Who’s Driving the Getaway Car? Banks and Tax Havens in Corruption in Africa

Imagine a theft has just been committed. A big one – say billions of dollars. Imagine everyone can see what has been stolen, and from whom. It’s clear who has ended up with the goods, but it’s impossible to prove they stole it. Some people say it was an inside job, that one of the guards let the thieves in, but it’s hard to say for sure, because nobody saw anything. 



What do you think happens next?


Well if the theft is from a large western bank, then there will be an investigation, and someone will be rounded up to pay. On the other hand, if it’s the theft of natural resources from some African country, what happens next is that the victims of the crime – the African people – are pilloried for choosing hopelessly corrupt guards, and everybody else is off the hook.


There are countless examples of mining concessions being granted for a song, and of government officials eventually retiring to their numbered bank accounts in secretive tax havens. Consider the granting of mining concessions in Congo , for example – mines worth 60 billion acquired by multinational companies for some 15 million. See Nick Shaxson’s "Poisoned Wells" for more. In all cases, you can see that the people of the country have been dispossessed. You have a fair idea of how it was done. You can’t tell who gave a donation to whom, because banks in tax havens operate in complete secrecy. If you want to bribe officials you first set them up with an account in Jersey, or the Isle of Man, or some other location where banks don’t have to answer questions. Then, when you pay them, nobody can see. It’s the secrecy of banks in tax havens that facilitates the corruption. Without that, nobody could get away with it.


There’s a lot that we’re not sure of here. But we can be sure that the people of Africa are being robbed, and that banks in tax havens are driving the getaway car.


So how should an ethical bank behave? Banks argue that secrecy is necessary for stability, for the professional relationship between the banker and the customer. Yet they operate happily and professionally in non-haven jurisdictions without such secrecy. Banks argue that nothing untoward is going on behind the veil of tax havens, that they know their customers.  John Christensen is a former economic advisor to the Channel Island tax haven of Jersey. In “A Game as Old as Empire,” he describes how banks there have operated a systematic flow of money from Africa, willing players in the robbery of some of the poorest people on earth.


When we talk about socially responsible banking, it should mean more than funding community groups, and supporting microfinance. It should mean refusing to offer secrecy to hide a crime. It should mean openness in transactions and staying out of tax havens, not taking the wheel of the getaway car and robbing Africa blind.


Disclosure: I do not have money in an offshore bank. I do not own a mining concession in Africa. I do have an interest in the welfare of some Africans through chairing Soweto Connection.

Site Disclaimer.