As the Panama Papers revelations lay bare in unprecedented detail how the rich and powerful are avoiding taxes, it is tempting to think of the bankers, financial lawyers, accountants and consultants who assist them in doing so as evil psychopaths. This idea is extremely popular: ‘homo financialus’ as a monster. Think of the classic Wall Street (‘greed is good’), of the mass murdering banker in American Psycho, and more recently, of the blockbuster Wolf of Wall Street.

The truth, however, is very different – and far more disconcerting. There are clearly rotten apples in the financial sector, and some niches seem particularly prone to attracting them. Yet the overwhelming majority of the people working there seem just like you and me. They are not monsters, but they are working in what you might very well think of as ‘monstrous organisations’.

Over the past four years I’ve spoken to hundreds of these financial workers, in Tokyo, Amsterdam and Frankfurt, but mostly in Europe’s financial centre: the City of London. It is a difficult thing to do because finance is governed by a brutally policed ‘code of silence’. Those caught speaking to journalists lose their jobs and face terrifying sanctions. Yet, if you give people anonymity, some will sit for an interview.

Finance is a huge sector and the desks engaged in tax evasion for big corporations and rich people (“high net worth individuals”) are but a tiny part of the whole. Yet the self-justifications of banking staff involved in helping clients avoid taxes were strikingly similar to those offered in other areas in banking.

Perhaps the best term to describe the tone by which people spoke of their work and its ethical dimensions is ‘matter-of-fact’. For example, when they explained how to sell a deliberately intransparent financial product to ‘some guy’ at a small bank in Sweden or an airline company in Finland, knowing that ‘this guy’ has no idea what he is buying. Or how to create a deeply misleading media hype about a new tech company that their bank is hoping to get listed on the stock exchange. Or how to make incredible amounts of money by building a computer algorithm that trades at almost light speed on financial markets, often holding shares for less than a few seconds and exposing those financial markets to huge risks.

As I said, bankers are not monsters, so you can ask them, human being to human being: how can you live with yourself doing things like this?

Many started out by saying ‘you just don’t think about it’. As one employee in the legal department of a major bank put it, looking back at the years when she was setting up shell companies in the Virgin and Cayman Islands: “When you’re in the thick of it, working late every day, you just don’t stop and think. It was later that I realised, hey, these products were probably used for tax evasion. When you’re in the middle of it, you are just focused on the next pile of documentation coming your way.”

People in finance, be it law, consultancy or banking, work extreme hours and are often sleep deprived. Juniors especially are expected to pull so-called ‘all-nighters’ by which you work all through the night, jump in a taxi around 6AM to go home for a shower and return with the same taxi for another day in the office. Such pressure eats away at your sense of ethics, interviewees say; you become exclusively focused on ‘corporate survival’: getting the work done. What is more, everyone around you behaves like this, too, if only because the internal competition is so fierce. In London you can be fired in five minutes and the most ‘competitive’ firms may hire two people for one and the same post to see who survives. ‘Top’ banks meanwhile pride themselves on firing two to three percent of their ‘worst performing’ staff every year – no matter how profitable that year was.

Interviewees speak of a ‘culture of fear’, and of ‘zero loyalty’: If you can be fired in five minutes, your horizon becomes five minutes. Many asked: “Why do you expect me to treat my clients or society any better than my own bank treats me?”

This is not the kind of corporate environment in which you are likely to dare raise ethical objections. Yet, most interviewees insisted, fear or exhaustion are not the core of the issue. You want to know how I as a banker or lawyer can live with myself, they said. Well, what I do is legal, so how can you blame me?

This is exactly the defence offered by the Panama firms involved in the tax evasion, as well as by the PR departments of financial firms across the West implicated in all this: we did not break any law so we are by definition innocent.

When pressed for details, financial workers used two interconnected terms to explain themselves: ‘a-morality’ and ‘shareholder value’. Please understand, everybody said: ‘a-moral’ is not the same as ‘immoral’. Immoral means knowingly breaking the law. The sign says you can go 100 kilometres, but still you decide to drive 150. That’s immoral. A-moral, by contrast, means that your ethical and moral framework is defined by what the law allows.

In finance you do not ask if a proposal is morally right or wrong. You look at the degree of ‘reputation risk’. Financial lawyers and regulators who go along with whatever you propose are ‘business-friendly’ and using loopholes in the tax code to help big corporations and rich families evade taxes is ‘tax optimisation’ with ‘tax-efficient structures’.

Once I tuned my ear in to it, I began to hear such ‘sanitised’ terms everywhere and this is because the vocabulary available to people in finance to think about their own actions has been deliberately stripped of terms that can provoke an ethical discussion. Hence the biggest compliment in finance is to be called ‘professional’. It means you do not let emotions get in the way of work, let alone moral beliefs – those are for home. In most conversations the word ‘ethic’ came up only in combination with ‘work’, referring to an almost absolute obedience to one’s boss.

If a-morality is the reigning mentality in today’s financial sector, then ‘shareholder value’ provides the ideological underpinning. Almost every interviewee brought this up. Like most global corporations today, they explained, big global banks are owned by shareholders such as pension funds and insurers. These demand from banks that they make as much profit as they can, within the law. Those profits are the sole criterion by which shareholders judge a bank. So, bankers would ask me, how do you expect us to behave ethically when our owners simply look at two things: is it profitable and is it legal?

One trader in London needed very few words to analyse the dynamics: ‘If you are a pension fund with shares in Morgan Stanley, and you see that Goldman Sachs made 50% more profit, you will not like that. These numbers make you look like a bad investor. So you put pressure on Morgan Stanley, saying, “You have 18 months to prove you can turn this around or there’ll be a sell-off.”’ And so Morgan Stanley will look at legal tax evasion and realise: if we get involved there, we make more profit. It is legal so what is to stop us?

In sharp contrast to the idea that they are casinos, banks in fact have vast departments called ‘compliance’, ‘legal’ and ‘internal audit’ – all tasked with making sure that no law is broken. However, most interviewees continued, ‘the question is always: how can we, within the rules, game the system?

This, then, is the corporate universe that produces tax evasion for the rich on an industrial scale. Those on the inside have absolved themselves of moral responsibility and at least in the interviews my counter arguments seemed to hold no sway: how can you hide behind the law if your sector has such an influence in writing the law? Think of campaign donations and finance – basically political corruption. Think also of the extremely lucrative ‘second careers’ for those politicians who give the financial sector what it wants. And think of the huge financial lobby, employing thousands of people in Washington, London, Brussels and other regulatory centres. And those lobbyists, too, will tell you: what I do is legal, so I must be innocent.

It is a depressing picture and morality in this context becomes almost a life-style option. One of the most interesting interviewees was someone specialised in building built financial instruments to avoid taxes. For at least a decade this so-called structurer had been making around a million Euros a year, saving it all up so that by his mid 30s he would never have to work again. Recently he had quit and I asked him why.

It was like the story of Dr Faustus, he explained. ‘You sell your soul to the devil. I sold my soul for worldly riches. The price the devil demanded was my moral bankruptcy. For a long time I was OK with that, until I wasn’t. What triggered this change of heart? There was not one particular moment. You have to look at yourself in the mirror every morning. I imagined a future son or daughter asking me, Daddy, what do you do for a living? What was I going to say?”


This article was originally published on Faber & Faber.

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