Originally published on GI-ACE
October 9 saw our GI-ACE project’s first workshop, with the aim of laying out the research done so far and seeking advice on future lines of enquiry from the project’s advisors and around 20 hand-picked experts. Coming from the worlds of journalism, civil society, politics, law enforcement, academia, and risk management, these experts each have their own unique perspective on the fight against corruption. Our project aims to look at possible enabling or complicit practices regarding money-laundering in three different but related areas: banking, real estate, and reputation management.
This summer saw the major undertaking of sending out the first 7,000 of 48,000 total email solicitations to banks from a series of specially created shell companies that we have registered in a variety of jurisdictions. Some of the locations are hot spots for money laundering, which should raise red flags for anti-money laundering (AML) compliance teams at the banks. In order to assess the level of compliance in financial institutions located in various countries, our aim is to calculate the number of positive responses we get from banks despite these red flags.
Our real estate strand began with the compilation of a database using publicly available sources of property purchased by Central Asian and African politically exposed persons (PEPs). From this, we hope to create a possible typology of enabling and complicit practices by real estate agents and conveyancing solicitors. One potential roadblock here is the fact that the filing of Suspicious Activity Reports (SARs) to the United Kingdom’s National Crime Agency (required by law in regulated sectors such as real estate when an individual knows or suspects that money is being laundered) is confidential. Therefore, we will be unable to ascertain how many of the database examples (more than 60 so far) led to concerns being flagged via the SAR system.
Research conducted over the summer, however, suggests that real estate agents and solicitors are not filing enough SARs when suspicion exists, either because of a lack of knowledge of the law (which appears to be more common with real estate agents) and/or a lack of supervision and enforcement of the law in regulated sectors. This lack of supervision has resulted in very few prosecutions of individuals for a failure to report money-laundering concerns. The next stage of this strand of research aims to ‘fill in the blanks’ in our database through the conducting of interviews with industry professionals to get their insights into enabling practices, possible loopholes, and other issues with the UK’s Money Laundering Regulations.
The workshop’s section on reputation management focused on examples of the type of practices associated with individuals looking to ‘launder’ their reputation – the gifting of charitable donations, the commissioning of ‘puff pieces’ in the media, and the supressing of negative commentary through the use of high-powered law firms who try to prevent publication with ‘Cease & Desist’ letters. This element of the research may prove to be the trickiest to quantify because of the range of behaviours and tactics that can be employed. Many of these behaviours and tactics fall on a distinctly grey spectrum which, although arguably unethical, are not illegal. Workshop participants aided our understanding of this area by giving some concrete examples that they, themselves, had experienced and suggesting ways we could research the topic in a quantitative fashion.
The coming months will see the sending out of the remaining email solicitations to banks, the conducting of the interviews to allow us insight into the world of high-end real estate, and a mapping out of possible avenues into the world of reputation management, which may also include an analysis of university funding. We would like to thank our participants – especially those who travelled to Oxford from Africa and Central Asia – for their valuable contributions. We hope to convene a smaller workshop of journalists in 2020 in order to further assess the element of reputation management through the silencing of critical voices.