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28 October 2020

Kleptopia



I’ve just finished reading an interesting book, ‘Kleptopia’ by Tom Burgis, that presents the idea that we are living in a world where money is laundered for power, and the new ‘five families’ (as in Cosa Nostra) are represented by the Nats, the Brits, the Sprooks , the Petros and the Party. Well, we’ll come back to that bit.

The bulk of the book is about the rise of the oligarchs in post-Soviet Russia and its former satellite states. In fact, it majors largely on Kazakhstan and its dictator (who, of course, held the same power under the Soviets) Nursultan Nazarbayev. That gives it a bit of a frisson for those of us involved in metals, because the true wealth of that country lies in the metals and ores buried beneath its surface. Burgis is an investigations correspondent (new job title on me) for the Financial Times, and thus seems to have the expertise to understand and - importantly - to explain clearly the confused, not to say murky, existence of Kazakhstan’s mining and metal wonder-company, ENRC. The ownership of that company, its deep links with the President and his family are all brought out into the open in this book. Some of this will be familiar to many in the industry, but then the book is aimed at a general readership as well, and anyway the clarity with which the events and people are chronicled is welcome, and, it has to be said, yet again raises the issue as to why this company was ever regarded as suitable for a London listing.

Familiar names and faces - again, to those of us in the industry - swim into view as we are led through the dark alleyways of ENRC. Billy Rautenbach and Dan Gertler, Laurent Kabila and Robert Mugabe all have their cameo roles to fulfil. Other well-known friends and acquaintances make an appearance - Andrew Groves and Phil Edmonds, with the CAMEC/ENRC deal, and the Reuben Brothers all have their part to play, as the tentacles of the oligarchs spread to Africa.

And once they have made the money, the oligarchs and the rest have obviously got to do something about hiding it, and making it legitimate. Burgis’ main source for this area is a former bank compliance officer then FCA employee named Nigel Wilkins, who worked for a Swiss bank - BSI - and reported its wrongdoings, with reams of photocopied evidence, back to the (then) FSA. The latter did nothing with the information. Failure of ‘know your customer’, moving money from blurred jurisdiction to blurred jurisdiction to further disguise its provenance, dubious real estate transactions, even anonymous pre-loaded debit cards, all these are documented, undertaken not just by relatively unknown banks, but also by those with whose names everyone is familiar.

Tying together these two threads - first, the accumulation of wealth from the rape of (former soviet) Central Asia and then the continent of Africa, and then the legitimising of such ill-gotten wealth through the western financial system is where Burgis finds his conspiracy. He sees a network across the world, designed to take this dirty money and re-convert it into power (his contention - probably correct - being that the money originated from power in the disintegration of the Soviet Union) to the benefit of a murky grouping of the ‘five families’ mentioned above. What these represent, we are told, are the nationalist governments, principally those of the former east bloc but nevertheless stretched to include Donald Trump and - surprisingly - Boris Johnson, the British legal and financial system, a grouping of former spooks and crooks, the wealthy of the oil-producing world and the Chinese Communist Party. Well, he argues it quite convincingly, but I have my doubts about this bit. Yes, there are a lot of crooked people in the world, hiding ill-gotten money, ignoring laws that the rest of us obey, but is it really a global conspiracy of kleptocrats? I remain to be convinced……

But it’s a book worth reading, not least because it does provoke thought and discussion of this dirty business of money movement and wealth creation - or theft. It’s well written, although I do believe underneath I did detect something of a political agenda struggling to get out. I’ll just leave a final quote:
“The world was indeed growing more dangerous - and Trump was helping to construct a new global alliance suited to the times. It was an alliance of kleptocrats……In truth, they were united in their common resolve to advance the privatisation of power…..With Trump’s election, they controlled the three great poles power. In the White House, a launderer, installed with the help of Putin’s Kremlin. And in Beijing, Xi Jinping……Naturally, a facade of decorum was required.” 


Kleptopia, by Tom Burgis, is published by William Collins, £20. 


On a different, and sadder, note, Alan Booth died recently. Miles Linington, who knew him well for many years, remembers him:

Alan Booth

Born: 23rd November 1934

Having completed his time in the National Service (RAF), Alan entered the world of “metals”, joining Vivian, Young & Bond (VYB), an LME Ring Dealing Member, in 1955. At this time, Alan's father, Alec, was Director in charge of Physical Trading and his uncle, Stanley Booth, a floor trader. VYB was part of the British Metal Corporation and at that time they owned other Ring Dealing Members, namely V. Kaye, H. Gardiner & Amalgamated Metals.

Alan went on to join H.J. Enthoven, another Ring Dealing Member, in the early sixties. A few years later, H.J. Enthoven was purchased by Billiton, a Dutch metal trading company and they renamed the company Billiton Enthoven Metals. Alan soon became Managing Director and remained with BEM until his retirement in 1992.

During his time at BEM, he also served on the main committee of the LME, which covered the time of the International Tin Crisis. After the LME was reconstructed in 1989, Alan chaired both the Tin and Warehouse Committees and also served as a Trustee on the LME Benevolent Fund.

Upon retiring, Alan and his wife, Carol, moved to the New Forest in Hampshire, where they spent many happy years until his death on 16th October.

ML.


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