Oh Snap

Revealed: The Tory Donor Whose Bank Got Caught in a Money Laundering Scandal

The former Chairman of a bank that was fined over $900 million for money laundering has helped to fund Theresa May’s election campaign.
June 8, 2017, 7:00am
Sir John Peace is knighted by Queen Elizabeth II (Anthony Devlin/PA Archive/PA Images)

A key Tory backer is the former head of a bank that was fined hundreds of millions of dollars for laundering money via regimes that had sanctions imposed on them.

Sir John Peace gave the Conservative Party £50,000 on the 10th of May to help their election campaign, making him what they call a "premier supporter".

This money entitles Peace to membership of the "Conservative Leaders Group", a Tory fan club whose "Members are invited to join Theresa May and other senior figures from the Conservative Party at dinners".


Sixty-eight-year-old Sir John Peace was Chairman of Standard Chartered Bank from 2009 to December of 2016. He was Deputy Chairman from 2007 to 2009.

London-based Standard Chartered Bank are not a well-known high street bank, but they are a big deal in the City. They are the 28th biggest company on the UK Stock Exchange, and make their money through big transactions in Africa, Asia and the Middle East.

In August of 2012 US Regulators in New York imposed a $340 million fine on Standard Charters. Regulators say the bank "concealed" sanctions-busting from 2001 to 2010, so some of the lawbreaking happened on Sir John's watch.

US officials said, "For almost ten years, Standard Chartered Bank (SCB) schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping SCB hundreds of millions of dollars in fees. SCB's actions left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes."

In December that year, another US regulator imposed a $227 million fine on the bank for making money by breaking US sanctions with transactions involving Iran, Sudan, Libya and Burma. "Standard Chartered Bank regularly engaged in prohibited banking practices, took steps to conceal the illegal conduct and misled regulators about the pattern of illegality," said George Venizelos, Assistant Director in Charge of the FBI New York Field Office.


The charges say the bank "engaged in this criminal conduct" by removing references to Iran and other sanctioned countries from the paperwork, and "deleting payment data" that showed the sanctions-busting.

Incredibly, after the fine, Sir John dismissed the crime as nothing more than a bit of a screw up. At a press conference in March of 2013 he was asked why Standard Chartered were still paying bonuses to top staff, even after the huge fine. He said: "We had no wilful act to avoid sanctions; you know, mistakes are made – clerical errors – and we talked about last year a number of transactions which clearly were clerical errors or mistakes that were made." Woops – egg on our faces for this clerical error of dodging sanctions to facilitate money laundering!

His attempt to play down the law-breaking enraged US officials, who had agreed not to prosecute the bank further in return for an admission of guilt and for obeying the rules in the future.

Like a bad kid at school being made to say sorry in front of the whole class, Sir John was forced into a cringe-worthy public climb down. He had to issue an official apology saying his original statement "was wrong" and that "Standard Chartered Bank unequivocally acknowledges and accepts responsibility, on behalf of the bank and its employees, for past knowing and wilful criminal conduct in violating US ­economic sanctions, laws and regulations", and that he and the bank "apologise for the statements I made to the contrary".


It didn't end there – in 2014, New York Authorities imposed another fine of $300 million because the bank had not tightened up their "anti-money laundering" rules as they promised in 2012 and had made money on "high risk transactions" in Hong Kong.

Then, in December of 2016, Singapore regulators fined Standard Chartered $3.6 million, again for money laundering.

Sir John left Standard Chartered at the end of 2016. He is still the Chairman of Burberry, switching laundered money for fresh threads, a post he has held since 2002.

Burberry is a company not without its own controversies. In 2007, Burberry closed their main Welsh factory, moving production to China, leading to protests. The firm also faced protests by low paid cleaners at their flagship Regents Park store in 2015.

Sir John donated to the Tories in a personal capacity. As his current employer, Burberry did not respond to my request for a comment for this article.

The Conservative manifesto has no proposals for tightening up banking regulation. Their manifesto does promise to wind up the Serious Fraud Office – Britain's premier corporate and financial crime-fighting agency – by absorbing it into the National Crime Agency, which deals with drug and gun crime. Some legal experts warn this move will make it harder to fight fraud and corporate crime. American regulators caught Standard Chartered's cheating, but Tory proposals could mean the chance of UK officials stopping corporate crime will become even slimmer.

If Burberry workers get pushed to protesting again, they might be glad to know that under Tory proposals, Sir John (who earns £400,000 for his part-time role) could end up representing them. The Conservative manifesto waters down a previous proposal to get workers represented on company boards by giving them directorships. Instead, companies "assign specific responsibility for employee representation to a designated non-executive director". Sir John is one such non-exec director.