This whole process will not be quick, and there will be the usual abundant opportunity for acronyms, circumlocution and horse-trading. But eventually the hooves are going to have to hit the road. There is simply no way of hiding the fact that, under Donald Trump, the United States has broken its promise to bring greater transparency to shell companies; nor that it has scaled back prosecution of financial crimes, pardoned convicted financial criminals, and unleashed a crypto frenzy.

Throughout its history the FATF, set up by the G7, has been able and willing to overlook transgressions from big countries that it wouldn’t tolerate from smaller ones. It punished the remote island states of Niue and the Marshall Islands in its first ever blacklist for their lack of transparency around shell companies, for example, while merrily tolerating the fact that not even the Federal Bureau of Investigation could figure out who owned a corporation in Nevada. Nauru got punished for moving dirty Russian wealth while the UK and Switzerland didn’t.

The FATF’s structure, which ensures it is dominated by large economies, is a classic example of how, if you’re not at the table, you’re on the menu. But, in the past, those large economies have at least pretended to go along with its recommendations. They’ve made promises, passed legislation, convened working groups, said the right things: all of which has given everyone the diplomatic cover they need to keep each other off the naughty step.

Trump’s not doing any of that, and it’s hard to believe that he’s going to change that habit. If the FATF criticizes his administration, I think we can safely assume Trump won’t take that well, and could — if past behavior is any guide — pull the United States out. But if the FATF doesn’t criticize what he’s been up to, it will lose all credibility. 

Speaking for myself, I think the FATF’s conception, structure and techniques are all flawed, perhaps irreparably, and that it has been part of the problem, rather than part of the solution, for most if not all of its 37-year history. Perhaps, therefore, Giles Thomson should get ahead of the looming fiasco by declaring a complete overhaul of the whole organization, re-examining its recommendations, its memberships, its strategy, and more.

What are the chances of that happening? Well, here’s some news from the Pacific: “Papua New Guinea one step away from being blacklisted, global money laundering watchdog warns”. Is Papua New Guinea the problem? No. Do we get anywhere by pretending that it is? Also no. Will the FATF carry on regardless anyway? I would love to be surprised by the answer to that question.

The need to clean house 

I’m a big fan of this video from Transparency International’s UK chapter, which lays out the inglorious history of corruption in British politics, and urges the government to be more ambitious in its new piece of legislation. TI has pointed out three areas where it thinks the government should go further, and I agree with all of them, but I would also like to see a complete ban on crypto donations, which would help prevent compliance departments being overwhelmed by automated efforts to circumvent donation limits.

I would also urge you to read this comment piece from RUSI about the threat to democracy posed by big funders from the American right, which has significance far beyond British politics. The world’s remaining democracies have been slow to recognize how radically the values of many U.S. billionaires have diverged from what we traditionally associate with conservatism, and to shore up their defences against them. “The task now is to strengthen our democratic guardrails — calmly, transparently and proportionately — before those boundaries are redrawn by others,” the writers Neil Barnett and Eliza Lockhart conclude.

Transparency International’s Russian chapter has been in exile since 2022 for obvious reasons (last year, for example, it had to issue a statement to argue that “fighting corruption is not terrorism”) but it has continued to conduct really valuable investigations into how illicit wealth flows in and out of its home country, including a recent one detailing the use of shell companies in the UK’s tax havens to trade with Russia, and identifying $8 billion worth of transactions.

The worst offender as a source of opaque companies was the British Virgin Islands, though Bermuda was also a problem, moving sanctioned products — including lead and zinc — as well as oil and other fossil fuels, a surprisingly large number of yachts, and a jet that ended up belonging to Chechen strongman Ramzan Kadyrov (whose ill-health is, apparently, once more the subject of speculation, poor chap).

“For many years now, we have observed a dysfunctional equilibrium in which illicit financial flows, tax evasion, sanctions circumvention, and other forms of misconduct are channelled through firms and intermediaries registered in unaccountable jurisdictions,” TI-Russia notes. Fortunately, however, the British government is hosting an illicit finance summit this June and so has the perfect opportunity to set an example by making sure this kind of thing stops happening on the territory it’s responsible for if nowhere else.

Here’s an interesting story from the Netherlands, where luxury firm Louis Vuitton was fined half a million euros for failing to identify customers spending large amounts of cash. This case was part of an investigation into the Chinese money laundering technique known as ‘daigou’, in which value is transferred internationally not via the financial system but by buying expensive objects and then reselling them in China. High-end fashion is often used in the system, and it will be intriguing to see if other countries follow the Dutch lead and investigate unusual cash purchases.

And here’s a piece on our favorite crypto company Tether, which is apparently valued by market participants at between $200 and $350 billion. That is less than estimates made in the summer, but still an awful lot of money. Fun fact: finance firm Cantor Fitzgerald has a five percent stake in Tether, which is thus worth $10 to $17.5 billion, via a convertible bond. Another fun fact: Cantor Fitzgerald is owned by Commerce Secretary Howard Lutnick’s children. 

Interesting question, would the prospect of your family earning a windfall of that size affect how stringently you would approach the regulation of a financial institution accused of involvement in industrial-scale money laundering? Lutnick, who led Cantor Fitzgerald for over 30 years, is of course not the kind of man who would let petty cash cloud his judgement, so this question is of academic interest only, but still, worth thinking about.

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The value of banknotes in circulation is a useful proxy for the size of the illicit economy, because they are used less than ever by ordinary people in ordinary transactions. So a primary source of demand for physical cash comes from criminals and money launderers. Since 2022, however, while the value of all the physical US dollars, Australian dollars, and pounds has been rising, the value of Euro banknotes in circulation has stagnated. 

This is especially notable because, in the giant €200 bill, the European Central Bank provides a super-convenient banknote for transporting large values around in a relatively small box. 

But it’s happy days for those looking for the green shoots of a revival in European criminal dynamism. In December, the value of Euro banknotes in circulation finally hit its first new all-time high — of €1.619 trillion — since June 2022, when it was €17 billion lower. Interestingly, however, the share of €200 bills in that total is falling. Consumers appear to prefer €100 bills and, if there are any money launderers out there able to explain why that is, please get in touch.

The Geenland gyp

I’m not going to express an opinion on the embarrassing idiocy of Donald Trump’s “policy” on Greenland, but I am interested in what the world’s biggest island would look like as the 51st state (as proposed in this bill from the improbably-named Congressman Randy Fine) from a financial crime perspective.

Greenland may be larger than Alaska, but it is the world’s least-densely populated territory, with only 57,000 inhabitants. That’s about the same number as people in Carson City, Nevada where there’s so little going on that it’s almost a relief to escape to the comparatively vast Reno, which isn’t something I’d otherwise imagine myself saying about such a barren wasteland. Greenland has a tenth of the population of Wyoming, the current least-populous US state, which might give you a clue about why I’m concerned should Greenland be accepted into the warm embrace of the USA. In recent decades, many of America’s least-populous states have enthusiastically embraced financial secrecy as a useful source of additional income, in that it allows them to swipe business/tax revenue from their larger fellows. 

South Dakota and Delaware are the most famous examples, but Wyoming, Nevada, Alaska, Oregon and others are involved too. It is famously easier to get a shell company up and running than a library card in many states, and those companies help their anonymous owners evade tax, launder money, hide stolen wealth, and more.

One of the reasons for this phenomenon is that it’s just so much easier for lobbyists to get pieces of enabling legislation passed through the legislatures of small states, which have fewer competing industries and smaller numbers of lawyers. Now, if that’s the case in Wyoming, just imagine what it would be like in Greenland – laws could be rushed through in minutes, rather than hours. There’s no tax revenue to speak of, so why bother having any taxes at all? It would be a criminality haven for the ages. 

It would, I admit, be quite amusing to watch the fury of Republican-voting states as they lost all this lucrative business to somewhere whose accession to the Union they had so enthusiastically endorsed. There would also be a tremendous irony in the extent to which shady Chinese and Russian money could pour through a secrecy haven even murkier than Delaware, considering the stated justification for the mooted annexation. But, more broadly, this would be absolutely awful for democratic accountability and other good things, so let’s hope it never happens.

Tether rides in with the cavalry

Tether, issuer of the world’s largest stablecoin USDT, has frozen $182 million worth of crypto that it thinks is linked to Venezuelan sanctions evasion. In this, it repeats a pattern familiar from its playbook of jumping aggressively to enforce Western governments’ rules just as soon as it has absolutely no choice about it. 

The fact that Caracas was relying on USDT to fund most of its oil trade was common knowledge, helping both to support a corrupt and dictatorial regime and to ensure a healthy source of demand for Tether’s signature product for years. The same was previously true of Garantex, a Russian crypto exchange much used by criminals and sanctions evaders, which continued to shift large amounts of USDT for two years after it was designated by US authorities. When Garantex was finally shut down in a laborious joint operation by Finnish, German and US authorities, Tether rushed into belated action, freezing $23 million. Similarly, it hurried to assist US authorities only after Trump had sent in special forces to kidnap the Venezuelan president, thus keeping the money flowing till the bitter end.

It shouldn’t be necessary to say it, but this isn’t supposed to be how anti-money laundering works. The whole point of global standards is that companies report their suspicions to the authorities and freeze accounts while those suspicions are investigated, so that assets can be confiscated if shown to be of criminal origin.

With Tether, however, it appears to be the other way round, that is keeping silent for as long as possible until the authorities compel them to act, which may help explain why USDT is proving to be so very popular. After all, who wouldn’t want a version of the dollar without any of the downsides?

Tether insists that it does cooperate with law enforcement agencies, and recently announced a partnership with the United Nations Office for Drugs and Crime. “Supporting victims of human trafficking and helping prevent exploitation requires coordinated action across sectors,” said Paolo Ardoino, CEO of Tether, in a recent joint statement with the UN agency. There is a grim irony to this, considering that USDT remains the currency of choice for the horrific scam farms of Southeast Asia, where huge numbers of trafficked people are abused if they fail to meet their fraud targets. 

“Aside from [the messaging app] Telegram, the cryptocurrency Tether also plays a key role in scam markets — the popular “stablecoin” is the preferred tool for all of the markets’ money-laundering transactions,” noted this analysis from Wired. “Tether and Telegram’s efforts to combat the ballooning scam industry’s use of their tools is comparable to Southeast Asian law enforcement’s minimal, often performative shows of raiding scam compounds, only to allow them to rebuild and resume operation.” Or indeed Tether’s performative rush to freeze Venezuelan crypto holdings.

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The British constitution is a ramshackle thing, bashed together over the centuries, and technically the government in London could just tell these Overseas Territories (OTs) what to do. But it prefers to be democratic about it, so the JMC is what we have instead. It matters because several of these OTs have long been among the world’s most egregious tax/secrecy havens – the Cayman Islands, the British Virgin Islands, and Bermuda were the top three in 2024’s Corporate Tax Haven Index – and it would be nice if they stopped.

Back in 2018, two backbench MPs persuaded parliament to pass a law forcing the OTs to open up their corporate registries, so as to stop them selling shell companies to the world’s financial villains, but progress has since been slow.

“If any Overseas Territory continues to defy the will of the U.K. Parliament, the Government should be prepared to escalate its response. All legal and constitutional options should be on the table to ensure these commitments are delivered in full and without further delay,” said Transparency International last month.

Not all the OTs are being defiant – Saint Helena is doing great, as are the Falkland Islands -- but most of them are not havens for shell companies so they’re not relevant. The one that matters most is the British Virgin Islands, and it is not knuckling down at all. To access the BVI’s register, you need a “legitimate interest”, and the owner of the company you’re looking at will be tipped off and be allowed to object.

“This mechanism could expose journalists or civil society organisations to physical or legal intimidation by those looking to hide their identity. It also provides the opportunity for those being investigated to liquidate or move illicitly obtained assets to avoid detection,” said TI (which also had other objections).

It’s hard to overstate quite how central the BVI’s shell companies have been to globalised financial crime. Impatience with its foot-dragging is completely understandable, but – at the risk of being that person – we do need to recognise that things are more complicated than they at first seem if we want a durable solution.

Almost three-fifths of the BVI’s budget comes directly from the fees paid by companies listed on its corporate registry, and the law firms and other services that work for those companies are a significant local employer. Previous transparency drives have clearly affected the islands’ attractiveness: it had more than 480,000 companies on its registry back in 2014, which was before the British government insisted that its police could access the database. It only has 360,000 now, and monthly incorporations have dropped from 12,000 to 7,000.

Before the BVI became a tax haven, it was extremely poor, and its current prosperity is entirely due to the attractiveness of its shell companies. Its politicians therefore are as reluctant to embrace transparency as a petrostate would be to join the global net zero movement, and no amount of finger wagging is going to change their minds.

Besides, London’s chances of having its wagging finger heeded were really not helped by the fact that the 2018 vote in parliament applied to Britain’s Caribbean tax havens but not to European counterparts like Jersey, Guernsey and the Isle of Man. The MPs’ intentions may not have been racist, but the outcome was, which unsurprisingly rankled people in the BVI.

British politicians can of course tell OTs to find a new way to make a living because enabling kleptocracy is reprehensible; but then BVI politicians can reasonably reply that the only reason they were so poor to begin with was because Britain enslaved their ancestors, failed to compensate freed slaves, and then followed up with 150 years of neglect.

The solution to me is a genuinely just transition in which the U.K. recognises that, because it encouraged its OTs to become tax havens in the past in order to save its own budget, it now has a responsibility to help them find a new way to make a living in the future. This will take time, require thought/compromise, and cost money, but – unlike the current approach – it might actually work.

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I shared a stage with Ed Caesar, author and journalist from The New Yorker- magazine, who has written some great pieces on oligarchs (as well as much else), with Paul Caruana Galizia, who made this excellent podcast on Londongrad, and with Hans Gutbrod, whose piece on Georgia’s own Bidzina Ivanishvili is very much worth reading. And if you like surreal, ethereal documentaries, I highly recommend Salome Jashi’s ‘Taming the Garden’, which tackles oligarchy and its implications through the story of Georgian trees. 

The joy of the festival is in the incidental meetings, of which few were more joyful for me than sitting next to Joseph Stiglitz at dinner and getting to hear his views on inequality, oligarchy, and the age of Trump. Where else would I ever get to do that? 

Moral of the story: you too should find time to come to Tbilisi next year for ZEG. If you do, you can also make a side-trip to the market to stock up on one of the world’s best condiments.

SHOW US THE MONEY

Victoria Cleland, the Bank of England’s Chief Cashier, has announced that worried Brits are hoarding cash. “At a time of uncertainty, at a time of crisis people do move to cash. They want to make sure they have literally got something under the mattress,” she said at a conference in London.

This, she said, helps to explain why the value of all the banknotes in circulation keeps going up – indeed, it hit a new all-time high of 85.872 billion pounds this year – despite the fact that people use less cash all the time. The Bank of England has previously estimated that between 20 and 24 percent of banknotes at any one time are being used in transactions, and the rest are unaccounted for (or, according to Cleland, hoarded). 

So, if we do the sums and we accept Cleland’s logic, we can say that around 1,000 pounds worth of banknotes is being hoarded by every single person in the UK, up from around 920 pounds last year. I have to say that, with all due respect to Cleland, I am very dubious about that figure, not least because someone is getting a double share to make up for the fact that I don’t have even a fraction of that.

The most recent survey I can find, which is from 2022, suggests I am not alone. The average Brit had just 113.82 pounds at home back then, and it’s hard to see why that total would have increased ninefold in the last three years.

This is not a UK-specific situation. The last survey conducted for the Federal Reserve shows that the average American had $373 either in their wallet or at home in 2024, down $70 from the year before. So cash hoarding in the US is going down, but the value of banknotes in circulation keeps going up –  indeed, it hit a new all-time high of $2.835 trillion in the most recent data release, which is around $7,000 for every person in the United States. So either Brits and Americans alike are spectacularly under-reporting how much cash they’re keeping at home, or someone else is using all that cash for something else.

Considering that barely a week goes by without news of major money laundering gangs being busted with bags full of banknotes, I personally would like it if central bank officials put a little bit of thought into asking whether the extremely healthy demand for their products is not in fact coming from organised criminals. And if it is, whether central banks ought to do something about that.

Five years ago, the House of Commons’ Public Accounts Committee scolded the Bank of England for not caring about where its banknotes go. “The Bank needs to get a better handle on the national currency it controls,” its chair, MP Meg Hillier, said. It still does.

TRACKING ‘ENDANGERED’ MILLIONAIRES

Regular readers will know how much I admire the ability of Henley & Partners, the world’s foremost passport vendor, to turn almost any piece of news into an advertisement for buying a new passport and/or visa.

In recent times, the alarm is being sounded by changes to British tax policy which, basically, make it more expensive for very rich people to live and to die in the UK. And Henley responded in the way that it always does – “provisional estimates for 2024 are even more concerning, with a massive net outflow of 9,500 millionaires projected for this year alone,” it reported last year about the “wealth exodus”. All was not lost, however. If only the UK would scrap taxes on capital gains and inheritance and privatise its healthcare system, millionaires might be persuaded to stay.

The ‘research’ was picked up very widely, with few media outlets questioning its methodology, its publisher’s motivations, how representative its purported database of 150,000 people was of the millions of millionaires in the world, or indeed how exactly anyone knows where they’re all going. The Tax Justice Network has now delved into the report, and its findings are worth a read, not least the headline conclusion that there was no exodus. The correct policy response, it argues, would therefore not be tax cuts at all but higher taxes on wealth.

So, what should we think? Are millionaires leaving the sinking ship, or are they clinging on to help rebuild? Should we lower taxes or raise them? The obvious solution is surely to use satellite tags so millionaires can be tracked like wildebeest as they migrate from the watering holes of Chamonix to the rich, grazing pastures of Mayfair via the rutting grounds of St Barts. Only then can we know for sure if they’re being chased into extinction.

CALLING OUT MONACO

The European Union’s regularly updated “list of high-risk jurisdictions presenting strategic deficiencies in their national anti-money laundering and countering the financing of terrorism (AML/CFT) regimes” has done something worthwhile for the first time I can remember by singling out Monaco.

Normally, the list is made up of a random selection of irrelevant places and third-order tax havens. And there’s plenty of the usual on display: why anyone would worry that Côte d'Ivoire, Namibia and Nepal, for example, are supposedly big centres for financial crime, I have no idea. And normally, the list will avoid pointing a finger at any country that is closely allied or aligned with any EU member, which means the U.S. and U.K. never get singled out even though they’re clearly far more problematic than, say, Algeria.

This time, however, the list does single out Monaco. The principality is a major problem, with deep ties to deeply unsavoury people and a fast-developing financial scandal.

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This was at the time not a controversial piece of legislation, not least because American politicians – as part of the Financial Action Task Force – have been pressuring other countries to pass similar laws since the late twentieth century. But it has proved messy to implement. FinCEN, the United States’ financial crimes enforcement network, only finished making the necessary rules to file what it calls “beneficial ownership information” last year – just in time for judges in Alabama and Texas to declare them illegal, and then for the second Trump administration to basically ditch them altogether by saying they don’t apply to 99.9 percent of corporations that are registered in the U.S.

The consultation period over this decision to ditch the filing requirement is now over. (So, if you feel strongly but didn’t get round to writing in, I’m sorry to say you’ve missed your chance.) It is now possible to browse through the several-dozen submissions from concerned citizens and organisations, which is an enlightening experience.

MAKING COMPANIES OPAQUE AGAIN

In the pro-rules camp, you can find comments from law enforcement agencies, anti-corruption organisations, environmental campaigners, credit unions and others who are concerned that the Trump administration’s decision to maintain the previous lax standards is damaging and unwise.

“Without this data,” stated the National District Attorneys’ Association, in a fairly typical submission, “prosecutors are left blind when investigating shell companies used by fentanyl and human traffickers, cybercriminals, and corrupt foreign actors.” These, they added, “are not abstract concerns –these are real threats to American families and communities.”

In the other camp are the small business owners, or associations representing them, who are delighted that the requirements to file their details with FinCEN are now history, and want all beneficial ownership information already filed to be deleted. 

“For many of us, the original BOI requirements felt like an unfair assumption of guilt, treating hard working entrepreneurs as potential criminals rather than the backbone of our economy,” wrote Stephen McKissen, the owner of a video production company in Denver, Colorado. Removing the requirement, he argued, “for US companies and US persons to report BOI lifts a significant weight off our shoulders.” 

Ever since the world’s first piece of anti-money laundering legislation was passed in 1970, businesses have complained about the compliance burdens it imposed upon them. Criminals hide by pretending to be legitimate businesspeople, and the only way they can be exposed is by imposing rules on everyone, thus obliging honest folk to undergo paperwork and inconvenience, which is not popular with the honest folk (or, I suppose, the dishonest ones).

It's crucial to the way the legislation is implemented therefore to minimise that inconvenience, to make sure it does not cause so much irritation that it becomes a political issue. This appears to be where the U.S. efforts ran aground. I had a look at the FinCEN portal through which company ownership is registered and which the small businesses were complaining about. It didn’t look too bad to me, but if the registration process is anything like the comment-reading process, I can see why people are annoyed about having to do it.

Every single comment on the proposed rule changes has the same headline, so it’s impossible to tell which are interesting and which are utterly banal, without opening a new page, then opening a new attachment. When you return to the main page, the list of them rearranges itself unexpectedly, so it’s hard to know which ones you’ve already read. It is in short a very poorly designed piece of software, and you’d think a country that created Google, Apple, Facebook and the rest might have been able to find some better programmers.

Back, though, to America’s notoriously lax shell company legislation. It is the result of it being devolved to state level, so that some states – Delaware and Nevada are stand-out examples – end up competing with each other to attract more incorporation, thus sparking a race to the bottom. 

Perhaps there’s nothing that could have been done to make American business owners appreciate the need to file information about beneficial ownership, but the lesson for bureaucrats is that you have to make compliance easy. Having to file information at both state and federal level was never going to be popular, particularly if the web portal involved was also clunky and annoying. 

However, what’s left of the Corporate Transparency Act will nicely align with the White House’s wider agenda, since it now only applies to foreign companies that have registered to do business in the United States. If criminals currently using offshore-incorporated corporations want to avoid having to report their identity to the authorities, they’ll now need to set up a domestic shell company, which will I suppose be a small win for USA Inc.  

It’s too early to say whether Trump’s tariffs and threats will bring businesses and manufacturing back to America, but he is at least making onshore shell companies great again.

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New Zealand is often touted as the go-to destination for riding out the apocalypse. Vivos has apparently built a 300-place luxury bunker on the South Island, and Rising S Bunkers, an American company that specializes in the building of doomsday shelters, have been busy too. Peter Thiel obtained New Zealand citizenship, though tragically was not able to build his own mega-bunker after he failed to get planning permission. But that has not stopped other billionaires from planning their escapes to the land of the long white cloud.

BILLIONAIRE BOLTHOLES

Politicians in Wellington are only too happy to help. In April, they eased up on the rules around the country’s golden visa programme to attract more of this sweet flight capital, removing a requirement that applicants speak English, and reducing the cost. You now only need to spend 21 days in the country to establish residency, down from three years, which is good news for tech barons keen not to have to pay tax or make friends or stuff like that.

“In the past, the vast majority of applicants were looking for tax havens,” former immigrant minister Stuart Nash told the FT. “Now they’re looking for safe havens.” Nash is a man for the snappy catch phrase. Since leaving government, he has set up Nash Kelly Global, a relocation company, which has the distinctly yuk for an ex-politician but very on-brand tagline: ‘What they don’t tell you about New Zealand. It’s not what you know. It’s who you know.’

But I’m afraid New Zealand is not quite the safe option it’s been cracked up to be. For a start, how safe is New Zealand? Lynas’ deaths table shows that in the event of war, 68 percent of New Zealanders would be dead after two years of nuclear winter. Okay, that’s better than Russia (98 percent), the United States, China, the United Kingdom, Canada, France, Germany (99 percent) or Switzerland and the United Arab Emirates (100 percent), but it’s still not great. And expensive fortifications wouldn’t help: billionaires would not be able to hide forever from gangs of survivors and would be, Lynas writes, “winkled out of their bunkers and hiding places like fat grubs”. 

So, which countries do offer the best survival prospects in the event of Trump or Putin getting an itchy trigger finger? Iceland, Argentina, Paraguay, Uruguay, Costa Rica, Haiti and – painfully no doubt for Kiwis – Australia all have a 0 percent death rate. At present, Iceland does not sell visas, and Australia closed its investor visa programme last year, so it’s no good to you even if you have the cash to flash. But there are plenty of options among the others: Uruguay’s is a bit pricey, but Costa Rica will sell you residency for just $150,000, and Argentina is practically giving it away.

I’m surprised no one’s started marketing these countries to rich people worried about nuclear war: ‘If life sends you nuclear winter, enjoy the fresh powder.’ Mr Nash, you can have that one for free.

ESCAPE TO MARS

Of course, everywhere on Earth is going to be impacted a bit by nuclear war, so why not abandon our planet altogether? Elon Musk’s current plan is for a first unmanned mission to take off for Mars next year, with people due to land on the red planet in 2028, and for a self-sustaining colony to exist within 20 years.

SpaceX has released a handy new video simulation of the journey, though I hope for the Muskonauts’ sake that they won’t have to listen to that dreadful music for the entire eight-month trip. If I was as rich as Musk, I’d have licensed Queen’s ‘Don’t Stop Me Now’ at least. The upside to living on Mars of course is that you wouldn’t be on a planet that could be rendered uninhabitable by a nuclear bomb. The downside though would be that you’d be on a planet that’s already uninhabitable. So, perhaps it would be better to focus on securing the future of Earth instead? 

“Surely the best way to protect the human species in coming decades is to focus on resolving the tensions we face at home, from unbridled nuclear proliferation to strategic global competition and realignment,” wrote noted physicist Lawrence Krauss.

Predictably enough, Musk dismissed Strauss’ argument by tagging @IfindRetards in reply (such a hilarious guy!). But Strauss raises an interesting point. Cold War-era treaties, negotiated to prevent an extraterrestrial arms race, declare that there is no sovereign territory or territorial appropriation in space. Yet, according to Starlink’s terms of service, Mars is “a free planet”, and no Earth-based powers have authority there: “Disputes will be settled through self-governing principles, established in good faith, at the time of Martian settlement.” 

That looks a lot like Musk is claiming the right to govern Mars as its settlers see fit. Of course, it’s not impossible that the new settlers (who will have been chosen by Musk, trained by Musk, brought to Mars by Musk’s rocket, and who will be entirely dependent on Musk for future resupply) might set up a genuinely democratic system of self-government. But it’s also possible that Musk might want to claim Mars for himself. That would be in violation of Earth’s treaties, and therefore bad. It would also – considering the havoc wreaked by Musk in his brief stint in government – be a pretty grim prospect on its own terms. 

Of course, you don’t need to go to Mars to set up your own government. Right here on earth we have Eleutheria, which is now aiming to negotiate a 99-year lease for a bit of Tuvalu to build a “free private city”, having given up on the idea of building a state in a Bir Tawil, an isolated, unclaimed bit of desert between Egypt and Sudan. It is indeed easier to imagine the end of the world than the end of capitalism.

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Poor little rich men

Oliver Bullough

Where kleptocrats go house-hunting

Oliver Bullough

The super-rich and their secret worlds

Isobel Cockerell

The post The oligarch’s guide to sitting out a nuclear winter appeared first on Coda Story.

Well, Donald Trump’s back in the White House, Vladimir Putin is still waging his horrific campaign against the Ukrainian nation, and too many governments are blaming foreigners instead of oligarchs for the collapsing state of public services. Back in 1993, the then Russian prime minister Viktor Chernomyrdin observed, after yet another policy failure, “хотели как лучше получилось как всегда”. Literally translated, it means “we wanted the best, but it turned out like always.” But I’ve never found an English version that fully captures the poetic irony of the Russian original. 

THE NEW CLASS OF MULTI-CENTIBILLIONAIRES

In 2020, I marvelled at the concept of the “centibillionaire,” someone whose wealth was worth more than $100 billion. Back then, the OG centibillionaire – Jeff “Amazon” Bezos -- had just gained his first comrades, ushering in a whole new class of the super-rich.

It’s not even half a decade later, and that already looks hopelessly dated. Pah, everyone and his gran has got $100 billion these days. Bezos, Mark Zuckerberg and Larry Ellison have already seen their net worth vault past $200 billion, while Elon Musk has more than double that again. This, I think, makes Musk the richest man who’s ever lived, since the previous presumed holder of the title – Mansa Musa, the 14th-century emperor of Mali – owned  a mere $400 billion in current terms, much of which he spent on a spectacular pilgrimage to Mecca.

ONE DOLLAR, MANY VOTES

Wealth inequality will be a major issue this year, partly because the creation of a new class of American uber-mega-super-oligarchs is inherently interesting, but also because – as Elon Musk’s unhinged interventions in British and German politics makes clear – this has real consequences for the rest of the world. 

Too much discussion of inequality focuses on incomes, such as this piece in the Financial Times with the misleading headline “Inequality hasn’t risen. Here’s why it feels like it has”. If you look at how much people own, however, it’s another story. Since 1977 -- the year I was born, as it happens -- the richest one percent in America has increased its share of the nation’s stuff from 22.7 percent to 34.9 percent. That is a lot of money.

And money is power, as Francis Bacon didn’t say. If you are wealthy, you get a wildly disproportionate amount of attention, which means you can bend laws, corrupt politics, and reshape the world to suit your vision. It’s often said that modern democracy isn’t one man/one vote, but instead one dollar/one vote. In reality it’s worse than that. A hundred billion dollars buys you a lot more than a hundred billion votes.

This must be great for the centibillionaires but, for those of us who believe in democracy as a vehicle for representing the views of everyone, it’s all the more reason to try to build and/or rebuild defences against the oligarchs.

THE TRANSPARENCY BATTLEGROUND

The dirty secret of the international financial system is that the tools used by Putin and other kleptocrats to hide, move and multiply their stolen wealth were designed not for them, but for Western tax-dodgers. Once shell companies in the British Virgin Islands, Swiss bank accounts, trusts and all the other paraphernalia had been created, financial criminals realised that they liked convenience, value and discretion just as much as tax dodgers did. 

Wealthy Westerners haven’t stopped wanting to dodge taxes and scrutiny just because Putin’s a baddie, and transparency measures have proved distinctly unpopular among the one percent as a result. “Sure, I want to stop corrupt crooks from taking over the world via anonymous shell companies, but why should that mean I can’t use them?”

It explains the bizarre ping-pong that was played with the US Corporate Transparency Act at the end of last year. The CTA, passed in the dying days of Trump’s last term in office, obliges states to collect information on who actually owns companies, thus ending the race to the bottom that has allowed Delaware and Nevada, for instance, to demand less information from applicants for corporations than for library cards. This piece of legislation was a big deal. It has taken four years for FinCEN, the Treasury Department’s financial crime experts, to craft the detailed regulations that would make the law a reality, and finally – at the start of 2025 – it was due to start collecting information about who owns what.

The CTA would not actually require this ownership information to be published, it would just be collected and made available to law enforcement agencies. Even that was too much for the improbably-named Texas Top Cop Shop Inc, which sells “tactical gear” to police officers and is suing to stop the CTA.

• “Though seemingly benign, this federal mandate marks a drastic two-fold departure from history. First, it represents a Federal attempt to monitor companies created under state law — a matter our federalist system has left almost exclusively to the several States. Second, the CTA ends a feature of corporate formation as designed by various States — anonymity. For good reason, Plaintiffs fear this flanking, quasi-Orwellian statute and its implications on our dual system of government,” the complaint states.

(Off topic, but, I think we may soon need an international legal treaty decreeing that anyone who calls something Orwellian should lose their case automatically. This might sound a bit, well, Orwellian but a hard line is needed.) 

In early December, a Texas court responded to Texas Top Cop Shop Inc by granting an injunction, preventing the U.S. government from requiring companies to provide ownership information as the CTA demanded. On December 23, a higher court stayed the injunction, and the law was back on. But on December 26, a different panel of judges (who presumably hadn’t had much of a Christmas) stayed the stay on the injunction, and the law was paused again, so the government has gone all the way to the Supreme Court. And that’s where we are at the moment.

LOOKING AHEAD

Offshore tax havens that also sell anonymous companies have long been able to point to the dire state of corporate transparency in the United States and use it as an excuse not to take action themselves. This means secret shell companies are still available for the Russian regime to hide its ownership of oil tankers behind, thereby circumventing Western sanctions and continuing to fund its war against Ukraine. Around a fifth of oil tankers are now in this “shadow fleet”, which poses a huge environmental threat, as well as a financial one.

Just over two years ago, a similar challenge to transparency measures in the European Union managed to halt them for a while. Fortunately Brussels is pushing out a new package of anti-money laundering measures, which would open up corporate registers to journalists and other bona fide researchers. That’s not to say that the EU has become closed to dodgy money, as this troubling investigation from September revealed, but at least it is trying to expose who owns it.

In the year ahead, I’ll be keeping an eye on government efforts to stop financial crime and the legal challenges against them brought by the Texas Top Cop Shops of this world. I suspect there will be many and perhaps, when it turns out like always, an English-language equivalent will be found for Chernomyrdin’s wistful cynicism.

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The post The age of the multi-centibillionaire appeared first on Coda Story.

This conversation has been lightly edited for length and clarity. 

Isobel: Your book is called “The Hidden Globe.” Can you tell us what that means to you? 

Atossa: It’s a book about loopholes and how people, companies, and even countries use them, especially those with significant money and power. The idea of a loophole, the etymology of it, is actually a slit in a castle wall that you can shoot arrows out of while you're obviously protected by the wall. And I think that that's really important to remember when you're thinking about how these loopholes work today. They allow those employing loopholes to hide behind the wall while taking advantage of the provisions that are afforded to them.

Isobel: These loopholes — this hidden globe — often exist as a physical space though. How does that work? 

Atossa: Visualizing the physicality of these spaces was key in trying to express what it was I was thinking about. For years and years I had this hunch that there was something weird going on between countries. Something we were not talking about that didn’t totally correspond to our idea of a nation state. Power was being wielded in ways that didn’t adhere to our concept of national sovereignty. 

So if you look at the map of the world, you'll see 192 countries. But what isn't shown on the map is all the stuff in between and above and beneath. Maps don’t show that laws don’t necessarily go hand in hand with territory.

In a lot of cases, it does—if you rob a bank, for example, that’s a physical crime that would be prosecuted based on your location. But for more transnational activities where jurisdiction isn’t clear, it’s not necessarily “you’re in country X, so you’re bound by the laws of country X.” You might be in a free zone with its own laws or on a ship with a flag of convenience. There’s this uncoupling of land and law, where countries create alternate rules when it’s convenient.

Isobel: Dubai is an example of this. Can you explain how?

Atossa: Dubai has its own civil and Islamic laws, but they carved out a space for finance companies to operate in a familiar legal environment. They created a court from scratch and simply imported judges and rules. This new court—the Dubai International Financial Center—uses common law. Essentially, they made up new rules and created a new jurisdiction within the existing one, almost like nesting dolls.

Isobel: And sometimes these judges aren’t even physically present…

Atossa: Right, they don’t even always import the judges; some work remotely. I open the book with Swiss mercenaries, and there’s an analogy between those mercenaries and these judges who adjudicate cases over Zoom. They’re trained in one country and then “borrowed” by another. Mark Beer, one of the judges, actually lived in Dubai, but the others hopped around in places like the Caribbean, the UK, and Singapore. Countries want to hire these judges because companies want a familiar legal environment—not necessarily favorable rules, just consistency, so that they don’t risk fines or shutdowns over compliance issues. But it’s strange that companies can make up a court for themselves, while I don’t get to choose where to adjudicate my parking ticket.

Isobel: You grew up in Switzerland and you talk a lot about freeports — these hidden spaces in Geneva, the city of your childhood, where people can hide goods and assets. Did you ever go inside one of these places?

Atossa: I never actually got to visit the Geneva Freeport, even though it’s only a mile from where I grew up. I could get into places like northern Laos and Dubai, but not the Freeport. The idea of works of art hidden away where no one can see them—that was almost more offensive to me than, say, a country compromising its sovereignty. 

Art does what it does; it can be beautiful or disturbing. But then we layer abstraction on top of it—its speculative market value, its value to an individual or as part of the art market. Putting art in crates, where people can’t look at it, for tax reasons or so someone can obscure its value from an ex-spouse feels deeply wrong. 

Historically, freeports were for storage of things like grain, which had a shelf life. You couldn’t let goods sit in a freeport indefinitely, neither here nor there. But with art, due to both the nature of the items and storage technology, they can remain there for an incredibly long time. That’s the loophole—not that there’s storage, which is fine, but that an artwork can be both “in transit” while not moving at all. This is a legal fiction that exemplifies the world I’m writing about.

Isobel: I used to naively think that people bought art because they loved art or found pieces beautiful. I didn’t fully grasp, before reading your book, that actually art collecting often has very little to do with being an art lover.

Atossa: There’s been some recent reporting that art isn’t necessarily the investment it was once thought to be—not all works will appreciate like a Picasso might. But if you’re very wealthy, there are only so many places to put your money: real estate, stocks, and art is just another asset class. When financial affairs are handed over to accountants or family offices, art isn’t exempt; it’s yet another commodity. Owning a piece of art allows you to take out loans against its value or use it as collateral. So, while many rich people may appreciate art as we do, art also serves a function as part of a portfolio.

This is where freeports come in. If art is viewed as an asset, you don’t want it to get damaged, and you may not want people to know it exists. If there are only ten da Vincis, they’re worth more than if there were fifty. So there’s a game of obscuring value, existence, and location. There’s also a tax element: you may not declare it in the same way as other onshore assets if, for example, there’s a sales or use tax associated with it.

Isobel: Tell me more about growing up in Geneva. What was it like? 

Atossa: When I was a teenager, a lot of the kids I grew up with had parents who were diplomats, so they had diplomatic plates on their cars and some degree of immunity. I remember an ex-boyfriend who was speeding and nothing happened because of those plates. Or someone would be smoking pot and the cops would say, “I know who your mother is, I know who your father is,” and then do nothing. 

It’s not like they were doing anything outrageous, but there’s this awareness of different worlds within Geneva.

Isobel: You’ve lived in New York for two decades now but you wrote about how much you missed Geneva during the pandemic — how it was almost calling to you. What’s your relationship with Switzerland like now?

I don’t think Swiss people see me as truly Swiss. It’s that classic expat feeling: in Switzerland, I feel American; in the U.S., I feel Swiss. And with Geneva, you have this city that seems quiet and boring on the surface but, as my book discusses, there’s so much going on behind the scenes. Switzerland does have a lot going for it, and Geneva is now a more progressive city than other Swiss cities. It’s not just a capitalist hellhole. But I still don’t feel entirely at home there. It’s like a haunting, almost spooky feeling. Geneva’s a place that can freak you out if you overthink it. Most people don’t do that, but I have. 

Isobel: You called Geneva the “City of Holes,” which fits this idea of a place that’s quiet but full of hidden dramas.

Atossa: Exactly. It’s strange how everyone carries on as if it’s normal. But when you realize how much of the world’s coffee or finance goes through Geneva, it’s absurd. The city punches so far above its weight class, given its size and demographics.

Once you know about these hidden aspects, you can’t unsee them. You walk past a building with a plaque saying “Offshore Partners LLC,” and it’s hard not to think, “If walls could talk…” There’s so much you want to know, so much that you can’t know. There’s this blankness you encounter—almost like an invisible wall. You want to know, but Geneva has a way of keeping its secrets.

Isobel: I’ve been working on a lot of stories about tech elites, the technopoly and so on. And something I’ve come across again and again is a “bunker mentality.” This idea that the tech bros have that they want to create their own jurisdictions, their own walled-off communities that will protect them from government regulation — but maybe in the future will also protect them from apocalyptic climate chaos, or the ravages of societal breakdown. Can you explain this mentality? 

Atossa: I think these tech leaders have convinced themselves that they’re victims, that everyone hates them and they need to protect themselves at all costs. It’s a classic persecution complex seen throughout history among monarchs and dictators. With power comes paranoia.

Some of these people aren’t stupid; they see that things aren’t working for most people. That can lead to a reasonable fear of being pursued or facing consequences for their actions.

For the tech guys, their identity is tied to being hackers. They think of themselves as clever problem-solvers, whether it’s with code or social issues. They live in a world of nations that don’t align with their ideals, so they look for shortcuts to create a future they envision. The appeal of charter cities is that they feel like a hack. The original concept of charter cities came from [Nobel Prize-winning American economist] Paul Romer, who had some honest intentions. He believed that foreign laws could bring better infrastructure to developing economies.

But for the tech elite, they thought: “We don’t even need to lobby Washington; we can create our own rules.” These charter cities would be business-friendly, with no taxes and streamlined bureaucracy. The catch? It’s not democratic. If a corporation runs a charter city, that corporation effectively becomes the ruler.

This appeals to certain tech types who are disillusioned with democracy, probably because they fear the consequences if democracy were to take real effect.

Isobel: In your book you mentioned the longevity movement — this obsession with living forever that has gripped tech bros — and how it’s connected to the idea of charter cities. What’s going on there?

Atossa: Right, the longevity hackers are frustrated with regulations, like those imposed by the FDA [U.S. Food and Drug Administration], which slow down testing for new treatments. They want faster processes and are seeking places where they can expedite those trials. This is already happening in a Honduran charter city called Prospera. 

Isobel: You discuss outer space as a potential ultimate charter city. Can you elaborate?

Atossa: Absolutely. The ultimate charter city—or tax haven—could be in space. It’s an interesting thought, as it represents a frontier where these tech leaders could establish their ideal conditions without the constraints of current Earth-based systems.

The artwork for this piece was developed during a Rhode Island School of Design course taught by Marisa Mazria Katz, in collaboration with the Center for Artistic Inquiry and Reporting.

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The Age of Broligarchy

Natalia Antelava

Oligarchs: The New Gods & the Case of Bill Gates

Natalia Antelava

Vanuatu pushes citizenship-by-investment as costs of living rise

Oliver Bullough

The post The super-rich and their secret worlds appeared first on Coda Story.

I’d like to think, because of the work I do, that I’d be immune to the gravitational pull of money, but I’d probably be lying. On the rare occasions when I’ve met someone wealthy — and they’ve been multimillionaires, rather than centibillionaires, and thus nowhere close to the lower reaches of the Forbes list — I can’t help noticing that slight tug as my brain says: “Just think of what could be achievable if I could persuade this person to invest in one of my pet projects.”

Which is all to say that, although I’d hope I could resist the lure of the vast mass of Saudi money if I was confronted by it, in reality, I’m not sure I wouldn’t throw myself in and start doing lengths like Scrooge McDuck. That’s certainly what everyone else seems to be doing. So, it’s time to check in once more on Neom, the blandly-named but horrific new city that Saudi Crown Prince Mohammed bin Salman has decided to build in the desert because he can:

• “Con Air” director Simon West is set to film a historic drama, “Antara,” in Neom.
  
• Sindalah has partnered with prestigious JLS Yachts as Neom’s first superyacht destination gears up for opening. “With 86 berths for yachts up to 50 meters and additional serviced offshore buoys for superyachts up to 180 meters, the Sindalah marina will become a new hub for the global yachting calendar,” the press release reads.
  
• A tunnel contract is up for grabs at Neom’s port city, Oxagon: “The tunnel will link the offshore elements of Neom’s floating port city Oxagon in the Red Sea with the Neom Connector – a high speed railway that will connect Oxagon with its linear city, the Line.”
  
• Neom is touted as a potential host for the 2034 World Cup.
  
• The NEOM McLaren Formula E Team has unveiled a motorsport livery designed using generative artificial intelligence.
  
• South Korean robot maker takes part in supermassive Saudi development Neom.
  
• Neom, the $500bn megacity, which organizers claim will be 33 times the size of New York City, is due to include a 105-mile straight-line city.

I could go on, but you get the point. A lot is happening, and it is all bewildering. There is a film production hub, a new harbor for superyachts, a high-speed railway, a new port city, a sports venue and a new city that will run for 100 miles in a straight line. A couple of months ago, I was in the Marshall Islands, which is a series of atolls in the Pacific Ocean, where the capital city — Majuro — is long and thin, making it extremely time-consuming to get anywhere and thus incredibly impractical. The Marshallese had no choice about its shape, however, because the island is the rim of a submerged volcano, rarely more than 656 feet wide at any point, and Majuro could only be built where the land was. The Saudis, however, are choosing to build a city in a way that is guaranteed to ensure the longest possible journey times, for no apparent reason. I could understand someone designing it in Minecraft, but why are real-life engineers willing to participate in such an absurd idea?

And that’s just the start of it. Why are engineers building a skiing venue, which will host the Asian Winter Games, at a time when — thanks to climate change — even the Swiss are struggling for lack of snow? Why have other engineers decided to build a waterfront for a region of Jeddah that has no waterfront? Why are soccer players who used to wear rainbow armbands willing to play in a country where homosexuality is illegal?

• “I think people know what my views and values were before I left and still do now. And I think having someone with those views and values in Saudi Arabia is only a positive thing. I can’t promise anything, but what I can do is sit here and say I have my values and beliefs,” English player Jordan Henderson said.

That seems like a quote that sums up nicely why people, from golfers to mixed martial artists,  choose to work in Saudi Arabia — it’s all about the gravitational pull of colossal amounts of money.

• "A lot of people who said, ‘We will not work in Russia because of Putin,’ are now working in Saudi Arabia,” said Austrian architect Wolf Prix, who helped to design the linear city and is, at least, consistent in his willingness to accept money, since he has also designed an opera house in Russian-occupied Crimea. “I'm not glorifying anyone who acts in an authoritarian way…Once and for all: Architecture is art and art knows no sanctions or borders,” he has said.

It’s a noble-sounding philosophy, but it’s not exactly Paul Simon performing with Ladysmith Black Mambazo, is it?

There are many good reasons to support the urgent creation of renewable energy systems, and not least among them is the need to stop giving money to tyrants who happen to sit on vast fossil fuel reserves. Last year’s profits for Saudi Aramco — $161.1 billion — were the largest ever reported by any company.

If the Saudi royal family was no richer than any other government, then perhaps any artists who “know no sanctions or borders” might choose to side with the three people who have been sentenced to death in Saudi Arabia because they objected to Neom being built, rather than with the government building it. Their names are Shadly Ahmad Mahmoud Abou Taqiqa al-Huwaiti, Ibrahim Salih Ahmad Abou Khalil al-Huwaiti and Atallah Moussa Mohammed al-Huwaiti.

• “Despite being charged with terrorism, they were reportedly arrested for resisting forced evictions in the name of the NEOM project and the construction of a 170km linear city called The Line,” a specially convened group of U.N. experts said. “We urge all companies involved, including foreign investors, to ensure that they are not causing or contributing to, and are not directly linked to serious human rights abuses,” they added.

TAXES

This is potentially exciting: The Financial Accounting Standards Board, which lays out how accountancy rules work in the U.S., has decided that American companies should publicly declare not only how much they pay in taxes but where they pay it, rather than providing that information solely to the tax authorities.

The measures have been under discussion for seven years, with many companies opposed to the idea of revealing any more than they already do, but pressure from investors appears to have finally got a slightly watered down version of the standards over the line.

• “Time and time again investors have made it clear that they need a closer look into the tax practices of the companies in their portfolios,” said Ian Gary, the executive director of FACT. “Now, after years of deliberations and revisions, FASB is finally delivering some of these much-needed reforms for investors and the public.”
  
• “We believe more aggressive management of tax issues could, at times, provide evidence that a company’s management team and board may have a risk tolerance that is greater than we would prefer given our long-term (often 6-8 year) average holding period,” said one investor in comments quoted by the Wall Street Journal.

Country-by-country reporting was first suggested by campaigners two decades ago as a solution to the way multinational companies were able to use accountancy tricks to move profits from high-tax countries and thus dodge the taxes that pay for public services.

• “To truly eliminate profit shifting and stop trillions from being stashed in tax havens, we must make robust, public country by country reporting a requirement for all multinational corporations everywhere,” the Tax Justice Network says.
  
• “At the core of the demand for country-by-country reporting is a contention that globalization is not working for the benefit of everyone. Some nation states and large parts of the world’s population have lost out as the power of the global corporation has risen, including its power to not pay tax in the right place at the right rate and at the right time,” said Richard Murphy, the accountant who first came up with the idea.

Although initially dismissed as an impractical dream, the idea has gradually become reality around the world, and producing a non-public report to be shared with tax authorities is now a requirement of the OECD. In the European Union, rules will apply, from next year, obliging companies to publicly report taxes separately for each member state, as well as for jurisdictions the bloc labels as “non-cooperative.” Other countries are inching toward public reporting of their companies’ taxes as well. Does it work? Well, not yet.

• “Our results collectively suggest that U.S. Multi-national Enterprises continue to engage in tax-motivated income shifting after U.S. CbCR adoption,” one paper finds.

But perhaps, like communism or Brexit, that’s because it hasn’t been tried properly.

SINGAPORE

It’s all going on in Singapore, where a large money laundering ring has been busted and an investigation continues. It’s not exactly a surprise to anyone that dirty money is flowing through Singapore, but I was interested by the details of the passports held by the suspects.

• “Ten foreigners aged between 31 and 44 were arrested, from Cyprus, Cambodia, Dominica, China, Turkey and Vanuatu,” Reuters reports.
  
• “Turkish national Vang Shuiming, 42 …. also has passports from China and Vanuatu,” according to the Straits Times.

• “A 40-year-old Cypriot national … jumped out of the second-floor balcony of his bungalow and was found hiding in a drain,” ABC writes.

What do all of those countries, except China, have in common? They are all places that sell (or have sold) passports under citizenship-by-investment schemes. Such golden passport schemes are controversial, but their proponents argue that countries should be able to award citizenship however they like, that robust due diligence programs ensure criminals are excluded from obtaining identity documents and that such schemes help to correct the unfairness inherent to different passports offering different travel privileges.

And yet, I do not know of a single country that has sold passports, which hasn’t ended up selling them to criminals.

Kristin Surak, an academic from the London School of Economics, has a book coming out this month on this very topic, and if you’re interested, you should read it. Her key conclusion is that, no matter how many such scandals we see, golden passports are not going away.

• “In some Caribbean microstates, citizenship by investment constitutes as much as 30 percent to 50 percent of GDP, making the programs extremely important economic resources for development,” Surak says. “In essence, this is an issue of capitalism, which needs nation-states in order to operate. States are necessary because they back up legal jurisdictions and laws protecting ownership and private property. And states get their power from bounding, claiming, and limiting populations. As long as the intertwined relationship between capitalism and nation-states persists, we will see the demand for golden passports grow.” 

WHAT I’M READING

I’m plowing my way through “The Secret History of the Five Eyes,” which traces the origins of U.K, U.S., Australia, Canada and New Zealand’s intelligence cooperation to the years preceding World War II, then races through various scandals, cock-ups, conspiracies and disasters up to the present day. I’m keen to see how the five Anglophone nations cooperate against money laundering, and this is tangentially relevant, though — to be honest — it feels a bit like this book would need to be about 20 times longer than it is to have a hope of fitting everything in.

The post Why Saudi money is so hard to refuse appeared first on Coda Story.

A friendly source in the citizenship-by-investment business is very rude about Vanuatu’s passport-for-scale scheme because it offers honorary, rather than full, citizenship. (“Honorary citizenship? What’s that? It’s like being honorarily pregnant,” he says.)

However, there do seem to be folks out there taking advantage of what the Pacific archipelago has to offer, according to Robin Kapapa, who runs the country’s citizenship-by-investment program — including the controversial Gupta brothers.

• “Kapapa said that Atul and Rajesh became Vanuatu citizens under the country’s Economic Citizenship Programme in 2019 upon declaring their innocence.”

They continue to declare their innocence. The Gupta brothers are accused of corruption and state capture in South Africa and are currently (successfully) resisting extradition from the United Arab Emirates. But this is the kind of thing that gives a golden passport program a bad name. From February 2023, the European Union suspended its visa waiver program with Vanuatu, citing the risks posed by the nation’s laissez-faire approach to welcoming wealthy people into its warm embrace.

So why would someone want a Vanuatu passport? Here’s a heart-warming (if, possibly, fictional) story from a passport broker’s website about an elderly Indian gentleman who bought one so he could get heart surgery in the U.K. and who got it in just one and a half months for a very reasonable $130,000. In fact, because so many of the broker’s clients were getting citizenship at the same time, the gentleman paid just $5,000 for the final ceremony, two-thirds off the normal price! I confess that I’m puzzled by the notion of getting a group discount on a pledge of allegiance but, no matter, on with the show.

• “In early January, Samar’s application for citizenship was approved. He was able to celebrate this with his children and grandchildren, who had come to visit him in London.”

I’m going to go out on a limb and speculate that most people applying for Vanuatuan citizenship are not kindly Indian grandpas seeking life-saving medical intervention but rather shadier characters. The British government has said that it’s looking at whether countries selling passports should lose their visa waivers. I wouldn’t be too surprised if Vanuatu’s citizens start finding it harder to visit the U.K. before too long. Until recently, the program, which was launched in 2017, was the single biggest source of income for Vanuatu’s government but — without its best visa waivers — the passports are becoming significantly less attractive.

So, how to market them? Well, according to a bizarre press release from Astons that I have just received, you do it by alerting Americans to how much money they could save if they took up Vanuatuan citizenship and moved to Vanuatu. An American’s monthly bills will, apparently, come to about $1,142 a month in the Pacific archipelago — and that’s 24.6% less than the average monthly spending in the United States.

• “This is one reason why so many US high-net-worths are opting to emigrate by securing alternative citizenship via investment. You can get an equally good, if not vastly superior lifestyle, without the massive price tags associated with a luxury lifestyle in the United States,” the press release says, quoting Aston’s “immigration expert” Alena Lesina.

By my calculation, it would take them almost three decades to earn back the cost of the passport, which doesn’t sound all that great. In fact, I am bewildered by the thought processes of whoever thought it was a good idea to market alternative citizenships as a solution to the cost of living crisis, but — to their credit — they did provide data for all the countries that sell passports, allowing you to calculate quite how ridiculous the whole idea is for yourself.

Egypt is the cheapest option, with the average monthly spending of only $127.13. This means that — in the unlikely event that an American with $250,000 to invest in an Egyptian passport was willing to live like an average Egyptian after relocation — it would take them a mere 15 years to earn back the cost of their new passport, via reduced bills. But Dominica is the bargain. A Dominican passport costs just $100,000, which means that, thanks to a cost of living averaging about $206.23 a month, you could earn back the cost of citizenship in not much more than six years. It’s true that Dominica is utterly lovely, but hmmmmmm.

OFFSHORE SHELL PEOPLE AGAIN

Attentive readers of this newsletter (which is to say, I’m sure, all of you) may remember that last October I wrote about some findings from the U.K.’s Centre for Public Data, a think tank that wants public officials to share better statistics about what they’re up to.

Their report revealed, for the first time, that while the U.K. had been gradually cracking down on the misuse of offshore shell companies to obscure property ownership and dodge taxes, enterprising investors had learned to hide their actions behind “offshore shell people” — individuals in tax havens who appear to be putting their names on the deeds so as to hide the real owners’ identities, presumably in some kind of trust.

This meant that, while politicians and the media had been obsessing about oligarchs using shell companies, those same oligarchs had effectively bypassed the government’s restrictions, in very large numbers, without anyone noticing.

Anyway, the Centre’s Anna Powell-Smith has emailed me to say that there were errors in the information provided to her by His Majesty’s Land Registry after the Freedom of Information requests she sent them — which she then shared with everyone else. That is ironic and appropriate, considering the task she has set out to do, but her response has been classy and proactive (and an example of best practice). Thanks Anna.

So, there are in fact 181,701 properties in England and Wales owned by offshore-based individuals, rather than the previously reported 247,016. That’s fewer than we thought but still more than anyone previously realized and far more than there are properties owned by companies.

• “We still believe that HMLR should publish official statistics on this topic - if anything, this error only makes that more pressing,” Powell-Smith’s blog post states.

I agree. Any information that is not secret should be public, and information should be provided in the most accessible way possible, so that companies and people can use it for research, business, education or anything else they choose. A government’s information belongs to the country’s citizens after all, and it’s up to those citizens what they do with it.

Transparency also helps to keep that information accurate. The flaw in this data was discovered by Anna, not by HMLR, and it was her questions that led to officials discovering that they were misrepresenting the situation. This is significant, since Anna’s original report led to questions being raised in the British Parliament, and legislators need the most accurate information if they’re to make the best decisions. Fortunately, the flaws didn’t change the overall picture in her report, but it’s quite scary to think that laws could be passed based on incorrect official data.

Interestingly, Scotland already provides this dataset in an easily accessible form. Out of the 2.5 million properties in the country, 26,953 are owned outside the U.K., and the largest number of owners are American (including a certain Donald Trump, who owns Scottish golf courses), followed by residents of Hong Kong and Australians. Other popular locations include the usual tax havens — Singapore, the UAE, Jersey, the British Virgin Islands — which suggests that investors in Scotland have deployed offshore shell people, too.

One issue in Scotland is that huge estates own much of the countryside, where rich people like to shoot grouse or deer and generally pretend to be noble hunters. So, a single property title can actually cover a significant chunk of the country. And that appears to be the case here, with four of the top five most popular offshore-owned areas located in remote and rural areas along the west coast of Scotland, one of the beautiful (and sparsely-populated) parts of Britain.

Anyway, I’ve gone further down this rabbit hole than probably anyone but me wishes, but I think this is an interesting demonstration of the fluidity and flexibility of the offshore world. When governments attempt to outlaw tricks used to hide ownership or avoid taxes, another trick is invented. It is the reason why politicians need to be as entrepreneurial in their response to oligarchs as those oligarchs are in their response to the laws that politicians pass. And it’s also why accurate information should always be freely available to citizens so they can spot those tricks as Anna did or as Graham Barrow does with shell companies, in real time.

If any of my readers know of countries that publish equivalent information, please send it over! I’d love to take a look and see if the same patterns occur elsewhere.

CASH IS (STILL) KING

Question: How does a modern money launderer hide the provenance of his clients’ profits? Answer: The same way he always did, by using cash.

Authorities in Spain and Italy, both of which have a good reputation when it comes to tackling financial crime, have busted a big money laundering ring and published pictures of wads of cash that they’ve seized. The methodology is exactly the same as in recent busts in the U.K., the U.S. and elsewhere: Drug gangs earn cash, then hand it to money launderers, who pass the cash onto people who want it, paying the gangsters with drugs shipped from overseas. Crucially, the cash circulates only within countries, and value is transferred internationally in the form of stuff — whether phones, drugs, luxury handbags or any other good, legal or illegal. Our defenses are set up to catch electronic money crossing borders, but the international trade system is wide open to abuse.

Inevitably, therefore, criminals are moving illicit wealth around the world via wrongly-priced exports/imports or via smuggling and bypassing the well-monitored financial system in the process. They’d be stupid if they did anything else, and they’re not stupid.

Thank you to a reader in Latvia (you know who you are) for sending over this new and fascinating report from the Hague Centre for Strategic Studies, covering exactly this point. Its analysis shows that criminals are becoming increasingly specialized. Logistics, cyber and money laundering are now separate operations run by gangs that sell their services to each other in exactly the same way as outsourcing firms do in the legitimate economy. The report sees this as a revolution in organized crime, comparable to the development of transnational cartels in the 1970s.

• “Organised crime in today’s interconnected world consists of increasingly fluid, decentralised, technologically savvy and resilient trading networks. These networks leverage a wide range of professional service providers and systemic enablers as part of their operations,” the report states.
  
• “In real terms, this has arguably led to a net amplification of the relative (political) power, economic clout and, correspondingly, overall threat posed by organised crime, most significantly seen in the suffocation and distortion of licit economies and the erosion of formal governance systems and the ‘rules-based international system’ – which is already in rapid retreat at the state level.”

It seems to me that the global money laundering system can best be analyzed by comparing it to the formal financial system. Both are restless, energetic and constantly shrugging off governments’ attempts to control them. I haven’t yet seen a revolving door between government and organized crime analogous to the one between politics and finance, but perhaps that’s something Anna Powell-Smith could look into.

WHAT I’VE BEEN READING

This past week, my younger son and I have been racing each other through Leigh Bardugo’s “Shadow and Bone” trilogy. I like reading the same thing as the kids and am — perhaps unrealistically — quite looking forward to the day when they have an equal interest in financial skulduggery as I do, so we can chat about offshore structures with the kind of intensity with which we currently discuss wizardry. Perhaps I’ll wave “Treasure Islands” in front of them next and see if either is prepared to pick it up.

The post Vanuatu pushes citizenship-by-investment as costs of living rise appeared first on Coda Story.

The thunderous reverberations of last week’s lightning-bolt-from-the-blue European court decision to block public access to company ownership information are getting — if anything — louder. I’ve had a bit of pushback against my interpretation in last week’s newsletter of this momentous decision, so I’m going to lead with it again, because it’s that important.

Those EU countries that had already implemented the bloc’s fifth anti-money-laundering directive, or 5AMLD, and allowed anyone to look at their corporate registries have rapidly complied with the court’s ruling.

• “Following the judgment of the Court of Justice of the European Union of 22 November 2022, access to the RBE website via the internet is temporarily suspended. A solution allowing access to the RBE data by professionals as defined in Article 2 of the amended Law of 12 November 2004 on the fight against money laundering and terrorist financing will be communicated shortly,” says the Luxembourg registry.
• “The contents of the UBO register can currently only be consulted by competent authorities such as the Public Prosecution Service. For example to investigate money laundering or the financing of terrorism,” notes its Dutch equivalent.

According to the Financial Times, the Belgian and Austrian registries are also offline and — it goes without saying — any progress in other countries towards meeting the measures laid out in 5AMLD will now be halted. Why is this a big deal? Why do I not agree with the subscribers who wrote to me last week to point out that, among other things, the viewpoint I expressed in my newsletter was "not correct," "legally dubious" and "not true"?

The entire basis of the court’s ruling is that people’s right to privacy is so important that access to company ownership information should be limited to competent authorities or to any “person or organization capable of demonstrating a legitimate interest.” That in turn is based on the assumption that the competent authorities are sufficiently resourced, motivated or empowered to care. Considering the decades-long history of those authorities being precisely the opposite of that, as demonstrated by decades of financial crimes being committed under the cover of under-investigated shell companies, this is a pretty heroic assumption to make.

The reason we have tax havens is because, for decades, competent authorities have realized they can make money by selling strings-free corporations to anyone rich enough to afford their services, then hiding those clients’ identities. If you’re prepared to trust competent authorities to police corporate registries, then I have a bridge to sell you.

How to solve this? Yes, we need to resource corporate registries’ investigative departments, and we need to pass laws to punish financial criminals. But also, we need to unleash citizen investigators, due diligence companies, journalists, tech startups and others to scrutinize the corporate registry data and to make sure corporate registries don’t slip back into their bad old ways.

If you want to see what such collaboration looks like, check out this superb collaboration between Graham Barrow and journalists from the Sunday Times, revealing how fraudsters are registering British “burner companies” in properties without the residents realizing, using them for scams and then discarding them and leaving the victims to pick up the pieces.

• “The genuine owners of the properties have been left terrified by demands for repayment of debts that the firms have run up, and sometimes letters from victims of scams asking for their money back,” the article states. “It is a crime spree that is making life a misery for anyone who has the misfortune to have a burner company set up in their family home.”

If we were relying on the “competent authorities” to do something about this (or even to have noticed it was happening), we’d be waiting forever, which is why we shouldn’t do so.

If the EU court’s latest ruling forms the basis of a new settlement, it’s perfectly possible that the EU could not just see rampant fraud of this nature, but could also slide towards the U.S. model, whereby different member states compete to offer the most “business-friendly” corporate structures, just like Delaware has done for so long. If one state declares, say, that Transparency International has a “legitimate interest” and can therefore have access to its registry, while another one does not, then that second state would be able to sell corporate structures that undercut the regulations of its neighbor, just like wealthy Californians have enjoyed “the Nevada advantage” for so long.

We are therefore in the perverse situation in which, if Ukraine gains its ambition and joins the European Union, it will have to roll back its pioneering anti-corruption measures because they would be deemed to unjustifiably infringe on the privacy of the country’s oligarchs. And that’s just the start of it.

• “Company ownership transparency is not only a tool for rooting out corruption. It is also fundamental for building confidence in our business environments and critical for establishing public trust and accountability in the rules that govern us – both essential ingredients for the functioning of democracy. Open registers also contribute to combating tax evasion efforts and improving integrity in public procurement. They are important also in tackling natural resource crimes and improving governance in extractive industries. It is precisely on these bases that civil society has successfully campaigned for public registers in Nigeria, Ghana, Zambia, Liberia and Kenya, among others,” said 33 African and European anti-corruption groups in an open letter to the European Commission.

The European Union, along with the United Kingdom when it was a member, was central to global efforts to open up corporate registries and allow citizens to check how companies are being abused to hide fraud, tax evasion and corruption. Without the EU, those efforts are dramatically weakened, and the first signs of that are already visible, including in Britain’s tax havens.

• “This decision will no doubt have implications for the commitments made by British Overseas Territories and Crown Dependencies to establish publicly available registers of beneficial ownership, in respect of which a number of those jurisdictions have, or currently are, undertaking consultations, and which most have committed to put in place by 2023,” noted a statement from Bermuda-based “offshore magic circle” law firm Carey Olsen. “The pendulum finally appears to be swinging back towards privacy and security, and public beneficial ownership registers may not in fact be a foregone conclusion. We will continue to watch this space and share developments.”

This statement from Mishcon de Reya, the law firm that brought the case that resulted in the European Court of Justice's momentous ruling, shows it is also taking aim at FATCA — the crucial piece of U.S. legislation that obliges foreign banks to inform the U.S. Treasury if U.S. citizens have undeclared assets, and are therefore dodging tax. Analysis from KPMG suggests the decision could even undermine EU efforts to stop corporations from shifting profits into low-tax jurisdictions.

• “The case could impact other legislation in the field of transparency, including the recently adopted EU Public Country-by-Country Directive. In particular it would be interesting to see how the CJEU would interpret the compatibility of the Charter with opt-in provisions such as the ‘safeguard clause’ under which Member States can allow in-scope groups to defer the disclosure of commercially sensitive information for up to 5 years, and where no clear definition was provided,” the accountancy firm noted.

So, at the risk of repeating myself, I’m going to remake the point I made last week. If you wish to keep your business affairs private, there is nothing to stop you doing so: just act in your own name, or in a partnership. If you wish to use a corporation, however, then privacy is not (and should not be) available to you.

• “While legal persons are needed to operate complex businesses, collect capital, and limit risks and the liability of individuals, they have not been created as a tool to hide ownership. On the contrary, it is legitimate to expect transparency around ultimate beneficiaries. Individuals, if they want, could trade in their own name and therefore avoid the public reporting obligations that come with legal structures,” as Transparency International put it in an amicus brief to one of the cases around corporate transparency.

I look forward to the day when European courts recognize the self-evident truth of that paragraph, and we all start moving forward again, and I only hope there isn’t too much collateral damage in the meantime. As it stands, however, I am in the unusual position of being glad about Brexit, since it means this dreadful decision is not enforceable in the U.K.

BAOBAB

Bidzina Ivanishvili, Georgia’s richest man, has a bit of a thing about trees, in that he’s been collecting them from all over the country in order to ship them to the Shekvetili Dendrological Park on the Black Sea coast. It is of course possible to grow trees from seeds, but who’s got time for that? Which explains the bizarre selection of images you can find if you google “Ivanishvili” and “trees”: mighty trees on barges, on trucks, all kinds of weirdness, being gathered together. There’s even a documentary about it.

• “He collects century old trees along Georgia’s coastline. He commissions his men to uproot them and bring them to his private garden. Some of these trees are as tall as 15-floor-buildings. And in order to transplant a tree of such dimensions some other trees are chopped down, electric cables are shifted and new roads are paved through mandarin plantations,” says the summary for “Taming the Garden,” which was screened at the Sundance film festival to enthusiastic reviews. “The film moves the concept of uprooting from its metaphorical meaning into an oppressive, tangible and yet surreal reality.”

Now Ivanishvili’s tree collectors are looking further afield, which has caused drama in Kenya, where an attempt to collect some baobabs has fallen foul of local regulations.

• “In a statement on Monday, Kenya’s Minister of Environment and Forestry, Roselinda Soipan Tuya, said she had revoked a license to transport the trees that had already been uprooted, while a license to uproot the trees had also been revoked,” it says here.

It was a decision that attracted attention around the world, of which my favorite example was in New Zealand’s Dominion Post, which referred to the former Georgian prime minister as a “baobab-mad billionaire.” If I were a billionaire, I’d aspire to be described like that.

WHAT I’M READING

So many books, so little time. It’s been the Winter Weekend here in Hay-on-Wye, which is the smaller counterpart to the giant summer book festival held in my hometown, and I enjoyed chatting to Luke Harding about his new book on the Russian assault on Ukraine. I’ve also been reading Lulu Chen’s Influence Empire, the story of Tencent and China’s tech ambition, which is fascinating. This is clearly a period of massive turbulence in China, and I’m finding this book a really useful source of context about how the online space works, what forces shape it and why we should care.

The post Europe slides toward US-style corporate ownership rules, enabling corruption and scams appeared first on Coda Story.

Last week, I talked about tax havens, and how they appear spontaneously; in a similar way to how my dog appears spontaneously whenever I sit down to eat. Thinking about it though, I wish there was a term for these places other than “tax haven,” because they are about so much more than tax. The Tax Justice Network calls them “secrecy jurisdictions,” which is good, but that doesn’t go far enough either.

The most successful havens provide all the services that the rich and powerful want, whether that’s shielding them from scrutiny, selling them fine art, helping them evade justice, and more. And in that context, I am fascinated by a legal challenge being brought by Irish Council for Civil Liberties, which reveals a hidden side to Ireland’s highly successful career as a haven for giant U.S. companies looking for a comfortable base in the European Union. Dublin has previously fought off attempts by the European Commission to make it impose higher tax bills on Apple and other large tech companies, but now it appears to be using rather sneakier techniques to stop them having to obey EU rules.

The EU has sought to provide the world’s strongest regulation on tech companies, with its flagship General Data Protection Regulation designed to give individuals control over their own data. The bloc might not have created many tech giants, but at least it could make sure consumers wouldn’t be harmed by anyone else’s. Or at least that was the theory.

There is a flaw, however, which is that enforcement of the GDPR depends on national level regulators. And that means its fate is in the hands of an Irish government that has built an entire generations-long development model on giving U.S. corporations and the tech oligarchs exactly what they want, and resisting pressure from foreigners to make them hand over a penny.

• “There’s also that conflict of interest factor, that Ireland benefits a lot from having those tech companies there, and I think it puts them under unfair pressure to have to hold those things in tension,” Frances Haugen, who exposed Facebook’s practices to public scrutiny earlier this year, told members of the European parliament. “Because I’m sure Ireland cares about the safety of our children, Ireland cares about our democracies being threatened, but they also have extreme pressures being exerted against them.”

Some of the practices used by tech giants in the European Union are troubling, including this analysis of Google by Norway’s Consumer Council, which suggests it was deceiving consumers into agreeing to being tracked. (Google has said it has updated its approach.) French regulators fined Google 50 million euros, but Ireland has shown much less urgency.

And this is not the only example. Europeans began to notice that complaints brought against tech companies were taking much longer to investigate in Ireland than in other member states, and this is what the IPPR set out to investigate. What it found was worrying, not least because Ireland oversees regulating compliance by Google, Facebook, Apple and Microsoft, all of which have major offices in the country, and that is pretty much everyone that matters.

• “The Irish Data Protection Commission is the bottleneck of GDPR enforcement against Big Tech across the EU. Almost all (98%) major GDPR cases referred to Ireland remain unresolved,” a report by the group concluded. “No other GDPR enforcer in the EU can intervene if the Irish DPC asserts its lead role in cases against big tech firms headquartered in Ireland. As a result, EU GDPR enforcement against Big Tech is paralyzed by Ireland’s failure to deliver draft decisions on cross-border cases.”

The group has written to the European Commission complaining about its failure to demand action from the Irish regulators.

• “The fanfare surrounding the GDPR was such that the EU’s global influence will wane if it is allowed to fail. Consumers will suffer too, because innovative start-ups and venerable news publishers will be unable to compete because of Big Tech’s entrenched internal data free-for-alls. The worst cost will be that continuing data misuse will tyrannize citizens, and debase politics,” the letter says.

It will be fascinating to see the outcome. Haugen is arguing for the EU to have a single central regulator, which she said would help to prevent the kind of issues that she exposed at Facebook (or whatever it’s calling itself these days).

• “I think there’s a real, real need for there to be some kind of centralized authority in Europe,” she said. “If there’s only maybe 200 or 300 people in the industry who have enough experience and insights around how these systems work and what the consequences of them are, if we expect to spread them across 27 agencies, I think it’s going to be very ineffective.”

This of course pre-supposes that EU member states want their regulators to be effective, or that they would be prepared to share their right to tax and regulate companies with their fellows even if they did. The EU also has its hands full with challenges to other aspects of its supposedly shared values, not least from Poland and Hungary. However, it’s hard to see how the EU can continue to hold itself up as an exemplar of tech regulation if it allows a member state to willfully refuse to enforce the regulations the union as a whole has agreed.

In the meantime, however, it’s euros-in for the tech companies.

SUMMIT FOR DEMOCRACY? SHMUMMIT FOR SHMEMOCRACY!

So, Russia and China are totally fine with having not been invited to Joe Biden’s online Summit (Zoomit?) For Democracy next month, as they explained in a joint article last week, because nothing says “we don’t care” better than a 1,000-word rant written in that kind of weird mangled English autocracies used before the world got Google Translate.

• “This trend contradicts the development of the modern world. It is impossible to prevent the shaping of a global polycentric architecture but could strain the objective process,” the two countries’ ambassadors informed readers of The National Interest, a conservative magazine published by a think tank founded by that noted believer in due process, President Richard Nixon.

Both countries make a strong defense of their democratic-ness, though I personally would have found China’s insistence that its “eight non-Communist parties” proved the plurality of its set-up more convincing if it had just said it has nine political parties. Similarly, Russia’s claim that a referendum last year strengthened its “democratic institutions” only makes sense if you weren’t aware that it rubberstamped Vladimir Putin’s desire to be president until 2036.

• “There is no need to worry about democracy in Russia and China. Certain foreign governments better think about themselves and what is going on in their homes. Is it freedom when various rallies in their countries are dispersed with rubber bullets and tear gas? It does not look very much like freedom.”

I apologize for the extended quotes. I am a connoisseur of this kind of nonsense, and this is a vintage example. The article wound up with some forceful points about how modern history shows that you can’t export democracy militarily, which would have been more relevant if that was what the White House was doing, rather than convening the leaders of several dozen friendly countries for a chat. Some 109 countries are invited, plus the European Union, which likes to pretend to be a country at times like this, plus Taiwan.

• “Civil society groups have documented 15 consecutive years of global decline in democracy.  This, of course, presents huge challenges to global stability and prosperity that can only be solved collectively, with likeminded democracies coming together to reverse this decline,” said U.S. Under Secretary of State for Civilian Security, Democracy, and Human Rights Uzra Zeya, last month.

Inevitably, journalists started trying to parse the invitation list, to figure out the criteria by which countries had been considered democratic. It is undeniably a little hard. Poland got invited, but Hungary didn’t. Iraq got invited, but Turkey didn’t. Angola got invited, but Mozambique didn’t. Anyway, the brave folks at the Carnegie Institute have tried to impose some logic on it, which concludes that Iraq probably only got invited to prevent Israel being the only Middle Eastern attendee; while Pakistan’s attendance is more about keeping it on team anti-China than anything else. As for Angola, no one appears entirely sure what’s going on there.

• “Biden’s team intends for the December summit to be merely the first step in what administration officials are billing as a “year of action.” The real make-or-break moments will occur in the months ahead and revolve around a simple question: can the summit galvanize real reform commitments and reverse fifteen years of democratic decline?” the report’s authors asked.

Anders Aslund has written an interest analysis of previous attempts to do what the summit supposedly aims to do, and it’s not very hopeful.

BELARUS FREE THEATRE

If you don’t know the Belarus Free Theatre, you’re in for a treat. They are the inheritors of the legacy of the kind of brave, creative, innovative voices that opposed communism in Eastern Europe during the Cold War. Sadly, because of the difficulties of working in Belarus, their directors are based in London, but they have maintained performances and rehearsals at home as much as possible.

If you are in London on December 10, they are part of the panel discussing the documentary Alone, which will be given a U.K. premiere at the Barbican. Go along.

WHAT I’M READING

I am lucky enough to be from the Welsh town of Hay-on-Wye, which is home to the world’s finest books and ideas festival. We have just had the Winter Weekend, which is like a smaller (and colder) version of the summer gathering, and it was awesome to be in a big tent with lots of people once more. I really enjoyed seeing the historian Dan Jones talking about his new book, which compressed the entire millennium between the fall of Rome and the reformation in a single volume.

So, I’m reading that, and I’ve got quite a long way to go, but it’s very enjoyable so far.

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