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The FinCEN leaks and the corruption of capitalism

Marxist Analysis · 2026-05-13

Core Argument

The central thesis is that the FinCEN leaks are not an exposé of exceptional criminality within an otherwise functional system, but rather a revelation of the normal functioning of capitalism. The article argues that money laundering, corruption, and financial crime are not aberrations that regulation can fix, but are structurally integral to a system driven by the relentless pursuit of profit. The real function of state regulation and fines is not to eliminate corruption but to manage it — skimming a portion of illicit profits for state coffers while leaving the institutional architecture intact. The only solution, therefore, is not better regulation but the expropriation of the banks and their operation under workers' control as part of a democratic socialist plan.

Theoretical Grounding

The analysis is grounded in the Marxist theory of the state and bourgeois law. It rejects the liberal notion that corruption is a deviation from capitalism's ideal form, and instead treats it as the "other side of the coin" of legal exploitation. The state apparatus — including financial regulators — is understood not as a neutral arbiter but as an instrument for enabling the extraction of surplus value from the working class. The article draws on Trotsky's Transitional Programme, specifically its argument that workers must demand the abolition of business secrets and the opening of all corporate ledgers, as a transitional demand that exposes the impossibility of reform within capitalism. This places the piece firmly within the revolutionary Marxist tradition that rejects the possibility of "cleaning up" capitalism through regulation, and instead insists on the necessity of breaking the power of the financial oligarchy.

Conjunctural Relevance

The article was published in September 2020, at the height of the COVID-19 pandemic's economic disruption. The conjuncture is explicitly named: capitalism is in "its worst crisis in history," with millions of workers losing livelihoods while the wealthiest individuals and financial institutions profit from the crisis. The FinCEN leaks — covering $2 trillion in suspicious transactions between 2000 and 2017 — are situated alongside earlier scandals (Panama Papers, HSBC's laundering for Mexican drug cartels) to demonstrate that post-2008 regulatory reforms have been entirely ineffective. Specific data is cited: only 80 UK staff tasked with investigating over 460,000 suspicious activity reports in 2019. The article names Deutsche Bank, HSBC, and the Tory Party donor scandal involving a Russian oligarch as concrete examples. The political point is that the pandemic has stripped away any remaining pretence that capitalism can be reformed from within.

Where the Argument Continues

The article is a relatively short, agitational piece aimed at a broad audience. It does not develop the theoretical argument about the relationship between fictitious capital and money laundering, nor does it explore the specific mechanisms by which overaccumulated capital seeks outlets through illicit channels. These questions are taken up in other IDOM articles on financialisation and crisis, particularly those analysing the 2008 crash and its aftermath. The Transitional Programme reference points to a deeper body of Trotskyist literature on transitional demands and the strategy of workers' control. The argument about fines as a revenue stream for the capitalist state could be further developed in relation to the Marxist theory of taxation and the fiscal crisis of the state.

Connections

  • Trotsky, The Transitional Programme: The direct source of the closing quote and the strategic orientation toward workers' control and the abolition of business secrets.
  • IDOM articles on the 2008 financial crisis: These provide the deeper analysis of fictitious capital, overaccumulation, and the tendency of the rate of profit to fall that underlies the structural corruption described here.
  • IDOM articles on the Panama Papers and HSBC scandals: Earlier exposés that the article explicitly references as part of the same pattern.
  • Marx, Capital Volume 3: Particularly the chapters on the role of credit and the banking system in capitalism, which provide the theoretical foundation for understanding why financial institutions are structurally predisposed to facilitate illicit flows.
  • Engels, The Origin of the Family, Private Property and the State: For the theory of the state as an instrument of class rule, which underpins the article's rejection of regulatory solutions.

Key Quotes

  1. "Illegal commercial activity and money laundering that the world's major financial institutions have (knowingly and unknowingly) facilitated is only the other side of the coin of the legalised exploitation and corruption that takes place every day under capitalism."

  2. "Capitalist states have no real intention of putting most of these corrupt financial institutions out of business. Instead, regular fines are a useful way to skim off some of the profits made by big business and redirect it to state coffers."

  3. "Capitalism is a system based on the extraction of profits from the working class, for the benefit of a super-rich elite. The purpose of bourgeois law, and the whole apparatus of the state, is to enable this process."

  4. "We cannot trust financial regulators, capitalist states, and big business politicians to solve the question of crime and corruption within society. These evils stem from the capitalist system itself and its relentless pursuit of profits."

  5. "Only by nationalising the banks, financial institutions, and major monopolies under workers' control and management, as part of a democratic socialist plan, can we root out all corruption and criminality once and for all."

  6. "If the abolition of business secrets is a necessary condition to workers' control, then control is the first step along the road to the socialist guidance of economy." (Trotsky, quoted in the article)