"Why We Must Never Stop Bashing the Bankers" - Responding to Mervyn King's special pleading!

Speaking to the Huffington Post, and re-printed in the Daily Telegraph today, Sir Mervyn King makes a special plea for the demonising of bankers to stop.

"....Sir Mervyn King has called for an end to the demonisation of bankers over the financial crash, insisting the problem was with the system rather than individuals.

The outgoing governor of the Bank of England said there was a failure to adequately regulate the financial sector and society had given "too much status" to those in the City..."

In a way, these parting words are an attempt by him to defuse the suggestion that he has been altogether too critical of the banks.

Well, I'm sorry, but like another great tart, Mandy Rice-Davies once said; "...He would say that, wouldn't he..!"

I think it is wholly farcical that the outgoing Governor of the Bank of England, the regulatory figurehead, on whose watch this era of organised financial crime has taken place and been allowed to go unpunished, should now start pontificating about the need to cut the criminals some slack, and blaming the regulatory process. He says;

"...I would say to people, though, don't demonise individuals here. This wasn't a problem of individuals, this was a problem of a failure of a system..."

"...We collectively allowed the banking system to become too big, we gave it far too much status and standing in society and we didn't regulate it adequately by ensuring that they had enough capital. We have to put that right..."

Sorry, who's this 'we' you keep banging on about, Merve, it surely wasn't the regular readers of this blog, or those who got screwed in the PPI scandals! I'll bet it wasn't the men and women who got defrauded by HBOS or the clients who were sold dodgy interest rate swaps. And it certainly wasn't me, so who was it?

Why is it that Mandarins of Sir Mervyn's kidney, always seek to spread the blame among as many people as possible and then accuse the process, but never the individual? 

It's called 'Techniques of Neutralisation' in financial criminology, and it is a classic way of trying to shift the blame away from those people who really are responsible.

It's because they know, only too uncomfortably, that when you start to focus on individuals, they themselves can quickly be brought under the spotlight. Far easier to blame the process and claim that some unforeseen error (like absence of capital) caused the problem.

Yes, it's true, the regulatory process fucked up big time! They engaged in a process of 'light touch' regulation, because wee 'Goordy Broon' got bamboozled by the clever chaps in the City, believing that they were really bringing him shed-loads of money, so he gave them 'light touch' regulation, which in practice meant no regulation at all. Labour took the constraints off the banks, and then expressed surprise when the entire edifice ran out of control down the hill and crashed into the wall!

The whole crisis can be explained very simply. Banks in America, who have branches and entities in the UK as well, were lending money to people to invest in property, in a seemingly unceasing upward spiral of prices. The practice quickly spread to banks in the UK as well.

This wasn't real money that was being lent out, and the lending banks didn't have to worry about the likelihood of its being repaid because they were packaging up the debts as fast as they could and selling them on to someone else as securitised investments. Those speculators, in turn, repackaged these debts and sold them on, and so on and so on!

They created a vast mountain of debt, all leveraged on two premises. One was that house values would continue to rise, and the second was that all those people who had borrowed so heavily to mortgage themselves up to the back teeth, would not default on their obligations!

The irony was that the one premise depended upon the second , and once defaults in payment started as people lost jobs or became redundant, so the hiccup in the debt market led to a loss of confidence in the house market, which led to a slide in house prices. And as every price tick downwards was observed in the value of house prices, it amplified the leveraged debts incurred exponentially.

Eventually the debts became so huge that they could not be managed and despite the existence of credit default swaps and other Machiavellian derivative contracts which had been written to give the impression of a fully hedged portfolio of debt exposure, banks were staring real defaults in the face.

Dean Baker in an article of Feb 11, 2010 in The American Prospect entitled "...Mervyn King Is Not Only an Incompetent Central Banker, He Also is a Bad Teacher..."

identified the failure by Alan Greenspan in the US and Mervyn King in the UK to tackle the bubbles in their respective countries' housing markets, a failure which resulted in catastrophic "fallout" when the bubbles burst, resulting in the worst recessions in both countries since the Great Depression. 

Rather than risk a melt-down in  the banking market and possibly the undermining of the whole economic complex on which the City of London depends, and on which the UK Government depends even more. the decision was taken to use tax-payers' money to prop up the banks which had been brought low because of a combination of pure greed, avarice, hubris and downright criminality.

It wasn't you or me who did this. We were not the ones who made these decisions. We were not responsible for allowing the banks to give out money like a man with no arms, to people whose chances of repaying the debts were so illusory that phrases like snowballs and hell spring to mind!

These decisions were made by men and women who were being paid incrementally-rising levels of bonus for every new crock of shit they sold. Every time some idiot took out yet another loan, the bankers were getting rewarded. They didn't need to worry about the creditworthiness of their borrowers because the debts were off their balance sheet as soon as they were created, and packaged up and sold on. And of course, they were selling a vast number of worthless and fraudulent PPI contracts as well, to the punters, so the profits just rolled in.

But it was people doing this, making these decisions, providing these loans, the bankers, people who should have known better!

It was people who were defrauding their clients on the PPI contracts, it was people setting up the banking arm of HSBC in Mexico to move the drug money for the Mexican cartels.

It was people who were manipulating the LIBOR market and ringing up their mates and offering bribes to bring the price down to or keep it up at wholly artificial levels.

All these elements were human interventions, and they were carried out by people who we must assume had the capacity to think about their actions, and make moral judgements about what they were doing!

And it was people who were sitting in control of the regulatory mechanisms, Mervyn King at the Bank of England;  Adair Turner at the FSA, and what were they doing?

The answer, sadly, is very little! Were they all waiting for each other to act, hoping that someone else would take the responsibility to grasp the nettle!

It is simply not good enough for the outgoing Governor of the Bank of England to say now, "...oh let's not demonise individuals here, this was about a failure of regulation..."

Well yes, to an extent, he's right, it was about a failure of regulation, but it was more than that, it was about a failure of regulators to identify the guilty individuals, and to take them on, whatever the cost.

This is the moral dilemma you accept when you become responsible for ensuring that any sector of society obeys the rules you are there to enforce, whether you are a cop on the beat or a regulator in a suit, you have a duty to perform, and the way in which you perform that duty will say everything about you!

It also says as much about the people who appointed you, whether they got the right person for the job, and if not, why not?

You know, it was perfectly well within the ambit of Sir Mervyn's role as Governor of the Bank of England, when things were going really badly, to arrange a meeting with the boss of the FSA, the Home Office, The Commissioner of the City of London Police, H.M.Treasury, and to have raised his concerns at the way the City was behaving. He could have pointed out the levels of organised criminality which were taking place, and asked the FSA what they were doing about it, and if the answer, as it would have been was 'very little', he could have perhaps invited the Police Commissioner to provide some input to the discussion.

He could have taken soundings with the Home Office, he could have discussed it with the Treasury, he could have done something to emphasise his concern and to demonstrate that he was not merely complacent!

He may have done this for all I know, although if he did, I am surprised we have not heard of something like that going on.

You see, this is the perennial response to allegations of major City criminality. Let us rather blame the process and claim it is being reformed, but leave the individuals alone. The only problem with this formula is that no matter how many times you reform the process, the criminals are still there, and with the same propensities to commit crimes!

No, we have to continue to demonise the individuals, and we have to require that they are held responsible for their own actions.

This is the only way that we will ensure that others do not become so willing to step forward and behave in a similar way in future.

The only way in which the City is going to be freed from this miasma of organised criminal conduct is for a full and permanent cleansing of the Augean stable, with a root and branch cleansing of the crooks and the wide-boys who run its operations. There has to be a cauterisation of those wounds which have cost the City so dear, and there has to be a complete revitalisation of policies of ethical integrity and complete financial transparency.

That is if the City really wants to regain any of its tattered reputation for sound practice! Mervyn King says it can be done.

"...The reforms being made to the way the City was regulated would result in a “revolution in the way in which banking is handled and we will be able to be proud again of British banking”. 

“In a couple of years’ time we could, if we carry on the right path, get to a point where we would be best practice in the regulation and structure of our banking system,” he said. “Then instead of people trying to mock British banking, as they did in 2007/8 when things went wrong, they will actually look and say, well actually they did learn the lessons....” 

That's what he says in public and to the Daily Telegraph, but he is kidding himself. 

He has to say these things, he cannot go into retirement in the full and certain knowledge that as Governor of the Bank of England he has presided over the greatest period of banking scandals since the South Sea Bubble.

He has often been accused of being quite acerbic towards the banking sector. Some of Britain's top banks were warning in March 2012 that they will move abroad unless a less “hostile” successor to Sir Mervyn King, the Governor of the Bank of England, is appointed when his term ends. It is likely that these, his latest words about the banking sector, are an attempt to defuse his criticisms of the banks in the past.

I fear it is already too little and too late! The genie is out of that bottle, and now the ordinary members of the public know only too well the kind of men who have brought this country to its knees, financially, and have left the ordinary tax payer with a legacy of debt which will take years to expunge.

So, I say there must be no soft-peddling on these dishonest bankers, and we must continue to keep bashing them at every possible opportunity, naming and shaming them if possible, because apart from locking them up, it will be the only other process that might, just might, keep them on the straight and narrow!

The City of London and the Offshore sector - The Enemy Within

The City of London, the world's biggest tax evasion facilitator and money laundry has just been given some more good news, courtesy of George Osborne and the Coalition Government. The Chancellor of the Exchequer has just sent them a lightly coded message that their offshore revenue stream is guaranteed for the foreseeable future!

George Osborne has just chaired a G7 ministers' meeting at which the question of tax evasion and aggressive tax avoidance was on the agenda!

The Huffington Post reports that "...Osborne G7 Talks Sees Chancellor Criticised After Dodging Details On Tax Avoidance..."

Regular readers of this blog will recall my observations last week ("Lies, Damned Lies, and Civil Service Misinformation") about the likelihood of the UK Government doing anything too aggressively to challenge the offshore-sector and its control of the tax evasion/aggroidance (my shorthand for aggressive tax avoidance schemes) industry ! 

And so it has proved

George Osborne has now been criticised for failing to set out any concrete steps to promote economic growth or tackle tax avoidance during G7 talks, despite his insistence that the meeting with finance ministers and central bank chiefs was "successful and constructive."

Using such weasel words, and playing up the meeting for all it's worth, Osborne sought to make a great deal of how the meeting had made real steps in the debate on fiscal evasion issues. 

However, when pressed on the substance of these discussions, the Chancellor declined to give any details of the talks, which were held on an informal basis in a country hotel in Buckinghamshire, but suggested there was more agreement between the rich nations making up the group on how to nurture the recovery.

With bromides like that, we are all the more informed! 

He had the sense to say that he recognised that the larger G20 group - which includes emerging economic powers such as China, India and Brazil (3 of the world's leading tax evasion and funny money practitioners) - was now the "primary economic forum for setting the global rules of the game", which was another way of saying that the G7 nations, which generally represent the old, and moribund economies, were irrelevant, despite his insistence that they - the United States, Germany, Japan, the UK, Italy, France and Canada - still wielded "major economic firepower" as they represented around half the global economy between them.

Admitting that while there were "...still many challenges...", he said, "...this meeting confirmed that there are more areas of agreement between us on fiscal policy than is commonly assumed..."

Quite what that means in real terms is anyone's guess, but what it does not mean is that the British Government is going to be cracking down on the offshore sector any time soon.

How can I say that with such confidence? Well listen to Osborne's deliberately feeble use of language.

Mr Osborne said British overseas territories "need to do more" to end tax evasion. 

Well, that's like saying the Taliban needs to do more to encourage greater female emancipation in Afghanistan!  Ambitious, possibly; desirable, certainly; but ultimately futile and illusory!

Asked about the future of tax havens such as Jersey or the Cayman Islands, he said he had already been "very tough" in his message to them but wanted to see more action.

"...Of course we would like these jurisdictions to do more..," he said.

"...We want them to commit to some of the existing agreements that are in place on tax information and transparency and we have these initiatives which we are pursuing in the G8, for example around beneficial ownership, which we would also expect all jurisdictions to be able to sign up to..."

None of these comments amount to a row of beans in reality. He can send all the tough messages he likes, he can want them to do more, and sign up to vague initiatives about beneficial ownership, but this isn't going to change the reality of the situation that the offshore sector survives and thrives because wealthy people put their money there secure in the knowledge that it will be secure and kept in complete confidence

I have already discussed the futility of these plans at some length in a previous blog and nothing I read here from Osborne is going to change my views one iota. Because then comes the reality interlude, when the real world politique creeps in! He says;

"...Of course you have to respect that many of these territories have important industries and we don't want to unnecessarily damage them..."

Well, I should think not, and that is the underlying hidden message he has to send them, because these offshore areas generate a huge amount of money which the City of London, the enemy within, is waiting to receive. But at the same time, Osborne has to play the Perfidious Albion games! So he reverts to the default mode and trots out the shibboleths again.

"...But it is necessary to collect tax that is owed and it is necessary to reduce tax avoidance and the crown dependencies and the overseas territories need to play their part in that drive and they need to do more..."

"... We all agreed on the importance of collective action to tackle tax avoidance and evasion..," he said.

Well, no doubt they did, as they peeled their Plovers' eggs, and shovelled down the Boeuf a la Bordelaise! It's not difficult to agree to an assertion as bland as that, after all, ask yourself, what was being agreed to?

"It is incredibly important that companies and individuals pay the tax that is due and this is important not just for Britain and for British taxpayers but also for many developing nations as well."

You will note that the emphasis here is on the "...tax that is owed..." but expecting the crown dependencies and the overseas territories to do anything about it, has the same element of successful expectation as being the voting returning officer at the turkey farm when the Christmas vote is announced!

It is this kind of state-sponsored double-speak that makes the UK look positively mendacious. It is the kind of statement that is drafted by some clever young Treasury policy wonk who knows full well there isn't the slightest intention by anyone in Government to do the least thing about it

And why?

Because the UK Government is a hostage to the City of London and the City now ultimately determines all financial policies, and that is why I term them 'the enemy within'. The Government has quietly surrendered the lead role in defining the UK's future to the City of London, a non-elected, non-transparent, undemocratic group of elites, and the Government will dance to their tune.

This is why the Government's threats to break up the 'too big to fail, too big to jail' banks into small regional hubs is met by two fingers from Threadneedle Street! This is why the proposal to ring-fence the retail banks is met be a resounding raspberry from Throgmorton Avenue!

You see, the City of London no longer needs the UK, the boot is on the other foot, the UK needs the City! I used to believe that the Government was Sovereign, that Parliament was the final arbiter, and that confronted with a vague threat to 'take our business elsewhere' if too much pressure was applied to the City institutions to reform their game, was an empty threat, and I have previously urged the Government to call their bluff! 

But I was wrong! The Government dare not call their bluff because the City of London isn't just a bunch of buildings inside four postal codes; it is a concept of enormous power, an exclusive entity, a very private members-only club into which outsiders are not invited to enter; it is a powerful clique which exerts huge influence and pressure; it is a Mafia! Even Her Majesty the Queen requests formal permission to enter the City of London on a special formal occasion (permission is always granted)!

The City doesn't exist to support this country, it exists for its own financial interests and the rest of us can go take a hike! It could, within a relatively short space of time, go offshore itself, indeed, it has already been described as the most powerful off-shore jurisdiction on earth! You don't need to be a palm-fringed island in the Caribbean to be an off-shore centre. The City has its own laws, and it only obeys those ones which Parliament enacts, when it pleases the suits so to do!

The amount of money that the City turns over each year is counted in Trillions of Pounds. As a fee, tribute, (bribe) to the UK Government to allow them to continue, the City contributes about 12% of the nation's GDP, in terms of the tax it agrees to pay on such profits as it sees fit to declare. The rest of its proceeds are very carefully squirreled away and are held in secure and confidential circumstances, and no-one is going to examine them!

The great financial crisis has brought the role of the City and its functions into greater notice and under more scrutiny, but we should not hold our breath hoping that Cameron or Osborne are going to do anything to bring this criminogenic enterprise to heel! They simply do not have the power to do it, and that is the problem.

When the Prime Minister or the Chancellor go down to the City to speak at their tables, you will note the degree of respect which is afforded to the men and women in fancy dress! They have to be respectful, because the City might take their ball away and go and play elsewhere, and they know that would be disastrous for them.

So they pay lip-service to the conventions, and they make sure they protect the City from any attempts that somewhere called 'Brussels' might make to impose their will on the City of London. Transaction taxes! Not on your Nellie, monsieur. Capital adequacy rules! Only if everyone else is signed up to the same calculations, mein herr!  Anti-money laundering regulations! Now you are being fanciful, old boy!

In a time of the worst financial crisis any of us have ever experienced; at a time when we can see no light at the end of the austerity tunnel, the City of London continues to pursue its own path and writes its own pay cheque! Don't expect it to change its ways, because this is how it has always been done, the City of London is another country, and it is immune from the ordinary rules of engagement that attach to those outside the Square Mile.

No Government of the UK will ever dream of challenging its autonomy, they daren't! The men and women of the City will be allowed to carry on as they have done for centuries, and no-one there is going to be subject to the ordinary laws of the land, as long as they are working for the City and its collective owners! It is a sanctuary, a safe-haven from hue and cry, and as long as you play by its rules, you will be protected.

You don't have to take my word for it, just review the last 5 years worth of criminal financial scandals that have come out of the financial sector, and add up the number of players who have spent time at her Majesty's pleasure? 

Not an awful lot!

So, when you read George Osborne's claims that he and his mates in the G7 are taking tax evasion seriously and calling upon the overseas territories to do more to tackle aggressive tax avoidance, you know that these are just empty words designed to give the impression of concern, but in reality, just going through the motions!

Nothing, but nothing is going to be allowed to undermine the hegemony of the offshore sector, it would be naive to think otherwise!

The Psychology of the Fraudster

If you find yourself wondering how so many people could have invested with Bernie Madoff or how others could so successfully gull apparently sensible individuals into believing their stories, read on.

 Towards an Understanding of the Manipulative Personality

“If you owe the bank £1,000, they can make your life a misery. If you owe the bank £10 million, then you own the bank.”

I was first taught this lesson in immoral philosophy, when I began my posting to the Fraud Squad at New Scotland Yard. My mentor, an elderly ‘mittel european’ refugee and ‘businessman’, who had spent his mature years, either selling insurance and other forms of investment opportunities, or borrowing money from a series of banks and individuals, cross-firing it through a wide variety of accounts, and then, mysteriously, forgetting to pay it back, tried, gently, to teach me the gospel of eternal greed.

He was, he would assert vigorously, not a crook!

Far from it! He was merely the conduit through which a large number of very greedy individuals (in which group he included bank officials), realised a false hope of enrichment. The fact that they would, and could, never achieve their ambitions, was immaterial. He was the provider of the avenue of golden opportunity, through which this constant parade of ‘schmucks’ could try and reach their own personal nirvana, a land of limitless opportunity, restricted only by the limitations on their own credulous expectancy!

He was a professional con-man, and over a period of months, he taught me that virtually all victims of fraudsters have only themselves to blame. At first, I was shocked. Did he not perhaps retain a certain degree of sympathy for the old, the infirm and the weak-minded?

The latter, the truly feeble-minded and those whom he considered to be incapable of formulating a true understanding of the offer being made to them, he exempted! They were not true ‘marks’ in any event, because their mental state meant that they could not be said to be able to enter into the proposed arrangement with the requisite degree of volition, which, he preached, was a very necessary state, if the ‘big con’ was to be successful.

This lack of the requisite mental state immediately predicated against their being considered as true ‘sucker’ material because he could not accurately predict their behaviour, and therefore this made them very dangerous from his point of view. I came, slowly, to realise that he was not exempting them from any sense of concern for their condition or for sympathy for their weakness, but because they posed an unacceptable threat to him, and it was the existence of the threat, whose implications he was powerless to control or influence, that made him eschew this particular group.

This was a man who always played the percentages, and he had worked out long ago that when dealing with the real nutters, and the feeble-minded, the odds were stacked against him!

As my career in the Fraud Squad, and later, as a financial regulator and legal practitioner developed, I came to realise the truth of the old man’s message. He was not unique. He was a member of a class of men and women with a particular mind-set, a group of individuals whose view on life had become distorted, in some cases mildly, and in some, to an exaggerated degree. They are all, without exception, victims themselves in some form or another, (he had spent years in a concentration camp) and conducting their affairs in a deceitful way provided them with a means of striking back at the perceived injustices of which they consider they have been made victim! 

Such people all conduct their affairs according to the creed which my first teacher explained to me. He divided them into three groups. In some cases, like him, they do it merely to make a great deal of money. These are the practitioners at the very apogee of their craft. They recognise their motivations, and they use them ruthlessly to acquire huge wealth. They have no interest in any other form of reward, and like as much as possible, to remain as anonymous as possible.

In many cases however, other individuals use their twisted talents first to acquire power, which they then use to acquire financial rewards. These are the most dangerous, because they are really in denial as to their own true state of mind, and are using their talents as much to deceive themselves as their victims. Nevertheless, they will use the same disciplined tactics as their more directly entrepreneurial colleagues.

Finally, there is a small, but nevertheless identifiable group who suffer from a clinically-identifiable illness. In polite company it is referred to as ‘Munchausen Syndrome’, but in more common parlance, the condition is known as being a pathological liar! Such people are sad individuals who are simply incapable of determining the difference between truth and lies, and cannot see that their deceits and distortions render them wholly unbelievable. They also fail to understand that others, with whom they have to conduct normal relationships, quickly learn to distrust them, and guard themselves against the impact that such dangerous individuals can impose.

All these groups operate on the recognition of a carefully orchestrated combination of conditions. As my old con-man taught me, the potential victim has to demonstrate three important features in order to be successfully gulled, and they have to be identified in the correct order.

The critical triumvirate are greed, ignorance and fear, and they have to be present at the right time in the process of the relationship, for the successful con to work.

Once they have been identified, it did not matter in which environment the con was being played, it would be achieved successfully. Thus it is that the true con-artist can operate with impunity in any market or climate where a financial motivation is an important criteria of the perceived success or achievement of the victim.

Greed, he opined, was the crucial emotion. Greed enabled the victim to overcome his natural state of caution, and encouraged him to exercise the important ‘willing suspension of disbelief’. This was vital, because it was the crucial predicator which rendered the victim capable of moving from the status of potential victim to that of qualified ‘mark’. The reason such a move was necessary was because once the greed emotion had been aroused, it was important for the ‘mark’ to want to move to the next stage, and that desire had to be a voluntary one.

This was where the second component came into play. Ignorance on the part of the ‘mark’ had to be maintained and encouraged. It was during this stage that the critical degree of greed-enhancement had to be supported, because it was during this period that the ‘mark’s’ psychological dependence on the need to continue to believe the fraudster, was enhanced and cemented. If he was offering an investment scheme, he would always insist that the potential victim invest far more than he could afford. If it was in his work environment, he would always commit to deliver a far higher degree of profitable sales than any other salesman.

‘The schmucks’ he would tell me, ‘are always on the look-out for something for nothing. If you only offer a punter an investment he can just afford, you aren’t playing to his greed motive, and he might consider backing out. Always get him to commit far more than you know he can afford. He will beg, borrow or steal the cash to get into the game. Once he’s hooked, you’ve got his money anyway, so what do you care? The more he’s committed, the less likely he is to want to expose you’. 

‘If he’s a sales manager, then your commitment to achieve a huge sales target plays to his greed factor just the same. He needs to make his targets to get his bonus, and he wants his bosses to think he’s a go-getter. So regard him like the ‘schlemiel’ he is and treat him like a mushroom. If he asks how you’re going to achieve it, just think of him like a punter, stay schtum, and give them any load of old patter, but never give them any facts’, that way you can  never be held accountable. When, later, you haven’t reached the targets you promised, he will be so frightened that his own bonuses won’t be paid that he will make any excuse he can for your shortfall. He will go into bat for you, he will even fiddle the figures to make it look like his team achieved their huge targets.’

Ignorance of the true facts therefore was a critical component, and it was at this stage that the greatest danger to the con-artist was present, because if the level of ignorance could not be maintained, then the greed factor might be undermined, and this could lead to an unravelling of the entire scheme, with potential problems for the scammer.

So, the necessary degree of ignorance was maintained by a number of tactics. The choice of victim was an important criterion. ‘Always con your friends, family or work-colleagues first’, the old man used to insist. ‘They are much more likely to believe you and far less inclined to shop you, when it goes wrong’. The ignorance factor could always be enhanced by making the victim believe that even if the opportunity sounded too good to be true, it could not possibly be unachievable because the con man was considered to be such a close friend or a trusted work colleague. ‘A good con-man, he once told me, ‘doesn’t have to go looking for his victim. In most cases, with the right story, they will come to him!’ The more socially elevated a group they are, if your story means they can achieve something which is important to their egos, they will lap it up like kittens and milk.

Ignorance could also be enhanced by providing a minimalist amount of information about the investment scheme, the business plan, or the market opportunity.  On the other hand, it could be achieved by the provision of a huge volume of detailed reportage, designed to create an overload of facts. On balance, this method was usually preferred, because it gave the impression of crucial knowledge and technical expertise, a state designed to alleviate potential disbelief.

As my old mentor explained, most potential victims were too scared to demonstrate their own state of pitiful ignorance, for fear of appearing to be less qualified than they might want to be considered. Quite often, a neat variation on the con-man’s methodology is to appear to defer to the potential victim, implying that the ‘mark’ is a person of considerable experience in the area within which the scam is to operate. ‘...Let the mark do the work for you. Let him think he understands the proposal, then his ego will lead him on...’ This is done, particularly within the workplace environment, where a senior manager is being bamboozled, in order to encourage him, as the potential ‘mark’, to believe that the proposal is one in which he is expected to display competence and core knowledge. This is where the fear factor, the third, and perhaps most vital component, comes into play.

‘Fear’ my immorality tutor explained, ‘is the most powerful influence in completing the big con. When you see the fear in their eyes, then you know you’re home and dry. You can laugh all the way to the bank, because they are never going to admit what has happened’.

At first, I did not believe him. ‘Surely’, I queried, ‘once a victim knows what has happened, he will want redress, he will seek revenge and retribution’.

‘Very, very rarely’, came the experienced reply. ‘Look at it like this. Virtually all victims of the big con are stupid, gullible, and at heart, fundamentally dishonest themselves. That is why a scheme that has all the hallmarks of overt dishonesty or even mild criminality is far more likely to succeed, than plain vanilla offerings. When they find out they’ve been conned, what man or woman in their right mind is going to later admit publicly that they were willing to part with their money in a scam which they were told was probably dishonest, and certainly immoral’?

‘What business manager is going to admit to over-promoting a man who has successfully shot him a line about his ability to deliver profitable returns? If he makes this admission, his own bosses will start to doubt his management judgements, and query his decision to promote the man in the first place, and if the bosses’ own financial rewards are threatened by his failure, then they will line up to support him as well. The best situation for the scammer is if he has the slightest chance of taking those above him down with him if he falls, because then he will be wholly protected. All concerned will close ranks to protect the con-man, sooner than expose him and then put themselves in the firing line for their own incompetence. In reality, they will almost certainly promote him, in the hope that he will become someone else’s problem’!

Fear was crucially important, he explained, because its existence was the vitally necessary degree of protection that meant that the scam merchant could guarantee he would not be exposed. Most victims ultimately came to realise that the scheme they had adopted was utterly risible, totally ridiculous and utterly laughable and that they had been conned, but then were incapable of doing anything about it. Indeed, the quicker they came to the unmistakable conclusion that they had been fooled, the better, because then the con-man could move on to the next ‘mark’, knowing he was safe from investigation.

The true expert, he said, was the con man who having successfully gulled a victim the first time, could go back and gull him again. While not an every-day occurrence, he had achieved it many times himself, using a variation on the greed and fear link, by playing on the victim’s willingness to accept that the second time around, things might get better, and that the business opportunity might just pay off. Like the inveterate gambler, the victim becomes the cause of his own downfall, and continues to try to beat the odds, sooner than admit he has been completely fooled.

This method, in his opinion, worked best in the working environment, when management could be more easily encouraged to believe that apparent failures to deliver on commitments could be explained by external circumstances such as a change in management in a client company, a purchasing policy shift, or the removal of a key business facilitator.

Most importantly of all in the work environment, if the con artist had the ability to promote others in his own immediate team to more senior positions, or to arrange for their internal reward, then this state of affairs could be allowed to continue almost indefinitely. Someone with real ability who would not fall in with the ethic of the group and who pointed out that internal policies were wrong or damaging, had to be got rid of as quickly as possible and ridiculed or smeared to make them seem foolish or worse, disaffected. Perception of others’ ability is always more important than real proof of competence. ‘People who can’, generally do, and are usually always overlooked or. People who talk about doing, generally get more attention. As long as the con-man can keep persuading others that he and his team are hugely effective, regardless of the truth, then more and more non-connected individuals would, when observing the almost inexorable rise of his direct reports, assume that they must be doing something special, if only to justify the realisation of their promotion or recognition...

Eventually, I had to give up on him. No-one wanted to give evidence against him, in fact, there were very rarely any complainants, despite the large number of people I suspected he had scammed. He died a very rich man.

When I heard he was ill and in hospital, I went to see him. I have to admit that I had become very fond of the old rogue, as his refreshing openness about himself and his incorrigible ways was almost addictive. Sitting by his bed, I asked him;

‘Is there anyone you couldn’t con’?

He smiled, and patting my arm he said;

‘Of course there is, you can’t con an honest man!’

But then he smiled even wider and said;

‘Of course, there aren’t too many of them around!’