Picture: ANA sock image – Financial institutions are an essential instrument in the maintenance of monopoly power. The emergence of banks dabbling in politics by de-banking “politically exposed persons” is of concern, ther writer says.
By Kim Heller
The game of monopoly power is a complex and ruthless one. Its key players buy and control the economy and dominate economic resources. The trump card of monopoly power is to manage and manipulate financial influence and access.
For those who hold economic control, the game is no child’s play. It is a real-life, high-stakes war of protecting incumbent interests. It is about maintaining a status quo which serves beholden elite interests, at all costs.
Power leaves nothing to chance. At each and every interval it will ensure that the deck is stacked in its favour. At all times it will leverage its control over society and economy, in a protective pounce against any perceived or real threat. There is an inbuilt structural might. Such is the invincibility of power. Until it falls. But this is rare, for power does not fail or fall easily. Those who huff and puff and try blow the house of cards down often set in motion their very own fall and downfall.
Expressing an unpopular view which challenges the supremacy of incumbent political and economic regimes, elites and establishment is a very expensive venture indeed.
In my book ‘No White Lies: Black Politics and White Power’, I pen how my strong political views and calls for social and economic justice, including land justice and reparations from white South Africans, have cost me dearly; job offers have been withdrawn, contracts cancelled and pending work opportunities summarily withdrawn or blocked.
There is an infinite number of people who have been punished by the incumbent system. Most are forgotten and forsaken. Economic sanctions against individuals who attempt to disrupt the assembly of power or dare to challenge the monopoly hold over economy, society and public discourse are commonplace and take many forms.
Such sanctions are intended to render people and organisations financially paralysed. They not only cut off access to economic and financial opportunities but damage and devalue the currency and credibility of so called ‘disrupters’. This is the brutal play of financial strangulation.
Financial institutions are an essential instrument in the maintenance of monopoly power. The emergence of banks dabbling in politics by de-banking “politically exposed persons” is of concern. It is undoubtedly responsible and legitimate for banks to protect and safeguard themselves from a growing surge of money laundering and other illicit activities.
But it appears as if the increasingly common practice of ‘de-banking’ is being used as a menacing punishment. Many individuals and organisations are losing their bank accounts or being denied bank accounts for no legitimate commercial reason. They are simply being prejudiced and punished for their particular outlook or expression.
Perhaps the most highly publicised account of de-banking is that of UK based right wing politician Nigel Farage whose bank accounts were closed by the prestigious UK bank, Coutts. Allegedly a dossier Farage obtained from the bank hints that the closure of his accounts was influenced by the fact that his political views did not align with the bank. Farage also claims he was denied bank accounts by nine banks due to his political profile.
Farage is no crusader for justice. Simply put his politics is vile. His views on immigrants and LGBTQ+ rights, among other issues, is despicable, in my view. However, this does not distract from the fact that Farage is being unfairly financially prejudiced.
Farage wrote “The establishment are trying to force me out of the UK by closing my bank accounts. I have been given no explanation or recourse as to why this is happening to me. This is serious political persecution at the very highest level of our system. If they can do it to me, they can do it to you”.
NatWest, the owners of Coutts have since ordered an independent review into the matter and the big boy of Coutts, Peter Flavel has since resigned. It is a small victory, but the problem of de-banking is still looming large. Recently, the Muslim Council of Britain disclosed that the de-banking of Muslim and Islamic organisations in the UK was disproportionally high. The head of the London based Muslim Charities Forum, Fadi Itani, told Al Jazeera that at least 50 organisations have faced bank closures.
Reports are also emerging on how, since the Russia-Ukraine conflict, Ukraine, businesses with links to Russia have been placed under scrutiny.
Former Brexit Secretary, David Davis, compares shutting down someone’s bank account to shutting down their water or electricity supply. Davis said, “You should be able to get a bank account regardless of your political views, whether you are a communist or a fascist.”
Closer to home, de-banking is gaining momentum. And it is seems to be targeting those who have spoken out against the establishment. The leader of EFF, Julius Malema has accused several banks in South Africa of discriminating against him and his son. Malema told journalists “My son’s bank [account] is being declined. He is 17 years old; he hasn’t done anything to anyone, but he can’t get a bank account … “We are being bullied by banks in South Africa”.
Editor Sizwe Dlamini recently wrote that banks are not independent but political entities. “There is an unspoken yet seemingly invincible alliance between banks and politics that rarely comes to light. This alliance, often invisible yet profound, wields an extraordinary influence over society, impacting everything from economic prosperity to policy direction and, alarmingly, the erosion of individual and press freedoms”, Dlamini writes. He refers to the closure of Independent Media bank accounts as a “clear attempt to silence dissenting voices that fail to subscribe to the establishment’s narrative”. He writes pointedly about how such behaviour undermines the right to financial inclusion and economic participation.
The neutrality of South African banks is brought into question when one ponders why certain individuals such as Julius Malema and Dr Iqbal Surve are being de-banked while others including Cyril Ramaphosa, Steinhoff’s Markus Jooste and those implicated in Zondo’s state capture inquiry are not similarly financially excluded or prejudiced. If reputational risk was a real factor for de-banking, the Phala Phala scandal should have raised the eyebrows of bankers. But the game appears to be one of eyes wide shut.
In the UK, Chancellor Jeremy Hunt has stated clearly that banks face "very large" fines if they close customers' accounts because of their political opinions. A similar posture is crucial for the South African financial industry. But for now, it looks like the deck is stacked against certain individuals and organisations.
It is financial strangulation for those targeted individuals and organisations, but it goes beyond this. De-banking damages the vocal chords of democracy, and yet we all remain silent. Lest we forget that tomorrow it could be any one of us.
Kim Heller is a political analyst and author of ‘No White Lies: Black Politics and White Power in South Africa’.
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