Learning to be Discreet

This afternoon, I was sitting in a cafe having an afternoon coffee to get my mind jumpstarted back into action.  The 3pm trough had hit and I was starting to feel my brain go soft and concentration became difficult.  Having read “When” by Dan Pink recently, I knew that this meant it was time for me to break the cycle, so that’s what I did.

At the table next to me were a couple guys from one of the big consulting firms in the building where the cafe resided.  They were clearly in financial management services and dealt with international clients.

As you know, I can’t really help myself from eavesdropping on people in those kinds of settings, so I settled in for a bit of a sticky beak.

The one younger guy was discussing a system they were working on with a client in the Middle East to help them move money more efficiently to their “agents” around the world.

What this guy was describing was “hawala”.

I recognized it right away because I’m familiar with various forms of money laundering and that one in particular because it was used extensively along the silk road a thousand years ago by early Muslim traders.

If you’re not familiar with hawala and money laundering, let me briefly enlighten you.

Money laundering is the process of taking “dirty money” and making it clean.  In the western world where we fastidiously track electronic money transfers, it is hard for criminals to make their money legitimate so they have developed a bunch of ways to “wash” their money through the regular economy and what comes out the other end, minus some “costs of doing business” is totally clean.

Hawala is a slightly different form of this and the best way to explain it is using an illustrative example.

Let’s say you have “agencies” in three countries: Canada, the US, the UK and Australia.

A client turns up in Toronto and says they want to send money to someone in Sydney.

The agency in Toronto makes a note that the client wants to send money to someone in Sydney in the amount of X minus a fee, let’s say 5%.

The client gives the agency in Toronto the money, the recipient turns up at the agency in Sydney and they give them the amount, minus the fee.

On the back end, the Toronto agency owes the Sydney agency some money they gave the recipient, so that debt is accrued.

Someone turns up in New York and they want to send money to someone in Toronto.  They hand over the money, the fee gets deducted, the recipient in Toronto goes to get the money and now New York owes Toronto some money.

Finally, someone turns up in Sydney, they want to send someone money in New York, they take out the fee, the recipient goes to New York, they get their money and Sydney owes New York some money.

What then happens is the three agencies settle their debts amongst each other: Toronto owes Sydney some money, Sydney owes New York some money and New York owes Toronto some money – they just balance out each other’s debts and the game continues.

No money has ever moved through a bank and crossed an international border.  It is virtually invisible money.

Governments HATE this stuff and hawaladars (the people who run these businesses) have been washing money for terrorists and drug dealers for decades.  Cracking these rings is almost impossible.

What this guy was describing was VERY similar to hawala – different divisions paying debts for each other in domestic funds in foreign countries and consolidating the outstanding amounts amongst the consortium.

Of course, banksters and corporate thieves have figured out how to do this, make it legal and tax effective.  These consulting firms are hired by governments to draft the laws now, so they know all the loopholes because they write them in.

However what this young guy was describing was VERY close to the legal definition of money laundering now.

But that’s not the point of this post…

The guy was indiscreet.  He was blabbering in a cafe about it.

A couple weeks ago, I was sat next to what could only be described as a Chinese political bagman – he was talking about the donations he was making to various Federal Government MPs on behalf of his Mainland China bosses and the fundraising dinners they were buying tables at to make sure they had influence.

He was being indiscreet.

When you work with clients, you’re going to get access to a bunch of details about their business.  If you do any kind of business coaching or mentoring, you’re going to not just know the details of their business, but you’re going to inevitably find out a great deal about them as people.

I’m always stunned at how indiscreet people can be with this information.

You will see me occasionally write about something a client has said or done – every time I do that, I double check with the person before I send it.  I also never name those people and I anonymise the information so that it’s generic.

I have lost count of the number of times I’ve had someone contact me and tell me all about one of their coaching clients’ business.  How much money they make, what they’re struggling with and all kinds of personal information.

That’s not a great way to behave.  You need to operate in confidence.

It should go without saying, but you need to be super careful about the things you discuss with other people and what you let slip inadvertently.

I have no doubt the young guy in the cafe was excited about how clever he thought he was being and the Chinese guy from a few weeks ago was clearly just bragging for his coffee companion.

But it’s still not clever.

You need to be a vault when it comes to client confidentiality.  Making sure you’re discreet and respectful is a starting point, not something you should aspire to.

You never know who’s listening… People like me are everywhere.  LOL.

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