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10 people now own everything

Oligarchy is a weekly newsletter tracking how the super rich are changing the world for the rest of us. Also in this edition: Vanuatu falls hard, Ben Wallace’s sharp pen

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When the TV series The Office first came out, I was working in a dysfunctional office, and I found watching it extremely cathartic. I have many favorite lines from the show but one of my very favorites is from when the boss announces he has “bad news and good news”, then explains that, although most of his underlings are going to be sacked, he personally has been promoted.

  • “That’s not good news, David, that’s only bad news and irrelevant news,” a colleague replied.

Anyway, that scene popped into my head when reading the latest Oxfam inequality report, with its revelation that, over the course of the pandemic, 99% of humanity has got poorer, but (here’s the good news!) the world’s ten richest men had more than doubled their wealth, at an average gain of $15,000 a second for the last two years.

  • “If these ten men were to lose 99.999% of their wealth tomorrow, they would still be richer than 99% of all the people on this planet,” said Oxfam International’s Executive Director Gabriela Bucher. “They now have six times more wealth than the poorest 3.1 billion people.”

It was not that long ago – only in the 1960s – that 3.1 billion was the entire human population of the earth. And now just 10 men, which is not enough people to make up a soccer team, own more wealth than them. What a time to be alive. Bad news and good news indeed.

While the world’s biggest oligarchs have been competing over which celebrities they can fly into space, the effects of inequality were killing 21,000 people a day. And the details of the report are, in some ways, worse than the headline. The pandemic has hit women harder than men, ethnic minorities harder than white people, and developing nations harder than rich ones. Humanity’s failure to respond to this crisis in an equitable manner is a worrying dress rehearsal for the far larger crisis that will be climate change.

  • “The answer to these complicated problems is ironically simple: taxes. Mandatory, inescapable, ambitious tax reform on an international level. This is the only way to fix what is broken,” writes Abigail E. Disney, a founding member of the Patriotic Millionaires group, in a foreword to the report. “There is more than enough money to solve most of the world’s problems. It’s just being held in the hands of millionaires and billionaires who aren’t paying their fair share.”

As luck would have it, the world did agree an ambitious tax reform on an international level just last year. So, how’s that going? Well, there’s bad news and good news. This piece from Bloomberg gets more and more depressing the longer it goes on. Various members of the European Union won’t implement the minimum tax without progress on taxing the tech giants; but the White House is failing to get anything at all through Congress, so there’s precious little hope of that; and the looming US midterms mean that American legislators have anyway got more important things to do than, you know, legislate. Just remember, while politicians are failing to get their acts together, the world’s richest ten-some are getting richer all the time. By my calculation, if the last two years are any guide, while you read that last sentence, they’ll have made more money than I’ll earn this year.

In the meantime, Allez Les Bleus!

  • “France will intensify its efforts to convince the skeptics over the next two months, as the country intends to make decisive progress during the EU finance ministers’ meeting scheduled for March, a senior EU diplomat says.”

Or, having said that, perhaps it’s just “bad news and irrelevant news” after all.

  • “A recent exposé by Le Monde and Contexte revealed how a French government position paper on new EU tax transparency rules was based on a paper drafted by MEDEF’s leading tax expert. MEDEF is one of France’s biggest corporate lobby groups. The paper outlined France’s ‘red lines’ and supported the council’s corporate-friendly position on the tax transparency proposal which included several industry-friendly loopholes. It is now expected that the same government department will lead on the French presidency’s approach to implementing the OECD deal,” says this analysis of the French position, which looks like it may be as penny-wise and pound-foolish as everyone else’s.

Credit where it’s due, not all billionaires are spiffing their fortunes on rockets that look like, well, you be the judge, or on building art galleries on their own islands. Mackenzie Scott has decided not to reveal the recipients of her latest round of donations but, chances are, she will have given away billions in the last three months alone. That is of course very welcome but, if you really want to improve society, you need to let society choose how it wants to be improved, and that means people need a say in how money gets spent, and that can only be achieved by democracies taxing everyone.

VANUATU

Vanuatu has had a tough pandemic. The first year of Covid-19 saw its economy shrink by 8.5%, as it closed its borders to tourists. It is a long way from other countries and has shared the difficulties all island states face when trying to diversify. Fortunately, it had something valuable to sell: passports, which earned it $175 million in 2020.

Sadly, the islands’ government appears to have got a bit greedy – as the Guardian revealed last year. There had already been concerns about people buying its citizenship to dodge global tax rules, but this was worse. All kinds of suspect individuals were snapping up travel documents so they could fly around the world undetected. The prospect of dodgy people having a back door into the European Union appears to have been the last straw for Brussels.

  • “Based on careful monitoring of the schemes and information received from Vanuatu, the Commission has concluded that Vanuatu’s investor citizenship schemes present serious deficiencies and security failures,” a statement from the European Commission said. The EU is now debating cancelling visa-free access for Vanuatans.

Among other failings, according to the commission, Vanuatu had given passports to wanted criminals; failed to exchange information with the applicants’ countries of origin or screened them adequately before granting them passports; accepted all but one of the applications; and given passports to citizens of countries that are typically excluded from other such “golden passport” schemes.

  • “Additionally, investor citizenship schemes operated by Vanuatu since 2015 are commercially promoted with the expressed purpose of granting visa-free access to the EU.”

Of course, readers may be thinking this is all a bit rich, considering the fact that EU members Cyprus and Malta have a record of selling passports to some distinctly questionable people, and bending their own rules in doing so. An official probe found that more than half of Cypriot passports handed out under a “citizenship by investment” scheme were done so illegally. Separately, many European countries sell visas as well.

The issue may well be that, if anyone’s going to make money out of selling access to the EU, the European Commission wants it to be Europeans. The fact that it’s not going to be Vanuatuans is very worrying for the Pacific nation.

  • “Especially in Covid times, the Vanuatu economy is almost solely being propped up by the citizenship program,” said Vanuatu Business Resilience Council chair Glen Craig. “If I was in the finance and economic management department of the government, I’d be very stressed right now about how we can afford to pay doctors and nurses and keep hospitals open.”

Of course, there’s a lot to be said for cutting off countries that flagrantly abuse their privileges to allow bad actors access to other states’ territory or financial systems. However, my concern is that, if we don’t give them a soft landing when they are cut off, they’ll just go on to sell something else, which will perhaps be even more pernicious. I keep hearing whispers, for example, that Britain’s Caribbean territories – which had their shell company operations regulated by parliament, with no compensation offered for the loss of revenue – are becoming increasingly welcoming to the drug cartels.

If Vanuatu can’t make a living selling passports or welcoming tourists, then how is it going to make a living? It’s a worrying thought.

​​UKRAINE

It’s important to give credit where it’s due and – having been all kinds of rude about the UK’s enabling of kleptocracy in Ukraine, Russia and elsewhere in this newsletter before – I am impressed by an excellent article about what Vladimir Putin is up to, which shows an impressive degree of historical knowledge, and which was written by a government minister. It’s worth a read.

The news from London at the moment is more than usually embarrassing (and it’s been an embarrassing few years), as our prime minister tries to claim he thought a party he attended during a new national lockdown was actually a work event. Leaving aside the hypocrisy of rule-makers ignoring their own rules, how bad must the party have been? I bet that, if French ministers had illegal parties, they’d be absolutely banging, and could in no way be mistaken for a meeting. It’s enough to make me ashamed to be British.

This steady drip of allegations of illegal parties have rather knocked what’s happening near Ukraine, on whose border Russia continues to amass troops, off the front pages. But at least Defense Minister Ben Wallace, who wrote the article above, is keeping his eye on things. Before his current post, he used to be security minister, and had a very clear-eyed appreciation of the threat posed to Britain and other Western countries by kleptocracy, corruption and organized crime.

There is continuous speculation about Boris Johnson being pushed out as prime minister. Wouldn’t it be nice if his replacement was someone who recognized that Britain’s world-leading offshore finance industry is perhaps the world’s greatest enabler of kleptocracy overseas, and thus a force multiplier for the enemies of civilization, rather than just a source of profits at home? Another senior conservative MP who’s been writing good stuff on this topic recently has been Tom Tugendhat, so keep an eye on him too.

FOREIGN AGENTS

Here’s a fairly bonkers story from Russia. Vladimir Zhilkin, head of the Tambov branch of the Russia pro-democracy group Golos, was officially branded a “foreign agent” under Russian law because – while trying to make a living – he accepted an 171 ruble fare from a Moroccan dentistry student who he’d driven across town.

  • “Life as a foreign agent is so great that I’m forced to work as a taxi driver,” said Zhilkin with heavy Russian irony.

This may look funny, but being a foreign agent is no joke. Everything they publish anywhere has to be labeled with a humiliating disclaimer declaring their status.

  • “This announcement (material) has been created and (or) distributed by a foreign media outlet, fulfilling the function of a foreign agent, and (or) Russian legal entity, fulfilling the function of a foreign agent.”

They also must tell the government about all their earnings and outgoings, along with an account of their activities. Zhilkin is one of many citizens who are trying to challenge this designation in court. Another individual received the status for selling some air miles to a Nigerian, while a pensioner was labeled a foreign agent for renting her flat to a Frenchwoman. The legal hearings into their designations are going on now, and I wish them luck.

The legendary human rights and historical research group Memorial was branded a foreign agent before being forcibly shuttered by a court at the end of last year. It is great that the European Court of Human Rights has intervened in the case. Bellingcat has also appealed against its own designation as a foreign agent and has pledged to take the case to the European Court of Human Rights if required.

WHAT I’M READING

I was lucky to get hold of a pre-publication copy of Sally Hayden’s My Fourth Time, We Drowned, which is an extraordinary book by an incredibly tenacious journalist. It’s the story of how the European Union has outsourced control of its southern border to criminals in Libya and is essential reading. If you think what’s going on at the U.S.-Mexican border is bad, this is orders of magnitude worse.

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Oliver Bullough

Oliver Bullough is an author and journalist from Wales, who specializes in writing about financial crime, often when it has links to the former Soviet Union. His most recent book is Moneyland, why thieves and crooks now rule the world and how to take it back, and he is currently trying to write another one despite lockdown.

@OliverBullough