How corporate dark money is taking power on both sides of the Atlantic

George Monbiot in The Guardian

It took corporate America a while to warm to Donald Trump. Some of his positions, especially on trade, horrified business leaders. Many of them favoured Ted Cruz or Scott Walker. But once Trump had secured the nomination, the big money began to recognise an unprecedented opportunity.

Trump was prepared not only to promote the cause of corporations in government, but to turn government into a kind of corporation, staffed and run by executives and lobbyists. His incoherence was not a liability, but an opening: his agenda could be shaped. And the dark money network already developed by some American corporations was perfectly positioned to shape it. Dark money is the term used in the US for the funding of organisations involved in political advocacy that are not obliged to disclose where the money comes from. Few people would see a tobacco company as a credible source on public health, or a coal company as a neutral commentator on climate change. In order to advance their political interests, such companies must pay others to speak on their behalf. 

Soon after the second world war, some of America’s richest people began setting up a network of thinktanks to promote their interests. These purport to offer dispassionate opinions on public affairs. But they are more like corporate lobbyists, working on behalf of those who fund them.

We have no hope of understanding what is coming until we understand how the dark money network operates. The remarkable story of a British member of parliament provides a unique insight into this network, on both sides of the Atlantic. His name is Liam Fox. Six years ago, his political career seemed to be over when he resigned as defence secretary after being caught mixing his private and official interests. But today he is back on the front bench, and with a crucial portfolio: secretary of state for international trade.

In 1997, the year the Conservatives lost office to Tony Blair, Fox, who is on the hard right of the Conservative party, founded an organisation called The Atlantic Bridge. Its patron was Margaret Thatcher. On its advisory council sat future cabinet ministers Michael Gove, George Osborne, William Hague and Chris Grayling. Fox, a leading campaigner for Brexit, described the mission of Atlantic Bridge as “to bring people together who have common interests”. It would defend these interests from “European integrationists who would like to pull Britain away from its relationship with the United States”.

Atlantic Bridge was later registered as a charity. In fact it was part of the UK’s own dark money network: only after it collapsed did we discover the full story of who had funded it. Its main sponsor was the immensely rich Michael Hintze, who worked at Goldman Sachs before setting up the hedge fund CQS. Hintze is one of the Conservative party’s biggest donors. In 2012 he was revealed as a funder of the Global Warming Policy Foundation, which casts doubt on the science of climate change. As well as making cash grants and loans to Atlantic Bridge, he lent Fox his private jet to fly to and from Washington.

Another funder was the pharmaceutical company Pfizer. It paid for a researcher at Atlantic Bridge called Gabby Bertin. She went on to become David Cameron’s press secretary, and now sits in the House of Lords: Cameron gave her a life peerage in his resignation honours list.

 Trade secretary Liam Fox. Photograph: Daniel Leal-Olivas/AFP/Getty Images

In 2007, a group called the American Legislative Exchange Council (Alec) set up a sister organisation, the Atlantic Bridge Project. Alec is perhaps the most controversial corporate-funded thinktank in the US. It specialises in bringing together corporate lobbyists with state and federal legislators to develop “model bills”. The legislators and their families enjoy lavish hospitality from the group, then take the model bills home with them, to promote as if they were their own initiatives.

Alec has claimed that more than 1,000 of its bills are introduced by legislators every year, and one in five of them becomes law. It has been heavily funded by tobacco companies, the oil company Exxon, drug companies and Charles and David Koch – the billionaires who founded the first Tea Party organisations. Pfizer, which funded Bertin’s post at Atlantic Bridge, sits on Alec’s corporate board. Some of the most contentious legislation in recent years, such as state bills lowering the minimum wage, bills granting corporations immunity from prosecution and the “ag-gag” laws – forbidding people to investigate factory farming practices – were developed by Alec.

To run the US arm of Atlantic Bridge, Alec brought in its director of international relations, Catherine Bray. She is a British woman who had previously worked forthe Conservative MEP Richard Ashworth and the Ukip MEP Roger Helmer. Bray has subsequently worked for Conservative MEP and Brexit campaigner Daniel Hannan. Her husband is Wells Griffith, the battleground states director for Trump’s presidential campaign.

Among the members of Atlantic Bridge’s US advisory council were the ultra-conservative senators James Inhofe, Jon Kyl and Jim DeMint. Inhofe is reported to have received over $2m in campaign finance from coal and oil companies. Both Koch Industries and ExxonMobil have been major donors.

Kyl, now retired, is currently acting as the “sherpa” guiding Jeff Sessions’s nomination as Trump’s attorney general through the Senate. Jim DeMint resigned his seat in the Senate to become president of the Heritage Foundation – the thinktank founded with a grant from Joseph Coors of the Coors brewing empire, and built up with money from the banking and oil billionaire Richard Mellon Scaife. Like Alec, it has been richly funded by the Koch brothers. Heritage, under DeMint’s presidency, drove the attempt to ensure that Congress blocked the federal budget, temporarily shutting down the government in 2013. Fox’s former special adviser at the Ministry of Defence, an American called Luke Coffey, now works for the foundation.

Former Arizona senator Jon Kyl. Photograph: Saul Loeb/AFP/Getty Images

The Heritage Foundation is now at the heart of Trump’s administration. Its board members, fellows and staff comprise a large part of his transition team. Among them are Rebekah Mercer, who sits on Trump’s executive committee; Steven Groves and Jim Carafano (State Department); Curtis Dubay (Treasury); and Ed Meese, Paul Winfree, Russ Vought and John Gray (management and budget). CNN reports that “no other Washington institution has that kind of footprint in the transition”.

Trump’s extraordinary plan to cut federal spending by $10.5tn was drafted by the Heritage Foundation, which called it a “blueprint for a new administration”. Vought and Gray, who moved on to Trump’s team from Heritage, are now turning this blueprint into his first budget.

This will, if passed, inflict devastating cuts on healthcare, social security, legal aid, financial regulation and environmental protections; eliminate programmes to prevent violence against women, defend civil rights and fund the arts; and will privatise the Corporation for Public Broadcasting. Trump, as you follow this story, begins to look less like a president and more like an intermediary, implementing an agenda that has been handed down to him.

In July last year, soon after he became trade secretary, Liam Fox flew to Washington. One of his first stops was a place he has visited often over the past 15 years: the office of the Heritage Foundation, where he spoke to, among others, Jim DeMint. A freedom of information request reveals that one of the topics raised at the meeting was the European ban on American chicken washed in chlorine: a ban that producers hope the UK will lift under a new trade agreement. Afterwards, Fox wrote to DeMint, looking forward to “working with you as the new UK government develops its trade policy priorities, including in high value areas that we discussed such as defence”.

How did Fox get to be in this position, after the scandal that brought him down in 2011? The scandal itself provides a clue: it involved a crossing of the boundaries between public and private interests. The man who ran the UK branch of Atlantic Bridge was his friend Adam Werritty, who operated out of Michael Hintze’s office building. Werritty’s work became entangled with Fox’s official business as defence secretary. Werritty, who carried a business card naming him as Fox’s adviser but was never employed by the Ministry of Defence, joined the secretary of state on numerous ministerial visits overseas, and made frequent visits to Fox’s office.

By the time details of this relationship began to leak, the charity commission had investigated Atlantic Bridge and determined that its work didn’t look very charitable. It had to pay back the tax from which it had been exempted (Hintze picked up the bill). In response, the trustees shut the organisation down. As the story about Werritty’s unauthorised involvement in government business began to grow, Fox made a number of misleading statements. He was left with no choice but to resign.

When Theresa May brought Fox back into government, it was as strong a signal as we might receive about the intentions of her government. The trade treaties that Fox is charged with developing set the limits of sovereignty. US food and environmental standards tend to be lower than Britain’s, and will become lower still if Trump gets his way. Any trade treaty we strike will create a common set of standards for products and services. Trump’s administration will demand that ours are adjusted downwards, so that US corporations can penetrate our markets without having to modify their practices. All the cards, post-Brexit vote, are in US hands: if the UK doesn’t cooperate, there will be no trade deal.

May needed someone who is unlikely to resist. She chose Fox, who has become an indispensable member of her team. The shadow diplomatic mission he developed through Atlantic Bridge plugs him straight into the Trump administration.

Long before Trump won, campaign funding in the US had systematically corrupted the political system. A new analysis by US political scientists finds an almost perfect linear relationship, across 32 years, between the money gathered by the two parties for congressional elections and their share of the vote. But there has also been a shift over these years: corporate donors have come to dominate this funding.

By tying our fortunes to those of the United States, the UK government binds us into this system. This is part of what Brexit was about: European laws protecting the public interest were portrayed by Conservative Eurosceptics as intolerable intrusions on corporate freedom. Taking back control from Europe means closer integration with the US. The transatlantic special relationship is a special relationship between political and corporate power. That power is cemented by the networks Liam Fox helped to develop.

In April 1938, President Franklin Roosevelt sent the US Congress the following warning: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism.” It is a warning we would do well to remember.

Now the Tories are allowing big business to design their own tax loopholes

 Illustration by Matt Kenyon

Aditya Chakrabortty in The GuardianShare on Pinterest

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Last Monday, as the prime minister rehearsed his Manchester conference speech, a story appeared in this newspaper that showed you who really runs this country – and how. It revealed that one of Britain’s largest companies, AstraZeneca, paid absolutely no corporation tax here in both 2013 and 2014, despite racking up global profits in those years of £2.9bn.

Revealed: how AstraZeneca avoids paying UK corporation tax


At first glance this sounded like an everyday tale of Mega-Business Making a Mockery of Our Tax Laws, to be filed alongside Google, Starbucks – or this weekend’s disclosure that Facebook paid less to the exchequer last year than you probably did. But this story is bigger. It’s less about accountancy than where power lies in 21st-century Britain.

Astra’s tax maestro is called Ian Brimicombe, and he is more than well-known at the Treasury: he is a trusted adviser. Shortly after George Osborne took over as chancellor in 2010, his team began rewriting the rules on how big businesses are taxed. To help, the government appointed senior executives from some of Britain’s giant companies to a “liaison committee”, comprising Astra’s Brimicombe, representatives from Tesco, Santander, BP and others.

Although the group was not widely reported, there was no disguising its purpose. In the Treasury’s own blunt words, the businesspeople were providing “strategic oversight of the development of corporate tax policy”.

Corporation tax alone is one of the biggest earners for the government, worth over £50bn a year – and now companies with millions, even billions of pounds at stake were to be given direct say on how they should be taxed.

The Treasury set up working groups specifically to advise on taxing multinational business – fitted out with directors from 40 multinationals, all with extensive networks of offshore subsidiaries. In his book The Great Tax Robbery, the former tax inspector Richard Brooks records that a Vodafone representative was put on the group “deciding how to tax offshore financing of exactly the sort his company was running through Luxembourg and Switzerland for hundreds of millions of pounds in tax saving every year”.

The new regime for multinationals began in 2013. Within five months,AstraZeneca had set up an unusual and intricate Dutch tax avoidance structure that would enable it to take full advantage of the new loopholes it had so helpfully advised on. To call this a conflict of interests is to miss the point – it’s far too brazen for that. Osborne’s Treasury blithely invited in some of the country’s biggest businesses and asked them to help design their own tax regimes. It’s like trawlermen asking fish to design their nets, or the Highways Agency allowing Jeremy Clarkson to set his own speed limit.

It might even be funny – if all these giveaways didn’t cost hundreds of millions amid a decade of belt-tightening. In their original assessment, Treasury officials calculated that the relaxation of the controlled foreign company rules would cost the public around £840m by this tax year. That’s getting on for the equivalent of three brand-new, fully staffed hospitals. The year 2013 also marked the start of the most severe cuts to social security, including the introduction of the bedroom tax. That particular cut has inflicted panic and upheaval on some of the poorest households in Britain, yet going by academic research it raises less half the amount given away to multinationals by the new controlled foreign company rules.

I write this – but we’re not even allowed to know how much money we’re giving away to Astra, Tesco and the rest. The Treasury’s initial assessment of the new rules came with a vital postscript: “The government would welcome evidence from business to help it refine the estimates of the elements of cost of the CFC reform.” Or, translated from the mandarin: this is guesswork.

When the tax-justice campaigner George Turner submitted a freedom of information request last month to find out how much the new system was costing taxpayers, Osborne’s department told him it would take too much time to find out. Turner persisted: what about the new patent box tax break, originally set to cost the public £900m? No luck there either. So ordinary taxpayers may have kissed goodbye to £1.8bn in school places and Sure Start schemes – or they may have lost a lot more. We won’t be told what’s happened to our own money.

These tax breaks aren’t in aid of struggling small businesses or innovative new tech firms: they are going into the coffers of the biggest companies in Britain, with their platoons of lobbyists and tax advisers and their web of connections into Whitehall.

The year before the government brought in these new tax breaks, AstraZeneca was granted £5m to encourage it to expand its research site at Alderley Park in Cheshire – money that the local MP (one G Osborne of Tatton) played a key role in securing. Just five months later, the drugs giant announced it was closing the centre, with the immediate loss of 550 jobs. From 2007-14, calculates York University’s Kevin Farnsworth, AstraZeneca took £91.3m in joint public funding from the government’s Innovate UK research group.

Britain is in the middle of a cold, austere decade. Ordinary taxpayers are having to tighten their belts – even while multinationals are being lavished with public cash. Osborne and Cameron tell tax-avoiding companies to “wake up and smell the coffee”, yet undercut the rest of Europe on taxes so as to lure Starbucks to put their offices in the UK. Tax avoidance is normally painted as big businesses finding and exploiting loopholes; but the Conservatives are now allowing those same outfits to design their own loopholes.

“Upwards redistribution” is how the Berkeley academic Gabriel Zucman describes it: taking from ordinary taxpayers and giving to the very richest. Zucman is a sometime co-author with Thomas Piketty and his new book The Hidden Wealth of Nations is set to do for tax havens what his colleague’s did for wealth inequality: define and popularise the problem.

“Britain is now engaged in the most extreme form of tax competition anywhere in Europe,” he told me this weekend. “It’s trying to become a tax haven.” This is what economic competence now looks like in the UK: an officially driven attempt to turn a developed country into a competitor to the Cayman Islands, with lavish handouts for those who can afford it, and cuts for those who can’t.

How have these corporations colonised our public life?

Our politicians have delegated power to global giants engineering a world of conformity and consumerism

• 
• • George Monbiot
  • The Guardian, Tuesday 8 April 2014

One of Unilever's ‘real women' series of advertisements for Dove. Photograph: PA

How do you engineer a bland, depoliticised world, a consensus built around consumption and endless growth, a dream world of materialism and debt and atomisation, in which all relations can be prefixed with a dollar sign, in which we cease to fight for change? You delegate your powers to companies whose profits depend on this model.

Power is shifting: to places in which we have no voice or vote. Domestic policies are forged by special advisers and spin doctors, by panels and advisory committees stuffed with lobbyists. The self-hating state withdraws its own authority to regulate and direct. Simultaneously, the democratic vacuum at the heart of global governance is being filled, without anything resembling consent, by international bureaucrats and corporate executives. The NGOs permitted – often as an afterthought – to join them intelligibly represent neither civil society nor electorates. (And please spare me that guff about consumer democracy or shareholder democracy: in both cases some people have more votes than others, and those with the most votes are the least inclined to press for change.)

To me, the giant consumer goods company Unilever, with which I clashed over the issue of palm oil a few days ago, symbolises these shifting relationships. I can think of no entity that has done more to blur the lines between the role of the private sector and the role of the public sector. If you blotted out its name while reading its web pages, you could mistake it for an agency of the United Nations.

It seems to have representation almost everywhere. Its people inhabit (to name a few) the British government's Ecosystem Markets Task Force and Scientific Advisory Committee on Nutrition, the International Fund for Agricultural Development, the G8'sNew Alliance for Food Security and Nutrition, the World Food Programme, the Global Green Growth Forum, the UN's Scaling Up Nutrition programme, its Sustainable Development Solutions Network, Global Compact and the UN High Level Panel on global development.

Sometimes Unilever uses this power well. Its efforts to reduce its own use of energy and water and its production of waste, and to project these changes beyond its own walls,look credible and impressive. Sometimes its initiatives look to me like self-serving bullshit.

Its "Dove self-esteem project", for instance, claims to be "helping millions of young people to improve their self-esteem through educational programmes". One of its educational videos maintains that beauty "couldn't be more critical to your happiness", which is surely the belief that trashes young people's self-esteem in the first place. But of course you can recover it by plastering yourself with Dove-branded gloop: Unilever reports that 82% of women in Canada who are aware of its project "would be more likely to purchase Dove".

Sometimes it seems to play both ends of the game. For instance, it says it is reducing the amount of salt and fat and sugar in its processed foods. But it also hosted and chaired, before the last election, the Conservative party's public health commission, which was seen by health campaigners as an excuse for avoiding effective action on obesity, poor diets and alcohol abuse. This body helped to purge government policy of such threats as further advertising restrictions and the compulsory traffic-light labelling of sugar, salt and fat.

The commission then produced a "responsibility deal" between government and business, on the organising board of which Unilever still sits. Under this deal, the usual relationship between lobbyists and government is reversed. The corporations draft government policy, which is then sent to civil servants for comment. Regulation is replaced by voluntarism. The Guardian has named Unilever as one of the companies that refused to sign the deal's voluntary pledge on calorie reduction.

This is not to suggest that everything these panels and alliances and boards and forums propose is damaging. But as the development writer Lou Pingeot points out, their analysis of the world's problems is partial and self-serving, casting corporations as the saviours of the world's people but never mentioning their role in causing many of the problems (such as financial crisis, land-grabbing, tax loss, obesity, malnutrition, climate change, habitat destruction, poverty, insecurity) they claim to address. Most of their proposed solutions either require passivity from governments (poverty will be solved by wealth trickling down through a growing economy) or the creation of a more friendly environment for business.

At best, these corporate-dominated panels are mostly useless: preening sessions in which chief executives exercise messiah complexes. At their worst, they are a means by which global companies reshape politics in their own interests, universalising – in the name of conquering want and exploitation – their exploitative business practices.

Almost every political agent – including some of the NGOs that once opposed them – is in danger of being loved to death by these companies. In February the Guardian signed a seven-figure deal with Unilever, which, the publisher claimed, is "centred on the shared values of sustainable living and open storytelling". The deal launched an initiative called Guardian Labs, which will help brands find "more engaging ways to tell their story". The Guardian points out that it has guidelines covering such sponsorship deals to ensure editorial independence.

I recognise and regret the fact that all newspapers depend for their survival on corporate money (advertising and sponsorship probably account, in most cases, for about 70% of their income). But this, to me, looks like another step down the primrose path. As the environmental campaigner Peter Gerhardt puts it, companies like Unilever "try to stakeholderise every conflict". By this, I think, he means that they embrace their critics, involving them in a dialogue that is open in the sense that a lobster pot is open, breaking down critical distance and identity until no one knows who they are any more.

Yes, I would prefer that companies were like Unilever rather than Goldman Sachs, Cargill or Exxon, in that it seems to have a keen sense of what a responsible company should do, even if it doesn't always do it. But it would be better still if governments and global bodies stopped delegating their powers to corporations. They do not represent us and they have no right to run our lives.

Give and take in the EU-US trade deal? Sure. We give, the corporations take

 

I have three challenges for the architects of a proposed transatlantic trade deal. If they reject them, they reject democracy

• 
• • George Monbiot
  • The Guardian, Monday 10 March 2014 20.30 GMT

Illustration by Daniel Pudles

Nothing threatens democracy as much as corporate power. Nowhere do corporations operate with greater freedom than between nations, for here there is no competition. With the exception of the European parliament, there is no transnational democracy, anywhere. All other supranational bodies – the International Monetary Fund, the World Bank, the United Nations, trade organisations and the rest – work on the principle of photocopy democracy (presumed consent is transferred, copy by copy, to ever-greyer and more remote institutions) or no democracy at all.

When everything has been globalised except our consent, corporations fill the void. In a system that governments have shown no interest in reforming, global power is often scarcely distinguishable from corporate power. It is exercised through backroom deals between bureaucrats and lobbyists.

This is how negotiations over the Transatlantic Trade and Investment Partnership(TTIP) began. The TTIP is a proposed single market between the United States and the European Union, described as "the biggest trade deal in the world". Corporate lobbyists secretly boasted that they would "essentially co-write regulation". But, after some of their plans were leaked and people responded with outrage, democracy campaigners have begun to extract a few concessions. The talks have just resumed, and there's a sense that we cannot remain shut out.

This trade deal has little to do with removing trade taxes (tariffs). As the EU's chief negotiator says, about 80% of it involves "discussions on regulations which protect people from risks to their health, safety, environment, financial and data security". Discussions on regulations means aligning the rules in the EU with those in the US. But Karel De Gucht, the European trade commissioner, maintains that European standards "are not up for negotiation. There is no 'give and take'." An international treaty without give and take? That is a novel concept. A treaty with the US without negotiation? That's not just novel, that's nuts.

You cannot align regulations on both sides of the Atlantic without negotiation. The idea that the rules governing the relationship between business, citizens and the natural world will be negotiated upwards, ensuring that the strongest protections anywhere in the trading bloc will be applied universally, is simply not credible when governments on both sides of the Atlantic have promised to shred what they dismissively call red tape. There will be negotiation. There will be give and take. The result is that regulations are likely to be levelled down. To believe otherwise is to live in fairyland.

Last month, the Financial Times reported that the US is using these negotiations "to push for a fundamental change in the way business regulations are drafted in the EU to allow business groups greater input earlier in the process". At first, De Gucht said that this was "impossible". Then he said he is "ready to work in that direction". So much for no give and take.

But this is not all that democracy must give so that corporations can take. The most dangerous aspect of the talks is the insistence on both sides on a mechanism called investor-state dispute settlement (ISDS). ISDS allows corporations to sue governments at offshore arbitration panels of corporate lawyers, bypassing domestic courts. Inserted into other trade treaties, it has been used by big business to strike down laws that impinge on its profits: the plain packaging of cigarettes; tougher financial rules; stronger standards on water pollution and public health; attempts to leave fossil fuels in the ground.

At first, De Gucht told us there was nothing to see here. But in January the man who doesn't do give and take performed a handbrake turn and promised that there would be a three-month public consultation on ISDS, beginning in "early March". The transatlantic talks resumed on Monday. So far there's no sign of the consultation.

And still there remains that howling absence: a credible explanation of why ISDS is necessary. As Kenneth Clarke, the British minister promoting the TTIP, admits: "It was designed to support businesses investing in countries where the rule of law is unpredictable, to say the least." So what is it doing in a US-EU treaty? A report commissioned by the UK government found that ISDS "is highly unlikely to encourage investment" and is "likely to provide the UK with few or no benefits". But it could allow corporations on both sides of the ocean to sue the living daylights out of governments that stand in their way.

Unlike Karel De Gucht, I believe in give and take. So instead of rejecting the whole idea, here are some basic tests which would determine whether or not the negotiators give a fig about democracy.

First, all negotiating positions, on both sides, would be released to the public as soon as they are tabled. Then, instead of being treated like patronised morons, we could debate these positions and consider their impacts.

Second, every chapter of the agreement would be subject to a separate vote in the European parliament. At present the parliament will be invited only to adopt or reject the whole package: when faced with such complexity, that's a meaningless choice.

Third, the TTIP would contain a sunset clause. After five years it would be reconsidered. If it has failed to live up to its promise of enhanced economic performance, or if it reduces public safety or public welfare, it could then be scrapped. I accept that this would be almost unprecedented: most such treaties, unlike elected governments, are "valid indefinitely". How democratic does that sound?

So here's my challenge to Mr De Gucht and Mr Clarke and the others who want us to shut up and take our medicine: why not make these changes? If you reject them, how does that square with your claims about safeguarding democracy and the public interest? How about a little give and take?

Cigarette packaging: the corporate smokescreen

Noble sentiments about individual liberty are being used to bend democracy to the will of the tobacco industry

BETA

• 
• • George Monbiot
  • The Guardian, Monday 15 July 2013 20.39 BST

'Lynton Crosby personifies the new ­dispensation, in which men and women glide between corporations and ­politics, and appear to act as agents for big ­business within government.' Photograph: David Hartley / Rex Features

It's a victory for the hidden persuaders, the astroturfers, sock puppets, purchased scholars and corporate moles. On Friday the government announced that it will not oblige tobacco companies to sell cigarettes in plain packaging. How did it happen? The public was overwhelmingly in favour. The evidence that plain packets will discourage young people from smoking is powerful. But it fell victim to a lobbying campaign that was anything but plainly packaged.

Tobacco companies are not allowed to advertise their products. Nor, as they are so unpopular, can they appeal directly to the public. So they spend their cash on astroturfing(fake grassroots campaigns) and front groups. There is plenty of money to be made by people unscrupulous enough to take it.

Much of the anger about this decision has been focused on Lynton Crosby. Crosby is David Cameron's election co-ordinator. He also runs a lobbying company that works for the cigarette firms Philip Morris and British American Tobacco. He personifies the new dispensation, in which men and women glide between corporations and politics, and appear to act as agents for big business within government. The purpose of today's technocratic politics is to make democracy safe for corporations: to go through the motions of democratic consent while reshaping the nation at their behest.

But even if Crosby is sacked, the infrastructure of hidden persuasion will remain intact. Nor will it be affected by the register of lobbyists that David Cameron will announce on Tuesday, antiquated before it is launched.

Nanny state, health police, red tape, big government: these terms have been devised or popularised by corporate front groups. The companies who fund them are often ones that cause serious harm to human welfare. The front groups campaign not only against specific regulations, but also against the very principle of the democratic restraint of business.

I see the "free market thinktanks" as the most useful of these groups. Their purpose, I believe, is to invest corporate lobbying with authority. Mark Littlewood, the head of one of these thinktanks – the Institute of Economic Affairs (IEA) – has described plain packaging as "the latest ludicrous move in the unending, ceaseless, bullying war against those who choose to produce and consume tobacco". Over the past few days he's been in the media repeatedly, railing against the policy. So do the IEA's obsessions just happen to coincide with those of the cigarette firms? The IEA refuses to say who its sponsors are and how much they pay. But as a result of persistent digging, we now know that British American Tobacco, Philip Morris and Japan Tobacco International have been funding the institute – in BAT's case since 1963. British American Tobacco has admitted that it gave the institute £20,000 last year and that it's "planning to increase our contribution in 2013 and 2014".

Otherwise it's a void. The IEA tells me, "We do not accept any earmarked money for commissioned research work from any company." Really? But whether companies pay for specific publications or whether they continue to fund a body that – by the purest serendipity – publishes books and pamphlets that concur with the desires of its sponsors, surely makes no difference.

The institute has almost unrivalled access to the BBC and other media, where it promotes the corporate agenda without ever being asked to disclose its interests. Because they remain hidden, it retains a credibility its corporate funders lack. Amazingly, since 2011 Mark Littlewood has also been the government's adviser on cutting the regulations that business doesn't like. Corporate conflicts of interest intrude into the heart of this country's political life.

In 2002, a letter sent by the philosopher Roger Scruton to Japan Tobacco International (which manufactures Camel, Winston and Silk Cut) was leaked. In the letter, Professor Scruton complained that the £4,500 a month JTI was secretly paying him to place pro-tobacco articles in newspapers was insufficient: could they please raise it to £5,500?

Scruton was also working for the Institute of Economic Affairs, through which he published a major report attacking the World Health Organisation for trying to regulate tobacco. When his secret sponsorship was revealed, the IEA pronounced itself shocked: shocked to find that tobacco funding is going on in here. It claimed that "in the past we have relied on our authors to come forward with any competing interests, but that is going to change ... we are developing a policy to ensure it doesn't happen again." Oh yes? Eleven years later I have yet to find a declaration in any IEA publication that the institute (let alone the author) has been taking money from companies with an interest in its contents.

The IEA is one of several groups that appear to be used as a political battering ram by tobacco companies. On the TobaccoTactics website you can find similarly gruesome details about the financial interests and lobbying activities of, for example, the Adam Smith Institute and the Common Sense Alliance.

Even where tobacco funding is acknowledged, only half the story is told. Forest, a group that admits that "most of our money is donated by UK-based tobacco companies", has spawned a campaign against plain packaging called Hands Off Our Packs. The Department of Health has published some remarkable documents, alleging the blatant rigging of signatures on a petition launched by this campaign. Hands Off Our Packs is run by Angela Harbutt. She lives with Mark Littlewood.

Libertarianism in the hands of these people is a racket. All those noble sentiments about individual liberty, limited government and economic freedom are nothing but a smokescreen, a disguised form of corporate advertising. Whether Mark Littlewood, Lynton Crosby or David Cameron articulate it, it means the same thing: ideological cover for the corporations and the very rich.

Arguing against plain packaging on the Today programme, Mark Field MP, who came across as the transcendental form of an amoral, bumbling Tory twit, recited the usual tobacco company talking points, with their usual disingenuous disclaimers. In doing so, he made a magnificent slip of the tongue. "We don't want to encourage young people to take up advertising ... er, er, to take up tobacco smoking." He got it right the first time.

Why do bankers get to decide who pays for the mess Europe is in?

There were summits about how much misery would be imposed on the Greeks – and no trade unions got a say

• 
• • Aditya Chakrabortty
  • guardian.co.uk, Monday 2 April 2012 20.00 BST

What you're about to read does, I admit, sound like a conspiracy theory. It involves powerful people meeting in private offices, hundreds of billions of euros, and clandestine deals determining the fates of entire countries. All that's missing is a grassy knoll or a wandering band of illuminati. There are, however, two crucial differences: these events are still unfolding – and they're more worrying than any who-killed-JFK fantasy I've ever heard.

Cast your mind back to the euro crisis talks last year, when the future of Greece was being decided. How much Athens should pay its bailiffs in the banks, on what terms, and the hardship that ordinary Greeks would have to endure as a result.

There were times when the whole of 2011 seemed to be one long European summit, when you heard more about Papandreou and Merkozy than was strictly necessary. Yet you probably didn't catch many references to Charles Dallara and Josef Ackermann.

They're two of the most senior bankers in the world – among the top 1% of the 1%. Dallara served in the Treasury under Ronald Reagan, before moving on to Wall Street, while Ackermann is chief executive of Deutsche Bank. But their role in the euro negotiations, and so in deciding Greece's future, was as representatives of the International Institute for Finance.

The IIF is a lobby group for 450 of the biggest banks in the world, with members including Barclays, RBS and Lloyds. Dallara and Ackermann and their colleagues were present throughout those euro summits, and enjoyed rare and astounding access to European heads of state and other policy-makers. EU and IMF officials consulted the bankers on how much Greece should pay, Europe's commissioner for economic affairs Olli Rehn shared conference calls with them.

You can piece all this together by poring over media reports of the euro summits, although be warned: you'll need a very high tolerance threshold for European TV, and financial newswires. But Dallara and co are also quite happy to toot their own trumpets. After a deal was struck last July, the IIF put out a note bragging about its "catalytic" role and claiming its offer "forms an integral part of a comprehensive package".

By now you'll have guessed the punchline: that July agreement was terrible for the Greeks, and brilliant for the bankers. It was widely panned at the time, for slicing only 21% off the value of Greece's loans, when Angela Merkel and many others agreed that financiers ought to be taking a much bigger hit. As the German government's economic adviser, Wolfgang Franz, later remarked in an interview: "If you look at the 21% and our demand for a 50% participation of private creditors, the financial sector has been very successful." Another way of putting it would be to say that the bankers overpowered even the strongest state in Europe.

None of this was inevitable. Iceland had made it clear that simply defaulting on one's loans didn't immediately lead to economic apocalypse. Across Greece, there were massive, repeated protests about the enormous spending cuts that citizens would suffer by paying off Goldman Sachs and the rest. And there was a growing movement in Greece and Portugal and France, among other countries, questioning the legitimacy of some of these loans.

None of these voters, none of these opinions got even a fraction of the consideration, let alone the face time, that was extended to Dallara and Ackermann. At Corporate Europe Observatory in Brussels, Yiorgos Vassalos has been tracking the negotiations over Greece: by his reckoning only the IIF got to have such personal, close-up access. These were summits settling how much misery would be imposed on the Greek people – and no trade unions or civil society groups got a say in them. "The only key players in those meetings were European governments and the bankers," says Vassalos.
Mindful of appearances, the EU has been less eager to admit to the influence of the bankers' lobby. When European officials were first asked by Corporate Europe Observatory about the extent of IIF access, they responded that it was limited to the Greek government. Only when it was pointed out that the Wall Street Journal and Bloomberg were reporting that Dallara met Merkel and Nicolas Sarkozy at midnight at an October summit to finalise a bigger reduction of the value of Greek debt did the officials back down: the IIF, they agreed, had been negotiating with a range of governments, on a whole host of issues to do with Greece's future.

So the bankers whose excesses helped land Europe in this mess then get to sit round the big EU table, like any other government, and decide who should pay for it. And the answer, unsurprisingly, is: not them. The bigger question is: why finance has been granted such power? In a forthcoming paper entitled Deep Stall, the Centre for Research on Socio-Cultural Change gives one compelling reason: because so many countries across Europe are, through both their public and private sectors, so dependent on financiers in other countries for credit. That includes Britain, which relies on 10 eurozone countries for loans worth over 70% of its annual national income – a higher proportion even than Italy. The tale of the IIF and how it got such a powerful say on the fate of ordinary Greeks is really a chapter in a much bigger story of how governments across the western world got swallowed up by their finance industries.

Bankers are the dictators of the West

Robert Fisk in The Independent

Saturday, 10 December 2011

Writing from the very region that produces more clichés per square foot than any other "story" – the Middle East – I should perhaps pause before I say I have never read so much garbage, so much utter drivel, as I have about the world financial crisis.

But I will not hold my fire. It seems to me that the reporting of the collapse of capitalism has reached a new low which even the Middle East cannot surpass for sheer unadulterated obedience to the very institutions and Harvard "experts" who have helped to bring about the whole criminal disaster.

Let's kick off with the "Arab Spring" – in itself a grotesque verbal distortion of the great Arab/Muslim awakening which is shaking the Middle East – and the trashy parallels with the social protests in Western capitals. We've been deluged with reports of how the poor or the disadvantaged in the West have "taken a leaf" out of the "Arab spring" book, how demonstrators in America, Canada, Britain, Spain and Greece have been "inspired" by the huge demonstrations that brought down the regimes in Egypt, Tunisia and – up to a point – Libya. But this is nonsense.

The real comparison, needless to say, has been dodged by Western reporters, so keen to extol the anti-dictator rebellions of the Arabs, so anxious to ignore protests against "democratic" Western governments, so desperate to disparage these demonstrations, to suggest that they are merely picking up on the latest fad in the Arab world. The truth is somewhat different. What drove the Arabs in their tens of thousands and then their millions on to the streets of Middle East capitals was a demand for dignity and a refusal to accept that the local family-ruled dictators actually owned their countries. The Mubaraks and the Ben Alis and the Gaddafis and the kings and emirs of the Gulf (and Jordan) and the Assads all believed that they had property rights to their entire nations. Egypt belonged to Mubarak Inc, Tunisia to Ben Ali Inc (and the Traboulsi family), Libya to Gaddafi Inc. And so on. The Arab martyrs against dictatorship died to prove that their countries belonged to their own people.

And that is the true parallel in the West. The protest movements are indeed against Big Business – a perfectly justified cause – and against "governments". What they have really divined, however, albeit a bit late in the day, is that they have for decades bought into a fraudulent democracy: they dutifully vote for political parties – which then hand their democratic mandate and people's power to the banks and the derivative traders and the rating agencies, all three backed up by the slovenly and dishonest coterie of "experts" from America's top universities and "think tanks", who maintain the fiction that this is a crisis of globalisation rather than a massive financial con trick foisted on the voters.

The banks and the rating agencies have become the dictators of the West. Like the Mubaraks and Ben Alis, the banks believed – and still believe – they are owners of their countries. The elections which give them power have – through the gutlessness and collusion of governments – become as false as the polls to which the Arabs were forced to troop decade after decade to anoint their own national property owners. Goldman Sachs and the Royal Bank of Scotland became the Mubaraks and Ben Alis of the US and the UK, each gobbling up the people's wealth in bogus rewards and bonuses for their vicious bosses on a scale infinitely more rapacious than their greedy Arab dictator-brothers could imagine.

I didn't need Charles Ferguson's Inside Job on BBC2 this week – though it helped – to teach me that the ratings agencies and the US banks are interchangeable, that their personnel move seamlessly between agency, bank and US government. The ratings lads (almost always lads, of course) who AAA-rated sub-prime loans and derivatives in America are now – via their poisonous influence on the markets – clawing down the people of Europe by threatening to lower or withdraw the very same ratings from European nations which they lavished upon criminals before the financial crash in the US. I believe that understatement tends to win arguments. But, forgive me, who are these creatures whose ratings agencies now put more fear into the French than Rommel did in 1940?

Why don't my journalist mates in Wall Street tell me? How come the BBC and CNN and – oh, dear, even al-Jazeera – treat these criminal communities as unquestionable institutions of power? Why no investigations – Inside Job started along the path – into these scandalous double-dealers? It reminds me so much of the equally craven way that so many American reporters cover the Middle East, eerily avoiding any direct criticism of Israel, abetted by an army of pro-Likud lobbyists to explain to viewers why American "peacemaking" in the Israeli-Palestinian conflict can be trusted, why the good guys are "moderates", the bad guys "terrorists".

The Arabs have at least begun to shrug off this nonsense. But when the Wall Street protesters do the same, they become "anarchists", the social "terrorists" of American streets who dare to demand that the Bernankes and Geithners should face the same kind of trial as Hosni Mubarak. We in the West – our governments – have created our dictators. But, unlike the Arabs, we can't touch them.

The Irish Taoiseach, Enda Kenny, solemnly informed his people this week that they were not responsible for the crisis in which they found themselves. They already knew that, of course. What he did not tell them was who was to blame. Isn't it time he and his fellow EU prime ministers did tell us? And our reporters, too?