Prince Andrew’s outburst in Bishkek proves it: Britain has become a Banana monarchy

In October 2008, on a visit to Bishkek, the capital of Kyrgyzstan, a “cocky” Prince Andrew not only welcomed, but actually endorsed bribery and corruption.

In an U.S. embassy cable leaked by Bradley Manning to Julian Assange’s Wikileaks, the U.S. ambassador to Kyrgyzstan revealed that, during a tw hour brunch with British and Canadian business people at a hotel in the central Asian republic’s capital, Bishkek, a “rude” Prince Andrew — then the UK’s Special Representative for International Trade and Investment — attacked the Serious Fraud Office for what he called “idiocy”.

In the cable, Ambassador Tatiana Gfoeller revealed: “Rude language à la British … [Andrew] turned to the general issue of promoting British economic interests abroad.

“He railed at British anti-corruption investigators, who had had the ‘idiocy’ of almost scuttling the Al-Yamamah deal with Saudi Arabia.”

The prince, Gfoeller explained, “was referencing an investigation, subsequently closed, into alleged kickbacks a senior Saudi royal had received in exchange for the multi-year, lucrative BAE Systems contract to provide equipment and training to Saudi security forces”. 

Gfoeller’s cable continued: “His mother’s subjects seated around the table roared their approval. He then went on to ‘these (expletive) journalists, especially from the National [sic] Guardian, who poke their noses everywhere’ and (presumably) make it harder for British businessmen to do business.” [FULL TEXT OF 29 OCT 2008 US EMBASSY CABLE]

Prince Andrew’s unsettling behaviour confirmed that the second son of Queen Elizebeth II doesn’t have any moral compass to speak of.

However there is a wider and perhaps more disturbing picture here.

Ambassador Gfoeller reported that, when Andrew cricisee UK regulators and media for “poking their noses everywhere” and seemingly preventing businesspeople from greasing the palms of officials and politicians in countries such as Kyrgyzstan, the assembled Canadian and British business people “practically clapped.”

This made me think of a wider problem with British regulators: that too many of them seem to actively welcome corruption and collude with corrupt companies to help them cover up past wrongdoing, or are simply too lazy, frightened or “captured”, to bother tackling high-level fraud and corruption.

This story was published on page five of the current issue of Private Eye (9 August – 22 August 2013):

On 1 August 2010, the Financial Reporting Council announced that is was dropping of its three-year probe into the failure of BAE Systems’s auditors, the serially useless KPMG, to raise the alarm, question, or do indeed do anything at all about the massive commissions (= bribes) that its defence industry client was handing to individuals and shell companies to smooth the path to the historic al-Yamamah deal.

The FRC’s excuse? Apparently it would have meant delving too far back into the past. Of course, it didn’t mention that seven current and former KPMG partners and executives are among the FRC’s board directors and senior staff, including the likes of Peter George and Sir Steve Robson. So no conflict there, obviously.

The background to this is that the FRC launched an “investigation” into KPMG’s role as auditor and adviser to BAE Systems in 2010, after the company settled corruption probes in the US and UK. 

The FRC investigation was, perhaps conveniently, focused on audit and advisory work carried out by KPMG between 1997 and 2007.

BAE Systems — farcically — settled with the Serious Fraud Office by admitting to a minor accounting charge relating to its activities in Tanzania, for which it paid a modest penalty of £30m.

Tony Blair’s government was, rightly, lampooned as wilfully blind to corruption when it bullied the SFO into dropping its investigation into the al-Yamamah arms deal on the grounds of “national security” (sucking up the Saudi Arabia was a kay part of it).

As part of a settlement between BAE and the US Department of Justice in 2010, the UK based arms manufacturer was forced to pay a criminal fine of $400m (£263m) and plead guilty to a charge of conspiring to make false statements to the U.S. government. Yes there are some jurisdictions in which regulators still do thier jobs. KPMG has denied misconduct and welcomed the FRC’s decision to drop its investigation.

The FRC has form when it comes to letting ‘Big Four’ accountancy firms — Deloitte, Ernst & Young, KPMG and PwC — off the hook.

On 11 April, The Times’s Alex Spence revealed that the FRC had decided against probing ‘Big Four’ firms’ pre-crash audits of UK banks, apparently because it wanted an easy life. “There was a lack of will,” one well-placed insider told Spence at The Times. “There was a general reluctance to get into it. It would just be too disruptive, too damaging.”

The FRC has yet to make clear whether it is going to bother to launch a specific probe of KPMG’s role as auditor of the disastrous UK bank HBOS in 2001-08. It is apparently sitting on its hands while it waits to see the outcome of the FSA’s whitewash report into the Edinburgh-based bank’s failure.

On a related matter, there’s continuing pressure for John Griffith-Jones — chairman of the Financial Conduct Authority, who was senior partner at KPMG during its time as HBOS’s auditor — to stand down from his FCA role, as a result of the conflict of interest arising from his perceived complicity in audits that lacked professional rigour and which are widely seen as having exacerbated the irresponsibility, recklessness and malpractice that fuelled the banking crisis which in turn has crippled the British economy.

Pirc, the corporate governance watchdog, and HBOS whistleblower Paul Moore, himself a former KPMG partner, are among the many powerful voices who are calling for Griffith-Jones’s head.

It’s also worth noting that, in March 2011, Prince Andrew, also known as the Duke of York, came in for serious criticism over his friendship with the dodgy American billionaire wealth manager Jeffrey Epstein. The pair were photographed walking side by side in New York’s Central Park in December 2010 after Epstein had served an 18-month prison sentence for soliciting a minor for prostitution. Also in 2011, Andrew’s ex wife Sarah Ferguson admitted to having accepted £15,000 from Epstein, to help pay off debts she owed to a former personal assistant. 

This blog post was published on 17 August 2013. We only know about Prince Andrew’s behaviour in Bishkek, Kyrgyzstan thanks to the efforts of U.S. army private Bradley Manning (later Chelsea Manning), WikiLeaks and The Guardian. As a result his repeated poor judgement, Andrew was effectively sacked  UK’s Special Representative for International Trade and Investment in Junly 2011. He had had the role since 2001.