I have always been a swot, living mainly in my head. Physically I’ve never been much cop; I was always the one picked last – and even then, reluctantly – for sports teams, and my clumsiness is legendary. But in the same way as other people marvel at a fiendish goal or a world-beating marathon time, I thrill to a nifty piece of deductive reasoning. Let me give an example.
We all know that rich people like to buy nice stuff – whether they have come by their wealth honestly, or whether they have pinched it or otherwise acquired it dishonestly. That’s a fairly simple deduction to make: rich = buying luxury goods. And indeed that was the main reason behind the publication in April 2017 of Transparency International’s interesting report “Tainted treasures: Money laundering risks in luxury markets”. In it, they argue for the adoption of sellers of luxury goods into the AML family, the adoption bringing with it regulation and supervision requiring those sellers to undertake the standard AML steps: due diligence, record-keeping, reporting of suspicion, and staff training. But tucked away in the report’s conclusion was the deduction that I had never made, even though – in the words of Basil Fawlty – it’s bleeding obvious: “The desire to own luxury items can be a primary motivation for corrupt behaviour. While the psychological motivation of individuals engaged in corruption is an under-researched field, the behaviour of kleptocrats who amass multiple luxury properties and items in a short period of time suggests owning these goods was one of the goals of the corrupt activity. The same does not apply to other high-risk business sectors; few if any corrupt deals have, for example, the ultimate goal of paying accounting fees.”
Isn’t it obvious now you read it? Many criminals launder money through the purchase of luxury goods, but some become criminals in the first place in order to own those luxury goods. In recent weeks Malaysians have been “transfixed”, as the local press would have it, “by the sight of truckloads of orange boxes containing Hermès Birkin handbags and luggage filled with cash and jewellery being seized from flats linked the former Prime Minister Najib Razak”, who is being investigated for his part in setting up the 1MDB state investment fund (now suspected of being a vehicle for corruption and a front for money laundering). The sensationalism of the event was maximised, as the police raid was live-streamed on social media. And with Razak’s wife Rosmah Mansor being compared with Imelda Marcos – another insatiable consumer of luxury goods – it seems that Transparency International’s deduction is right on the money. I shall tuck it away for future use.
I hate money laundering 
I dunno Susan. Does the man on the Clapham omnibus desire and covet luxury goods? I don’t believe so. Like all of us he would like a few extra bob to spend. If he’s a car driver he’d like a nicer car. A homeowner might like to keep up with the Jones(es) and trade up a notch. But few dream of top-end cars, jewels, private yachts…
I think the greed kicks in once the money’s in the bank – legally or illegally as you say. After that it’s hard to stop trading up to further and better luxury items. Maybe that’s what TI means.
I think they’re probably talking about people living a rather more glamorous life than ours, Roy! And with reasonably easy access to a lot of money. Imagine a government minister on an average salary. He sees a colleague with a fancier car, or a new swimming pool, or photos from a luxurious holiday. He realises that, with a bit of clever paperwork, he could siphon a wad of public money into his own account… I’d like that car/pool/holiday, he thinks – and that’s the trigger for his corruption. And yes, I think once you have a fancy car you probably do want a fancier one, and more diamond watches, and a bigger private jet. Me, I get over-excited if there are four Jaffa Cakes on the plate at elevenses rather than the usual three. (Now that the packs contain ten JCs rather than the previous twelve – product shrinkage – it works out that way: two days of three and one of four.)
Hi Sue, Maybe not enough is said about the partners in crime. Nazib was not committing crime for handbags, surely. The reluctance of investigators, prosecutors and society to condemn money laundering families as equally guilty of the predicate crime facilitates its commission.
I couldn’t possibly comment about this gentleman’s penchant for handbags, Tristram, but you are absolutely right about condemning money laundering families as well. The importance of family members is recognised in the PEP definition in most jurisdictions, so it seems only logical to pursue that to conviction. Talking of family, Razak is now saying that many of these handbags were a gift from his son-in-law, who is the nephew of Kazakhstan’s president (http://www.scmp.com/news/asia/southeast-asia/article/2151746/malaysias-ex-pm-najib-razak-says-many-luxury-handbags-were). What’s that they say about not being able to choose your family?