The Economist - USA (2022-03-12)

The Economist March 12th 2022 Culture 71

Chinese clients. Another dissects the mys­
terious purchase of a disused Tube station
in  London  by  a  Ukrainian  tycoon;  he  be­
came  pally  with  British  luminaries  before
moving to Vienna, where he is fighting ex­
tradition to America for alleged corruption
(Britain has filed no charges).
The  most  revealing  chapter  is  on  the
“Scottish  limited  partnership”  (slp).  This
arcane  corporate  form  has  featured  in
some of the most notorious “laundromat”
cases,  involving  industrial­scale  washing
of money from former Soviet countries; in
one,  a  criminal  group  stole  $1bn  from
banks in Moldova, more than an eighth of
the  country’s  gdp.  The  wheeze  owes  its
popularity to a single sentence in a law of
1890, which defines the slpas “a legal per­
son distinct from the partners of whom it
is composed”. It thus provides a buffer be­
tween  miscreant  and  misdeed  that  is  un­
available  in  regular  partnerships—should
anyone be so indelicate as to pry.
One  of  the  few  who  did  pry  was  David
Leask, a journalist with the Herald, a Scot­
tish newspaper. His work led to calls from
Westminster mps to end the ruse; the gov­
ernment vowed action. Business had other
ideas.  Associations  representing  lawyers
and  estate  agents  cautioned  that  a  crack­
down  would  create  bad  publicity  and
impose  extra  burdens  on  legitimate  busi­
nesses.  Moneymen  warned  it  could  harm
the  City’s  competitiveness.  An  umbrella
group  for  private  equity,  which  had  long
used  slps  in  its  (legal)  tax­avoidance
arrangements, counselled against a “need­
less  act  of  national  self  harm”.  All  this
played on ministers’ fears of blunting Brit­
ain’s financial edge and, as often before, it
worked:  it  is  still  possible  to  own  slps
anonymously and avoid filing accounts. 
To  be  fair,  British  politicians  have  had
their  moments  in  the  fight  against  dirty
money.  One  came  when,  as  prime  minis­
ter,  David  Cameron  hosted  a  global  anti­
corruption summit in 2016. He also pushed
through  reforms  including  a  public  regis­
ter  of  company  owners,  the  first  in  a  g 20
economy. But momentum stalled with the
distractions of Brexit and covid­19.

Closing the laundry

Britain’s  perennial  trouble  is  less  shoddy

laws  than  a  lack  of  resources  to  enforce

them vigorously. Mr Cameron’s ownership

register is an example. Companies House,

which runs it, cannot afford to vet the in­

formation  submitted,  let  alone  go  after

those  who  file  fibs.  The  combined  budget

of  national  agencies  that  fight  economic

crime  is  a  paltry  £850m  ($1.12bn),  says  a

watchdog—less than 1% of the amount es­

timated to be laundered through the coun­

try  annually.  Ministers  have  announced

various anti­corruption outfits and initia­

tives  but  failed  to  provide  the  funding  to

give  them  real  clout.  The  country  has  no

credible  equivalent  to  the  punch­packing

units in several American agencies.

On  the  rare  occasions  when  British

prosecutors get the bit between their teeth

in white­collar cases, they are more likely

to involve corporate fraud than cross­bor­

der corruption. When they do pursue big­

time graft, they are typically outgunned by

the blue­chip lawyers hired by their deep­

pocketed  targets.  Witness  “unexplained

wealth orders”, a sensible legal innovation

introduced in Britain in 2018, which allow

assets  to  be  seized  if  their  owners  cannot

prove  they  were  bought  with  legitimate

funds. Of the four cases so far, one has al­

ready  been  overturned.  Prosecutors  are

hamstrung  by  the  high  legal  bar  for  the

confiscation of assets. According to an in­

dex of property rights, they enjoy stronger

protection  in  Britain  than  in  any  other

European country—onereason why oli­

garchsaresofondofEnglishcourts.

Ultimately,MrBulloughseesa mystery

at  the  core  of  the  servile  business  model.

What  does  the  country  get  out  of  it?  True,

some  lawyers,  prconsultants  and  estate

agents  do  very  nicely.  But  the  earnings

from  oligarchs  and  other  foreign  patrons

of  London’s  offshore  machinery  and

swankiest  neighbourhoods  are  tiny  com­

pared with the overall revenues of the City.

Meanwhile,  the  reputational  risks  of  a

model  that  sucks  in  cash  from  benighted

kleptocracies have never been clearer.

Beggaring your neighbours for relative­

ly little gain—call it Cruel Britannia—is not

a  good  look.  Whether  the  efforts  of  cam­

paigners,  combined  with  the  stench

around  Londongrad  since  the  assault  on

Ukraine,  help  put  an  end  to  Butler  Britain

remains  to  be  seen.  Mr  Bullough  argues

compellingly  that  though  more  anti­cor­

ruption  funds  and  tougher  enforcement

arewelcome, whatisreallyneededisa

change of philosophy: for principles to

takeprecedenceovertheprofitsofa few.n

Ottomanhistory

Too close to the son

N

otforthefirstorlasttimeinhistory,

the  master  of  an  authoritarian  power

straddling  Europe  and  Asia  looked  west—

and  was  reassured  to  find  his  adversaries

divided.  Squabbles  among  the  rulers  of

western  Christendom,  theological,  com­

mercial  and  personal,  made  it  easier  for

Sultan Suleiman to achieve his grand aim. 

He  led  his  vast,  multi­ethnic  armies

deep  into  European  territory,  in  1529  (and

again in 1532) stopping only at the gates of

Vienna.  He  had  established  Islam’s  place

on  the  continent.  In  the  five  centuries

since, the personality and achievements of

Suleiman  the  Magnificent  have  never

ceased  to  puzzle  and  fascinate.  Christo­

pher de Bellaigue approaches him from an

unusual and intriguing angle.

Despite  his  dazzling  charisma,  aspects

of  Suleiman’s  life  suggest  a  vulnerable,

even lamentable figure: a ruler who tried to

be  fractionally  more  lenient  than  his

predecessors  but  was  caught  up  in  the

murderous  calculus  of  palace  politics.  He

loved and trusted two individuals, both of

Orthodox  Christian  background.  One  was

his  erstwhile  servant  and  falconer,  Ibra­

him, whom Suleiman met when they were

both  around  20,  and  who  proved  to  be  a

master  of  statecraft.  The  other  was  his

favourite consort and wife, Hurrem.

But  this  was  not  a  happy  trio.  Hurrem

helped  persuade  Suleiman  (perhaps  cor­

rectly) that Ibrahim was flying too high and

could become a rival. One morning in 1536,

in  the  bedroom  next  to  the  sultan’s,  Ibra­

him  was  found  strangled.  (Much  later,  it

seems,  Hurrem  induced  Suleiman  to  kill

his beloved son, born by another woman.)

A portrait of Suleiman the Magnificent reveals the allure and burden of power

Lonely at the top

The Lion House. By Christopher de

Bellaigue. Vintage; 304 pages; £20.

To be published in America by Farrar,

Straus and Giroux in November; $28