Very interesting insights into the British regulatory and financial system that enables billions of sovereign wealth and oligarchs to own much of London. From the history of how the system started, countries competing for capital investments by reducing taxes, to where we are today, which are highly convoluted schemes of hidden entities created purely to avoid or reduce taxes, and those capital, including dark money, owns much of properties in London, NYC, and some major cities in the world. Interesting book for finance readers.

Boy, did I learn a lot reading Butler to the World. I had a general knowledge of Gibraltar, Jersey, Guernsey, The Caymans and The British Virgin Islands, the sort of awareness one gets from regular newspaper reading - limited, indeed. Reading this well researched and very readable book was mind blowing. As the world struggles these days with the pressures of Covid and war, the US on the brink and the top 1% rakes in the money hand over fist leaving the rest of us to fight for crumbs, there is a group of oligarchs, et al who do whatever they darned well please. Britain has found its place as the Jeeves who makes all of the nasty, ugly business possible. No questions asked. If questions are asked they are dealt with.
As current as Putin and his invasion of Ukraine, much is explained about the current state of affairs and how it has come to pass. On one hand I was fascinated while at the same time I was horrified. I'm glad I read Butler to the world but it was depressing, knowing that there are people who will go to any lengths to amass money and power. That Britain will continue to make it happen regardless of the harm it brings to the rest of the struggling people of this world.
My thanks to the publisher St. Martin's and to NetGalley for giving me an advance copy in exchange for my honest review.

If you're not up on your oligarchs, kleptocrats and millionaire scammers, Oliver Bullough's Butler to the World will come as a major shock. In it, he shows how both British government and finance have altered or ignored laws, welcomed criminals and exported crime to other countries, all in the name of income. The City, London’s financial hub, “must be protected at all costs”, no matter how many millions of lives are shattered elsewhere around the world. The UK will accommodate all who flash a wad, no matter where it came from.

This is a truly remarkable book. Bullough builds relentlessly, starting with relatively ordinary crime and insufferable selfishness. But every chapter steps it up a notch or ten, as the UK and its former colonies engage in a race to the bottom of morality. It is well researched, well documented, engagingly written, and endlessly diverting. But the story is revolting.

His unifying idea is the classic English butler, Jeeves, who can fix anything for his master, even if he has to bribe or beat up a cop to do it. The result is always calm seas, and life goes on for Jeeves’ master, Bertie Wooster, spoiled, incompetent upper class brat. This is Bullough's portrait of the UK. The country continually finds ways to accept and launder dirty money, offer thieves not just citizenship, but honors, and racks up gigantic financial gains while aiding them to become established, if not sainted. And because everything financial is hidden, the government benefits not at all. Everything goes to the boys in The City. This is not good government.

Bullough has a very economic style. Here's how summarizes what I just explained: "It operates as a gigantic loophole, undercutting other countries’ rules, massaging down tax rates, neutering regulations, laundering foreign criminals’ money. It’s not just that Britain isn’t investigating the crooks; it’s helping them, too."

It starts hundreds of years ago, when Scotland allowed the formation of limited partnerships, feudal firms that never had to reveal ownership, activities or pay taxes. Today, numerous firms continue to pop up in Scotland, using the same short list of addresses - private homes where the occupants set up these companies all day long. Panama is just a spruced-up copy of what the UK invented.

The corruption ramps up throughout British history. Whole chapters of the book are devoted the Suez Canal zone, the BVI, Gibraltar and Scotland. Gibraltar doesn’t get much press any more, but what happened there is textbook government caving to finance. Gambling was determined to be the savior of the tiny and artificial economy of this peninsula on a rock, no bigger than a large park. Casinos and lotteries were the names of the games, and as more and more laws were relaxed or nullified, more gambling entities moved there to escape regulation and taxation. In the race to the bottom, Gibraltar kept slashing its tax rates for gambling revenues. They ultimately dropped to 1%, undercutting even the mother country. Now with the internet, online gambling, horrifically fixed so the customer can never win, and lotteries from all over, base themselves in Gibraltar. The money of the world flows directly to them, unimpeded by bureaucracy, regulation or financial restrictions. The amount of money draining from the poor of England alone is stunning. Thousands of pounds per person per year. And the British government? Just watching. Ironically, the government has had to complain; it loses not only the cash everyone wastes on lotteries, but the companies have moved away so they can’t be taxed, either. This is the model of what Britain has given to the world.

The lessons were learned in the British Virgin Islands, where it dawned on some lawyers that they could make a decent living setting up shell companies for the rich overseas. It festooned to its logical conclusion in the Cayman Islands, which has been built entirely on shell companies to hide the fortunes of the corrupt elected, dictators, rich executives and of course every kind of criminal imaginable. An American financial lawyer found the BVI law firm (before the internet, when research was nearly impossible and telephoning was absurdly expensive) and told them what he wanted to set up. So they did. He even wrote the laws for island governments to adopt.

The money their customers stole has simply gone missing from the country of origin, denying everyone there all kinds of services. Bullough uses the example of dirt poor Moldova, where a billion dollars disappeared into shell companies in Scotland. For the less than a million poor Moldovans, a billion dollars is gigantic, and will not be made up any time soon. The result is decaying infrastructure and little or no services. Moldova, like so many other countries, was not poor; it was ripped off. Worldwide, estimates for money stashed in shell companies is between 12 and 20 trillion dollars.

Another example comes from today’s news, where Russian troops invading Ukraine find themselves poorly armed and without food, so that they have to scavenge. The reason? The huge buildup in the military budget went into shell companies for top generals and politicians, who all seem to have gigantic yachts in Cypress (another British colony that learned well), while draftees sent to Ukraine have to deal with food rations that expired (stale-dated) in 2015. Vladimir Putin’s skimming is estimated to be as high as a hundred billion US dollars. One of his accounts was discovered in the Panama Papers, where a modest cellist from St. Petersburg was the named owner of a shell company with a billion US dollars in it. Turns out he was a neighbor and friend of Putin’s when they were both just starting out. All this money is simply not going to what it was collected for. This is why Bullough can say countries like the Caymans, the BVI and most of all the UK are busy exporting poverty and suffering, by importing and investing the ill-gotten gains of criminals.

There is a chapter on the considerable lengths the British government has gone to ensure nothing changes. There have been cases where members of Parliament have (naively) thought they could introduce bills to regulate this known and obvious criminal activity. The latest is an MP by the name of Roger Mullin:

“Unbeknownst to Mullin and indeed to pretty much everyone else, the Treasury and the private equity industry were actually seeking to loosen those same regulations, so limited partnerships would have to report even less information to the authorities than they already did. They had no interest in whether Eastern European money launderers could or could not do business, but they did want investments to be even more profitable than they already were. Remember how the Bank of England doomed controls on international money flows in the 1950s? The Treasury was doing exactly the same thing now.

“And the Treasury had a great advantage in this battle, thanks to a little-known provision in parliamentary rules called a legislative reform order. To get tighter restrictions on SLPs, Mullin needed to pass an actual law,” while loosening the rules only required a simple order to do so.

The great butlering innovation of British finance is called the Eurodollar. Created in the 1950s, 50 years before the euro currency came into being, it is simply a way for bankers to avoid acknowledging the color of cash. If dollars are tracked, they can call it a Eurodollar deal and the authorities have no say. It works the other way just as well. Bullough compares it to light: it can be a wave or a particle, depending on whatever works at the moment. Eurodollar trading allows vast pools of money to transit all over the world, instantly, and the taxman can’t touch them, no matter where they land – or they just change labels and move on again. Here too, there is no direct benefit to the government of the UK, but it keeps The City humming, and those are the people in power.

Bullough has a delightful chapter on the people running the Bank of England and the financial companies. Their old boy network is a strictly closed club, where those inside call each other by first names, and they signify an outsider (from a different school, or God forbid, a university, or worse - Jewish) by addressing them by last name only, even in official communications. They operate on gut feelings and the need to keep the money pumping. Who they hurt, including the whole country, is of no concern. They are money men, and their lives are to keep it coming in. Law is a distraction to be minimized or eliminated.

As early as 1907, records show debates in London using the excuse that Britain would simply lose money if other jurisdictions taxed less than London did, and that there was no point in tightening laws until other countries did so as well. This twin excuse has succeeded everywhere, all over the world, every time the issue comes up. The result is this totally amoral race - to the bottom. And the UK is pretty much there now.

Today, regulators that have had their budgets continually slashed are swamped with reports from banks about suspicious accounts and transactions, but they don’t even have the staff to read them all. So the vast majority of the filings don’t ever get read, just filed, and only a sliver (.04%) have penalties imposed. Because of this, 98.5% of cases never even get reported. In other words, the UK offers all but zero chance being caught.

There are 26 responsible financial agencies in the UK, all overstretched, underfunded, and incapable of carrying out their mandates. It has come to the point where if you are rich enough, you can bring a criminal case yourself in England, because the police can’t afford it. Con artists have gone to prison and had all their assets seized from these private prosecutions. This is just as wrong.

In one galling story, an accountant from Azerbaijan was ripped off by a Russian con artist in England. It was a phony bank branch in a gleaming office tower in Hong Kong, as elaborate as anything in the film The Sting. He got some degree of justice, but the courts were astonishingly more worried about reputational damage to the profession than meting out justice. As Bullough tells it:

“The SRA (Solicitors Regulation Authority) fined him (the con man) £45,000, which is better than nothing, but the ruling revealed that its primary concern was whether Sharif (the victim) had damaged the reputation of his profession and made no mention at all of the damage that money laundering does to the victims of corruption in Azerbaijan. It took comfort from the fact that ‘no client had suffered loss as a result’ of Sharif’s conduct, which is particularly perverse because the whole point of filing a suspicious activity report is to allow the authorities to confiscate criminal wealth.” This is a stunning condemnation all by itself.

In sum, “Britain has essentially outsourced responsibility for stopping money laundering to the money launderers, and is failing to stop dirty money as a result. Much of the time the same bodies tasked with regulating professionals’ financial transactions are also charged with lobbying government on their behalf, while also relying on those same professionals’ membership fees to keep solvent.” It is business as usual in the UK.

This is Bullough's beat. He writes about it in numerous publications. He is even a guide on the London Kleptocracy Tours, where instead of Hollywood film stars' homes, the tours drift past the mansions and flats of the world's biggest thieves. These are civil servants like Russian Foreign Secretary Sergey Lavrov, who can somehow afford to give his 21 year old daughter (he is a bigamist with at least two families) her first apartment, a four million pound flat in the fashionable west end. Meanwhile the Chancellor of the Exchequer has moved out of his Downing Street flat after it was discovered his wife considers herself non-domiciled in Britain so that she pays no taxes on the IT fortune she inherited in her native India. Instead, they have moved back to their luxury accommodations all the way over in Kensington, a couple of miles west. Her husband, Rishi Sunak, has called for an investigation, not of his wife’s dodgy finances, but how the world found out about them. The list is endless.

I realized when I reviewed Bullough’s previous book, Moneyland, that this was the person everyone needs to explain financial shenanigans. Here, with Butler to the World, he proves it firmly again. The book is not just shocking, but often laughably so. It is as entertaining as it is informative.

The UK may be a butler to criminals, but it is a farcical one. Jeeves would probably take offense.

David Wineberg

An interesting continuation of the best-selling “Moneyland”. This time the author takes a deeper dive into the British way of helping rich people to hide their fortunes, no questions asked. The story is appalling and leaves you with a healthy dose of skepticism about the latest declarations of the British government cutting ties with Russian oligarchs.

However, the level of detail can leave a reader a little bit exhausted. In some chapters, even the author’s lively journalistic style couldn’t make engaging parts devoted to financial mechanisms deployed by various enterprising people and institutions, I appreciate the research but I think that the book would profit from some editorial cuts. But it is certainly essential reading for anyone dealing with global finances and geopolitics.

Thanks to the publisher, St. Martin's Press, and NetGalley for an advanced copy of this book.

A look into how Britain has a hidden, darker side. I thought this book would be much more historical but it mostly focuses on more modern (post wwIi) events.