professional and accurate, like a hitman should be. Made on a miniscule budget it is also thoroughly depressing. I can’t recommend it enough.