London, Oct 11 2010 | Global Witness British high street banks have accepted millions
of pounds in deposits from corrupt Nigerian politicians, raising serious
questions about their commitment to tackling financial crime, warned Global Witness in a report
published today. By taking money from corrupt Nigerian governors between
1999 and 2005, Barclays,
NatWest, RBS, HSBC and UBS helped to fuel corruption
and entrench poverty in Nigeria.
What is so extraordinary about this story is
that nearly all of these of these banks had previously fallen foul of the UK banking regulator, the Financial Services
Authority (FSA), in 2001 by reportedly helping the former Nigerian dictator
Sani Abacha funnel nearly a billion pounds through the UK. These banks
were supposed to have tightened up their systems but as this
report now shows, a few years later, they were accepting corrupt Nigerian
money again. There is no sign that the FSA has taken any action this time.
Global Witness's new report, International Thief Thief,
is based on analysis of court documents from litigation in London by the
Nigerian government to get funds returned from the UK that were stolen by two
former state governors. British banks made it possible for Dieypreye
Alamieyeseigha of Bayelsa State and Joshua Dariye of Plateau
State to bring their corrupt loot into
the UK.
"Banks are quick to penalise ordinary
customers for minor infractions but seem to be less concerned about dirty money
passing through their accounts," said Robert Palmer, campaigner at Global
Witness. "Large scale corruption is simply not possible without a bank
willing to process payments from dodgy sources, or hold accounts for corrupt
politicians," he added.
One of the banks profiled in the report is RBS,
now majority owned by the taxpayer. RBS allowed former governor Alamieyeseigha
to receive bribes and bring £2.7 million into the UK. An English High Court judge
found that at least £1.56 million of these funds were bribes paid by a state
contractor called Ehigie Edobor Uzamere, currently a Nigerian senator, in order
to win a contract to build a fence around the governor's official lodge. Global
Witness has asked RBS whether it carried out adequate checks on its customer
and his funds, but has not had a reply.
"It adds insult to injury that not only are
ordinary taxpayers propping up failing banks, but that one of these banks has
facilitated corruption in Nigeria, a country where more than half the
population are still without access to clean water. This undermines British
development aid, which fills the gaps created by poor governance and failing
state services," said Palmer.
Global Witness is concerned that banks and the
FSA have yet to take this problem seriously enough. Anti-money laundering
regulations require banks to identify their customers and the source of funds,
but they are not being adequately enforced. Banks need to get much better at
checking where the money is coming from and whether it was obtained through
corrupt practices. The banks in this report may not have broken the law, but corrupt
money still entered the UK
and so our financial system is still complicit in corruption.
This is an ongoing problem, as shown by the
action taken against HSBC by the US regulators last week. They
required HSBC's American arm to overhaul its due diligence systems following
violations of US anti-money laundering laws and inadequate monitoring of
transactions and customers, including ‘politically exposed persons' - ie the
foreign senior officials who could be involved in corruption.
The British coalition government plans to
abolish the FSA. Whatever body replaces it must take corruption seriously. The
government and the new regulator must send a clear signal to the financial
sector that corrupt money is not welcome. And the banks themselves must demonstrate
much more clearly the steps they are taking to stop dirty money entering the
financial system.
Note to editor
For more information on the US action against
HSBC US, see United States of America Department of the Treasury Comptroller of
the Currency, Consent Order in the Matter of HSBC Bank USA, N.A. Mclean,
Virginia, 7 October 2010; United State of America, Before the Board of
Governors of the Federal Reserve System, Cease and Desist Order Issued Upon
Consent Pursuant to the Federal Deposit Insurance Act, as Amended, 7 October
2010
