The flip side to corruption is that the money has to go somewhere. Obviously, a facilitation payment of $100 can go into a foreign official’s pocket—but, when corruption happens on a larger scale, there must be a bank ready to park the millions garnered from the fraud.
A recent case involving $500 million that was allegedly sent by the sovereign wealth fund of Angola to U.K. bank HSBC and then turned up in an account at Standard Chartered perfectly illustrates that point.
The funds sent to HSBC were allegedly confirmed with a document from the sovereign wealth fund of Angola, but it now appears that confirmation was a forgery and HSBC is denying it received any money. What’s more, the British government has frozen all accounts associated with the funds.
It is alleged that José Filomeno dos Santos, the former chair of the Angolan sovereign wealth fund and son of the former ruler of the country, is behind the fraud and a key figure in the U.K. investigation. Corruption might run in the family, as dos Santos’s sister, Isabel dos Santos, once ran the country’s state-owned energy enterprise Sonangol and allegedly looted the company.
It is evident that banks and regulators have been working together to stem the tide of corruption prevailing in the dos Santos family, as the new president of Angola, João Lourenço, has dismissed Isabel dos Santos from Sonangol and removed all of the prior governors from the Angolan sovereign wealth fund (each of these governors had been appointed by the prior president, José Eduardo dos Santos).
In addition, U.S. regulators have cracked down on banks for their lax money-laundering controls and become much more vigilant in the fight against global banking fraud. Both HSBC and Standard Chartered were heavily sanctioned by U.S. regulators and have now upped their game in terms of complying with U.S. regulations.
The collusion between banks and regulators to stop the transfer, hiding, and parking of corrupt funds is one more step in the worldwide fight against bribery and corruption.