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It is arguably one of the biggest heists in modern history. Since the end of the cold war the world has witnessed the emergence of a new generation of autocrats who as well as establishing a stranglehold on political power at home have busily filled their bank accounts abroad with assets plundered from their countries.
At first glance observers might ask whether these are all merely symptoms of a world pitched into chaos and delusion as an old international order crumbles. Yet, is there perhaps an underlying system to this phenomenon of extreme wealth accumulated at great speed in often appalling ways? That is the question at the heart of Kleptopia, Tom Burgis’ compelling investigation into the proliferation of dirty money.
Each case is different, but together form part of a similar tale of political and moral corruption, violence, weak regulation and complicity within the international financial system where money is quickly anonymised. The result, argues Burgis — a Financial Times journalist who has written the book in a freelance capacity — is the further emboldening of dictators and the poisoning of democracies. Or as the book’s subtitle puts it, the conquering of the world by dirty money and establishment of a place he calls Kleptopia.
Burgis builds his well-documented case around four people — a regulator, an ex-Soviet billionaire, a Canadian lawyer with a strange client, and a New York crook — as parts of a complex system of shadowy financial transactions and secrecy that permeates out across the economic and political worlds. On one level it is a retelling of David versus Goliath in which the role of the underdog is assumed by Nigel Wilkins, a compliance officer working at a Swiss bank, BSI. What Wilkins witnessed sparked suspicions that the bank was handling dirty money. He started gathering evidence of a system of complex relationships — from Asian oligarchs to the heart of global finance, African dictators to Manhattan realtors — that he later handed over to the regulators, who did nothing.
The trail is picked up again after Wilkins meets with Burgis who sets off in pursuit of a story of global money-laundering and the privatisation of political power. It is a gripping story that reaches back to the 1980s with the ascendance of pro-market thinking and the collapse of the Soviet Union which unleashed huge sums of money into the financial system.
Over time this created dependencies. Dirty money is not simply a case of a bunch of political and business villains. It is about systemic addiction to financial stimulants — in this case untraceable money. “Tax evasion deprived governments of revenue. Money laundering was the other side of the same coin,” writes Burgis. “Like tax dodging, it was a subversion of money’s role as a token of reciprocal altruism that allowed large and diverse societies to function. But while tax evasion sucked money out, money laundering pumped money in.” Or as he adds, dirty money “was just another source of investment into otherwise declining economies.”
The many strands in this complex global story are elegantly woven together and delivered in a form that makes the technicalities of finance accessible to the non-expert. The mind-boggling sums are brought down to earth: the $100m of extra “commission” paid out in one industrial acquisition is “enough money to pay that year’s wages or twelve thousand Russians”. Burgis also tells what happens if such workers dare to demand a few dollars more to live decently. Roza, a Kazakh oil company worker in her fifties, is tortured and sentenced to seven years’ prison for reminding her colleagues of their right to share in their country’s natural resources. In Kleptopia, demanding the truth and equality costs lives, thanks to the global money web’s defences.
Kleptopia illuminates the legalised secrecy around the hubs of big money and how integral dirty money is to political power. However, Burgis does not pursue the question of how these main arteries of money stretch out to wider society, forming capillary systems that ultimately benefit ordinary people, turning many into the devotees of autocrats and thus corrupting entire societies. It is this wider web that establishes a political atmosphere where many begin to believe that when the autocrat falls everything collapses. And that is why they support and protect the leader as if they are fighting for their lives.
Still, at the very end of the book, Burgis asks the essential question facing ever more people in an increasingly volatile world: “Do you want to love Kleptopia and be brought in the wall? Or would you rather be outside, in the wilderness that we used to call commons, defenceless as the water rises? Choose.”
Kleptopia: How Dirty Money is Conquering the World, by Tom Burgis, William Collins, RRP£20, 446 pages
Ece Temelkuran is the author of ‘How to Lose a Country: The 7 Steps from Democracy to Dictatorship’
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