The Mail on Sunday published an article yesterday about Tony Caplin titled “The Prime Minister Hired a Bankrupt Associate to Run a £60 Billion Quango: The Tycoon Put in Charge of the Treasury’s Vast Budget by His Conservative Friends is Fired After MoS Investigation.” In summary, David “We’re All in This Together” Cameron hired a man who had previously worked for his father, Ian, at a city firm called Panmure Gordon, placing him in charge of a £60 billion quango (for non-Britons: “a semi-public administrative body outside the civil service but receiving financial support from the government”). What David Cameron and his officials didn’t know, as revealed by the Mail on Sunday, is that Tony Caplin declared bankruptcy in 2012, and bankrupt individuals shouldn’t be involved in managing public funds.
Understandably, the scandal blew up in Cameron’s face, and Caplin was forced to resign from his semi-government roles. In addition to bankruptcy in 2012, another instance of misconduct unveiled by the Mail on Sunday was an email sent by Iain Corby, another fallen Tory operative, offering Caplin commissions on potential investments in “anything from £100 million to £5 billion to invest in UK infrastructure projects…”
Speaking of “infrastructure projects,” my long-time readers may have heard the name Tony Caplin before. In fact, I obtained documents in November 2011 regarding a $2 billion bond supposedly granted to Caplin by the Central Bank of Venezuela, to develop “humanitarian projects” in “North, Central, and South America.” Four days after the documents were leaked, I published an update due to claims of forgery and statements made by the then-president of the Central Bank of Venezuela, Nelson Merentes, denying any involvement with Caplin or his fictitious Isle of Man company, Kellmar Ltd. However, in the four days between the original publication and the update, I had contacted a journalist from the Wall Street Journal who was interested in my blog about Caplin. I called Caplin and inquired about his involvement, but he didn’t say much. Nevertheless, Caplin admitted not only to being aware of the documents but also to his participation in the plan, as described in documents submitted to the WSJ, stating he was invited by “a very distinguished law firm” in the U.S.
The law firm turned out to be little more than a lawyer and his briefcase. There were other actors besides Caplin and his “very distinguished” lawyer mentioned in the documents (Credit Suisse, an ambassador from St Kitts & Nevis, Kellmar Ltd), but none responded to requests for comment.
In light of Caplin’s admission and Merentes’ statements, I called emailed the Serious Fraud Office, the Financial Services Authority, and the Isle of Man authorities to alert them of potential irregularities in late November 2011. Now, the Mail on Sunday has revealed that Caplin declared bankruptcy in 2012. I stepped away from the Mail on Sunday’s exposure of its claim about “unfounded internet reports suggesting that the Isle of Man-based company, led by Mr. Caplin, received a charitable bond of $2 billion from the Central Bank of Venezuela.” The reports were not unfounded, according to Caplin’s own admission to the WSJ journalist.
I believe this is a moment of vindication. By exposing corruption in Venezuela, I’ve realized that, in general, the authorities in the UK and Europe are completely unaware of what happens in Venezuela. It could not be otherwise, of course. What is revealing is that the warning calls are never heeded. It happened with Caplin and with Hanson Asset Management, a shadowy investment firm in London that “acquired” the largest newspaper conglomerate in Venezuela, Cadena Capriles. It happened with Marcelo Barone Serra, another Venezuelan thug who had basically embezzled millions of dollars from Paraguay and was/is happily operating in London despite having an INTERPOL arrest warrant. It’s happening in Spain, where Derwick is laundering much of its ill-gotten wealth, and with Juan Carlos Escotet’s BANESCO, which is waiting for approval from Brussels to acquire Novagalicia, and with Moris Beracha, neck-deep in $500m+ Ponzi schemes by Francisco Illarramendi, while doing phenomenal business nowadays with Telefónica de España in Brazil. We know of Venezuelans who established banks and investment firms in Switzerland and London, spent millions on properties, and flew in some of the world’s most expensive planes… Recently, German media pointed out another potentially massive scandal regarding Bundesdruckerei and its representative in Venezuela. The common denominator here is, sadly, Venezuela, its officials, and “businessmen,” also known as boligarcs.
There is certainly nothing wrong with doing business or being wealthy. What should be determined, unfortunately, is whether the wealth financing it is legitimate, which sadly is seldom the case…
UPDATE APRIL 22, 2014, 07:14 GMT: Journalists from The Times, Daily Mail, and The Independent have been in touch, asking questions about my November 2011 posts regarding Caplin, wanting to know if he did anything wrong or illegal in connection with the $2 billion Venezuelan bonds, and how the SFO and FSA responded to my communications. When the issue of the authenticity of the leaked documents was raised, I contacted blogger Miguel Octavio, who just happens to work in finance. It took him about a minute to realize that the bond purportedly “freely and clear” transferred to Caplin couldn’t have been. He even sent me a GRAB from Bloomberg with information about the holders of that bond at that time. While the documents turned out to be fake, Caplin’s admission to a WSJ journalist that he agreed to participate in the project, as outlined in the documents, demonstrated that at the very least, he was aware of the existence of those documents, as published in my blog. But more importantly, it revealed Caplin’s intention to use what he should have known were forged documents to supposedly raise funds. Following are my explanations/emails on this matter, as sent.
Let’s start with Caplin’s previous career as head of Panmure Gordon.
Do you think a former head of a brokerage firm in the City of London doesn’t know that a government bond can only be used as collateral by individuals/banks who actually hold parts of that bond?
Do you think a former head of a brokerage firm in the City of London doesn’t know that inactive brokers shouldn’t try to raise funds for totally unsecured projects on the other side of the world?
Do you think a former head of a brokerage firm in the City of London would normally agree, while holding official positions in different UK institutions, to participate in a structured deal based on documents whose authenticity could not be determined?
Furthermore, if Caplin had all those jobs, and others I’m not aware of, why would he admit to having accepted participation in such a scheme if there was nothing to gain?
I suspect Caplin was aware from the start that it was a scam. His response along the lines of “I accepted to participate because I was invited by a very distinguished law firm” largely explains his approach, which could be summed up as “Let’s try this and see what happens…”
Questions about what Caplin did wrong. From what I gathered from the documents, Caplin’s role was to raise funds for the projects using the bond as collateral. His passport number (perhaps you can have it checked) is in one of the documents, along with details of his history. However, by the time of publication, Caplin was no longer registered as active with the FSA. Thus, the answer, in my opinion, could be found in the ethical responsibilities he had at that time from various roles in several public bodies. Do senior positions in the NHS, the Public Works Loan Board, and the Medical Research Council allow holders to perform such activities? Does the FSA permit inactive individuals to raise funds for such projects?
I contacted the SFO about this, as well as the Isle of Man authorities, and I believe the British government should have looked into this carefully, given that what was being sold was a supposed $2 billion sovereign bond from BCV as collateral for some shady health project, involving a group of unreliable people, and an individual (Caplin) -not registered with the FSA- with no background in the Caribbean or Venezuela.