Bankers who torpedoed the economy are set to get away with it after all

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Andrew Green QC, Andy Hornby, bank, banker, Banking Standards, Coalition, Conservative, crisis, David Cameron, Democrat, economic, economy, FCA, financial, Financial Conduct Authority, Financial Services Authority, fred goodwin, fred the shred, FSA, fund, George Osborne, government, HBOS, James Crosby, Johnny Cameron, Lib Dem, Liberal, Lord Stevenson, maxwellisation, Mike Sivier, mikesivier, Mirror, Parliamentary Commission, pension, Peter Cummings, politics, Private Eye, RBS, recession, Robert Maxwell, Royal Bank of Scotland, Tom McKillop, Tories, Tory, Vince Cable, Vox Political

Not even this many: This Economist cartoon paints a false picture of the situation. The magazine has stated: “In Britain, which had to bail out three of its biggest banks, not one senior banker has gone on trial over the failure of a bank.”

Here’s a word that should be in all our dictionaries but probably isn’t: ‘MAXWELLISATION’.

It refers to a procedure in British governance where individuals who are due to be criticised in an official report are sent details in advance and permitted to respond before publication. The process takes its name from the late newspaper owner Robert Maxwell, who fell off a yacht after stealing the Mirror Group’s pension fund.

Maxwellisation is how the irresponsible bankers who caused the economic recession, out of which some of us have just climbed according to the latest figures, are likely to get away Scot (and the word is used most definitely in reference to the land north of England) free.

Current folk wisdom has it that most of us are still unhappy about the banking crisis. We want to see heads roll.

This is a serious headache for the Coalition government, according to Private Eye (issue 1371, p33: ‘Call to inaction’) – because almost nobody involved in that fiasco is likely to suffer the slightest inconvenience.

They really are going to get away with it because the government of the day really is going to let them.

It seems that Andrew Green QC has been hired to find out whether action could and should be taken against those who bankrupted HBOS, beyond corporate lending chief Peter Cummings, who has already been banned for life from the industry and was fined half a million pounds in 2012.

That might seem a lot of money but the HBOS crash, along with that of the Royal Bank of Scotland, cost the taxpayer £60 billion (along with who-knows-how-much in interest payments).

Mr Green has also been asked why HBOS chief executives James Crosby and Andy Hornby were untouched, along with chairman Lord Stevenson.

For the facts, he need look no further than what happened with RBS, the Eye reckons.

In 2010, the Financial Services Authority – discredited forerunner to the FCA – allowed (allowed!) RBS’s top investment banker Johnny Cameron to ban himself from another senior banking job. The following year it pronounced chief executive Fred ‘The Shred’ Goodwin and chairman Sir Tom McKillop effectively blameless. Mr ‘The Shred’ was stripped of his knighthood, however.

This whitewash appears to have been an embarrassment for business secretary Vince Cable, who announced in December 2011 that he wanted to prosecute, disqualify as directors or ban from the financial sector those responsible at RBS and passed his request for disqualification up to the Scottish law officers in early 2012.

He is still awaiting an answer, it seems.

Back to HBOS, where Cable has made “similar disqualification noises”, according to the Eye, after a “highly critical” report from the Parliamentary Commission on Banking Standards last year.

Unfortunately for him, not only is HBOS also based in Scotland, so any proceedings may have to follow a similar path to those involving RBS, but also the FCA’s report into the bank’s failure is currently “unfinished”.

This is because it is being “Maxwellised” – according to the Eye, “whereby lawyers for those in the frame (if allowed) remove anything critical of their clients”.

The report continues; “With RBS, ‘Maxwellisation’ took several months and resulted in the whitewash that made any future action against those found not guilty difficult, if not impossible.

But the public wants heads to roll! Will anybody get what’s coming to them?

According to the Eye, the answer is a qualified “yes”.

Only one boss of HBOS still has links with any organisation regulated by the FCA – James Crosby is a director of the Moneybarn sub-prime car finance group and its parent, the Duncton Group. The FCA took over regulation of the consumer loan industry in April and has until December 2015 to provide full approval to the Moneybarn operation. The Eye states: “By then chairman Crosby would have to pass its ‘fit and proper’ test. He is completely unauthorised. So, a low-hanging scalp.”

Beyond that, expect “a wringing and washing of Coalition political hands, blaming legal loopholes, failures of others and it-was-all-a-long-time-ago”.

It is possible that other directors could be offered the Johnny Cameron deal – agree not to be a director for a few years “and this will all go away quickly and cheaply with no public hearings”.

Cable – along with George Osborne, David Cameron and any other Coalition MP who claimed that they were making laws to ensure the bankers responsible would face prison sentences – will simply walk away from the whole affair and hope that you forget about it.

Are you going to let that happen?

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History is made as Vox Political agrees with David Cameron

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avoid, Bernard Madoff, corporate, David Cameron, dodge, evade, evasion, Glaxo, haven, Jean-Claude Juncker, Luxembourg, Mike Sivier, mikesivier, Pearson, ponzi scheme, Private Eye, tax, Tesco, Vodafone, Vox Political

 

Jean-Claude Juncker, tax avoidance mastermind and now President of the European Commission.

Believe it or not, David Cameron was right to oppose the appointment of Jean-Claude Juncker as President of the European Commission.

If Private Eye is to be believed, Juncker has a record of wreaking fiscal havoc across the continent, thanks to his behaviour embracing corporate tax dodgers as finance minister and prime minister of Luxembourg.

Anti-EU readers will be interested to note that he was chair of the EU’s council of economic and financial affairs, in which role he played a key part in shaping the economic and monetary aspects of the 1992 Maastricht Treaty.

Eye 1368 (June 13-26) states that Luxembourg has turned itself into a tax haven, “but, crucially, one at the heart of Europe entitled to tax-free flows of money in and out of its borders in a way traditional sunny island havens… could only dream of.

“The Grand Duchy became the member of the economic club that pilfered from the club’s funds.”

Let’s look at examples: “An especially fruitful line has been multi-billion-pound corporate tax avoidance at its neighbours’ expense. In the most infamous case, Vodafone still routes more than £50bn worth of loans through Luxembourg for no purpose other than taking advantage of tax laws and administrative rulings carefully tailored by Juncker’s governments to facilitate large-scale tax avoidance… The company is sitting on a £17.4 billion “tax asset”, ie reduction in future tax bills around the world, courtesy of [Mr] Juncker.

“Hundreds of other multinationals, including the UK’s Glaxo, Tesco and Financial Times publisher Pearson, use Luxembourg in similar ways at enormous cost to Europe’s economies.”

And the buck doesn’t stop rolling with tax, either: “Juncker pursued an aggressive regime of financial deregulation, especially in the area of investment fund administration. So it was no surprise that when Bernard Madoff’s ponzi scheme collapsed in 2008, a large chunk of the money had come through loosely-regulated Luxembourg funds set up by Swiss banks.”

The man responsible for the above is now in charge of the European Union. David Cameron was right to oppose his appointment.

Be afraid.

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Will Question Time’s panel do what Parliament can’t – and hold Iain Duncan Smith to account?

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'ad hoc', allowance, Atos, BBC, benefit, biopsychosocial, Coalition, Conservative, corporate manslaughter, Democrat, Department, Disability Living Allowance, DLA, DWP, employment, ESA, fit for work, FOI, Freedom of Information, government, human rights, Iain Duncan Smith, Ian Hislop, IB, IDS, Incapacity Benefit, incapacity benefits: deaths of claimants, Lib Dem, Liberal, Michael Meacher, Mike Sivier, mikesivier, Owen Jones, Parliament, Pensions, people, Personal Independence Payment, Peter Lilley, PIP, politics, Private Eye, Question Time, Reform, returned to unit, RTU, sick, social security, support, theory, Tories, Tory, Universal Credit, unum, vexatious, welfare, work, work capability assessment

Picture the scene if you can: It’s shortly after 11.35pm on Thursday (June 5) and all my inboxes are suddenly overflowing – with the same message: Iain Duncan Smith will be on Question Time next week.

The implication was that there is an opportunity here – to show the public the homicidal – if not genocidal – nature of the changes to the benefit system this man mockingly describes as “welfare reforms”.

We were given the name of only one other panellist who will be appearing in the June 12 show, broadcast from King’s Lynn: Private Eye editor Ian Hislop. He is certainly the kind of man who should relish a chance to take the politician we call RTU (Returned To Unit) down a peg or two – in fact the Eye has run articles on DWP insanity fairly regularly over the past two decades at least.

Personally I’d like to see him joined by Michael Meacher and Owen Jones, at the very least. A rematch between Smith and Jones would be terrific television (but it is unlikely that the coward IDS would ever agree to it).

All such a panel would need to get started is a question about “welfare reform”. Then they could start at the beginning with the involvement of the criminal US insurance corporation Unum, which has been advising the British government since Peter Lilley was Secretary of State for Social Security. There appears to be a moratorium on even the mention of Unum in the British press so, if this is the first you’ve heard of it, now you know why.

Unum’s version of an unproven strand of psychology known as biopsychosocial theory informs the current work capability assessment, used by the coalition government to evaluate whether a claimant of sickness benefits (Incapacity Benefit/Employment Support Allowance or Disability Living Allowance/Personal Independence Payment) should receive any money. The assessment leans heavily on the psycho part of the theory – seeking to find ways of telling claimants their illnesses are all in the mind and they are fit for work. This is how Unum wormed its way out of paying customers when their health insurance policies matured – and it is also how Unum received its criminal conviction in the States.

Here in the UK, the work capability assessment appears to have led to the deaths of 3,500 ESA claimants between January and November 2011 – 73 per week or one every two hours or so. These are the only statistics available to us as the Department for Work and Pensions stopped publicising the figures in response to a public outcry against the deaths.

Members of the public have tried to use the Freedom of Information Act to pry updated figures from the DWP. I know of one man who was told that the 2011 figures were provided in an ‘ad hoc’ release and there was no plan for a follow-up; the figures are not collected and processed routinely. The last part of this was a lie, meaning the DWP had illegally failed to respond to a legitimate FoI request.

Having seen that individual attempts to use the FoI Act to get the information had failed, I put in a request of my own and suggested others do the same, resulting in (I am told) 23 identical requests to the DWP in June last year. Apparently this is vexatious behaviour and when I took the DWP to a tribunal earlier this year, it won.

But the case brought out useful information, such as a DWP employee’s admission that “the Department does hold, and could provide within the cost limit, some of the information requested”.

Now, why would the Department, and Iain Duncan Smith himself, want to withhold these figures – and lie to the public about having them? It seems to me that the death toll must have increased, year on year. That is the only explanation that makes sense.

The DWP, and its Secretary-in-a-State, have had their attention drawn to the deaths many times, if not in interviews then in Parliament. DWP representatives (if not Mr Duncan Smith himself) have taken pains to say they have been improving the system – but still they won’t say how many deaths have taken place since November 2011.

If it can be proved that DWP ministers were aware of the problem (and we know they are) but did not change the situation enough to slow the death rate (as seems to be the case), then it seems clear that there has been an intention to ignore the fact that people have been dying unnecessarily. This runs against Human Rights legislation, and a strong case could be made for the corporate manslaughter of thousands of people.

And that’s just ESA!

When we come to PIP, there’s the issue of the thousands of claimants who have been parked – without assessment – for months at a time, waiting to find out if they’ll receive any money.

Universal Credit currently has no budget, it seems, but the DWP is clearly still wasting millions of pounds on a project that will never work as it is currently conceived.

It would be nice to think that at least one member of Thursday’s panel might read this article and consider standing up for the people, but it’s a long shot.

Possibly a million-to-one chance, in fact.

According to Terry Pratchett, that makes it an absolute certainty!

Here’s hoping…

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