Big banks, tax avoidance and fraud: Western journalists are the puppets of HSCB

It is estimated that Her Majesty’s Revenue and Customs [HMRC] loses out on £16 billion per year due simply to tax avoidance. According to one source, HMRC has a tax gap of £34 billion per year – a tax gap is the money that HMRC should receive in tax per year but doesn’t. Taking the £16 billion of lost tax into account, almost half of the money that HMRC loses out on per year is due to tax avoidance.

It is important to differentiate between tax avoidance (which is legal) and tax evasion (which is illegal). Tax avoidance usually uses loopholes in the law with the means of paying the lowest possible amount of tax. Tax evasion is when a person or a company under reports income or uses illegal schemes to avoid paying tax.

This tax evasion and specifically tax avoidance is often committed by banks and big business. It was reported in 2015 that, despite making billion of pounds worth of profit in Britain at least five of the worlds biggest investment banks paid no UK corporation tax. But you wouldn’t believe this given the governments crackdown on ‘benefit scroungers’ rather than tax avoiders – more on this in a minute – and the way in which banks and big business continually play by their own rules and ignore the British tax laws thrusted upon the rest of society. 

David Cameron has stated on no less than six occasions that stopping tax avoidance is a ‘key part’ of his economic plan.

“When it comes to tackling corruption the international community has looked the other way for far too long,” David Cameron said at the latest anti corruption summit.

Hopefully the irony has not been lost on him that he has been directly part of the international community that has looked the other way – what’s more Cameron has directly profited from looking the other way when it comes to tax.

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Graphic of staff investigating tax avoidance compared to staff investigating benefit fraud

As aforementioned, despite Mr Cameron’s rhetoric that he will eliminate corruption it seems that he is far more interested in investigating benefit fraud of £1 billion rather than tax avoidance of well over £20 billion. According to statistics collected by whistleblower Nicholas Wilson and repeated by Angus Robertson – the Scottish National party’s leader in Westminster, the Department of Work and Pensions (DWP) employ 3250 to investigate welfare fraud, whilst in comparison HMRC employ a meagre 300 people which specialise in dealing with the rich. This is despite the fact that substantially more money in government tax is lost due to tax avoidance in comparison to benefit fraud.

Labour’s shadow chancellor John McDonnell says that ‘missing revenue could be collected if HMRC had more funding’ hinting that HMRC – the government department in charge of collecting tax from wealthy businesses and people are purposely under-funded so that the status-quo is kept intact. Indeed, regardless of Cameron’s endless corruption tackling sound bites it is a fact that the tax gap has stayed the same in the six years that he has been Prime Minister, if he was really attempting to halt tax avoidance and corruption then surely the tax gap would have shrunk, no?

John Caudwell, the British billionaire founder of mobile phone retailer Phones 4u has gone on record stating that the UK tax system is ‘open to be abused’. UK tax rules are ‘a little bit vague’ with many ‘grey areas’ Caudwell states.

Due to the sheer slackness of the UK government and UK tax laws an impression is created that the rich – be it people or companies – can get away with not paying the amount of tax that they should be paying. The Falicani list is a testament to this.

In 2009, after a raid on the home of whistleblower Herve Falciani, the police found computer files on a potential 130,000 tax evaders. Falciani worked as a computer technician for HSBC’s Geneva branch and stole the data from HSBC computers before attempting to sell it to several governments. After the police raid the French government sent the data to a number of different governments including the UK government in order to help them crack down on tax evasion. However, in 2012 the UK tax authority bizarrely declined to prosecute those named on the list.

HSBC, the bank which Mr Falciani worked for is a bank which has been littered in controversy. In 2012, HSBC agreed to pay $1.9 billion to the U.S. and admitted it violated money laundering and sanctions laws and “willfully” failed to conduct proper due diligence. The bank has helped clients dodge billions of pounds in taxes and has supported criminals including Mexican drug cartels. (For a more thorough look into the the crimes committed by HSBC see Steven Hsieh’s article here.)

HSBC is not known for its transparency. The bank has a stock market valuation of $215 billion, is considered to be Britain’s wealthiest company and has enough advertising muscle to ensure that critical investigative stories in major UK newspapers including The Times, The Guardian and the Daily Telegraph are spiked – in the latter case causing the chief political reporter to resign in protest. The so called free press the UK boasts to have is not as free as it seems.

In his resignation letter, Peter Oborne criticised the Telegraph heavily stating:

“The Telegraphs recent coverage of HSBC amounts to a form of fraud on its readers” adding: “It [The Telegraph] has been placing the interests of a major international bank above its duty to bring the news to Telegraph readers.”

All UK corporate media barring the Telegraph reported the story regarding HSBCs Swiss banking arm helping clients to dodge millions in tax. Yet despite this, HSBC suspended its advertising with the Telegraph and according to Oborne, Telegraph did everything possible in order to attract HSBC money back to the newspaper:

“‘Winning back the HSBC advertising account became an urgent priority. It was eventually restored after approximately 12 months. Executives say that [Telegraph Media Group CEO] Murdoch MacLennan was determined not to allow any criticism of the international bank. “He would express concern about headlines even on minor stories,” says one former Telegraph journalist. “Anything that mentioned money-laundering was just banned, even though the bank was on a final warning from the US authorities. This interference was happening on an industrial scale.”‘

Oborne’s final chilling point came when he told of bias within the whole of UK mainstream media:

“It is not only the Telegraph that is at fault here. The past few years have seen the rise of shadowy executives who determine what truths can and what truths can’t be conveyed across the mainstream media.”

Whilst the Telegraph for the reasons stipulated above declined on publishing the aforementioned HSBC story, The Guardian were busy slapping themselves on the back due to a job well done for reporting on the HSBC story despite the bank putting its advertising relationship with the newspaper “on pause.” But don’t let this fool you into thinking that publishers such as The Guardian have free reign over what they can and cannot write. According to the Guardian Media Group’s financial reports last year HSBC helped fund the paper’s move into the US market and as Investigative journalist Nafeez Ahmed points out:

‘The Guardian happens to be the biggest recipient of HSBC advertising revenue – more so than even the Telegraph and this is something you wont read about in the Guardian.’

Nicholas Wilson, former head of debt recovery at Weightmans solicitors, and whistleblower on HSBC fraud
Nicholas Wilson, former head of debt recovery at Weightmans solicitors, and whistleblower on HSBC fraud

Ahmed also questions why The Guardian and other major newspapers have declined to report on the leaks of whistleblower Nicholas Wilson. On his blog Wilson accuses HSBC of being involved in ‘a £1bn fraud on the UK high street, something they were involved in until 2010 or could even still be practising.’ Wilson states that:

“The fraudulent scheme illegally overcharged British shoppers in arrears for debt on store cards at leading British high-street retailers’ including B&Q, Dixons, Currys, PC World and John Lewis. Up to 600,000 Britons were defrauded.”

Ahmed summarised that:

“The revelations on HSBC fraud made by Nicholas Wilson are ‘the worst and largest case of single bank fraud to have ever emerged in this country. They make the Swiss leaks case look like peanuts.”

Yet despite this none of the ‘free press’ have reported on it:

“HSBCs fraud against British consumers has been systematically ignored by the entire British Press” states Ahmed.

(Pictured) Investigative journalist Nafeez Ahmed
(Pictured) Investigative journalist Nafeez Ahmed

HSBC is free to advise its UK clients on how to avoid paying tax whilst ensuring that the UK media is censored on the subject. Media Lens write how the Guardian is deeply embedded in corporate circles and elite networks: ‘The paper, therefore, might not at first sight appear to be a corporate institution. But the paper is owned by the Guardian Media Group which is run by a high-powered Board comprising elite, well-connected people from the worlds of banking, insurance, advertising… and other sectors of big business, finance and industry.’

The Guardian and other newspapers are profit seeking enterprises – this has obvious consequences for journalists and readers alike. World renowned British broadcaster the BBC resides under the same umbrella as the rest of UK media. The BBC trust is the governing body of the BBC that decides where the BBCs money is spent. The current chairman of the BBC trust is Rona Fairhead – an ex HSBC director – how likely is it that the BBC will report on wrong doings by HSBC unless instructed to do so? Not very.

As of today the Guardian wrote a cosy article centered around HSBC in which they quote the banks chief legal officer Stuart Levey: ‘HSBC is endeavouring to implement consistent and high standards across its global operations, designed to combat financial crime and prevent abuse by illicit actors. We have more work to do, but achieving that objective is one of our highest priorities. This approach is rightly expected by our regulators, including in the UK and the US.’ It wouldn’t go too far to say that UK corporate media have become PR representatives for HSBC given their distinct lack of scrutiny surrounding the bank – indeed – failing to report on scandals committed by HSBC amounts to a form of media censorship and a form of fraud on the readers of the respective publications. Chillingly, as long as mainstream media publications rely on HSBC for their funding – HSBC will be safe from adverse media publicity and as long as HSBC are advising their clients on how to avoid tax – tax laws affecting HSBC and their clients will not change.

 

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