Transcriber: Lena Szumlińska Reviewer: Reiko Bovee
So, here we are, in the heart of London, a world capital.
And there's a lot that's very good about that.
Let's think: it's a cultural powerhouse, it's an all-night party venue.
Realistically, I don't get to see much now because I have a two-year-old,
but I understand that other people are enjoying them.
And of course, it's the economic heart of Britain.
Think of all those talented people,
flocking to London every year, looking for work.
Some of them head up the road to Soho,
trying to get into the creative industries,
some of them head over to Old Street, trying to get into tech,
some of them hang around here, trying to get into politics.
And there are plenty who want to follow the money
into law, and property, and finance.
But there's a side to London that's less talked about,
and it's the role that this city plays in fueling corruption
in some of the poorest countries in the world.
And the role of some of our bankers, some of our lawyers,
and some of our property market in helping that to happen.
London is headquarters to HSBC which was recently fined
nearly 2 billion dollars by the US authorities,
for repeatedly accepting cash
that had been laundered by Mexican drug cartels.
During the time that HSBC was accepting this dirty cash,
35 thousand people died at the hands of the drug gangs in Mexico.
London is also home to branches of NatWest, Royal Bank of Scotland,
Barclay's, UBS and HSBC again,
which accepted millions of pounds from corrupt Nigerian state governors,
who were paying in the bribes that they've been accepting.
London is also home to the High Court,
which in a recent case involving a corrupt billion-dollar Nigerian oil deal
decided that one of the middlemen was entitled to 10% cut,
without questioning
whether the British Court should be dividing up
the proceeds of corruption in this way.
And London is also home to a property market,
that's very popular with the world's corrupt.
Most people think of corruption
as something that happens somewhere else, it's over there,
and it's nothing to do with us.
But what I'm going to talk about
is the role of some actors right here in London,
in helping some of it to happen.
I don't know about you,
but that makes me feel rather sad and angry.
I love London, and there's so much that's good about it,
but this all makes me feel rather ashamed.
I work for Global Witness,
a campaigning organization that investigates the deep links
between natural resources, conflict, corruption, and environmental devastation.
We spend half our time as investigative journalists,
unpicking the dirty deals,
and following the money to those responsible.
Then, we use our findings to campaign for change.
My colleague, Charmian Gooch, one of our co-founders,
won this year's TED Prize.
TED wanted to recognize our campaign
that's calling for an end to the globally-accepted practice
of allowing companies to incorporate whilst keeping their real owners hidden.
This is something that allows all manner of corrupt deals,
tax-evading deals, drug-trafficking, people-trafficking, you name it,
— serious, horrible crimes —
usually move the money using a company with hidden owners,
which is why we are very pleased that the UK has just said
it would bring in a register of the real owners of companies.
We've also campaigned for 15 years for new laws
that would require oil and mining companies
to disclose what they pay to governments.
This is on the basis that the people of Nigeria might stand a chance
of holding their government to account for the missing oil billions, if they knew
how much should've been paid in in the first place.
We've now won new laws in Washington and in Brussels
that would make this happen.
But some of the oil companies are trying to gut these laws.
I wonder what they're so worried is going to come out
if they have to reveal their payments.
We'll come back to that in a moment,
because I should perhaps first explain how on earth I got here.
I started out as a journalist,
thinking that that would be my way to change the world,
but I soon became rather frustrated just writing the stories,
one after the other.
And so I became a campaigner,
and I campaigned for several years for controls on the arms trade,
but I became rather down dealing only with the supply of horrible hardware,
and not the economic injustices that so often lead to the demand for it.
And so I became an aid worker,
and I found myself in Sierra Leone,
just at the end of a civil war which had been going on for 10 years.
And that is when I started to understand the resource curse first hand.
Sierra Leone is fabulously wealthy in natural resources:
diamonds, gold, bauxite, titanium,
but the diamonds had just fueled a civil war,
and the people were some of the poorest on Earth.
In one of the main diamond hounds I went to
there was just one main road through the middle of the town,
and half of the shops on it were diamond dealerships.
They weren't selling diamonds,
they were packed to the ceilings with TVs, and stereos, and generators, and bicycles,
which they were using to pay the local diggers,
who were bringing in diamonds worth many times more.
The other half of the road was aid agency compounds,
one after the other, and apart from a few stores on the street,
that was it for economic life in this town.
There's something going really wrong
when a country's natural resource-wealth
is not only failing to benefit ordinary people,
but is destabilizing politics and fueling war.
The aid work I was involved in was wonderful
and seemed to be much needed.
We were helping to reunite displaced children with their families,
we were supporting the reintegration into their communities
of girls who had been abducted, and raped by the rebels,
and forced to be their "wives,"
and we were raising funds for an amputee football team
who played the most extraordinary football on crutches.
But, as long as the majority of those natural resource revenues
continued to make their way, mostly into companies' coffers
and government officials' offshore private bank accounts,
then I felt like I was pouring water into a leaky bucket.
In short, the problem was much closer to home.
And so, here I find myself back in London, my city,
that is one of the foremost butlers to the world's corrupt.
You are right,
there is plenty of corrupt money in Dubai, and Singapore too.
But this one is my city, this is the city I live in,
this one is my city, full of bank accounts stuffed with corrupt cash,
my city full of lawyers, and accountants, and trust and company service providers,
who spend their days setting up shell companies
whose only purpose is to move money from one place to another.
Let's look at that financial sector.
A couple of years ago, our banking regulator finally admitted
that three quarters of British banks weren't doing enough to establish
what were the sources of the funds that their customers were depositing;
which is basically an acknowledgment
that the UK is wide open to corrupt funds.
Having corrupt funds in our bank accounts here is not just a side effect
of that corruption that's happening over there somewhere,
it's precisely what allows it to happen.
It's what allows the dictator to shore up his undemocratic power,
to keep funds off budget and out of sight of his opponents,
and to line up the bolthole for when it all goes wrong.
There's simply no point in stealing billions of dollars,
if you have to keep it under the bed; — does it fit, for starters —
but you want to go and put it somewhere where you can enjoy it.
As a Nigerian anti-corruption investigator put it to us:
"If you are going to fly a plane,
you don't take off until you know where you are going to land."
We know Ukrainian activists who are hopping mad
that their country's fledgling democracy has been repeatedly undermined
by a trail of corruption that leads straight back here, to London.
23 million dollars, in funds associated with the regime that's just gone,
has now been frozen in the UK, — too late, we'd say —
and it turns out that the ex-resident's palace
was part owned by a UK shell company.
That's the finance sector; let's have a quick look at property.
London's booming property market isn't particularly popular
with our own generation who can't afford somewhere to live,
but it's very popular with international hot money,
looking for somewhere to hang out for a while.
The Financial Times recently did an analysis of Land Registry data
to show that over a 13-year period to 2012,
40,000 properties in London alone were bought using offshore companies.
That basically means no one knows who they belong to.
The tax-fiddling reasons for using an offshore company to buy your house
are increasingly recognized, but corrupt money likes property too.
One of those 40,000 houses
would have been a 10 million-pound house up in Hampstead,
owned by one of Colonel Gadaffi's sons, through a British Virgin Islands company,
and another 4 properties in North London were owned,
again through a British Virgin Islands company,
by one of those corrupt Nigerian state governors I mentioned earlier,
who paid for them using bribes,
and the proceeds of ripping off his people,
the people who'd voted for him.
You usually only find out about properties like this
once the person involved is prosecuted, or pushed from power,
which doesn't happen often enough.
So, that's the property market
and then there's our ancient and venerable legal system.
Let me tell you a story about that.
Imagine that you have plans to rob a bank.
Imagine that you come to an arrangement
with one of your accomplices as to how much he's going to be paid.
Imagine that your accomplice then takes you to court to claim his fee,
and the court makes a decision as to how much he's entitled to,
without referring to the fact that a bank has just been robbed.
That is basically what's just happened here in the High Court in London,
except that the man involved hadn't been robbing a bank,
he'd been robbing the people of Nigeria of 1.1 billion dollars.
And this is how it happened.
Two oil companies, Shell and Italy's Eni, bought
a lucrative offshore Nigerian oil block for 1.1 billion dollars.
They paid this money to the government of Nigeria,
which then made a subsequent payment for an identical amount
to a company called Malibu Oil and Gas,
which was secretly owned by the former Nigerian Oil Minister.
He had awarded his own company, whilst he was in office, this concession,
and was now cashing in on his corruption.
Shell and Eni point out that they paid their money to the government of Nigeria,
but the court documents show
that their representatives met the former Oil Minister, called Dan Etete,
on a number of occasions, while the negotiations were going on,
and that they knew he was representing this company, Malibu.
When the 1.1 billion reached Malibu,
800 million of it was immediately wired on
to another five companies with hidden owners,
so nobody knows who's benefited; it certainly isn't the Nigerian people.
We can already see two things from this:
how corruption can happen behind companies with hidden owners
and why those new laws that I mentioned earlier,
which would require
oil and mining companies to disclose their payments,
would have been a really good idea in this case,
so that the Nigerian people could see the deals been done on their behalf.
Interestingly,
Shell is one of the oil companies lobbying against those laws.
Anyway, when the middleman took Malibu to court to claim his fee,
it all came out.
The court made a finding of fact
that the Oil Minister was the real owner of this company,
which is essentially an acknowledgment that this is a seriously dodgy deal,
and yet, the court awarded the middleman his cut,
he got about 110 million dollars.
We find this extraordinary.
Even more extraordinary is that the CPS, another authorities,
have not frozen these payments in order to stop him getting it.
It's deals like this which help to explain
why billions of dollars of Nigerian oil revenue
still go missing every year.
It's deals like this which help to explain
why a larger proportion of Nigerian people live in poverty
than before the oil money started to flow.
The UK, meanwhile,
gives 275 million pounds a year of development aid to Nigeria.
I am not suggesting that we stop the aid;
I've seen for myself what good aid can do.
I am suggesting though, that we stop fueling the corruption
that undermines that aid
and prevents oil revenues reaching ordinary people.
I am suggesting that we don't let our courts legitimize corrupt deals,
I am suggesting that we stop our banks accepting corrupt money,
and I am suggesting that, perhaps, it's time for the Land Registry
to record the real owners of properties,
and not just the offshore companies that they're hiding behind.
I am basically suggesting that we try and make London a place
where those who want to go and work in finance, and property, and law,
can do so if they choose, without helping to fuel the corruption
that keeps so many people still living in poverty.
Thank you.
(Applause)