Drug dealers and corrupt state officials are spending billions of pounds in the UK, according to a new landmark report.
Anti-corruption campaign group Transparency International on Thursday published a 50-page report analysing over 400 cases of corruption and money laundering where UK services were involved. The report found that billions in suspicious cash is being spent with banks, accountants, private schools, auction houses, estate agents, and architects in the UK.
A shady elite is splashing out on things like luxury jets and yachts, crocodile skin leather goods and top private school fees, the report alleges.
“These cases involve at least £325bn worth of funds diverted by rigged procurement, bribery, embezzlement, and the unlawful acquisition of state assets, taking place in 116 countries across the world,” the report said. Hot spots for cases include Russia, China, Nigeria, and Ukraine.
The cases analysed include: Mexico’s infamous Sinola drug cartel, which has laundered at least £11.6bn globally; state looting by former Ukrainian president Viktor Yanukovych and his associates, which resulted in the appropriation of an estimated £3.2bn in state assets; and Malaysia’s 1MDB scandal, where an estimated £3.5bn of state funds were funnelled into personal accounts.
Super yachts and luxury jets
Examples of spending by the corrupt elites in the UK include:
£8.3m paid to architects and interior designers;
The purchase of 7 luxury jets worth a combined £170m;
3 luxury yachts worth around £236m;
421 properties, worth £5bn, bought with suspicious wealth, which Transparency International says could be “the tip of the iceberg.”
The report also found that suspicious wealth was also being used to fund private school and university educations, usually for the children of the people involved in corruption. £4.1m went to UK institutions, including:
Top private schools Charterhouse, where foreign secretary Jeremy Hunt was educated;
Harrow, where Winston Churchill, Mark Thatcher, and Benedict Cumberbatch went to school;
The University of St Andrews, where the Duke and Duchess of Cambridge met;
University College London, where alumni include Alexander Graham Bell, Francis Crick, Ricky Gervais, and Christopher Nolan.
None of the institutions are accused of wrongdoing but Transparency International said the report highlights “the exposure of those across the sector to suspicious wealth.”
Charterhouse and University College London did not immediately respond to a request for comment.
A spokesperson for the University of St Andrew said it is “committed to ensuring that all of our business is conducted with integrity, transparency, and fairness” and “will never knowingly accept money that undermines these values.” The university said it “complies with all relevant rules, regulations and legislation.”
“The payment referred to in the report totals £5,000 received in 2007 — before current legislation, updated policies, and associated training existed,” the spokesperson said. “We will continue to do all we can to minimise risks as far as possible.”
A spokesperson for Harrow said: "We never comment on matters concerning pupils, but note the report emphasises that neither we, nor any of the other institutions mentioned are implicated in any wrongdoing."
A Monet, a crocodile skin jacket, and a new Bentley
The report also details the luxurious tastes of the corrupt elite, who can use supercars, luxury handbags, and designer goods as a way to launder and hide wealth:
Luca Filat, the son of the jailed former Moldovan Prime Minister, paid £400,000 on rent up front for a UK apartment and £200,000 spent on a Bentley Bentayga at a Mayfair dealership. A judge later ruled the money was likely due to state looting;
Jho Low, a Malaysian banker who was indicted by the US in 2018 for “conspiring to launder billions of dollars”, bought a £34m Claude Monet painting at Sotheby’s in London in 2013. He had previously bought Jean-Michel Basquiat and Vincent Van Gough paintings worth tens of millions from Christie’s in New York. (Low denies he is guilty of any wrongdoing in connection the the US indictment);
An unnamed individual spent over £50,000 of suspicious wealth on luxury goods at Harrods, including a Chanel crocodile skin handbag and a Tom Ford crocodile skin jacket;
“None of these companies are accused of any wrongdoing,” Transparency International’s report said. “The broad range of businesses identified in our review of this data shows how exposed the luxury goods and services sector is to suspicious wealth.”
“We’ve known for a long time that the UK’s world-class services have attracted a range of clients, including those who have money and pasts to hide,” Duncan Hames, Director of Policy at Transparency International UK, said. “Now, for the first time, we have shed light on who these companies are and how they have become entangled in some of the biggest corruption scandals of our time.”
In total, Transparency International identified 118 luxury goods and services firms, 81 law firms, 86 banks and finance firms, and 62 accountancy firms that were linked to suspicious cash.
“This should act as a wake-up call for Government and regulators, and deliver much-needed reforms to the UK’s defences against dirty money,” Hames said.
Daniel Bruce, chief executive of Transparency International UK, said: “Government and law enforcement agencies have made real progress in recent years to reduce the places for corrupt individuals to hide, yet our findings confirm it is still far too easy for criminals and the corrupt to seek impunity with the assistance of UK businesses.
“Businesses and Government should redouble their efforts, through resource and will, to remove the helping hand for those who have abused positions of power and stolen from their people.”