Friday, 24 August 2012

SFO rides again: or Nadir even lower; or Polly pecavi

Let corporate malefactors beware. The Serious Fraud Office, which has hitherto seemed incapable of pulling off any successful prosecution, or even any unchallengeable investigation, has just put Asil Nadir behind bars (or perhaps just a door) for crimes committed more than twenty years ago.

Mr Nadir is said to have stolen £29 million from 'his' company, Polly Peck. These days of course he would just have awarded it to himself as a bonus or incentive payment.

Friday, 17 August 2012

The yellow leaf

My way of life
Is fall'n into the sere, the yellow leaf;
And that which should accompany old age,
As honour, love, obedience, troops of friends,
I must not look to have; but in their stead
Curses, not loud but deep, mouth-honour, breath,
Which the poor heart would fain deny, and dare not.

William Shakespeare (1564-1616), Macbeth. Act v, Sc. 3

Reason not the need

O reason not the need! Our basest beggars
Are in the poorest thing superfluous.
Allow not nature more than nature needs,
Man's life is as cheap as beast's. Thou art a lady:
If only to go warm were gorgeous,
Why, nature needs not what thou gorgeous wear'st,
Which scarcely keeps thee warm. But, for true need--
You heavens, give me that patience, patience I need.
You see me here, you gods, a poor old man,
As full of grief as age, wretched in both.
If it be you that stirs these daughters' hearts
Against their father, fool me not so much
To bear it tamely; touch me with noble anger,
And let not women's weapons, water drops,
Stain my man's cheeks. No, you unnatural hags!
I will have such revenges on you both
That all the world shall--I will do such things--
What they are, yet I know not; but they shall be
The terrors of the earth. You think I'll weep.
No, I'll not weep.
I have full cause of weeping, but this heart
Shall break into a hundred thousand flaws,
Or ere I'll weep. O Fool, I shall go mad!

King Lear, Act 2, Scene 4, lines 263-285

Tuesday, 14 August 2012

Proverbs

A friend has drawn my attention to an interview with Angela Merkel quoted in The Economist (I wouldn't like it thought I subscribed to that all-the-answers journal), suggesting that she and I have something in common. He might have been referring to the fact that I 'don't do dinner parties' either (I suspect rather more thoroughly than AM doesn't) but in fact he was referrring to our joint acquaintance with the Book of Proverbs.

Mrs Merkel quotes Proverbs 16.18: “Pride goeth before destruction, and an haughty spirit before a fall.”

The Greeks might prefer 21.9: "It is better to dwell in the corner of the housetop, than with a brawling woman in a wide house."

The banker might take refuge in 12.9: "He that is despised, and hath a servant, is better than he that honoureth himself, and lacketh bread."

The blogger might opt for 8.34: "Blessed is the man that heareth me, watching daily at my gates, waiting at the posts of my doors." I suspect Google must have infiltrated that into the text, but all bloggers will be anxious at Proverbs' constant denunciation of the 'froward' man.

So let us rest with 21.16: "The man that wandereth out of the way of understanding shall remain in the congregation of the dead."

Entitlement

"We have, in some ways, created a welfare gap in this country – between those living long term in the welfare system and those outside it. Those within it grow up with a series of expectations: you can have a home of your own, the state will support you whatever decisions you make, you will always be able to take out no matter what you put in. This has sent out some incredibly damaging signals. That it pays not to work. That you are owed something for nothing. It gave us millions of working-age people sitting at home on benefits even before the recession hit. It created a culture of entitlement. And it has led to huge resentment amongst those who pay into the system, because they feel that what they're having to work hard for, others are getting without having to put in the effort."

David Cameron, Prime Minister and Leader of the Conservative Party

Effort...entitlement...privilege...it depends on your viewpoint. But there's always a policitian to tell you where you get the best view.


Need

'In our world it appears that as soon as a clear need appears, it is met falsely. It becomes a new occasion for exploitation.'

Saul Bellow

Monday, 13 August 2012

A Gold for language

Samuel Johnson said of Dryden, after Augustus's comments on Rome, that he found our language brick and left it marble. Where has 'Locog' left it?

We can perhaps pass by the use of 'ceremony', 'the performance of some solemn act according to strict form',

Ceremony
but who was it who not only coined that horror and misnomer, 'team GB', but obliged everyone from the BBC outwards to use it slavishly?

Whenever I hear 'team GB' now triumphantly cited by a politician, David Cameron or Boris Johnson (no relation, thank God), I cannot avoid thinking it contains a clear implicit meaning that some people are in the team and others are not. And we are not talking now of sporting teams. It's the modern updating of Mrs Thatcher's declension of the world according to whether one is 'one of us'.

The takeover of individual effort and triumph by officialdom and state is pretty blatant - nothing new there.

Fritz Schilgen 1936
And perhaps we should be thankful that it goes no further than a driving ambition to compell all school children to undertake two hours of competitive sports a day, to make them into what Eton made Boris Johnson is today, rather than just provide public sporting facilities for the nation at large.

Our future Prime Minister?

Now that the Olympics are triumphantly over, Dan Hodges, who describes himself as 'a tribal neo-Blairite', supporter of John Reid and David Blunkett, voter for Boris Johnson, has some team reflections. He writes, in his Daily Telegraph blog, with, apparently only half his tongue in his cheek (it doesn't look as if that's where he usually keeps it):

And so they return. Slipping home under cover of darkness, casting furtive glances over their shoulders lest they be spotted by the final nocturnal Olympic revellers, they are back amongst us. The London 2012 naysayers.

But now, as silence falls across the Stratford Stadium, whither the Harpy’s cries? Are they too ashamed? Too scared? Or do they think we have all forgotten?

Never. The last two weeks have brought the nation, indeed the world, together. And now is neither the time nor the place for the extended Olympic family to be roaming around, meeting [sic] out summary justice to the 2012 Quislings.

Or 'Never, never, never', as one of his perhaps other multi-political-cultural heroes might have put it.

Will we be dealing with these naysayers by putting an London Olympics Triumph Denial Act on the statute book? No doubt his erstwhile great leader would support it.

Does he know what a harpy is - 'a rapacious, plundering or grasping person' - sounds moree like the infamous International Olympic Committee to me. And 'whither' their cries, or 'whence' - or even, if he wished, 'wherefor'? Perhaps they have become directed missiles.

He doesn't know the difference between 'meet' and 'mete', but does he know what a Quisling is, or was? Boris seems the better candidate for the description, especially given the slighly embarrassing Nazi associations of the early revived Games. I hasten to add that I don't mean to imply that Boris is a Nazi.

Yet the whole Olympic presentation (the 'ceremonial' bit) seems to have been infused with strange misreferencing of our past. (Maybe that's a required quality for the 'modern' Olympics, Clio and Euterpe both, perhaps the whole band.)


So we could have an opening pageant of our national history that struck many popular chords, including the National Health Service, but, apart from that, gave no kind of acknowledgement of our imperial past that must have been formative in the inheritance of many competitors there.

But for Dan Hodges,

... they are in the minority. And in keeping with the spirit of London 2012, over time, we will come to forgive them. Forgive, yes. But we will never forget.

Well, some forgetting is easier than others.

My Spectre around me night and day
Like a wild beast guards my way;
My Emanation far within
Weeps incessantly for my sin.

‘A fathomless and boundless deep,
There we wander, there we weep;
On the hungry craving wind
My Spectre follows thee behind.

‘He scents thy footsteps in the snow
Wheresoever thou dost go,
Thro’ the wintry hail and rain.
When wilt thou return again?

’Dost thou not in pride and scorn
Fill with tempests all my morn,
And with jealousies and fears
Fill my pleasant nights with tears?

‘Seven of my sweet loves thy knife
Has bereav├Ęd of their life.
Their marble tombs I built with tears,
And with cold and shuddering fears.

‘Seven more loves weep night and day
Round the tombs where my loves lay,
And seven more loves attend each night
Around my couch with torches bright.

‘And seven more loves in my bed
Crown with wine my mournful head,
Pitying and forgiving all
Thy transgressions great and small.

‘When wilt thou return and view
My loves, and them to life renew?
When wilt thou return and live?
When wilt thou pity as I forgive?’

‘O’er my sins thou sit and moan:
Hast thou no sins of thy own?
O’er my sins thou sit and weep,
And lull thy own sins fast asleep.

‘What transgressions I commit
Are for thy transgressions fit.
They thy harlots, thou their slave;
And my bed becomes their grave.

‘Never, never, I return:
Still for victory I burn.
Living, thee alone I’ll have;
And when dead I’ll be thy grave.

‘Thro’ the Heaven and Earth and Hell
Thou shalt never, quell:
I will fly and thou pursue:
Night and morn the flight renew.’

‘Poor, pale, pitiable form
That I follow in a storm;
Iron tears and groans of lead
Bind around my aching head.

‘Till I turn from Female love
And root up the Infernal Grove,
I shall never worthy be
To step into Eternity.

‘And, to end thy cruel mocks,
Annihilate thee on the rocks,
And another form create
To be subservient to my fate.

‘Let us agree to give up love,
And root up the Infernal Grove;
Then shall we return and see
The worlds of happy Eternity.

‘And throughout all Eternity
I forgive you, you forgive me.
As our dear Redeemer said:
“This the Wine, and this the Bread.”’

China: a 'cultural revolution'?

Lifted out of poverty in Guangdong

Thursday, 9 August 2012

Indulgence craved

Early carbon offset trading

In pre-Reformation Europe one could, one was encouraged (pre-cursor of sub-prime mortgages) to buy, in effect, virtue. The Church had appointed itself the arbiter of virtue, and thereby the effective owner of virtue. For a payment, the laity could acquire an indulgence, an official forgiveness of past sins that might otherwise exclude one from heaven.

Well, actually, that is a gross over-simplification. It was all much more complicated:

To facilitate explanation, it may be well to state what an indulgence is not. It is not a permission to commit sin, nor a pardon of future sin; neither could be granted by any power. It is not the forgiveness of the guilt of sin; it supposes that the sin has already been forgiven. It is not an exemption from any law or duty, and much less from the obligation consequent on certain kinds of sin, e.g., restitution; on the contrary, it means a more complete payment of the debt which the sinner owes to God. It does not confer immunity from temptation or remove the possibility of subsequent lapses into sin. Least of all is an indulgence the purchase of a pardon which secures the buyer’s salvation or releases the soul of another from Purgatory. The absurdity of such notions must be obvious to any one who forms a correct idea of what the Catholic Church really teaches on this subject.

Yet some, at the time, thought rather differently, and that the result was to promote vice rather than virtue.

Luther thinking differently
All sorts of trouble followed after that.

In 1567, Pope Pius V cancelled all grants of indulgences involving any fees or other financial transactions, but indulgences continued to be a matter exercising the minds of the Church:

After the Council of Trent, Clement VIII established a commission of Cardinals to deal with indulgences according to the mind of the Council. It continued its work during the pontificate of Paul V and published various bulls and decrees on the matter. But only Clement IX established a true Congregation of Indulgences (and Relics) with a Brief of 6 July 1669. In a motu proprio on 28 January 1904, Pius X joined the Congregation of Indulgences with that of Rites, but with the restructuring of the Roman Curia in 1908 all matters regarding indulgences was assigned to the Holy Office. In a motu proprio on 25 March 1915, Benedict XV transferred the Holy Office's Section for Indulgences to the Apostolic Penitentiary, but maintained the Holy Office's responsibility for matters regarding the doctrine of indulgences.

By the bull Indulgentiarum doctrina of 1 January 1967, Pope Paul VI, responding to suggestions made at the Second Vatican Council, substantially revised the practical application of the traditional doctrine.

Environmental protection is the new virtue and we are in the process of erecting a new Church and complicated ecclesiatical mechanisms to protect it. But, in our society, someone owns everything, including the environment, and so our mechanisms must, once again, have a monetary aspect.

It was long ago decided that someone owned the land. 'Naturally' someone must own the water the air and everything else around us.

As George Monbiot tells us, our last government, at a cost of £100,000, 'commissioned a research company to produce a total annual price for England's ecosystems. After taking the money, the company reported – with a certain understatement – that this exercise was "theoretically challenging to complete, and considered by some not to be a theoretically sound endeavour". Some of the services provided by England's ecosystems, it pointed out, "may in fact be infinite in value".

'This rare flash of common sense did nothing to discourage the current government from seeking first to put a price on nature, then to create a market in its disposal. The UK now has a natural capital committee, an Ecosystem Markets Task Force and an inspiring new lexicon. We don't call it nature any more: now the proper term is "natural capital". Natural processes have become "ecosystem services", as they exist only to serve us. Hills, forests and river catchments are now "green infrastructure", while biodiversity and habitats are "asset classes" within an "ecosystem market". All of them will be assigned a price, all of them will become exchangeable.

'But it doesn't end there. Once a resource has been commodified, speculators and traders step in. The Ecosystem Markets Task Force now talks of "harnessing City financial expertise to assess the ways that these blended revenue streams and securitisations enhance the ROI [return on investment] of an environmental bond".'

Language school

The Royal Jordanian Air Academy or RJAA was established in 1966 with its main campus in Amman, the capital city of Jordan with a satellite campus in Aqaba. The Academy is considered to be one of the leading aviation training centres in the Middle East and it trains both private and commercial pilots as well as maintenance technicians. RJAA is privately owned ...

RJAA's major shareholder and Chairman, Mohammed Abu Ghazaleh, originally from Palestine, now lives in San Francisco. Arabian Business magazine considers him to be one of the world's most influential Arabs. His net worth in 2011 was $2.4 billion and, rather surprisingly, he is the Chairman and CEO of Fresh Del Monte Produce Inc., purveyors of bananas and pineapples among many other things.

Now you ask, what does this have to do with anything?

Well, it seems that American taxpayers will be forking over hundreds of millions of dollars to one of Mr. Abu Ghazaleh's enterprises, the aforementioned Royal Jordanian Air Academy. According to a release posted here on the U.S. Department of Defense website, the U.S. Air Force has awarded RJAA a firm, fixed-price contract to provide Type 1 Special English language and technical aviation training for Iraqi Air Force technical personnel between now and August 8, 2013. The total amount of the contract - $370,779,589 for the year, which works out to $1.02 million per day. Note that this contract is not for pilot training, just for English language and technical learning.

Acknowledgements to Viable Opposition

And, for more on bananas, see:

http://richlist.arabianbusiness.com/profile/1338/

http://badbananas.wordpress.com/tag/mohammad-abu-ghazaleh/

http://www.phillyrecord.com/2011/01/fresh-del-monte-a-tough-competitor-in-a-cut-throat-trade/

http://www.informationclearinghouse.info/article3336.htm

http://www.sptimes.com/2003/01/03/news_pf/Columns/Another_suspect_deal_.shtml

http://money.cnn.com/magazines/fortune/fortune_archive/2003/04/28/341728/index.htm

http://www.secform4.com/insider-trading/1418036.htm

A few bad apples

Some banks appeared unwilling to turn away, or exit, very profitable business relationships when there appeared to be an unacceptable risk of handling the proceeds of crime. Around a third of banks, including the private banking arms of some major banking groups, appeared willing to accept very high levels of money-laundering risk if the immediate reputational and regulatory risk was acceptable.


Over half the banks we visited failed to apply meaningful enhanced due diligence (EDD) measures in higher risk situations and therefore failed to identify or record adverse information about the customer or the customer’s beneficial owner. Around a third of them dismissed serious allegations about their customers without adequate review.

More than a third of banks visited failed to put in place effective measures to identify customers as PEPs. [Politically Exposed Persons] Some banks exclusively relied on commercial PEPs databases, even when there were doubts about their effectiveness or coverage. Some small banks unrealistically claimed their relationship managers (RMs) or overseas offices knew all PEPs in the countries they dealt with. And, in some cases, banks failed to identify customers as PEPs even when it was obvious from the information they held that individuals were holding or had held senior public positions.

Three quarters of the banks in our sample failed to take adequate measures to establish the legitimacy of the source of wealth and source of funds to be used in the business relationship. This was of concern in particular where the bank was aware of significant adverse information about the customer’s or beneficial owner’s integrity.

Some banks’ AML [Anti Money Laundering] risk-assessment frameworks were not robust. For example, we found evidence of risk matrices allocating inappropriate low-risk scores to high-risk jurisdictions where the bank maintained significant business relationships. This could have led to them not having to apply EDD and monitoring measures.

Some banks had inadequate safeguards in place to mitigate RMs’ conflicts of interest. At more than a quarter of banks visited, RMs appeared to be too close to the customer to take an objective view of the business relationship and many were primarily rewarded on the basis of profit and new business, regardless of their AML performance.

At a third of banks visited, the management of customer due diligence records was inadequate and some banks were unable to give us an overview of their high-risk or PEP relationships easily. This seriously impeded these banks’ ability to assess money laundering risk on a continuing basis.   Nearly half the banks in our sample failed to review high-risk or PEP relationships regularly. Relevant review forms often contained recycled information year after year, indicating that these banks may not have been taking their obligation to conduct enhanced monitoring of PEP relationships seriously enough.

At a few banks, the general AML culture was a concern, with senior management and/or compliance challenging us about the whole point of the AML regime or the need to identify PEPs.   ... continues

Tuesday, 7 August 2012

What standards? What charter?

"Simply the best, better than all the rest," was one analyst's verdict on Standard Chartered last week, reflecting the sense that the bank is different from any other listed in London.

Apparently it is all the fault of a 'rogue regulator'. Maybe so, but from Wikipedia:

The Shanghai branch of Chartered bank began operation in August 1858. Initially, the bank's business dealt specifically with large volume discounting and re-discounting of opium and cotton bills. Although there was a gradual rise in opium cultivation in China, the imports of opium still increased from 50,087 picul in 1863 to 82,61 picul by 1888. Transactions in the opium trade generated substantial profits for Chartered bank.

 In 1992, scandal broke when banking regulators charged several employees of Standard Chartered in Mumbai with illegally diverting depositors’ funds to speculate in the stock market. Fines by Indian regulators and provisions for losses cost the bank almost 350 million pounds, a third of its capital.

Scandal erupted again in 1994, when the Sunday Times of London wrote that an executive in the bank’s metals-trading arm had bribed officials in Malaysia and the Philippines in order to win business. The bank, in a statement on 18 July 1994, said there were “discrepancies in expense claims” that “included gifts to individuals in certain countries to facilitate business, a practice contrary to bank rules.'

In 1997, Standard Chartered sold its metals trading arm to Toronto-based Scotiabank for US$26 million. In 1994, the Hong Kong Securities and Futures Commission found that Standard Chartered’s Asian investment bank had illegally helped to artificially support the price of new shares they had underwritten for six companies from July 1991 to March 1993. The bank admitted the offense, apologized and reorganized its brokerage units. The commission banned the bank from underwriting IPOs in Hong Kong for nine months. Standard Chartered’s Asian investment banking operations never recovered, and in 2000 the bank closed them down.

The bank fully recovered in late '90s, during this time, the bank sold off holdings in continental Europe and the Americas, sold the headquarters building (lease-back) and branch properties in Hong Kong. In 2000, Standard Chartered acquired Grindlays Bank & Chase Manhattan Bank Hong Kong retail banking business. The ethics issues and financial losses triggered turmoil in Standard Chartered’s London executive suite. The bank went through three CEOs in three years: Malcolm Williamson was replaced in 1998 by Rana Talwar, who was in turn unseated by Mervyn Davies in 2001. By the time Davies took over, his predecessors had systematically sold off the bank’s holdings in continental Europe and the Americas.

Monday, 6 August 2012

Evidence base

"I've got no scientific evidence for this at all, but I think it really does make a difference."

"There is no accurate assessment of the figures on this..."

Tony Blair, justifying the £9million (or whatever) cost of the London Olympics.

Perhaps he's right, but how starkly it contrasts with the evidence-based, payment-by-results rhetoric and approach of most modern government in this country.

But of course there is no reason to look for consistency in the way our world is organised. We - 'ordinary' people and policians alike - focus on and celebrate the individual triumphs of athletes in these games whose organisation and presentation is dominated by big government, big organisation and big commerce. At least the opening ceremony wasn't outsourced to G4S by competitive tender or produced by a government task force.

Public accountability - according to Maude

Explaining the impact of the change, Maude said: "People feel accountable to those people whose views make a difference to their future careers, and if the views of ministers are not being sought – and in my own department they were not – then there is not a very clear sense of where the accountability of civil servants seems to lie."


Maude said coalition ministers were enraged by the way some civil servants mounted passive resistance by declining to challenge government policy but refusing to implement it. He has described the practice as too widespread and a "sin against the holy ghost".