The Spider's Web: Britain's Second Empire (2017) - full transcript

(dramatic music)

[Newscaster] The British soldier,

all around the globe you'll find him

from Gibraltar to Hong Kong.

Everywhere he stands against
the threatening years,

staunch symbol of our
common will to order.

Up!

(solemn music)

[Narrator] The British Empire,

the largest empire the
world has ever known.

For over 300 years, Britain ruled.



It's army has conquered.

And it's bankers proclaimed
the might of its currency.

But one day, it all began to fall apart.

One by one, countries
declared their independence

from Britain, and no amount of
force could reverse the tide.

(solemn music)

As British elites saw
their wealth, privileges

and empire disintegrate,
they began to search

for a new role in a changing world,

and they found one in finance.

(solemn music)

This is a film about
how Britain transformed

from a colonial power to
a modern financial power

and how this transformation has
shaped the world we live in.



(solemn music)

(dramatic music)

In the days of the British
Empire, the City of London

was the world's biggest
global financial center.

The City of London was the
kind of beating financial heart

of the British Empire.

Historians, Cain and Hopkins,
called it the governor

of the imperial engine.

All these countries in the Empire used

to use the sterling currency,

and the City of London was
kind of the financier of this,

not just inside the sterling zone

but outside the sterling zone as well.

[Narrator] As Britain's empire declined,

so too did the City of London.

[Reporter] One British
Army truck is bombed,

killing two soldiers and wounding 12.

As rioting becomes daily,
more widespread on Cypress,

young people of high school
age take an increasing part

in the violence.

Here, a group of girls are being dispersed

after a rock-throwing battle
with British military police.

(solemn music)

[Narrator] With the decline of empire,

British commercial interests

across the globe were under threat.

In 1956, Egypt nationalized
the Suez Canal.

[Reporter] A new
Middle East crisis arises

as President Nasser of Egypt

tells a wildly cheering
crowd in Alexandria

that Egypt has seized the
internationally owned Suez Canal.

France and Britain issue
a 12-hour ultimatum.

Within hours of its expiration,

Britain's war planes are
winging their way to Egypt,

and its bombers attacked five
key cities, including Cairo.

[Narrator] The United States
was opposed to the invasion

and put pressure on Britain and France

to withdraw their troops.

There will be no
United States involvement

in these present hostilities.

It is our hope and intent
this matter will be brought

before the United
Nations General Assembly.

There, the opinion of the
world can be brought to bear

in our quest for a just end
to this tormenting problem.

(solemn music)

[Narrator] Britain was humiliated.

The Suez crisis signified
the end of Britain's role

as one of the world's major powers.

Following the crisis, there was a run

on the sterling, on the UK pound.

Some people suspected
the American government

was encouraging this run on the UK pound.

[Narrator] As financiers
withdrew their money

from Britain, the value
of the pound decreased.

To protect the value of the pound,

Britain limited the
bank's overseas lending.

They were not able to invest abroad.

And obviously, they were unhappy.

And we don't know exactly the context,

but it's very clear that the
banks, or their representative,

made a representation
to the Bank of England, ,

which in itself was
dominated by representing

from the banking industry.

It seems that they have
reached an agreement,

which was never written, that
if the banks intermediated

between two non-residents,
in a foreign currency,

in that case the dollar,

that this particular intermediation,

this particular deal
will not be considered

by the Bank of England
under its own jurisdiction.

[Narrator] The banks
began to create a market

for dollars in London, called
the London Eurodollar market.

To differentiate these
Euromarket activities

from their domestic banking activities,

banks kept two sets of accounts.

The Bank of England, the
UK regulator, declared

that the London Euromarket
accounts were not in London.

They were elsewhere, and
therefore it had no responsibility

for regulating them.

It's about providing a legal space

in which you pretend
activity is taking place.

And the importance of that is

that you pretend it's not taking place

in the economy where it
really is taking place.

So you're taking activity from the place

where it's regulated and taxed

and pretending that it's
happening elsewhere.

Now, where doesn't really matter.

It's just elsewhere.

[Narrator] When American banks realized

that London offered the ability
to avoid US regulations,

they moved their international
operations to the city.

(solemn music)

Around the same time as American banks

were moving their international
operations to London,

another new kind of financial
space began to emerge,

far away from London, in
Britain's overseas jurisdictions,

the last remnants of empire.

Back in the '60s,

the Cayman Islands was
a complete backwater.

The stories go that the
mosquitoes were so thick

in the air sometimes they
were enough to suffocate cows.

That's a legend that you hear
about the Cayman Islands.

I don't know how true it was.

But there was nothing happening there.

[Narrator] Accountants and
lawyers from London arrived

in the Cayman Islands and
other British dependencies

and began to draft a set

of financial secrecy laws and regulations.

Because these jurisdictions'
main selling point was secrecy,

they were called secrecy jurisdictions.

What the Cayman Islands was doing

was straightforwardly illegal activity.

Drug money was coming in, in
huge quantities, tax evasion.

Whatever you wanted, you could have it.

[Narrator] The Bank
of England was observing

the developments from London and noted

in a report market secret,
dated 11th of April, 1969,

"We need to be quite sure that
the possible proliferation

"of trust companies, banks, et cetera,

"which in most cases would be no more

"than brass plates manipulating assets

"outside the islands
does not get out of hand.

"There is of course no objection

"to their providing
boltholes for non-residents,

"but we need to be sure that in so doing,

"opportunities are not
created for the transfer

"of UK capital to the non-sterling
area outside UK rules."

These small territories,

the last remnants of the British Empire,

which are still overseas
territories today,

they are still the last
remnants of the British Empire.

There are 14 of these
overseas territories.

Seven of them are bonafide a tax haven,

including the Cayman Islands, Bermuda,

the British Virgin Islands.

Some of the biggest tax havens

in the world today are still British.

[Narrator] With access to
large amounts of offshore money,

the Euromarket grew rapidly.

By 1980, it had reached $500 billion.

By 1988, $4.8 trillion.

And by 1997, nearly 90% of all
international loans were made

through this market.

The British Empire had sunk,
leaving hardly a trace behind.

But the City of London
adapted and survived.

The City of London,
London's financial district,

is a peculiar place.

It has been called a city within a city,

a state within a state.

It is run by an organization

called the City of London Corporation,

a private company that
performs all the functions

of a local council with
a private police force

and private courts.

Those of you who aren't from the UK,

some of you even who are,

might not be aware just how weird a thing

the little City of London
is within the big London.

The City of London is a separate
entity to the wider London,

and it has its own head, the lord mayor.

He's distinct from the mayor.

He runs the rest of London.

[Narrator] Every November,

the city stages the lord mayor's show,

the world's oldest civic procession.

(upbeat music)

The city of London has long
had this curious legal status,

because back in 1066, when
William the Conqueror came over,

the city was one of the
only portions of England

that he failed to conquer,
and he struck a deal

with the city, in 1067, that allowed them

to continue to function.

[Narrator] To this day,
the City of London is exempt

from numerous laws that
govern the rest of Britain.

Its political system derives
from the Middle Ages.

The city's electorate is
dominated not by its residents,

but by the private business
operating within the city.

Its lord mayor is selected by
the heads of medieval guilds.

They have a representative
in the House of Commons

called the Remembrancer.

Apart from the clerks
of the House of Commons,

he's the only unelected person there.

All other lobbyists
have to stop in the lobby.

They're not allowed past the lobby.

[Narrator] The City of London

has a permanent representative
in the House of Commons

whose role is to report back

to the City of London Corporation

and to lobby Parliament
on behalf of the city.

The Corporation of London, clearly,

it's a unique and interesting phenomenon

that should have attracted
many political scientists,

political economists and columnists.

But I don't know if
anyone who has studied,

systematically, the Corporation
of London and its impact

on policy or economic policy.

So we can only surmise.

Some people assume or surmise

that the Corporation of
London is extremely powerful.

It is able in one way or
another to shape British policy,

particularly with international matters.

Clement Attlee, the prime minister

of the Second World War,
had something to say

about the City of London Corporation.

[Paul] He did, yeah.

"Over and over again, we
have seen that there is,

"in this country, another power than

"that which has its seat at Westminster.

"The City of London, a
convenient term for a collection

"of financial interest,
is able to assert itself

"against the government of the country.

"Those who control money
can pursue a policy

"at home and abroad contrary to that

"which is being decided by the people."

[Narrator] At the heart
of the City of London

stands the Bank of England.

The Bank of England is
not just a central bank.

It is also a financial regulator.

At the demise of empire,

the Bank of England used
its regulatory authority

to help attract the
world's banks to London.

In 1972, the Bank of
England issued a license

to the Bank of Credit and
Commerce International,

which set up its head office in London.

Within 10 years, the BCCI grew

into the seventh-largest
bank in the world.

10 years later, the BCCI was bankrupt.

The Deputy Director of
the CIA, Richard Kerr,

said late today that the CIA did use BCCI

to support CIA activities overseas.

[Narrator] But BCCI
had not just collaborated

with the world's intelligence services,

it had also engaged in
extensive financial fraud,

money laundering and terrorist financing.

BCCI constituted
international global crime

of a level that boggles the mind.

[Reporter] BCCI was financing terrorism.

The Bank of England knew
it, says the report,

but instead of supervising it properly,

it tried to prevent the bank's collapse.

I am saying very directly

that the Bank of England
had sufficient information

in front of it to close BCCI
15 months earlier than it did.

Millions of depositors
were hurt in that process.

[Narrator] Numerous
whistleblowers from BCCI

had contacted the Bank of England.

Yet the Bank of England did nothing.

The Bank of England had plenty of time

to intervene and investigate,
but it did not do so,

because the tradition at that time,

which still survives,
is that, well, actually,

you have to just kind of send hints

and talk over lunch tables

with the chaps regulating other chaps,

and all would be well.

[Narrator] Robin
Leigh-Pemberton, the governor

of the Bank of England at the time

of the collapse of BCCI,
commented, "The present system

"of supervision has
served the community well.

"If we closed down a bank every
time we found an incidence

"of fraud, you would
have rather fewer banks

"than we do at the moment."

London was a place for
banks to engage in business

that was not allowed elsewhere,

where senior bankers did not have to worry

about the consequences of their actions.

This is one of the reasons
why today there are more banks

in London than in any
other financial center.

In Britain, nobody goes to jail.

No bankers go to jail.

They generally don't.

They are a protected species.

And that is part of the offshore
business model of the UK,

is to say, "We will protect you.

"Bring your money here,
and we will look after you.

"We're not gonna put you in prison.

"We'll let you do what you want."

[Narrator] Light-touch
regulation was one way

of attracting business to London.

Another was secrecy.

From the 1960s onwards, City
of London institutions began

to establish offshore
branches in former outposts

of the British Empire.

Their aim was to create offshore centers

with strong secrecy legislation in order

to attract capital from across the globe.

Swiss banking secrecy
is the most famous,

the most well-known.

You put your money in a Swiss bank,

and they promise not to tell anybody.

That's one kind of secrecy,
but another kind of secrecy,

which is very British, is the trust.

And the trust is a very
slippery, complicated

and devious mechanism.

Trusts emerged, the legend
has it, from the time

of the Crusades, when the
knights would go off and fight

in foreign lands, and they
would leave their assets

in the care of trusted stewards.

What trusts do, ultimately, is they play

with the concept of ownership.

Ownership is not such a simple thing.

So the settlor, the knight in this case,

would hand over the assets to someone

who these days would be called a trustee.

It's often a lawyer.

Legally, you are separated
from those assets.

They're not yours anymore.

There's a barrier.

You can't be taxed on them.

Nobody's gonna find anything

about your connection to these assets.

[Narrator] In Britain's
offshore jurisdictions,

no qualifications are
necessary to be a trustee.

Anyone can set up a trust
and act as a trustee.

There is no registry of trusts.

There are no bodies to certify
that a trust has been set up.

The only persons who
know about the creation

of this agreement are the
trustee and the settlor.

There's no obligation to register it.

There is no financial
reporting obligation of trusts.

They're not required to
put annual statements

on to account anywhere.

So actually trusts are, to
all intents and purposes,

invisible arrangements.

[Narrator] Economist John Christensen

was an economic adviser to
the secrecy jurisdiction

of Jersey for 10 years.

We're not talking about a few million.

We're talking now about trillions,

trillions of dollars of capital,

which apparently belong to nobody.

For tax purposes and for other purposes,

they belong to nobody.

Everything, works of arts, gold bullion,

horse-race horses, cars, real estate,

not just financial assets but a whole lot

of non-financial assets
belong to these trusts,

sitting there belonging to nobody.

Now think that one through,
'cause we are talking

about maybe as much as $50 trillion

of assets sitting offshore,
behind these instruments.

Well, the Cayman
Islands are among several

British overseas territories

who have signed a new
information exchange agreement

with Britain and the rest of
Europe to tackle tax evasion.

The countries are now required

to automatically provide
details of the ownership

of bank accounts and how they're used.

Cayman became the first
signatory last week.

It's important that the Cayman Islands

should be recognized as the
first overseas territory

to sign such an agreement
with the United Kingdom.

And I think this importantly reflects

the constructive approach that
the Cayman Islands has taken

in delivering our shared objective

of rooting out tax evasion.

The trust lies at the core
of the British secrecy model.

They don't use banking secrecy.

The Swiss use banking secrecy.

The British, of course,
are only too willing

to kill off banking secrecy,

because they will then
capture a larger market share.

That's why the Brits are doing this.

[Narrator] Trusts are
the basic building block

of Anglo-Saxon secrecy,
and they form the basis

from which complex offshore
structures are created.

Every secrecy jurisdiction
offers a specific set

of services, from trusts
to shell companies

to secret bank accounts
and nominee directors.

The combination of these services

into complex structures
spanning multiple jurisdictions

enables the creation of secrecy structures

that are almost impossible to penetrate.

An offshore structure
will often have a trust kind

of sitting at the top of it.

The trust will be here,
managing the assets,

kind of controlling the assets.

Underneath it, the trust will
own some shell companies.

Each one might be in a
different jurisdiction.

So you might have a trust
in one jurisdiction.

These trustees are somewhere else,

whose beneficiaries are somewhere else,

which owns offshore
companies somewhere else.

Each of these companies
might then own assets.

So they might own a bank
account, a racehorse, a yacht,

a painting, a portfolio
of shares or whatever.

[Narrator] There are
numerous variations of trusts

and offshore secrecy structures.

There are offshore lawyers
whose work entails the creation

of evermore complex
and obscure structures.

The aim of these structures
is to hide the identity

of the owners of offshore
assets and allow offshore wealth

to be recycled back into global markets.

Looking on the amount

of money being administrated
from tax havens,

you see that it is a
curve going like this.

And all the talking we have been doing,

along with other wonderful people fighting

against tax havens, has
not changed anything.

It is the world where
you say, "Go on talking

"and go on talking.

"You're interesting me."

And I'm going on doing what I want to do.

We know everything today,

because we have had the Panama Papers.

We have seen it, and we are
not able to act upon it.

And we are not able to act upon it,

because this system is really
protecting the few people

that are having benefit from it.

And these are, of course,
in fact, very few people,

but they are powerful.

And I see in the Panama
committee that I'm sitting in,

the only thing that could change this is

to have a public accessible register

of the beneficial ownership of trusts

and of all kind of companies.

It is easy.

[Narrator] The Panama Papers
are a collection of leaks

from the offshore law
firm Mossack Fonseca.

Mossack Fonseca is the
fourth-largest offshore law firm.

The other nine of the 10
largest offshore law firms

are registered in British
overseas jurisdictions.

When countries complained to Britain

about the activities run
out of its offshore havens,

Britain claims that these
places are independent

and that there is nothing it can do.

I'd heard time and time
again from officials in Berlin

and in Paris and in Washington
and in other countries

that they'd been told by
the British government,

yes, they're well aware of
what's going on in Jersey,

and they think it's very unfortunate,

but they don't have the
powers to intervene.

Well, that's a straightforward lie.

They do have the powers to intervene.

They just choose not to.

Britain plays this kind
of game of pretending

when it suits them to pretend

that these places are independent.

At the end of the day,
Britain appoints the governor,

appoints lots of senior
people in these places.

They are responsible for
foreign relations and defense.

And also they can veto
their legislation as well.

So Britain has a massive
degree of control.

Basically it is controlling these places,

allowing them a little
bit of political space.

[Narrator] During his time
as economic adviser to Jersey,

John Christensen frequently
traveled to London

for talks with various British
government departments.

As economic adviser,
I had a lot of contact

with different departments.

Traditionally, UK
governments have tried not

to interfere in the domestic
affairs of places like Jersey.

So it happens in a more
subtle sort of way.

You kind of go and talk to someone,

either at the home office or the treasury.

And they'd say, "We're not
actually, particularly keen

"on this piece of legislation.

"It might be a good idea if
you didn't go down that route."

And over a cup of tea,
that's quite a strong signal.

That's a signal, go back to the island,

and say they don't want you to do this.

[Narrator] The British
government prefers not

to interfere overtly.

Instead, it communicates its desires

through informal discussions.

There is no paper trail
or official statement.

Discussions take place
behind closed doors.

The relationship that these places have

with London is very much about
the British establishment,

and people understanding each other.

I mean, anybody who is British
or knows British people knows

that communication between
us is often very subtle,

and you have to kind of know the codes

when people say stuff.

I mean, a lot of irony involved and a lot

of kind of codified language
for British establishment,

that people kind of
understand how it works.

And I think that is very much the case

with the British relationship
with the tax havens.

I think there's a lot of
understanding of what we can

and can't do without anyone
having to actually spell it out.

[Narrator] By keeping its power hidden,

Britain is able to claim

that these jurisdictions
are politically autonomous.

Independence for Cayman is
not on government's agenda.

That's the message being sent

to the UN Special Committee
on Decolonization.

Attorney Steve McField will
be representing government

at the UN meeting.

The committee was set up to
help colonies around the world

on the road to independence.

But Mr. McField says
he'll be making it clear

that Cayman is not ready
for that transition.

And that message is that the Premier,

his Cabinet, his party has no mandate

from the people of the Cayman
Islands to seek independence.

That is the message
that I will be carrying.

[Narrator] When the
Bahamas declared independence

from Britain in 1967, the
offshore bankers relocated

to the Cayman Islands

and continued their business from there.

It was the British connection
that reassured bankers

and their clients that
their money was safe.

This British bedrock,

that is what has allowed these
places to become so trusted

by the financial services industry

and offshore finance and all these people.

[Narrator] In reality, much
of the wealth administered

in Britain's offshore havens
is controlled from London.

The City of London, by and large,

likes to do its really
dirty work outside London.

There might, Heaven forbid, be a regulator

that actually takes the job seriously

and starts to prosecute
them for fraud in London.

So better to do the frauds
offshore in Gibraltar or Jersey,

where there's much less risk

that a serious prosecution
will ever happen.

[Narrator] Deals are often discussed

and concluded in London but
then registered offshore

for tax transparency
and regulatory purposes.

What they allow the city
to do is to get involved

in dirty business, but
then when the scandal hits,

to say, "Well, they're
kind of independent.

"There's nothing we can
do about those places.

"That's not us.

"That's tax haven activity,
and we're the city.

"We're not involved in
that kind of stuff."

So it's an incredibly kind
of convenient relationship.

The City of London has
shaped the way in which Jersey,

Guernsey and the British
overseas territories

have developed as tax havens.

I see these places as
the Frankensteins created

by the City of London.

[Narrator] Today, the UK is
the world's largest provider

of international financial services.

The UK has an almost unique
role in global finance.

And if you look at data, the kind of data

that we've constructed in
the Financial Secrecy Index,

you can see the relative
shares of each country

in the global provision of
financial services exports.

That's financial services
to non-residents.

Now there are two big centers,

and everything else is
quite small in comparison.

[Narrator] The two large
centers are the United States,

with around 19% of the global market,

and the United Kingdom and
its offshore jurisdictions,

which have around 25%
of the global market.

And if you add to that
other jurisdictions,

ex-colonies, that recently
independent, fairly recently,

by which I mean Hong Kong, Singapore,

maybe even Dubai and Bahrain and Cyprus,

then you reach a figure of nearly 40%.

And I think that figure
represents better the position

of London in the global financial market.

(dramatic music)

And the soldiers left.

The administrators left all the colonies.

But they still kept a
significant degree of control

over the financial flows from
these former parts of empire

and the rest of the world.

So you could describe
it as a second empire,

Britain's second empire, sort
of hidden financial empire,

spanning large parts of the globe.

[Narrator] At the time
of the British Empire,

the City of London was the world's largest

global financial center.

Not only Britain's colonies

but also independent countries
did their banking in London

and used the Empire's currency
for trade and financing.

As the Empire declined, so
too did the City of London.

The establishment of the
London Euromarket enabled

City of London banks to continue

to exploit their empire
era networks and expertise,

and the creation of secrecy
jurisdictions gave banks access

to large amounts of cheap money.

International banks from across
the globe set up branches

in London and Britain's
offshore jurisdictions

in order to take advantage
of this new system.

This system has taken the
place of the occupation,

I mean, up till '62 for France.

I don't know for England,
but about the same time,

England very physically
present in that sort of thing

and other colonies.

And when you look at the money flows

through the tax havens,
they are increasing

when we withdraw from the colonies.

We are still plundering
developing countries

as former colonial powers.

[Narrator] Wealthy
individuals, organized crime

and corporations shifted
their wealth offshore

in exchange for secrecy and no tax.

And as countries around the
world began to deregulate

and open their economies, it
became ever easier to do so.

Today, as much as half

of all global offshore
wealth may be hidden

in Britain's secrecy jurisdictions.

One of the losers is Africa,

whose flight capital flows mostly

into the modern British spider's web.

I think it's no coincidence

that Britain's offshore
empire emerged more or less

at the same time as the
collapse of the formal empire.

We tend to think of Africa
as being a huge net debtor

to the rest of the world,
but that was the extent

of their debts at the end
of 2008, $177 billion.

[Narrator] The debt of
Sub-Saharan African nations stood

at $177 billion in 2008.

Yet the wealth these countries'
elites had moved offshore

between 1970 and 2008 is
estimated at $944 billion,

over five times their foreign debt.

$944 billion, do the maths.

Far from being a net debtor,
Africa, Sub-Saharan Africa,

is a net creditor to
the rest of the world.

[Narrator] As capital moved offshore,

African nations borrowed money

from international banks at high interest.

Over time, these debts became so great

that they may never be repaid.

Secrecy jurisdictions were
starving developing nations

of their wealth

and their tax revenues.

For a long time, a lot
of developing countries,

including recently
Ecuador, have been trying

to set up a UN tax body,

which is of a higher value
than what is currently there,

which is the UN Tax Committee.

And every time this has
happened, it has gotten blocked.

During the financing
for development process

in Addis Ababa last year,

I think it was the UK and the
US that blocked attempts again

to set up this world tax organization.

So why would they not want

to have democratic decision-making
in global decisions

on how tax gets collected across borders?

I don't understand this.

As long as we have cross-border activity

that involves both criminal
and legal activity,

as long as we're unable
to separate the two,

this is going to continue to be a problem.

[Narrator] Western
nations block attempts

to provide greater transparency

of international financial flows

and the implementation of global standards

for the collection of tax across borders,

whilst elites in developing
nations use offshore centers

to hide their wealth offshore.

The oil from Gabon has not
benefited people in Gabon.

And this is true for the
copper in Zambia, for the gold

in Mozambique or in Mali.

They have benefited, the
company that do extract it,

and their shareholders.

It has benefited the corrupt
elite in the country.

In developing countries,
the offshore system

of tax havens has facilitated
the looting of the countries

by their elites.

It has enabled them to steal the money

and keep it safe somewhere else.

Illicit financial flows,
because the anonymity

that drives them creates
incentives for people

in positions of power to be corrupt.

This is why there's a group of countries

where development
progress is so difficult.

It's that the incentives of individuals

and the ability to pursue them
through all the mechanisms

that are underpinning the
shift flows outweigh the type

of mechanisms that lead you
to a powerful, representative,

effective state that can
start to deliver development.

(solemn music)

[Narrator] Worldwide,
developing countries lose

over a trillion dollars every year

in capital flight and tax evasion.

Most of this wealth flows
into large western nations,

like the United States and Britain,

and enables their
currencies to stay strong,

whilst developing nations'
currencies remain weak.

But illicit flows into western nations

also had another unexpected side effect.

The economies of the United States

and Britain began to financialize.

The origins of this financialization

or deindustrialization
go back to the 1960s.

[Reporter] Anti-war demonstrators
protest US involvement

in the Vietnam War in mass marches,

rallies and demonstrations.

President Johnson
meanwhile let it be known

that the FBI is closely
watching all anti-war activity.

[Narrator] In the 1960s,
US economist, Michael Hudson,

was working at Chase
Manhattan Bank on Wall Street

as Chase's balance-of-payments economist.

During the 1960s,

the United States'
balance-of-payments deficit

was entirely a result of
foreign military expenditures.

[Narrator] Dollars were
flowing out of the United States

as a result of the cost
of the Vietnam War.

The United States attempted
to prevent the dollars flowing

to Vietnam from being
deposited in foreign banks.

The government asked Chase
to set up a branch in Saigon

during the Vietnam War,
and as you can imagine,

it didn't have windows.

It was sort of a fortress.

It lost money, but the
government went to Chase,

because it said if you
don't get this money

that's being thrown off by
the military in Vietnam,

then it's going to go into French banks.

It'll get the general to go,

and you know what he's
gonna do every month.

He's gonna cash it in for gold.

That's what the United
States was trying to stop.

[Narrator] The US was not successful

in stopping the outflow of money.

So it began to hatch a different plan.

In 1967, Michael Hudson was handed a memo

by a former State Department employee.

In 1967, I was given

by a former State Department employee,

in the elevator at Chase Manhattan,

a memo from the State Department urging

that Chase Manhattan would take the lead

in helping the United States
become the Switzerland

of the world, meaning the flight capital.

The State Department,
through Chase, asked me

to estimate how much money
do you think is available

if America were to become
the new Switzerland

and how do we do it.

The plan was to organize
offshore banking centers

in the Caribbean and elsewhere.

And the hot money wouldn't
come directly into Chase,

because that wouldn't
be nice and very legal.

What happened was that the
Latin American criminals,

other criminals, drug dealers,
all sorts of organized crime,

would put their money in the
offshore Caribbean banks,

and these offshore banks
would then deposit the inflow

in the head office.

[Narrator] By moving
offshore dollars back

into the United States, the US
was able to stop the outflow

of dollars and support
the value of its currency.

Every country looks to
its foreign exchange rate.

The foreign exchange rate is
not only imports and exports.

It's capital movements, and if you look

at the International Monetary Funds's

monthly International
Financial Statistics,

you have sort of a
steady balance of trade,

a steady immigrant's remittances.

What goes up and down are
called errors and omissions.

What the United Nations
and the IMF call errors

and omissions are flight capital.

It's the reason that it's
omitted is they don't like

to really look at this.

In the 1930s, Roy Ovid Hall,

economist for the US Commerce Department,

wanted to include criminal movements

in the balance-of-payments statistics.

And Congress got very upset.

I was told, in Washington,
the argument was,

"We're a Christian country.

"We don't want to report crime.

"It's just, we don't look at it."

And they forbid him to
include criminal money

in the balance of payments.

I guess now you call it
errors and omissions.

You don't call it criminal
inflow and outflow.

[Narrator] In the 1960s
and '70s, Britain was faced

with a similar dilemma
as the United States.

Money was flowing out,

and this decreased the value of the pound.

Britain realized that it
too could support the value

of its currency by opening
its domestic markets

to the trillions of dollars passing

through its offshore havens.

But just as in the United States,

this had an unexpected side effect.

The British banks today,
just as in the 19th century,

don't put their money into
British manufacturing.

They put their money into
real estate speculation,

into financial speculation,
foreign currency, trade.

So the financialization

of London has helped
deindustrialize the country,

because it's enabled
sterling to be supported

by this huge inflow of hot money,

this inflow of drug-dealing
money and criminal money

and tax evasion money all over the world,

that is going to London instead
of going to Switzerland,

Lichtenstein or the Caribbean.

[Narrator] With the silent
backing of the United States,

Britain's offshore havens grew rapidly.

And before long, the
offshore system developed

into the world's dominant
international financial market.

Few were aware how this market functioned.

In 1986, economist John Christensen

went offshore to investigate.

He applied for a position
at the Jersey office

of one of the world's
major accounting firms.

At Deloitte Touche, I was working

in what's called company
and trust administration,

straightforward, offshore stuff.

I went offshore specifically
to work in that area,

because that's where you're dealing

with the offshore companies,
the shell companies,

the offshore trusts, and
you're administering them.

That way, I could see, from working

inside a big global accounting firm,

exactly what the clients were doing.

I had complete access
to all the client files.

And over the course of
my period of working

with Deloitte Touche,
I investigated over 100

of their clients offshore,
and this is what I found.

There was some insider
traders, some market rigging,

some avoiding disclosure
of conflicts of interest,

illicit arms trading, illicit
political campaign donations,

contract kickbacks, bribery,
fraudulent invoicing,

trade mispricing and, at the
bottom, tax evasion, okay.

This is what the clients were doing.

(solemn music)

And the basis of a sample
of the clients I looked at,

not a single client was
involved in what I would regard

as genuinely legitimate activity.

They were all involved in some
kind of tax dodging or worse.

I met with Carl Levin,
who used to be my senator.

And he made a lot of inquiries
into private banking,

asking question to the bankers.

What do you think the
percentage is among your clients

that are using this companies
for legitimate purposes?

The answer was, "I believe that 99.9%

"of my clients are using these companies

"for illicit purposes."

This is a reality.

This is American bankers
telling what they are doing.

And it's exactly the same
thing with UK bankers,

helping their client to
have accounts in Panama

or in Bermuda or in Cayman Islands.

(solemn music)

[Narrator] Secrecy
jurisdictions are heavily used

for fraudulent and gray-area
financial activities,

areas where secrecy is not
just desirable but a necessity.

Legitimate financial activity has no need

for the secrecy offshore
havens provide, nor a desire

to pay the high fees offshore
banks and law firms charge.

Today, close to half of the
world's secrecy jurisdictions

are British dependencies.

In public, these jurisdictions
claim they are transparent,

and their financial
services sectors are engaged

in legitimate financial activities.

Our economy is not based on secrecy.

It's based on transparency.

It's based on a sound
regulatory environment.

It's based on good governance
and good government

with a British government legal system.

That's what our financial
institutions are based on.

Well, tonight, we have
a response from the head

of Cayman Finance, after a group

of US-based anti-tax evasion
activists announced plans

to travel Cayman to draw attention

to what they feel is
corporate tax evasion.

Finance chairman, Mr. Richard Coles,

says he's encouraging the group to visit

and says, "Our financial
sector has nothing to hide."

I would say if anybody wants to come

to Cayman to find out what's coming,

what we do here, come on down.

We have no secrets here.

When I went to the Cayman
Islands, back in 2008,

I think it was, I called
the government spokesman.

He said, "Okay, we have
had an order from on high

"that nobody is allowed to speak to you.

"You are off limits."

[Narrator] In 2011,
journalist Nicholas Shaxson

released Treasure Islands,
a groundbreaking book

about the offshore system.

The author of a series of
international media reports

says he would welcome a debate

with Cayman Finance Chair Tony Travers.

Mr. Travers recently called
Nicholas Shaxson an imbecile

with the understanding of an 11-year-old.

There are always going
to be the politics of envy.

Now the politics of envy are exacerbated

by imbeciles who don't actually understand

what's going on in the Cayman Islands.

I don't know what he's talking about.

And furthermore, he doesn't
know what he's talking about.

[Narrator] The Cayman Islands

is the fifth-largest
financial center in the world.

It hosts 80,000 registered companies,

over three-quarters of
the world's hedge funds

and $1.9 trillion in deposits.

It has a population of
60,000, roughly equivalent

to New York's homeless population.

(solemn music)

A strange mixture of characters
populate the offshore world,

British ex-public schoolboys,

members of the world's
intelligence services,

global criminals,
assorted lords and ladies

and bankers galore.

(solemn music)

With so much at stake for so many wealthy

and powerful individuals, it may come

as no surprise that
Britain's offshore havens

have developed their
own curious mechanisms

to prevent information from leaking out.

For many people, who work offshore

and who don't like what they're doing,

it's very hard indeed to dissent,

because they will be attacked
personally with a degree

of viciousness which
is quite extraordinary.

Most of the time though, the instruments

of suppression are
relatively sophisticated.

You won't get promotion by
doing this, or you know,

your family won't like it.

It's not generally
let's slam them in prison.

That's far too crude.

We are talking about very
substantially the establishment,

the British establishment, in these cases.

The mechanisms are very, very subtle.

A sort of ostracism is
one way of doing it.

These peculiar mechanisms
for if someone tries

to blow the whistle, you
find all sorts of methods

that aren't the, you don't just fire them.

You give them far too much work to do.

You steer them in a different direction.

[Narrator] One person
who is intimately familiar

with how suppression works
offshore is former Jersey senator

and health minister, Stuart Syvret.

In 2009, he leaked a report
on a rogue nurse suspected

of killing patients at Jersey's hospital.

It all came to a head
during a state's debate

on Tuesday, the 10th of March.

Senator Stuart Syvret brought
the sitting to a standstill,

claiming Senator Jimmy
Perchard had sworn at him

and told him to go and top himself.

Senator Perchard denied the claim saying,

"I absolutely refute that."

But less than a week later,

he was forced to admit he'd lied.

Senator Perchard has now admitted
that on another occasion,

he did tell Senator Stuart Syvret to go

and do everyone a favor
and slit his wrists.

I was arrested at my house one morning

by six plainclothes police officers.

There were another two specialist

data-search police officers on-hand

and also another two police
officers in full body armor

and one of those battering
rams they kind of use

in drugs raids.

So 10 police officers descended on me

without a search warrant.

The property was turned
over from top to bottom.

All of the computers
were seized and searched.

All kinds of private
constituency data was stolen

by the police.

(solemn music)

[Narrator] Shortly
after we began filming,

a police officer exited
the police station.

As he hurried past, he
grinned at the camera.

The officer was on his
way to test the sirens

on his motorbike, which
he did at intervals

throughout much of the
remainder of the interview.

When it came

to prosecuting me--
(siren wails)

[Narrator] Stuart Syvret was prosecuted

under the data protection law.

When the authorities
were prosecuting me,

I claimed that this was a legitimate

public interest disclosure defense.

And I, with an expert witness, was able

to produce a set of reports
that effectively destroyed

(siren wails)
the prosecution case.

[Narrator] In reaction to this,

the magistrates ruled that
Stuart Syvret's defense case,

that he had leaked the report
in the public interest,

would no longer be
admissible but continued

to prosecute him all the
same without a defense case.

Over the past seven years,

Stuart Syvret has been
repeatedly taken to court

and imprisoned three times.

He does not know when or if
the persecution will end,

nor does he know when he will find himself

behind bars again.

To look at Jersey from the outside,

it looks like it's got
a prosecution system.

It looks like it's got a
court and a legislature.

But none of it's real.

It's a Potemkin village.

None of these systems in Jersey meet

the tests of being objective,
(sirens wail)

of being objective or
actually functioning properly.

The experience that
Stuart Syvret had is perhaps

at the blunter end of the scale.

He was simply suppressed
and taken to court

on trumped up charges.

(siren wails)

(speech drowned out by siren)

This is kind of how oppression
happens in Jersey, see.

All kinds of little things
get done to harass people.

They don't often go to
the kinds of extremes

that they did against me in
terms of actually arresting me

and putting me in prison, but
the authorities use all kinds

of other lesser, little methods
to interfere with people,

kind of sabotage things, you know,

obstruct people, make
life difficult for people.

You know, if you annoy the
establishment in Jersey,

you won't get a job here.

Your children won't get decent jobs.

That's kind of how it works, isn't it?

I went to Jersey in March
2009, with Nick Shaxson.

About 24 hours after we arrived
in Jersey, we were there

for several days, Nick said,

"Have you noticed that
we're being followed?

"Ever since we arrived at the
airport, we've been followed."

He said, "Don't look know,
but we're being followed now."

It turns out he was quite correct.

We were being followed.

And I found that very disturbing,
very disturbing indeed.

[Narrator] They have a saying in Jersey.

If you don't like it here,

there's always a boat in the morning.

Jersey finance promotional
literature states,

"Jersey represents an extension
of the City of London."

It's where the City of
London chooses to do many

of their activities which they
couldn't do in London itself.

We're here to talk about this
one company called Appleby.

I'll just read what they
say on their website.

"Members of the firm,
Appleby has gone on not only

"to political office but
also in a number of centers,

"Bermuda, Jersey, the Isle
of Man and the Cayman Islands

"to senior judicial office."

So essentially they're
boasting of the fact

that their staff and their
partners have a real interchange

between the people that are in power

in these offshore financial centers.

[Narrator] The same
lawyers and accountants

who set up and administer offshore trusts

also occupy senior political positions.

In Britain's offshore world,

most politicians are in business.

They lobby for business and
promote business interests.

They draft, refine and pass legislation.

Politicians sit on the boards

of the companies they
are supposed to regulate.

(solemn music)

There is no place for
dirty money in Britain.

Indeed, there should be no
place for dirty money anywhere.

The challenge I'm laying down
for every country today is

to root out the rot of
corruption, to ensure transparency

over what your own companies
are doing, require transparency

for foreign companies
in your country, too,

and work with us to spread this approach

to transparency around the world.

[Narrator] In public,
British politicians claim

they are cracking down
on secrecy jurisdictions

and corruption, but in
practice, they do the opposite.

I talked to politicians in Brussels.

They say that they've had
more lobbyists from London,

and including politicians,
come to them to protect

the City of London's
interests than they've had

from every other European
member state combined,

which gives you some idea of the extent

to which British
politicians see themselves

as essentially lobbyists
for the City of London.

We'll begin with our big story.

Cayman's efforts to ensure transparency

in its financial services
sector is being recognized

by the international community.

Earlier this week,

the UK's Prime Minister
David Cameron told Parliament

that the tax haven label placed
on its Crown dependencies

and overseas territories is unfair.

[Narrator] Many British
politicians have personal

and business ties with the City of London

and British secrecy jurisdictions.

Former British Prime Minister
David Cameron's father,

Ian Cameron, was an
expert in offshore funds

and was involved in offshore
trusts from the 1980s onwards.

At this courthouse behind me here

in Saint Helier, we found this.

It's a document called a grant of probate,

and it's attached to the
English will of none other

than Ian Cameron, David Cameron's father.

Say hello to Mom and Dad.

I'm fine, how are you?

Good to see you.

[Reporter] Ian Cameron
was certainly a wealthy man.

In 2009, his personal
fortune was estimated

by researchers for the
Sunday Times Rich List

at 10 million pounds.

Yet when Ian Cameron died in 2010,

his estate was much smaller
than might be expected,

just 2.7 million pounds.

In many cases, it's the
politicians and their cronies

and their families and so
on and the business people

who sponsor the political parties,

who aren't using these
offshore services themselves.

So they've got no personal
interest in closing it down.

If they wanted to close it
down, they could do it tomorrow.

The fact of the matter is
they don't want to do it,

because they themselves are
complicit with the process.

If you come from the
same kind of background,

and you know the right people,

then all the kind of legal
niceties will often fall away.

You can get away with
doing all sorts of things

that they wouldn't just let
any old person, you know,

if you came knocking on the door saying,

"Can you set up an offshore
company to do this,"

they'd tell you to get lost.

But if you're part of the networks,

you can do these kinds of things.

So that's a very important
part of the whole system,

upper-class British public
school kind of establishment,

that has been there since,
you know, for centuries.

[Narrator] The British
establishment, an old-boys network

of privileged elites, had
carved out a lucrative niche

for themselves in the offshore world

after the demise of empire.

They transformed themselves
from administrators of empire

into financial handlers
for the global elite

and multinational corporations.

As more money flowed offshore,

societies around the globe began

to feel the impact of the offshore world.

The reality is not what you believe.

Your prime minister has the
power to decide on the future

of your country.

The power is hidden here.

We have country after
country around the world

where the lack of financial
transparency about taxation,

about ownership, about corruption
has undermined the extent

to which governments deliver
representative policymaking

for their citizens.

We have extreme cases like
the hiding of tax evasion

by people in finance ministries
in Greece, in France,

but we also have this system
that in general is geared

towards anonymous company ownership.

The anonymous ownership of
properties across London,

of half of the land in Scotland.

Do we really think that any circumstances

in which government has work better,

in which markets work better,
in which the distribution

of income and assets is better,

when we allow so much to be hidden.

Who wants to not know who
you're doing business with?

Who wants their government to
have people working for it,

or to be led by people
whose assets are hidden,

whose financial transactions

are conducted anonymously offshore?

This is a bad direction for the world.

We need the citizens to
understand what is happening,

that they are the ones
who is carrying the burden

and that some individuals having the power

are exonerating themselves.

Ordinary people are paying taxes.

Rich people are not.

So this is inequality, and
it is leading up to populism,

because it shows so clearly

that the people today
leading the vote are not able

to take care of the
interest of ordinary people.

Back in the '60s and '70s,

you know, tax evasion or pushing back

against taxation, it was kind of seen

as antiestablishment, so
you know, The Rolling Stones

and Phil Collins, all these
people kind of going offshore,

going away, it was seen as a
sort of rebellious thing to do.

And if you fast forward
to the present day,

now that is the establishment.

The offshore system is the establishment.

[Narrator] Today,
offshore is the way elites

and multinational corporations
conduct their affairs.

Tax evasion is the way business is done.

This kind of sophisticated cheating

requires a huge infrastructure.

We like to talk about the
pinstripe infrastructure

of highly educated people
who think it is their right

to help others to cheat societies.

(solemn music)

We have a new mafia in town.

It does not actually shoot people.

It does not put bullets in their kneecaps,

but its trade is just as deadly.

It deprives people of opportunities

to have healthcare, education, security,

justice and essentially a fulfilling life.

[Narrator] Accountants form the backbone

of the offshore system.

They administer the structures

that allow individuals and corporations

to shift their money
offshore and evade taxes.

There are about 2.5 million

professionally qualified
accountants on this planet.

About 330,000 are in the UK.

Well-known people, well-dressed, well-fed,

highly paid are sitting
in city center offices,

and they are paid to dream
up tax avoidance schemes

for individuals and for corporations.

We can all elect a government,
which says, "Vote for us.

"We will give you better healthcare,

"better education, better security."

And the next day, accountant
says, "Sorry about that, folks.

"You elected this government,

"but we actually got a
tax avoidance scheme.

"The Amazons and the Googles

"and the Microsofts
won't be paying any taxes

"in your jurisdiction.

"Too bad, you voted for it, but actually,

"you're gonna get something else."

So it's a crazy world,

that part of the business model

at big accountancy firms is how

to deny public the services by erosion

of tax revenues.

And these firms are the rewarded

with government-funded contracts.

And the same firms are then advising

local governments and
the central governments,

and the same firms then report
on the company accountant,

tell us all is well.

When I argued this with a
Price Waterhouse partner

in a face-to-face debate,

he said, "Professor Sikka,

"you never give us credit for anything.

"We generate millions
of dollars of revenues,

"and we have lots and
lots of satisfied clients.

"What is your problem?"

And my response is very simply.

"That's the language of
drug-pushers and pimps."

(solemn music)

[Narrator] In Britain, a new breed

of civil servant was rising to the top.

One such civil servant was Dave Hartnett,

who rose to the top of
HMRC, the UK tax authority.

Dave Hartnett had a new
way of collecting tax.

Deals would be negotiated
on an individual basis,

behind closed doors.

In the case of the largest clients,

Dave Hartnett frequently led
the negotiations himself.

British Telecom was one
of the first companies

through the program and received a refund

of over 1 billion pounds.

BT's chief executive, Ben Verwaayen wrote,

"Earnings per share up 14% and nice

to know we have a 1-billion-pound
credit from the taxman."

Dave Hartnett claimed this
approach was more efficient.

Litigation in the courts is
really phenomenally expensive

in this day and age, all over the world

and I think is to be
avoided where possible.

And the artists persuade people to pay

by strength of argument and the like.

[Crowd] Pay your tax,
pay your tax, pay your tax!

[Narrator] After
protests erupted in 2011,

the Treasury Select Committee
questions Dave Hartnett.

Dave Hartnett claimed he
could not give any information

due to taxpayer confidentiality.

What in statute prevents you

from disclosing information to Parliament?

All my advice, Mr.
Barclay, so far has been

that I am prevented, and my
colleagues are prevented,

by the act and by the
decision of the commissioners.

[Narrator] Dave
Hartnett failed to mention

that the legal advice
he had received stated

that the disclosure of information was

at the discretion of the head of HMRC.

The head of HMRC was
Dave Hartnett himself.

Just like the mafia
has penetrated the state,

accountancy firms have
also penetrated the state.

And the head of anti-avoidance

in the UK tax authority is
from one of these firms.

The newly appointed chairman

of Her Majesty's Revenue and Customs,

which is a tax authority,
is a partner from KPMG.

Their partners have penetrated the state.

They are running the Treasury.

(solemn music)

[Narrator] Britain's
financial services industry

had penetrated the state
and began to shape its laws

for its own benefit.

The degree of political
capture by the City of London,

by the big banks and the big
law firms, is so enormous

that the politicians have effectively

become their spokespersons.

(solemn music)

[Narrator] With the government unwilling

to act in the interest of the public,

a group of protestors
confronted Dave Hartnett

at a private event in Oxford.

Hi, everybody, I'm sorry to interrupt.

I'm gonna take a few moments of your time.

Here, tonight, this is Dave,

and your award is the
lifetime achievement award

for services to corporate tax planning.

(audience applauds)

[Woman] Thank you.

Thank you very much.

Dave, you've been a great
friend to the industry

and a great friend to
many of us over the years,

and really we just can't thank you enough

for all you've done.

Obviously, it was at Vodafone,

you know, it saved us
billions off our tax bill.

And our friends at Goldman Sachs as well,

we've also saved us millions as well.

25 million or so.
Everybody, these people

are trespassers and intruders.

[Woman] And I know you've had problems

with those pesky protesters.

And you will go to him.

You will depart immediately
before we set the dogs on you.

♪ For he's a jolly good fellow ♪

♪ For he's a jolly good fellow ♪

♪ So say Goldman Sachs ♪

♪ And so say Goldman Sachs ♪

♪ And so say Goldman Sachs ♪

♪ For he's a jolly good fellow ♪

♪ For he's a jolly good fellow ♪

♪ For he's a jolly good fellow ♪

Let's go, you're trespassing.

[Woman] I'm so sorry.

You are trespassing scum, go.

(door slams)

(solemn music)

[Narrator] After his retirement,

Dave Hartnett moved to the private sector.

One of his positions was at
accountancy firm Deloitte,

where he advises foreign
governments on corporate taxation.

Dave Hartnett is a Companion
of the Order of the Bath,

an honor bestowed on him
by the British monarch.

We have formerly are ministers acting

as advisors to accountancy firms.

Accountancy firms provide jobs

and consultancies for potential ministers.

To my mind really, it's an
indication of corrupt structures.

People are buying and selling influences.

When a former minister works
for an accountancy firm,

he's not providing any
accounting knowledge.

He is opening political
opportunities, home and abroad.

That is what they are doing.

I hope by now you share my views

that I don't trust most bankers.

I don't trust most lawyers.

I don't trust most accounting firms.

I actually think they're engaged

in the conspiracy against public interest.

[Narrator] In Britain, secrecy
and complexity in finance

and government help to obscure
corruption in public office.

Financial structures are often so complex

that even after they
are publicly revealed,

they are not widely
recognized for what they are.

An example of this is PFI, the
private finance initiative.

PFI is private finance initiative.

It is a way of funding
public infrastructure,

things like hospitals,
schools, roads and bridges,

but financing them via the private sector,

rather than the historical method,

which is via central government.

Over a period of 30 or 40 years,

the amounts of kind of
repayment costs will be sort

of three or four times higher overall

than if you'd borrowed it

from the central government
in the first place.

So it's basically a giant accounting scam.

Once the PFI policy has been set up,

you find that's the Big
Four accountancy firms

were actually paid members of staff

within the treasury department

who were then actually
going around and selling

and advising upon the implementation

of PFI contracts by public authorities.

Effectively saying, "Come to
us, and we will show you how

"to derive the most benefit
from it," in other words,

how to perhaps exploit the legislation.

Even the offices

of the state tax authority
are now owned offshore.

HMRC, which is the tax
collector here in the UK,

their offices are owned in Bermuda

by a company called Mapeley Steps.

That's quite incredible.

[Narrator] The company
that owns the PFI contract

to run HMRC's head office borrowed money

from offshore investors at 15% interest.

Because the interest was so high,

the company was losing money.

Therefore, it did not pay tax.

In 2011, HMRC could not prove

that any PFI company was
paying any tax in the UK.

I think we need to have
a serious conversation

about the role of government
in this whole debacle

and how much our government
is being penetrated

by big banks and accountancy firms

and ultimately in whose
interest it operates.

(solemn music)

The reason we were protesting

outside the Africa PPP Conference is

that we wanted to make
sure that citizens back

in Africa should hear about the fact

that such policies have
been a complete failure,

here in the UK.

We know that these products
are not being marketed

to African countries in
their own best interests.

The only motivation is to spread the reach

of financial services into new markets.

And it's all being
promoted in the interests

of the City of London.

What you're seeing is basically

a second form of colonialization.

You've had initially occupation
and resource extraction.

And through that process,
countries like Britain,

which have had a large offshore empire

have developed significant networks,

and now those networks are being used

to promote and exploit financial services.

(solemn music)

[Narrator] The City of London

was the beating financial
heart of the British Empire.

As Britain's empire declined,
the city transformed itself

from a hub operating the
financial machinery of empire

into a global financial center.

Former insignificant outposts
of empire became the basis

for a spider's web of
offshore secrecy jurisdictions

that captured wealth from across the globe

and funneled it to the City of London.

Today, 25% of the international
finance is conducted

on British territory.

Almost half of the world's
secrecy jurisdictions are

under British protection.

Up to half of all offshore
wealth may be hidden

in Britain's offshore havens.

Financial services is how Britain's elites

make their money, and it is also

where former government ministers,

senior civil servants and
retired spooks from MI5

and MI6 receive lucrative
consulting positions

after their time in public service.

Together they have transformed
Britain and its dependencies

into the world's largest tax haven,

harming development throughout the world

and turning Britain itself into a country

that serves, above all, the
interests of its elites.

(solemn music)

(solemn music)