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Recoils at The Arms Industry PDF
Recoils at The Arms Industry PDF
and-dagger.”
His bankers at Barclays, the global financial group based in the United
Kingdom, have been happy to have his business, profitably moving hundreds
of millions for Ichikowitz and his companies.
After firing off several warnings to the U.S. Treasury Department‟s Financial
Crimes Enforcement Network, known as FinCEN, Barclays hired an outside
private intelligence firm co-headed by former British spy Christopher Steele to
dig deeper. The resulting brief raised even more red flags, citing sources who
said Ichikowitz had parlayed political donations into military contracts in
South Africa, according to a report Barclays sent to FinCEN.
The documents, part of a larger leak known as the FinCEN Files, offer an
unparalleled view into how controls within large global banks intended to
keep tainted money from moving around the globe collide with their
overriding imperative to churn out bigger and bigger profits. The reports also
point to a regulatory regime unequal to the task of policing banks‟ profit-
driven movement of illicit cash.
“Bankers are wired to make money. They don‟t want to say no,” said Paul
Pelletier, a former senior U.S. Justice Department official and financial crimes
prosecutor. “In order to get banks to behave, there has to be sure and swift
enforcement against bad actors. And that is not what is happening on the
ground.”
The suspicious activity reports shed rare light on apparent conflict within a
global bank about how to treat notable high-profile clients linked to
corruption scandals, but never formally charged with wrongdoing. The
tensions often pit bank compliance officers, who are charged with alerting
authorities about suspicious money flows against private bankers who trophy-
hunt for wealthy clients.
The frictions can even result in divergent approaches to the same client within
different parts of a bank.
Unlike investment bankers, who are charged with selling stock or engineering
game-changing merger deals, private bankers are tasked with trawling for
wealthy clients, luring their riches to the bank.
Ever since the 2008 financial crisis, private bankers — who compete to
manage about $200 trillion in global personal wealth — have become more
important to banks. In 2018, private banking contributed “a sizable 5 to 6
percent of profits,” McKinsey said.
More important, they lavish on clients an array of financial perks and services
— including access to hot initial public offerings of stock and attractive loans
such as Donald Trump extracted from his private bankers at Deutsche Bank.
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“The real growth of the global financial secrecy industry worldwide has been
powered by the premier first-world banks,” said James S. Henry, former chief
economist at McKinsey & Co. and now a global justice fellow at Yale
University.
Henry, drawing on new data from the Organisation for Economic Cooperation
and Development, together with information from the United States,
estimated that as of the end of 2019 roughly $50 trillion of financial wealth
was invested offshore and virtually tax free through more than 100 secrecy
jurisdictions.
Barclays added that it has “complied with all our legal and regulatory
obligations including in relation to U.S. sanctions.”
The gulf is particularly stark in Europe. Before the 2008 financial crisis,
compliance was a backwater profession attracting people with lesser
qualifications, said Andrew Samuels, who worked for Barclays in London from
2015 to 2016 as a program manager for whistleblowing and investigations.
The job Samuels held is common in banks and involves investigators fielding
tips from employees and assessing the risks some clients and transactions can
pose.