Want to fix Britain’s ‘dirty money’ problem? Start with our politicians
British politicians talk tough about defending democracy - but their colleagues earn fortunes working with the world’s oligarchs and autocrats
London has the dubious honour of being the global capital of dirty money. So this week I headed along to a small room in Parliament for the launch of a new report on how Britain’s PR industry launders the reputations of kleptocrats.
The discussion, chaired by Labour MP Liam Byrne, was lively. A public relations expert explained how firms clean the images of Russian oligarchs through everything from gaming search engine results to creating private charities.
The problem isn’t just kleptocrats and the corrupt super-rich.
Reputations are laundered in all sorts of ways, from sports washing to donating to Russell Group universities. As the report’s author, Tom Mayne, pointed out, autocratic Saudi Arabia is a major client of British PR firms.
There was lots of talk too, about the need for greater regulation. Britain’s official lobbying register - introduced, I’m not kidding, by future Greensill lobbyist David Cameron - only captures 4% of lobbying, according to Transparency International.
But there was one big topic I didn’t hear mentioned all evening: the ‘revolving door’ between British politics and the lucrative world of PR and lobbying.
Lobbying is probably the most popular job for British politicians after they leave office - although they prefer to call themselves ‘advisors’ or ‘consultants’.
Take Philip Hammond. Theresa May’s chancellor set up his own consultancy, Matrix Partners, two months after stepping down from government in 2019.
Since then Hammond has been paid at least £567,000 by the Kingdom of Saudi Arabia - whose agents killed dissident journalist Jamal Khashoggi - and £563,000 by a Bahraini government which “has effectively silenced political opposition”, according to Human Rights Watch.
There seems to be lots of profit in Hammond’s new business: Matrix Partners’ most recent accounts declared a dividend of £600,000 last year - up from £500,000 in 2022.
For two years after they leave office, ex-ministers are supposed to declare any jobs they take up with something called the Advisory Committee on Business Appointments. But, ridiculously, ACOBA cannot impose any sanctions on those who have broken the paper-thin rules - which includes Hammond, Boris Johnson and many others.
Hammond is far from alone in spinning from the Lords. A simple search of the Lords' register of interests finds hundreds of hits for ‘consultant’ or ‘consultancy’.
Peter Mandelson owns a ‘strategic advisory’ business, Global Counsel, that has worked with now sanctioned Russian oligarch Oleg Deripaska. It also worked for Uber in Russia, according to a 2022 Guardian investigation.
Mandelson was recently described by the BBC as an “unofficial advisor” to Keir Starmer.
Global Counsel’s most recent accounts show that staff numbers grew by more than 40% between 2021 and 2022, perhaps in expectation of an incoming Labour government.
Mandelson’s former boss Tony Blair set up his own consultancy that worked for various autocratic regimes including Azerbaijan, Kazakhstan and Egypt.
We could go on and on.
Former cabinet Francis Maude is paid to advise Kazakhstan, the Saudis and more. Another ex-minister and Tory peer James Wharton advises Russian-owned Aquind Ltd who, as this newsletter revealed last week, are once again bankrolling the Conservative party.
In probably the most notorious historic case, former Conservative peer Lord Bell spun for the Pinochet Foundation and the Belarus government (Putin’s best mates) before his firm, Bell Pottinger, imploded after it was revealed to be running a campaign inciting racial tension in South Africa.
MPs have been found lobbying for autocratic regimes. In 2018, DUP MP Ian Paisley Jr was suspended from the House of Commons for “paid advocacy” after failing to declare luxury trips worth over £100,000 when lobbying on behalf of the brutal Sri Lankan government.
Most MPs, however, are able to act as lobbyists without breaking any rules - despite the clamour around MPs’ second jobs in the wake of the Owen Paterson affair.
Former Tory chairman Brandon Lewis is paid £250,000 a year to advise a firm that is 49%-owned by a pair of sanctioned Russian oligarchs.
The corridors of Westminster are often filled with former MPs who are now lobbyists. As we revealed last year, former MPs who lobby for the nuclear, gambling and energy industries have used their ‘category x’ passes to get unfettered access to Parliament - but all the data about this is now destroyed thanks to rules brought in by Jacob Rees Mogg.
The All-Party Parliamentary Group(APPG) on Anti-Corruption - which organised the event I went to this week - does excellent work, but the APPG system itself is wide open for abuse.
Autocratic regimes spend hundreds of thousands of pounds every year paying for luxury trips for MPs and peers through APPGs. The chair of Azerbaijan APPG, Tory MP Bob Blackman, has even boasted of being ‘fed’ propaganda by the authoritarian state’s embassy to use in Commons debates.
So what chance of stopping the revolving door? Last year Angela Rayner said that Labour would set up a new commission to replace the “toothless’’ ACOBA and clean up politics. But the official opposition has said little about it since then.
British politicians are fond of talking about defending democracy - perhaps it’s time they did something about their colleagues earning fortunes working for oligarchs and autocrats?
Companies don’t always need to pay politicians to represent their interests.
Last May, investment minister Lord Johnson met with KPMG ‘to discuss the business environment in the UK’.
During the meeting Johnson “stressed that he wanted to be the window into Whitehall” for KPMG and similar companies, according to documents (below) released to this newsletter under Freedom of Information legislation.
Johnson also suggested that he could host a roundtable with KPMG’s clients, an idea that “was well received” by KPMG chief executive Jonathan Holt.
The documents make no mention of KPMG’s regulatory travails but it has been a bumpy few years for the firm. In 2022, it was fined £14m for forging documents and misleading regulators over audits for collapsed outsourcing giant Carillion.
Last October, KPMG was fined a further £21m in relation to Carillion, and last week it was hit with a £1.5million for “serious failings” in its audit of advertising agency M&C Saatchi.
Sometimes, it seems, even a “window into Whitehall” isn’t enough….
A cross-party alliance of🇬🇧politicians is earning astronomical sums by cozying up to dictatorial regimes, and oligarchs. Mogg's 'category X pass' deletes all relevant data for future scrutiny.
The most lucrative line of business is between corporations and Govts. Entrenched anti-governance means pain for ordinary people and gain for the UK's anarcho-capitalist politicians of all stripes, this not just wrong, it's obscene. I think the next step to further cement plutocratic autonomy comes in Sunak's 12 Freeports and 74 SEZs, tax-exempt for 10 years, all privately owned, post-Brexit Britain is being carved up into patchworks of corporate sovereignties, something that Thatcher tried but failed with because the UK was still in the EU, Brexit is turbocharging corporate hegemony. Zone fever is here. The End.