The rogue bank, the failing company and the Tory Party donations

In October 2008, at the very height of the global financial sector insolvency crisis, HSBC made a very strange decision: They made a massive £214.2 million loan to a struggling company called IPGL.

To get an idea of what was more normal practice for banks during the insolvency crisis and the post-crisis recession, consider the behaviour of the (majority taxpayer-owned) bank RBS which deliberately withdrew loans or hiked repayment terms in order to drive thousands of British companies into financial difficulties, and then used their Global Restructuring Group to close down the businesses and asset strip them for their own profits.

The RBS Global Restructuring Group destroyed 12,000 businesses in this way in what executives referred to in leaked emails as "the dash for cash". After the scandal was exposed by the hard work of people like Neil Mitchell they've now had to set aside a £400 million slush fund to compensate some of their victims.

Interestingly HSBC took a very different attitude towards the struggling and massively indebted IPGL, which was being run at huge losses by the then Tory party chairman and massive Tory party donor Michael Spencer. Instead of attempting to shut it down and asset strip it, they pumped a massive £214.2 million loan into it at a time when getting loans out of a bank was like getting blood out of a stone.

Spencer then funnelled over four million in donations to the Tory party via IPLG including over £1 million for their 2010 general election fighting fund. IPLG donations also covered the cost of flying David Cameron, George Osborne and others to the Davos World Economic Forum just months before the 2010 General Election.

If HSBC propped up a failing business and that business then went on to pump millions into the Tory party to help them win the 2010 General Election, it's easy to see how people might conclude that the failing business was used by HSBC to launder money into political donations.

HSBC, the Tory party, George Osborne's office and IPGL were contacted by the investigative journalists who broke this story and offered the chance to comment. They all declined.

While this HSBC-IPGL-Tory party business was going on HSBC were also laundering hundreds of millions of pounds in drug money for Mexican drug cartels and funds for terrorist organisations.

After the Tories came to power in 2010 the conduct of George Osborne and David Cameron clearly continued to favour HSBC and Michael Spencer's business interests. Their attempted favours towards Spencer continued even after their fall from grace over the spectacular failure of their EU referendum gamble in June 2016.

• In November 2010 The Tories made the HSBC Chairman Stephen Green an unelected peer in the House of Lords (where he still sits as a Tory peer).

• In January 2011 David Cameron appointed Green as Minister of State for Trade and Investment in the Tory/Lib-Dem coalition government.

• In 2012 George Osborne hampered the US investigation into the HSBC money laundering scandal and lobbied for them not to face criminal prosecutions claiming that such a move could lead to "financial contagion" because the bank was too big to fail.

• In March 2012 Spencer was named by the disgraced former Tory party co-treasurer Peter Cruddas as one of the millionaires to have benefited from the "cash for access scandal".

• In March 2013 George Osborne was the only finance minister in the entire EU to oppose a policy of limiting bankers' bonuses to 200% of their final salary. When it came to the vote he was defeated 26-1.

• In September 2013 Michael Spencer's firm was fined £55 million for rigging the Libor rate. In the very same month David Cameron tried to make Spencer an unelected peer in the House of Lords but was foiled by the ethics committee.

• After the bankers' bonus defeat Osborne wasted £50,000 of taxpayers' money on fighting a futile legal challenge against the EU bankers' pay cap, a battle he finally abandoned in December 2014.

• In January 2015 the Times editor Camilla Cavendish had a dinner with David Cameron and then spiked an investigative story about fraud at HSBC. She was soon appointed as Cameron's adviser at the Number 10 Policy Unit.

• In 2015 George Osborne washed his hands of the HSBC Swiss accounts scandal, and repeatedly refused to confirm whether he had discussions about the bank's collusion in tax evasion with Stephen Green before his appointment as a government minister.

• In January 2016 George Osborne delayed a Competition and Markets Authority report into reducing the dominance of the big four banks that was widely regarded as a move to placate HSBC.

• After resigning in disgrace after his EU referendum gamble failed David Cameron reportedly tried to make Spencer an unelected peer again in his resignation honours list, but was foiled a second time. 

• Although Spencer didn't make it into the unelected House of Lords in David Cameron's resignation honours list Camilla Cavendish (the former Times editor who spiked the HSBC fraud story) did.

The £214 million HSBC loan to the failing IPGL and their subsequent donations to the Tory party have now been referred to the Electoral Commission by the SNP's Roger Mullin, who is calling for an immediate investigation. The Labour MP John Mann has called for a public inquiry into what he called "the biggest party donor scandal ever".

Coverup/whitewash?

The French libertarian philosopher and economist Frédéric Bastiat once wrote that "when plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it", which stands as true today as when he wrote it in the 1840s.

There are so many revolving doors between Westminster politics, the financial system, the financial regulators and the media that it seems unlikely anyone will ever be properly held to account.

The Canary and Move Your Money broke this story on April 28th, but 5 days later the mainstream media has yet to move on it, preferring instead to focus the public attention on "vital" issues like the Shadow Home Secretary getting her figures muddled up in a radio interview and then subsequently correcting them.

The whole thing reeks of corruption, but we all know by now how these things tend to play out. Even if the story does eventually get some limited mainstream media coverage it'll doubtlessly all be brushed under the carpet again, and if anyone ever does end up getting the chop for it, it'll almost certainly be some lowly minion who gets fed to the wolves, not any of the big players.

But at least you know some of the murky details now.

Credits

The investigative work into the HSBC-IPGL-Tory party money flow was done by Fionn Travers-Smith of Move Your Money. The story was publicised by Steve Topple of The Canary.

The SNP's Roger Mullin deserves credit for publicly raising this issue with the Electoral Commission and Labour's John Mann deserves some too for calling for a public inquiry.

Follow them here:

Fionn Travers-Smith (Twitter)
Move Your Money (Twitter/Facebook)
Steve Topple (Twitter)
The Canary (Twitter/Facebook)
Roger Mullin (Twitter)
John Mann (Twitter)

You should also follow the HSBC whistleblower Nicholas Wilson (Twitter) for more corruption coverage.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

OR

A DBE for flood defence slasher Caroline Spelman!

When the Lib-Dems enabled the Tories back into power in 2010 Caroline Spelman was one of the 23 millionaires David Cameron appointed to his cabinet. He ignored the obvious conflict of interest of her ownership of a lobbying company for the food and biotech industries and put her in charge of the Department of Environment, Food and Rural Affairs.

David Cameron and George Osborne made it clear to all of their cabinet members that they were expected to ruthlessly slash their departmental budgets in line with the economically illiterate "let's cut our way to growth" austerity dogma they were pushing.

Spelman was keen as mustard. Not only did she set about gleefully slashing DEFRA spending, in order to score brownie points with Cameron and Osborne she ensured that her department suffered the deepest cuts of any department outside of the treasury. 

In order to make herself look like the most loyal of all of Cameron and Osborne's slashers she decided to ignore the expert advice and inflict massive cuts to flood defence spending.

The expert advice said that cutting flood defence spending to make short-term savings is an incredibly self-defeating example of creating false economies. This is because for every £1 spent on building or maintaining flood defences, £8 is saved in avoided economic damage. Thus for every £1 in spending cuts Spelman inflicted on flood defence spending in order to impress Cameron and Osborne, the cost to the country would be £8 further down the line.

Unfortunately for Spelman "further down the line" happened to occur very quickly indeed with appalling flooding in Cumbria in the summer of 2012. particularly badly hit was the town of Kendal which, thanks to Spalman's flood defence cuts, had had their flood defence improvement scheme cancelled.

It's unlikely that the people in Kendal who had had their homes and businesses ruined by flooding thought that their misery was a worthwhile sacrifice to help Spelman win brownie points with Cameron and Osborne, but Spelman obviously did.

For a while it all worked out swimmingly for Spelman. She didn't see the floods in Kendal as a reason to resign and stubbornly held onto her job. The problem for Spelman was that Cameron and Osborne needed a scapegoat to deflect public attention away from the fact that the economically inept flood defence spending cuts had been driven by their economically inept ideological austerity agenda. In September 2012 Spelman was sacked as DEFRA minister, apparently for the crime of being too loyal to Cameron and Osborne's ludicrous "Let's cut our way to growth" agenda

Despite the appearance that Spelman had been sacked for following Cameron and Osborne's instructions too enthusiastically, she never spoke out or criticised them for throwing her under the bus to deflect attention away from their own culpability in the flood defence debacle. Even after more massive floods hit in Somerset in 2013-14 and the massive floods that hit Cumbria and southern Scotland in 2015-16 she kept her lipm firmly buttoned.

After his reckless Brexit gamble failed in 2016 David Cameron handed Spelman the reward that she had been waiting for: In return for loyally keeping her gob shut about the austerity-flood defence cuts debacle Spelman was handed a DBE in Cameron's resignation honours list.

Of course Spelman's gong was far from the most controversial of Cameron's handouts. Cameron showered peerages, knighthoods and assorted other gongs on his cronies like confetti. Millionaire Tory donors, loads of other Tory MPs, millionaire bankrollers and inept strategists for the failed Remain campaign, loads of Tory advisers, George Osborne, George Osborne's image consultant, even Samantha Cameron's personal stylist ... but Caroline Spelman's DBE really is indicative of the hopelessly out-of-touch bubble of wealth and privilege that Cameron exists in that he could actually have thought that it would be a good idea.

Just think about all of the misery suffered by the thousands of people who have had their homes, businesses and property ruined by flooding in the last five years that could have been prevented or mitigated had Spelman not inflicted such savage ideologically driven cuts on flood defence spending.

Just think about how these people must feel seeing Cameron handing out a gong to Spelman for "political and public service", and another gong for "political and public service" to George Osborne, who was the architect of the economically illiterate austerity agenda that drove Spelman to make such idiotically counter-productive cuts in the first place.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

OR

Are Brexiters immune to irony?

One of the most commonly cited objections to membership of the EU were the complaints that the EU is undemocratic and that it's not right that unelected technocrats and political appointees should rule over our lives.

On June 23rd 2016 37% of the UK electorate voted in favour of a haphazard abandonment of the EU without anything even remotely resembling a coherent plan of action for what comes next. The immediate reaction of the Prime Minister David Cameron was to hand in his resignation and begin drawing up a list of his Tory mates to stuff into the unelected House of Lords and shower with knighthoods, OBEs, CBEs and other gongs.

The House of Lords

In the end Cameron stuffed thirteen new Tory cronies into the ridiculously bloated House of Lords including two multi-millionaire Tory donors (Andrew Fraser and Jitesh Gadhia). He wanted to stuff two more Tory donors in there too but Michael Spencer (who was embroiled in the Libor rigging scandal) was rejected by the scrutiny committee and Remain Campaign bankroller Ian Taylor turned down the peerage because he didn't like the negative publicity.

Thanks to David Cameron's six years of cronyism the House of Lords is now the second biggest legislative chamber in the world, second only to the Chinese parliament. It's by far the biggest unelected chamber, and as such is an affront to democracy. An awful lot of Brexiters seem immune to the irony that their vote to quit the EU is going to hand even more political power to the unelected £300 per day plus expenses House of Lords political cronies club.

Theresa May

David Cameron's replacement as Prime Minister Theresa May outright refused to intervene to stop David Cameron's brazen display of political cronyism. Interestingly she was appointed as leader of the Tory party without a hint of democracy. The 150,000 Tory party members should have been given a vote on their next leader, but the other candidate Andrea Leadsom was leaned on to withdraw from the contest so that may could be anointed as Prime Minister without any filthy oiks having their say.

The Bank of England

As a result of the vote for Brexit the widely reported economic chaos happened. The Bank of England slashed their economic growth forecast for 2017 from 2.3% to just 0.8%, which was the worst decline in economic expectations since records began.

Nowadays in the UK monetary policy is decided by a small group of unelected technocrats called the Bank of England Monetary Policy Committee (MPC).

The nine member MPC is comprised of the Governor of the Bank of England (appointed by the government) four external members (appointed by the Chancellor of the Exchequer), the Bank's chief economist and three deputy governors.

These nine unelected technocrats have enormous powers to influence the lives of ordinary people through tinkering with interest rates, propping up failed banks, inventing hundreds of billions of pounds out of nothing to flood the financial markets or buy up corporate bonds ... Yet there is no democratic accountability whatever and virtually nobody has even heard of the members of this tiny unelected group.

The response of these unelected technocrats to the Brexit mess was to use it as an excuse to create £170 billion out of nothing to flood it into the financial sector. Their own evidence from last time they did they created cash out of nothing after the financial sector insolvency crisis is that 40% of the economic benefit went to the 5% of wealthiest households, but they've decided to do exactly the same thing again rather than trying a different approach.

Instead of using the newly created cash to invest directly into stuff like infrastructure, jobs, house building, services, education, industrial development ... (things that benefit everyone) they've decided to distribute the cash to the private banks to funnel into unsustainable house price and asset inflation bubbles (things that almost exclusively benefit the wealthiest people in society).

The irony

As a direct result of the vote for Brexit David Cameron used his resignation as an excuse to stuff another 13 unelected Tory cronies into the House of Lords, the UK now has an unelected Prime Minister pursuing a fanatically hard-right agenda (just like a lot of people predicted) and the unelected technocrats at the Bank of England MPC are using the (widely predicted) economic chaos as an excuse to pump vast amounts of newly created cash into the private banks to gamble with as they please.

It's absolutely obvious that the UK is an undemocratic shambles dominated by political cronyism, private corporate power and unelected technocrats, yet there's hardly any outcry about it from Brexiters. It's as if they're perfectly content with cronyism and unelected technocrats ruling over their lives, as long as they're British* cronies and technocrats.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

OR

* Or in the case of the Bank of England Governor Mark Carney - an unelected Canadian technocrat appointed by British Tories.