Banks have a right to close accounts

There has been much brouhaha lately about banks closing the accounts of some customers. Each time that happens, there is much weeping and wailing and gnashing of teeth, with the wronged customers seeking – and invariably getting – public support for their plight.

The usual allegation is that banks are plugging into the cancel culture of woke modernity, ditching customers whose political views are out of synch with the majority opinion at the BBC and the Guardian.

Nothing would surprise me nowadays, and those poor victims may well be right. However, I suspect the real explanation is probably different.

I don’t think banks can be so selective as to deny custom to potential clients on purely political grounds. If they practised such an exclusion policy consistently, they wouldn’t stay afloat for long.

Assuming for the sake of argument that most board members at major banks have Tory leanings, could they afford to turn away leftish pop stars, footballers, mega-rich actors and indeed BBC presenters? They would be tossing aside millions in assets, something that the board would find hard to explain to the shareholders.

I have a hunch that one possible reason for closing an account is the suspicion that the money was acquired in dubious ways and may be used for dubious purposes. That gives rise to the concern that the potential blow to the bank’s reputation may negate any gain generated by the account.

For example, if a bank were gaining notoriety as a money laundry for the mob, it would be well-advised to get rid of the iffy accounts. I’m sure most bankers would agree, and not for any moral reasons either.

Their rationale would be based on dispassionate, hardnosed calculations, an activity at which British bankers excel. As an American friend, himself a banker, once told me, his British colleagues would “foreclose on their starving mothers if the bottom line demanded it”.

Two test cases have caught my eye, those involving Nigel Farage and ‘Countess’ Alexandra Tolstoy.

(I put her title in quotes because I consider it of limited validity. Russia never had primogeniture, meaning that all the children of, say, a count would also be counts even when their father was still alive. Thus, if a 70-year-old count had five children, and each of them were as fertile, one title would produce 31 counts within just three generations.)

When Coutts, England’s most exclusive bank, cancelled Nigel Farage’s account, he screamed bloody murder, and Mr Farage knows how to turn the volume up to its highest setting. He had been cancelled, he shouted, because of his uncompromising campaign for Brexit.

That doesn’t quite ring true. After all, 52 per cent of the British voted for Brexit, and many of them weren’t shy about expressing their views publicly. Some of my friends were UKIP members, and one even its leader for a spell. None of them has had his banking privileges withdrawn.

Coutts originally ascribed its decision to Mr Farage’s receiving some £500,000 in fees for his regular appearances on Russia Today, Putin’s propaganda channel. Farage and his representatives vigorously protested: that £500,000 represented his total income that year, with only £5,000 or so coming from RT. That’s all right then.

Yet numbers shouldn’t affect the principle: someone who steals £10 is as much of a thief as someone who steals £100. You might say that getting a fee from RT isn’t the same as theft, and I’d agree. It isn’t. It’s much worse.

Any appearance on a propaganda channel will serve the purposes of propaganda, for otherwise there would be no appearance. RT was using Farage as one of the syringes injecting its fascist poison into the West’s bloodstream.

Farage worked hard for his money even outside RT’s good offices. In 2014 he named Putin as the world leader he most admired.

While expressing token disapproval of the annexation of the Crimea, Farage declared it was really the EU’s fault. That pernicious organisation had “blood on its hands” for encouraging rebellion in the Ukraine. “If you poke the Russian bear with a stick he will respond,” was how Farage explained that prelude to the current war.

That was the official Kremlin line, with Farage and the leader he most admired singing it in unison. Since even then Putin didn’t bother to conceal his all-consuming hatred of the West, brandishing his nuclear shiv regularly, Farage was in effect an enemy agent – morally, if not quite legally.

I’m sure – and so probably is Coutts – that Farage still holds the same views, even if he is less vociferous in expressing them. That may legitimately make Coutts concerned that its client’s money partly came from a criminal setup and might conceivably be used to further its cause.

That strikes me as a good enough reason to reject Farage’s business, but the bank has since changed its tune. Mr Farage, it explained, falls under the threshold of £1 million in investible income every Coutts customer must have.

If I were him, I’d call their bluff by continuing to appear on RT until my account reached the required level. Scratch that: there isn’t enough money in the world to make me do Putin’s bidding. A few appearances on the BBC were bad enough, but I’d never stoop any lower.

The other test case involves Miss ‘Countess’ Tolstoy, whose account at NatWest has recently been closed. Her family is also in cahoots with Putin, which I had a chance of discovering first-hand a few years ago.

Miss Tolstoy’s brother kept pestering me with e-mailed diatribes each time I described Putin’s regime as the kleptofascist abomination it is. I’m sure he got his cue from his father, Nikolai, whose books on Second World War history I greatly respect.

That’s more than I can say for his person, certainly since the 1812 Ball I ill-advisedly attended years ago. That important event in London’s social calendar was organised by old Russian émigrés, most of whom, like Nikolai Tolstoy, were born and bred in Britain.

Presiding over the festivities, he announced with pride the presence of the Russian ambassador, “Our ambassador, ladies and gentlemen!” I demonstratively walked out, unable to contain the emetic reaction.

Later, his objectionable son accused me of treason: “If you don’t like your country, why don’t you go back and make it better” he demanded angrily. I could have explained to him that I left Russia long before he was born, don’t consider it my country (never did, actually) and, unlike the Tolstoys, don’t hold dual citizenship (I do, in fact, but the other one is US, not Russian).

However, realising that no such effort would have the slightest effect, I simple broke through my, admittedly thin, civilised veneer and told the idiot to perform a ballistically improbable act on himself.

Now his sister is in the news, and her links with Putin’s Russia are even more intimate. NatWest has declared her a PEP (politically exposed person), meaning a potential embarrassment.

For many years Miss Tolstoy lived with Sergei Pugachev, by whom she bore three children. Pugachev was widely described as an ‘oligarch’ and ‘Putin’s banker’, terms one could use interchangeably with ‘gangster’ and ‘money launderer’.

Her paramour was under investigation in Britain, but violated a court order by skipping the country in 2015. Miss Tolstoy claims she isn’t in contact with the fugitive and receives no support from him for herself and her children. I find that unlikely and, more important, evidently so does NatWest.

Miss Tolstoy demanded an explanation and received an unequivocal reply: “We’re not obliged to enter into any discussion or provide a reason for our decision. We’ve reviewed our rationale behind the decision and, unfortunately, this remains unchanged. We therefore won’t be meeting with you or discussing this further.”

Quite right too. A bank or any other business can refuse to serve anyone it chooses.

We expect banks to exercise that right selectively and rarely, and so they do. My contention is that in these two cases, they acted not only legally but also correctly. But I’m sure not everyone will agree.