How far down the scale of integrity do we have to slide before someone stands up and says 'enough is enough'?

As a nation we are sliding inexorably down a slippery moral slope to a place where integrity, honesty, human decency and just plain, simple ethical conduct will have no meaning and no identity!

Last week, it was announced that U.S. regulators have fined Royal Bank of Scotland $100 million for breaches of U.S. sanctions against Iran, Sudan, and elsewhere.

According to orders filed by the Federal Reserve and New York's banking regulators, going back as far as 2002, RBS put in place a system to transfer dollars from the U.S. in a way that hid from regulators and other banks where that money was headed.

The system, which was in place until 2011, ended up processing over 3,500 transactions, sending $523 million to Sudanese and Iranian customers. Some of the money went to individuals specifically barred by the Treasury Department from doing transactions with U.S. entities. The Treasury Department's list of barred individuals includes U.S.-designated terrorists and drug dealers.

According to New York regulators, RBS provided written instructions to its payment processors in the United Kingdom explaining that it was "important" to strip out any information that revealed the destination "for all U.S. dollar payments to a country subject to U.S. sanctions."

I have been looking hard but I cannot find any report or any evidence which shows any sense of concern being evinced by the Government, the Treasury or Government Ministers over this matter.

No doubt there will be some in the City, perhaps in Government, possibly among those who surround Boris Johnson who will say, '...Oh well, this is an old matter and things have changed since then...' but reflect, the fine has only just been announced, and what is more, this fine is going to be paid with British tax-payers' money. I haven't heard any outcry about that issue either.

What in God's name has happened to us as a country? How is it that we can have become so inured to scandals of this magnitude, that we can just blithely wipe off $100 million of taxpayers' money, at a time of great austerity, and no-one raises a word of objection?

Well I bloody well object, and this fine should be made to come straight out of the bonus pot that this pariah bank will have set aside for its overpaid  and grossly indulged staffers.

Of course, it is too much to expect that anyone would be prosecuted for this money laundering activity.

Cameron, Osborne, Bo-Jo and their clique don't seem to feel it necessary to prosecute City fat-cats for crimes like money laundering, and foreign sanctions breaking.

They daren't!

They are too fearful that if they were to raise a finger against these criminals, that it would send a lot of difficult messages to those international, so-called 'businessmen', the foreign billionaires whom they want to encourage to relocate their money to this country. The men and women in Russia, China, Singapore, Malaysia, India, Pakistan, Dubai, Saudi and elsewhere in the Far East who are suddenly in possession of huge amounts of money they would rather hide from their own politicians, prosecutors and regulators, for all sorts of dubious reasons, and relocate it to a sound banking environment, with a Government with sound appreciation of business methods and a liberal view of taxation!

A country where the banking and commercial sector is very much left alone to do its own thing without too much interference from Government, and where the regulators and prosecutors do what they are told and keep their noses out of all kinds of dirty dealings, if the Government tells them to!

A country with wide access to the offshore banking industry which understands the imperative of paying bankers well, and keeping them onside.

For secondary reasons they are also very concerned that the big banks would activate their threats and possibly relocate their centres of operation, and cease paying the annual 'Danegeld', (approximately 11% of GDP), they shell out annually for the privilege of operating in one of the least regulated jurisdictions in the banking world.

Mind you, it's not just the Tories who doff their hats to the City, Gordon Brown was a serial Square Mile arse-licker and brown noser when Labour were last in power, and he regularly made the trip down to the Mansion House to laud the banksters for their much supposed brilliance in financial wizardry.

There is and never has been any excuse for this kind of behaviour. We have lived through a banking crisis during which billions of tax-payers' pounds have been squandered propping up dysfunctional banking institutions, and being used to continue to pay unjustified bonuses to the very men and women who screwed up the financial system in the first place, while ordinary, decent, and honourable men and women have been forced into a seemingly endless period of financial austerity.

Those of us who lived our lives frugally and did not engage in an orgy of spending on leveraged credit cards; those who bought houses to live in, not to speculate with; those who brought up their children properly and honestly, and who educated them well, in the certain belief that a good education is the only way forward for intelligent children from ordinary families; those of us who saved as much as possible for the future, who paid our way and did not rely on State handouts and welfare benefits, we have seen everything we believed in and worked for trashed, devalued, undermined and debased.

Our savings are being whittled away by inflation and rock-bottom interest rates; our pension funds have been raped by greedy intermediaries and brokers; our children are told that education is not necessary and that all a young person needs is to 'get lucky' and win the Lottery or the X Factor.

Take this into consideration with any of the other trash programmes where kids of dubious abilities queue up to become the latest celebrity, or alternatively where football players get paid £200,000 a week (how can any person justify that kind of salary?), and you a looking into a whole new paradigm of distorted values, where ethics, honesty and integrity count for nothing any more, a dog-eat-dog world, where young girls are subjected to a level of sexualisation at criminally-early ages, and then trafficked for the gratification of perverts, paedophiles and panderers on the Internet.

We are subjected to constant exposure of the infamous and distorted value sets of wealthy people like Nigella Lawson and her former husband, Charles Saatchi, who will trade insults and expose the personal dirty laundry of their dysfunctional relationship with each other to a waiting world, while the criminal trial of their former employees goes, almost disregarded, while the press reports every last ounce of scandal and shame dredged up from the wreckage of their tawdry marriage.

What I am describing is a world where all attempts at maintaining ordinary integrity and basic morality, have been set at naught; where the lunatics have taken over the asylum; and where there are no standards of honesty and decency left.

Recent years in the financial sector have demonstrated how this absence of ethical morality and commercial integrity has been allowed to permeate throughout the entire body politic, right up to the very top floors.

Every conceivable financial crime has been perpetrated against the clients and customers, starting with theft and downright fraud, moving through conspiracy to rig markets, front running, insider dealing, and market manipulation; to vast numbers of cases of money laundering and terrorist financing.

Major global banks like HSBC have openly run money laundering operations for Mexican drug cartels, and when confronted, have called out noble members of the House of Lords to seek to mislead the public claiming that the UK regulators had no jurisdiction over the case because the bank concerned was in Mexico!

Other banks have been forced to set aside billions of pounds to reimburse their clients for wholesale fraudulent business practices in PPI sales; Barclays Bank led a grubby group of spivs and wideboys in the deliberate manipulation of the LIBOR market, from which more payments are expected next year as a whole raft of civil actions descends upon them in the US and other civil jurisdictions.

There hardly seems to have been a business sector from which the banks could have earned a turn, where they have not turned loose their army of crooks, hucksters, fraudsters, loblolly men and other purveyors of snake oil, or dodgy deals!

U.K. bank Standard Chartered paid a $340 million fine for violations of US law last year. Other banks caught up in activities which grossly flouted US Sanctions laws have said they believed they were following rules when they were omitting certain information when processing payments, rules that may have been allowed by the U.K. government but not the U.S. Not so, fraud and sanctions busting is the same wherever it is committed.

As well as paying the fine, RBS has been forced to put in place new measures to make sure it doesn't break the rules again. It also "terminated" the head of its "Money Laundering Prevention Unit" for corporate markets, which seems justified. Also out is RBS's head of banking in Asia, the Middle East, and Africa.

In my view, this is nowhere near enough.

When those Sanctions violations were undertaken, employees of RBS at very senior levels sat down and deliberately worked out the plan they adopted for ensuing that they hid the payments to interdicted jurisdictions from US regulators. This was not just some bit of off-hand skulduggery thought up by a couple of floor traders, this was a concerted and deliberate policy issue carried though by identifiable employees, and they should all have stood in the dock, in the US, and faced the likelihood of serious periods of incarceration.

We live in an era when all pretence at the maintenance of  anything resembling morality, decency or integrity has been extinguished, and anything goes in the financial market as long as there is a profit in it.

Banks can launder money, steal, cheat, lie, or defraud outright and absolutely nothing will be done about it. Their executives will never grip the rails at the Old Bailey, their employees will continue to be paid salaries and bonuses beyond the dreams of avarice, and when it all goes tits up, they will demand that the supine politicians prop them up with our money for fear they will collapse.

And the craven bastards will comply!

This is the UK now, and this is the environment in which we venture at our peril. It will continue to get worse as Cameron,. Osborne and Bo-Jo and their galere of shiny-faced toffs and millionaires continue to set out their stall to encourage every foreign crook and oligarch to come here to evade the consequences of their crimes at home.

Remember, as Balzac reminds us,

"...Behind every great fortune  there is a great crime..."!

Happy Christmas!

The Capo di Tutti Capi returns!

Bob Diamond, one of the most controversial bankers to emerge from the financial crisis, but the man ousted as boss of Barclays after a direct intervention by the Bank of England, is making a dramatic return to the City with the launch of a new Africa banking business.

The financier is attempting to raise $250m (£153m) by floating a fund on the London Stock Exchange within the next two weeks – he plans to use the proceeds to buy a stake in an African bank with a presence in several countries across the continent.

As part of the deal, Diamond is teaming up with an African entrepreneur called Ashish Thakkar, the 32-year-old chief executive of Mara Group, a conglomerate with "technology, 

manufacturing, real estate and agriculture" interests in 19 African countries. It is anticipated that both men will sit on the new public company's board.

Just when you might have thought that this spiv had taken a one-way ticket back to Hoboken or wherever and that we had seen the back of him, up he pops, trying to float a new venture in the City, –  an adventure which will not be without its inconveniences – as even Diamond's friends admit his reputation is lower in Britain than almost anywhere else in the world.

But there is nothing the regulators can do to stop him.

You see, when the spineless bunch of flabby, weasel-worded, financial regulators had dealings with Diamond last time, he was under the cosh for some of the more emotive events of the financial crisis, frequently being criticised about his pay and his aggressive attitude to business – and this was even before the scandal over LIBOR, forced him out of Barclays. In 2010 he was memorably dubbed the "unacceptable face of banking" after it emerged that he had received cash and share awards that could net him £63m.

His demise came in July last year, in the face of increasing pressure from politicians and regulators following the interest rate manipulation scandal. Marcus Agius, Barclays' then chairman, and Sir Michael Rake, the bank's most senior non-executive director, were summoned to see the then Bank of England governor Lord King, where they were told that "Bob Diamond no longer enjoyed the support of his regulators".

I bet those words caused Diamond to lose sleep at nights!

This is precisely the sort of regulatory approach that the City has traditionally preferred to adopt, when things became difficult.

The City fathers and those who regulate the Square Mile know that trying to undertake meaningful and rigorous regulatory intervention against the practitioners inside the City, would be a very difficult, not to say, impossible task.

That is because the vast majority of them has been engaged in some dirty dealings somewhere along the track, and would not be able to stand in a witness box as a witness to truth if the historical spotlight was suddenly beamed on them.

No, rather than engage in conduct which would mean that they had to take decisions which would bar Mr Flashboy from doing business in the City ever again, they demurred. They knew that by standing up to him, and showing him the door, he would respond immediately with legal action demanding Judicial Review, a costly, and very damaging process, from which few of the grandees would emerge with any dignity, and more importantly, it would shine a spotlight on the City of London and its dubious practices.

Better to get the Governor of the Bank of England to trot out the old chestnut about 'losing the confidence of his regulator'.

In one way and a couple of hundred years ago, this might have been a clever way of making sure that 'The Diamond Geezer' never did business again in the  City, because in those halcyon days, when the Square Mile was governed by the 'height of the Governor of the Bank of England's eyebrows', to go against the dictat of the Governor was sure and certain commercial immolation.

Once it was known that the individual concerned had been named and shamed by the Establishment, no-one else would do business with him for fear of being tarnished themselves.

The process was borrowed from and carried out elsewhere in the Square Mile, Lloyds, The Stock Exchange, but it was a way of making sure that a 'bounder' never came back to do business in the market again.

But these are different times and different days, and Bob Diamond isn't the kind of man to let a little historical tradition get in his way. Why would he care about some arcane British concept such as the confidence of his regulators? Barclays could invite him to leave, because at the end of the day, the Governor of the Bank of England was their lead regulator, but no doubt the exit cheque handed to Diamond had a good few zeros on it to cushion the fall.

Diamond Bob is an Anglo-American, a man from New York, and as his name suggests, he has a hard edge. He doesn't do 'tradition', he doesn't do 'Governor's eyebrows', he's either in the game or he's out, and if you want to keep him out, you have to put a stake through his heart in his coffin!

Whereas an Englishman faced with Diamond's dilemma would have possibly taken a sabbatical, retired from commercial life and gone into good works, charitable organisational support, become a friend of Covent Garden, worn shabby tweeds and grown roses, Diamond took time out to catch his breath, and then came back, harder and tougher than before.

You see, there is literally nothing to touch him or stop him from setting up his stall all over again.

He hasn't been convicted of anything. Any alleged crimes that were committed by the bank under his control of Barclays, any market manipulation, any insider dealing, any money laundering, well they have been allowed to quietly disappear! No prosecutions have been brought, no investigations have been mounted. and nothing untoward recorded.

Even the regulatory investigations have only resulted in fines being levied on the institution. 

There have been no regulatory adverse findings, no fitness and properness tests applied, no questions as to his suitability to have control of a public company determined!

No, Bob Diamond walked away without any recorded stain on his character. The man once dubbed In 2010 as "the unacceptable face" of banking by the then business secretary Lord Mandelson, citing Diamond's high level of pay (quoted as £63 million) and lack of humility, was able to come back into the heart of the City Establishment and start up a business which by any standards is going to carry a high degree of risk!

So, if the British financial and political establishment harboured any thoughts they were getting rid of Diamond by pontificating about him 'among the chaps' and murmuring about 'lack of confidence', well they were wrong, and now, the monster is back and running amok!

Diamond is raising $250 million (£153 million) for Atlas Mara, a cash shell, which is aiming to buy a controlling stake in an African financial services firm, and has already secured significant institutional backing, according to the Financial Times. Diamond is partnering with Ashish Thakkar, the founder of African conglomerate Mara Group, to launch the venture.

After leaving Barclays last July, Diamond set up New York-based merchant bank Atlas Merchant Capital and the financier is understood to be keen to tap into the opportunities in Africa.

Both Atlas Merchant Capital and Mara, which has a presence in 19 African countries across a number of sectors, will take significant stakes in the shell company with the remainder of the cash coming from institutional investors.

Diamond's choice of London to float his first major banking venture since leaving the City may surprise many, even though it is thought to reflect London's supposedly better ties with Africa, compared with Wall Street. One London-based banking source said: "It reflects the knowledge of Africa here, plus the time zone".

I say  'may surprise others', but it doesn't surprise me. You see, it also reflects the fact that a lot of bankers and City wide-boys will pile in to do business with Diamond all over again because he was known as a money magnet, and that's all these parasites care about.

Diamond will come back on a roll, a lot of spivs will queue up to invest money with him, and before you know it, there will be another regulatory concern sticking up above the financial waterline.

And the City, the regulators and the financial establishment have only themselves to blame.

What went on during the wild and wacky times at Barclays Capital was a classic example of the unacceptable face of capitalism. Barclays became a leitmotif for dodgy dealings and dirty deals. Just review their list of fines and other punishments dished out for their criminogenic behaviour during this era!  A good friend of mine who was a senior anti-money laundering compliance officer at Barcap, left voluntarily because, as he put it to me, '...he wanted to sleep at nights and not get arrested...'

The regulators have demonstrated a significant degree of naiveté and a lack of basic moral fibre in the way they have dealt with Bob Diamond.

They should have made him a target and lined him up in their sights with the sole view of bringing him down, hard. They should have called a Council of War, brought in the SFO, (although their present record is pretty awful), and the Fraud Squad,  and they should have seen what evidence they could find to bring alleged criminal charges against him. For myself, I would have thought that the Companies Acts might have been a fruitful hunting ground.

They needed to do this because they had to have convictions or at least findings of 'not being fit and proper' if they wanted to keep Diamond out of the market, and they failed in their duties.

Yet again, the regulators are proved to have failed to face up to criminal wrong-doing in the Square Mile, and yet again they will pay the price, in terms of an even more feeble reputation, but the British public will pay the price in terms of more reputational damage to our markets in the eyes of other countries, notably the Americans.

Diamond isn't doing this latest stunt because he needs the money! He's doing it because running businesses like this is the way he keeps the score.

His presence back in the London market proves yet again what I have said consistently. The City and those who manage her affairs dictate to the British Government the way things are going to be played, and the Government, cravenly bows its acquiescence, while holding out its begging bowl!

May I refer you to the website ." http://uti.is/2013/12/why-are-bankers-investigated-in-iceland-and-not-so-much-elsewhere/ where you can read Sigrún Davíðsdóttir's Icelog in which she poses the questions surrounding the issue of prosecuting banksters. The following comment by a gentleman called Tony Shearer encapsulates the issues very neatly.

"...Why is it that Iceland has taken action and the UK authorities have not? We know that in the UK the Serious Fraud Office has a catastrophic record, but it seems clear that the political will simply does not exist to make these prosecutions.

The UK banks and the 4 big accounting firms have effectively corrupted the politicians, regulators, and civil service. They have so placed their partners and former partners into the system, and their level of lobbying, secondments, and work that they do for these people is so great that they have undue influence. It seems to me that, as a result, the Chancellor of the Exchequer and the UK Prime Minister as well as the heads of the UK regulatory bodies and the civil servants regularly make the wrong decisions.

We will continue to have scandals involving the UK banks until such time as the senior politicians and senior civil servants clear out from the system those people in the banks and major accounting firms who have the wrong legal and moral attitudes.

The Chancellor, supported by the Prime Minster, has hung a large sign over the City of London to say that we are open to business for crooks and those with low morals. Iceland has hung out a sign to say the opposite. By the actions of the Icelanders and the inactions of the UK, the undesirables will avoid Iceland and chose London..."

 

The Vatican Bank - The Money Launderer's Bank of choice!

The Financial Times of Saturday 7th December has published a detailed dossier of an investigation into the dubious activities of the Vatican Bank and the I.O.R (Istituto per le Opere di Religione), and particularly its part in recent major money laundering activities!

From my perspective as a professional consultant and a critical commentator on these issues for over 35 years, I am always quietly amused by the absence of historical knowledge or understanding possessed by so many of the compliance personnel who are employed to facilitate the compliance with the anti-money laundering laws, and who come to these revelations with no historical perspective to assist them in their functions.

The truth is that the Vatican Bank and the I.O.R  have been closely engaged in criminal money laundering activities for many years, and they have had a very chequered history of dishonest activity which has been covered up and denied by successive generations of Papal administrations.

What follows is a distillation of a chapter taken from my book 'Money Laundering' which was published in 1994, and which began by examining the history of money laundering, and which examined the role played by the Vatican Bank.

Money laundering was not invented by the European Directive on Money Laundering in 1991, but had a long historical tradition arising out of the emergence and criminal activities of international organised crime. Like all businesses the various disparate activities had to be managed effectively, and the event which finally brought the influence of the  gangsters such as 'Lucky' Luciano and Meyer Lansky, as well as financiers as Michele Sindona together in the most ambitious and far-reaching enterprise of them all; an episode which would eventually be realised to have been the single most important event in the history of organised criminal money laundering, occurred between October 10th to October 14th, 1957 in the Sala Wagner of the Grande Hotel Des Palmes, Palermo.

It is from this moment that what we now call 'money laundering' changed from being merely an unstructured series of unrelated events intended to disguise the proceeds of individual criminal enterprises, to the sophisticated, organised, institutionalised system of alternative financial management it has now become, and its motivating factor was the explosion in demand for a new narcotic of choice, Heroin.

Like all great events in history, the meeting of the heads of the U.S and Sicilian Mafias in the Grande Hotel in Palermo did not happen simply by chance, and with the benefit of hindsight we can see the important influence of Sindona and his connections to the upper hierarchies of the Vatican and its bank.

Michele Sindona had been born in Patti, near Messina in 1920. Graduating with a degree in Law from university in 1942 he was well placed to assist the invading Americans, while conducting lucrative black-market dealings on the side with the leading Sicilian black marketeer, Vito Genovese, who, believing himself to be the next target on New York District Attorney Thomas Dewey's list, had escaped to Sicily from New York with $750,000 in 1937 after the conviction of Lucky Luciano.

Sindona's expertise in creative financing had soon brought him to the notice of his local bishop who in turn recommended him to the papal Secretary of State, Cardinal Giovanni Batista Montini, later to become Pope Paul V1. These two connections would later serve Sindona well as he began his climb through the upper echelons of the three pillars of Italian society, the Roman Catholic Church; the Christian Democratic Party and the Mafia. By 1948, Sindona had settled in Milan specialising in Corporate Tax affairs and acting as a commercial adviser to a wide range of clients.

At this time, all the major figures in Italian and Sicilian organised crime in the United States were either first generation immigrants from Europe or were the children of immigrant parents. Many, if not all had direct blood relations still living in Italy and Sicily, and the links and family connections on both sides of the Atlantic were still very strong.

It was this valuable family connection that Luciano intended to exploit in order to continue the lucrative international narcotics trade which he and his counterparts had created, but which was now increasingly under threat in the United States. It was this topic which was at the top of the agenda when the leading U.S mafiosi travelled to Palermo in 1957 to confer with their relations and colleagues.Every man who attended the meeting at the Grande Hotel was a noted drug trafficker, all of whom would be later indicted as a group by an Italian judge for 'organizing the drug traffic to the United States via Sicily'.

As a result of the confessions of Tommaso Buscetta, we now know that the most important topic of conversation on the agenda was the organization of the heroin trade on an international basis. The outcome of the meeting was an agreement between the Americans and the Sicilians on the way in which they would combine their resources to facilitate the trafficking in narcotics, and like all great ideas, its genius lay in its simplicity.

It was agreed therefore that the Sicilians would arrange for the importation of heroin into the United States and would run the distribution networks. The Americans would merely provide the 'front' facilities behind which the Sicilians would operate; they would collect the money, and arrange to launder the profits through a series of semi-legitimate companies, thus giving all the appearances of running a perfectly normal business enterprise. It was in the laundering of the heroin money, some through what would later become known as the 'Pizza Connection,' that the genius of Meyer Lansky's foresight and the artistry of Michele Sindona's technical facilities would come into their own.

Sindona is reported to have attended the meeting in the Grand Hotel des Palmes, although he was not present at the follow-up in Appalachin in up-state New York which took place on November 13th 1957, less than a month after the Palermo meeting. All those who had been together in Palermo reconvened to pass on the details of the agreement worked out in Sicily to other members of the U.S families. Lansky himself was not at the meeting, he was in Havana, but he was represented by Sam Giancana, who would later become the head of the Mafia in Chicago.

However, despite his absence, it is clear that Lansky had a great interest in the outcome of the proceedings and wished to be kept appraised of what transpired at the meeting. Who better to represent him therefore than Giancana, with whom Lansky had long enjoyed close business relations and for whom he had been conducting laundering operations in Havana since the late 1940s.

The Palermo and Apalachin meetings marked the turning point in the professionalising of the Mafia's handling of the international narcotics trade and its associated money laundering requirements and it is from this point that the influence of the Sicilians and particularly Sindona and his connections with the Vatican Bank became pre-eminent, because of their use by the CIA in the laundering of money and the channelling of funds to anti-communist elements in Sicily, much of the money forwarded to the church and the Christian Democratic party flowing through corporate fronts organised by Michele Sindona.

Having moved to Milan, Sindona had been introduced to the Istituto per le Opere di Religione (IOR) the bank which existed to serve the needs of the Vatican. The Vatican has always enjoyed a unique place in the legal and political life of Italy, having been recognised by Mussolini as a sovereign state in the Lateran Treaty of 1929. After the war, the Church, in conjunction with its new-found friends in the CIA, continued to assist in fostering anti-communist sentiment through its support of the Christian Democratic party and much of its financial influence was channelled through the IOR, which had been founded originally to facilitate the Church's supply of funds to support church organizations around the world.

The IOR did not merely function as a religious organisation however. It also acted for specially introduced clients whose financial affairs required a degree of discretion not normally found even in mainstream banking circles. Many of those clients were international tax evaders, but they also included leading Mafiosi, whose relations with the Church, both in Sicily and in the United States had always been cordial, and so meant that they could be given the requisite introductions without qualm, as Sam Giancana had discovered in Chicago.

'With Cardinal Stritch's move to New Orleans, Giancana claimed he hadn't lost an ally in the Church; he'd merely gained additional channels for money laundering.'

Through its trusted agent Sindona, the Vatican, together with its American bankers, the Continental Illinois Bank and Trust Company of Chicago, had in 1959 provided itself with the means to provide those discreet services by acquiring control of the Banca Privata Finanziaria (BPF), a Milanese bank with a record of assistance in illicit financial movements. Later in 1964, they added to their institutional portfolio by acquiring the Swiss Banque de Financement (Finabank), in Geneva.

It was through these facilities that Sindona was able to provide the Sicilians with so much assistance in the cleaning up of their illicit Heroin money, while at the same time, providing the CIA and its Catholic associates with the means to move secret funds around the world to support anti-communist influences in foreign countries.

'During Giancana's tenure outside the United States millions of dollars flowed to Continental Illinois, a bank then heavily invested in Finabank, a Swiss Bank owned in part by the Vatican and controlled by financier Michele Sindona, Giancana's Gambino connection.'

The Vatican's independency in fiscal matters had long been a bone of contention for successive post-war Italian Governments and the Vatican had been engaged in a lengthy rear-guard action to stave off the political demands for these privileges to end. In 1969, faced with the likelihood that the Government would force through the necessary legislative changes, leaving the Vatican to face a crippling tax bill, the fathers of the church turned to Sindona to assist them, through the agency of their own IOR, in the moving of their assets abroad.

In common with many European countries, Italy had imposed strict exchange control restrictions after the end of the Second World War. The Vatican however, as an independent sovereign state was not subject to the same controls and in any event,no customs facilities existed to check the sources of money flowing into and from the Vatican's coffers, usually through its own private Swiss Bank, the Banco di Roma per la Svizzera.

Sindona was by now in a unique position to help the Church in its laundering aims, and began to move huge sums of money and in addition, divest the Church of some of its more embarrassing public shareholdings through various front companies created or acquired by him for the purpose. He was supported and assisted by the man whom he had recommended for the post of head of the IOR, Archbishop Paul Marcinkus. Sindona was well aware of Marcinkus's abilities, having been previously associated with him through his relationship with Sam Giancana in Chicago.

Mob money was carried out of Chicago to Mexico under the safety of priest's robes, to be placed in banks scattered throughout South and Central America, but most often in Panama.

Often these funds were then diverted to Milan and on to the Vatican Bank in Rome, where they were easily transferred to Finabank in Switzerland - and straight into the hands of Michele Sindona and an up and coming Chicago priest residing in the Vatican, Paul Marcinkus.

Marcinkus had been recommended to Rome by his mentor, Cardinal Stritch and he had quickly come to the eye of Pope Paul V1. As an Archbishop representing the richest Catholic diocese in the world, it was only natural that Marcinkus would be able  to introduce new sources of dollar deposits which would in turn assist to cover the Vatican's operating deficit, and for a man of such obvious administrative talents, it was only natural that he should be put in charge of the affairs of the very bank which handled the money introduced by him.

Among the many institutions which came under the influence, first of Sindona and subsequently Marcinkus and which assisted the Church in the relocation of its wealth was Banco Ambrosiano, a traditionally staid 'Catholic' bank, created originally in the nineteenth century as part of a Vatican-inspired measure to counter the secular influence of Freemasonry.  Its manager, Roberto Calvi was a close business associate of Sindona as well as being a member of the sinister Freemasonic group, Propaganda Due (P2), for whom Calvi would become the lead source of financial support.

With Sindona's support and encouragement, Calvi had begun to bring about the transformation of the traditional Ambrosiano into a leading international merchant bank. His first step had been to acquire a Luxembourg shell company from Sindona which was subsequently renamed Banco Ambrosiano Holdings Ltd. This was quickly followed by the acquisition of the Swiss Banco del Gottardo and in 1971, the Banco Ambrosiano Overseas Ltd, otherwise known as the Cisalpine Bank, in the Bahamas, of which Paul Marcinkus was a member of the board of directors. Provided with these facilities, Calvi was finally in a position to supply whatever financial services his masters, whether in the Church, the Freemasons or the Mafia, required.

The creation of the Bahamian Cisalpine Bank for laundering the Vatican's wealth was an inspired move, while among Sindona's other financial creations which he used as a means of providing further laundering services was Moneyrex, a money brokerage operation which he had set up to take advantage of the volatile foreign-exchange market which had been created in the aftermath of the devaluation of the dollar in 1971. Moneyrex assisted in facilitating dollar-denominated brokerage transactions between banks with a surplus of dollars and those with a shortage, and among its other commercial partners was yet another Sindona-owned vehicle, the Franklin National Bank of New York.

Speculating heavily with borrowed dollars, Sindona plunged deeply into the world's financial markets. His foreign-exchange gambles failed to pay off however, due in no small part to the losses created at Franklin National. Despite $2 billion in loans from the Federal Reserve, and frantic efforts in Italy to stave off the impending collapse of BPF and the other institutions in Sindona's empire, the end came in the summer of 1974 and Sindona went on the run, first to Taiwan and then later to America, where he would be sheltered initially by the Sicilian branch of the Gambino family.

You couldn't make this crap up!

"...The British banking sector has become an organised criminal enterprise which has been allowed to develop because of the criminogenic environment in which it functions, which has resulted from the absence of any meaningful regulation which those who control and manage the banks would fear.

"   In this organised criminal category I include the various mis-selling cases, including pensions, PPI Insurance and interest rate swap derivatives; the criminal manipulation by Barclays and other banks of the LIBOR interest rate structures; the institutionalised level of money laundering as identified in the HSBC case; the serial abuse of the US sanctions provisions as indicated in the Standard Chartered Bank case; as well as many other examples of criminal actions such as theft of client funds, teeming and lading, abuse of client instructions, insider dealing, front running, churning, and market manipulation which have become the subject of international regulatory interventions.

"...If the recent financial devastation in UK financial markets has taught us anything, one qualifier stands out above all the rest of the explanations. The effective ‘regulation’ of the market in financial services in the United Kingdom, particularly in the areas of preventing and forestalling commercial activity which has the capability to undermine the well-being of the financial market, in which I include not only financial criminality and money laundering, but also the pro-active identification and prevention  of financial damage has, to all intents and purposes, totally failed.

"...It has failed despite the huge bureaucratic organisation which has been created for its control, because those who are employed to provide the regulatory oversight of the market, the Lead Regulator, the Financial Services Authority, and the subordinate compliance officers within the individual regulated member firms, do not and have never understood the true nature of the criminogenic personality of so many of those who profess the trade of financial practitioner, nor do they exhibit any great inclination to wish to deal with the egregious activities of these individuals in a 'policing' manner..."

I wrote these words as the opening section of my evidence which  I presented to the Parliamentary Commission on Banking.

My words and indeed, my entire report were completely ignored, and the government servants on the Committee sought to suppress my thoughts, on the grounds that I was saying things 'the banks wouldn't like'!

Well, in the last few days, we have been confronted with two more examples of behaviour of the most egregious kind, which prove, once again, that I was right, and that the British banking sector is a criminal sink, run by a bunch of the most criminogenic individuals, who have no moral compass, but who have no fear of the regulators, and so feel completely at ease with the commission of downright criminal offences.

I am referring to the Co-Operative Bank case, and to the latest scandal oozing from that publicly-owned bag of sleaze, the Royal Bank of Scotland.

It's hard to decide which is the more incredible story, the Co-op case with its lurid tales of sex, drugs and Rock of Ages; or the ghastly crimes being unveiled at RBS as the awful examples of business crime, bad faith, client gouging and general absence of any pretence at commercial ethics, becomes public property.

I think I must start with the RBS case, because it illustrates most clearly how the regulators have completely renounced any pretence they might have had to providing any meaningful regulation of the banking sector.

One of the duties of the regulatory function is to ensure that a regulated member and particularly a bank, is treating its clients fairly.

The FCA spells it out:

  "... Treating customers fairly (TCF) remains central to our expectations of firms’ conduct, that firms put the well-being of customers at the heart of how they run their businesses..."

They continue by identifying how clients have a right to be treated with consideration in these financially difficult times.

"... We expect customers’ interests to be at the heart of how firms do business. Customers can expect to get financial services and products that meet their needs from firms that they can trust. Meeting customers’ fair and reasonable expectations should be the responsibility of firms, not that of the regulator..."

Well, that was clearly not the case with RBS.

Businessman Laurence Tomlinson has delivered a report to Vince Cable in which he outlines examples of egregious behaviour at RBS over the question of the way in which the bank was treating its customers. In his report he refers to an investigation conducted by The Sunday Times, saying;

“...The Sunday Times has uncovered deeply alarming evidence of abuse of small businesses by RBS, which is corroborated by many more cases . . . There is a wealth of evidence which suggests that RBS has forced healthy, vibrant businesses into financial trouble and . . . seized their assets to benefit its own vast property empire...”

The allegations centre on RBS’s feared problem lending division, Global Restructuring Group (GRG), which is tasked with maximising returns on loans deemed “risky”.

But far from being “zombie companies”, many of the firms whose cases the Sunday Times newspaper has examined had never missed a loan repayment and were surviving the economic downturn before the bank pulled their finance.

RBS said it had put the firms into GRG because it did not consider them viable. The unit has the power to rip up loan deals, impose inflated interest rates and fines sometimes running to hundreds of thousands of pounds, drain cash from accounts and halt payments to suppliers and Her Majesty’s Revenue & Customs.

A former senior RBS insider has alleged that, as the recession hit, staff were tasked with scouring the loan book for businesses that had breached minor lending covenants so the bank could pull the deal and put them into GRG. He said the breaches could be as small as forgetting to file minor financial information.

Tomlinson’s report covers allegations of abuse against all the big banks, but singles out RBS for severe criticism. He accuses the bank of putting firms into GRG for minor setbacks which were “so insignificant, given the otherwise positive performance of the business, that the reaction of the bank can only be considered as utterly disproportionate at best and manipulative and conspiring at worst”.

The bank insists that it has every right to enforce the loan agreements in this way — but there are questions about whether it is appropriate for a taxpayer-owned bank to profit from the distress of small businesses in a downturn.

Whichever way one interprets this 'red in tooth and claw' behaviour, one thing is clear. RBS has behaved in a downright criminal manner, and their own conduct could be used in evidence against them.

In one case of the forcing of a valuable business into receivership, there is documentary evidence available to show that a bank official described how the banks' own property management company, West Register, “would have an appetite for the scheme.”, meaning that they were very anxious to get hold of the property concerned to add to their own portfolio. By forcing the company into threatened bankruptcy, West Register were able to try and buy the property at a considerable under value.

The presence of the word 'appetite' in this state of affairs changes the criminogenic nature of the actions engaged in by the bank, and puts them firmly into the area of the crime of theft.

It proves that the bank was not acting with the sole intention of protecting its loan book, and in circumstances where foreclosure was the only alternative. The word 'appetite' clearly indicates that the bank was anxious to add properties to its own portfolio, and that it would do so at whatever opportunity.

Any criminal investigation of these actions would focus intently on the similar fact evidence demonstrated by the RBS department in the undermining of perfectly solvent businesses by undervaluing their asset base. Such activity is clearly malicious and would go to negative any argument that the bank was acting within the limitations of its legitimate behaviour. The prosecutor would look at the way and the manner of the RBS technique and invite the Jury to infer that there was a 'method' by which RBS enriched themselves at the expense of their clients by holding out loans which they later disclosed on spurious undervaluing of their real worth, with the intention of taking over valuable real estate by a deceit. Such a finding would clearly demonstrate the necessary element of 'dishonesty', so all we need now is a prosecutor with the courage to take on the bank and the relevant directors and executives concerned!

As for the Co-op bank, well, what is there left to say?

A pathetic man who was not a banker (not that that necessarily means a great deal, but it would be nice to have an attempt made to find someone who could read a balance sheet), and whose taste in Class A drugs and exotic young men singled him out as perhaps someone who might not have been entirely 'fit and proper' to have control of a licensed bank.

I don't care personally about his own predilections, my concern is whether or not he is fit to have control of other people's money, and whether his habits may have laid him open to blackmail or unsound commercial judgments. Whatever, this is clearly yet another case where the regulators should hang their heads in shame, because they manifestly failed to undertake any proper due diligence into Paul Flowers' suitability for the post he held.

So, only a few months after the report of the Banking Commission, with the firm undertakings that things were going to be different from now on, we are faced with two more shameful exhibitions of British banking conduct.

The RBS case will limp along until everyone is bored with the issue and another scandal has surfaced to take its place. The best we can do is to keep loudly speaking truth to power and letting them know, in no uncertain terms that we don't accept this kind of behaviour, and that the regulators must stop shilly-shallying around and do something which finally demonstrates that they mean what they say!

Like I said, you couldn't make this crap up!