The Spider’s Web: Britain’s Second Empire
Directed by Michael Oswald (2017)
The Spider’s Web is about the network of secret offshore tax havens that has allowed Britain to financially enslave much of the Third World. The film begins by describing the special status of the City of London corporation, a special enclave within greater London that services as Britain’s financial district.
The City of London has a private police force and private courts, Unable to conquer this area of London during the 1066 invasion, William the Conqueror negotiated a treaty making it virtually self-governing.
After an attack on the British pound during and after the 1956 Suez Crisis (see Suez: Britain’s Illegal War Against Egypt), the British government implemented two important measures to stem the hemorrhage of pounds overseas: 1) it temporarily restricted foreign investment and 2) it created a City of London eurodollar market to accept foreign investments in US dollars.
Keen to escape US regulation, US banks flocked to set up international operations in London. At the same time, City of London bankers augmented their eurodollar market by drafting secret and illegal regulations to make the Cayman Islands (still a British colony) a secret haven for tax evasion and money launderers.
Eagerly creating similar offshore havens in Bermuda, Virgin Islands, Jersey and other colonies, by 1997 City of London banks controlled 90% of all international loans via their eurodollar market. The filmmakers blame the creation of this vast offshore banking network for the “financialization” of both the US and UK economies (ie the decision by US/UK banks in the mid-seventies by major US/UK banks to invest in financial instruments rather than manufacturing).
Africa is the region most heavily exploited by this illegal financial network. Between 1970 and 2008, African elites in cahoots with multinational corporations moved $944 billion in oil, gold, diamond and rare earth revenues into offshore tax havens. This was five times the amount of global debt ($177 billion) Africa owed in 2008.
The most interesting part of the film is an interview with former Chase Manhattan economist Michael Hudson about the State Department approaching him in 1967 for his help setting up a US offshore tax haven to stem the flow of US dollars overseas for Vietnam-related military expenditures.