Journalists add “-gate” to the name of a scandal. It’s a quick nickname which allows the audience to know what’s being discussed, without having to go through all the details.
Why the word “gate”? It all links back to the “Watergate” Scandal in the 1970s.
In 1972, a break-in occurred at the offices of a Democratic party, at the Watergate complex. The burglars were trying to bug the offices of the party running against the President.
Then President of the USA, Richard Nixon (a Republican; against the Democrats) made a speech, saying he knew nothing about the burglary. He was re-elected, winning by a landslide.
Two journalists, Bob Woodward and Carl Bernstein, uncovered the fact that Nixon had lied to the people of America. He had known about the burglary and tried to cover it up. His team was also responsible for other illegal activities whilst attempting to get Nixon re-elected. After two years Nixon eventually resigned; the first President in history to do so.
This became known as the “Watergate” scandal. A New York Times columnist then started adding “-gate” to other famous scandals, and the phrase stuck.
1992. A transcript of a sexually explicit phone call between Prince Charles and Camilla Parker-Bowles was released. The phone call was made back in 1989, when Prince Charles was still married to Princess Diana. One has been very naughty indeed.
2008. Comedian Russell Brand and presenter Jonathan Ross left obscene messages on the answer phone of 83-year-old actor Andrew Sachs. Not only that, but they did this whilst on Brand’s Radio 2 show. In the messages Brand claims to have slept with Sachs’ granddaughter. Did no-body tell him kiss-and-tell is not cool?
Both Brand and the head of Radio 2 resigned from the BBC. The BBC was also fined £150,000 by Watchdog organisation Ofcom. That’s one expensive voicemail.
2012. Conservative MP Andrew Mitchell rowed with police officers outside of Downing Street in London. The Sun ran a story claiming Mitchell had called them “plebs”. Mitchell denied saying this, but the police report said differently. Mitchell eventually resigned. Case closed.
Only it wasn’t. New CCTV footage made people question the police’s version of events. Several details didn’t add up and people wondered if Mitchell had been stitched up by the police. Several officers were eventually fired for misconduct and for giving details to the press. Andrew Mitchell then sued The Sun and the Police officer for libel. Big mistake; the judge concluded that he had used the word “pleb” and Mitchell had to payout £80,000. Ouch.
Case… confused. By this point the word “plebgate” had gone viral.
We live in a world run by technology so it’s only right that the next big scandal should be “Emailgate”.
Hillary Clinton got into trouble earlier this year when it came out that she used a personal email address during her time as Secretary of State. She should have used an official State Department email address. Silly Hillary.
Why is this important? Well, you might not have noticed, but Hillary is running for US President next year and people didn’t like that fact that all her messages from her previous time in office were unavailable. She’s now been ordered to release emails from her personal account.
In the UK, it’s just been reported that emails from Downing Street are automatically deleted. The email system which deletes messages after three months was installed just before the Freedom of Information Act was made law. This act meant that public service workers would have to surrender their email if a Freedom of Information Request was made. Suspicious, no?
The system has been blamed for causing chaos at Number 10. It could also mean incriminating evidence is being deleted; could this be the next emailgate scandal?
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HSBC Rebrand = Hide Scandals, Become Credible? The bank may be about to stage a massive disappearing act.
Big bank HSBC is getting rid of 50,000 staff members across the world; 8000 of these from the UK.
Instead of face to face contact, customers can look forward to more online banking and “self-service”. We’re hoping self-service means you can just help yourself to money whenever you like.
HSBC is also reviewing whether they should move their HQ out of the UK. The bank’s UK branches are going to be re-branded under a different name. Ooh, fancy.
HSBC stands for Hong Kong and Shanghai Banking Corporation. It was founded in Hong Kong in the 1860s. HSBC only moved across to Britain in the 1990s when they took over the UK’s Midland Bank.
Most of HSBC’s money comes from trading in Asia. At present they are losing money in the UK because of the Bank Levy. This taxes big banks on their profits and hit HSBC hard last year. They had to fork out £750 million to the tax office. Ouch.
So… it might make sense for HSBC to go home to Asia. But don’t panic HSBC customers; no decisions have been made yet.
HSBC decoded: If HSBC leave it will be a big blow for the government’s money-man; Chancellor George Osborne. He’s been struggling to keep banks and big businesses happy in the UK. Everyone worried about businesses leaving because of the EU referendum. If they do, it could damage the UK economy and mean fewer jobs and dollar for everyone. HSBC’s decision could be crucial.
HSBC’s UK high street branches are to be “ring fenced”. This means people’s deposits and mortgages are separated from the bits of HSBC that trade on the financial markets. The idea is that by keeping them separate your money is safer. These rules were brought in after the financial crisis.
The HSBC rebrand means UK branches will launch under a different name. For the banking world this is like Coca Cola changing its name to something like Lilt or 7UP. It may be big news but the product being sold is still a fizzy drink. Change the name of a bank… and it’s still a bank.
The press has reported several scandals involving HSBC in the past few years.
The Guardian reported HSBC’s recent fine for money laundering charges. Money laundering takes money gained illegally (e.g. drug money, stolen cash) and makes it look as though it was obtained legally.
HSBC’s Swiss branch was supposedly also found to have helped people avoid paying tax by hiding their income from the tax man.
This doesn’t mean all bankers are crooks, but it definitely wasn’t good press for HSBC. Is the planned HSBC rebrand an opportunity to distance themselves from the bad vibes? Not according to them:
“We will operate with a different brand name… The reason for doing it is actually so that clients are aware whether they are dealing with the ring-fenced bank or the non-ring fenced bank. Obviously if both are called HSBC it’s a bit confusing… It’s more about clients being able to work out which one they are dealing with than it is about anything else.” – HSBC Chief Executive Stuart Gulliver, speaking at a HSBC investor update.
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Two is better than one: The FIFA scandal consists of two investigations
FIFA stands for Fédération Internationale de Football Association. They are a non-profit organisation and they organise the Football World Cup. The World Cup happens every four years, each time in a different country.
FIFA is now involved in two criminal investigations.
The first investigation is being run by USA Justice Department. They have arrested 9 FIFA officials on charges of corruption. One of the arrested men is FIFA vice-prez Jeffrey Webb. They stand accused of taking bribes and may be extradited to the USA for trial. At the moment the amount of money involved is unclear; it’s thought to be millions of dollars.
Bribe: Getting someone to act in a certain way by giving them money.
As well as that Swiss police launched a second investigation and have raided FIFA’s offices to take files and computers. They are looking for evidence that the bids for the 2018 and 2022 World Cups had been fixed.
For all you non-football fans: Russia is hosting 2018 and Qatar will host 2022.
This announcement happened in 2010. Ever since then reports of corruption have flooded in. A high-ranking FIFA official was said to have named colleagues who were open to bribery.
In fact, looking up “FIFA scandal” shows how regularly these accusations have come up…
The Foreign Exchange Scandal: If you’re going to break the law, probably best not to email about it. Several big banks have been hit with record fines totalling $5.7 billion after it was revealed they had fixed the foreign exchange markets to make profit.
Foreign Exchange is the conversion of different currencies. Changing one countries money into another. The value of a country’s currency is determined by things like trade, investment and tourism and what’s going on in the country at the time (I.e. things like war tend to have a negative affect).
How other countries are doing also effect this. Most countries “float” their currency on the market against other countries – which basically means the value of their currency is affected by how well the other countries are doing and also by trading in the Foreign Exchange (Forex) Market.
Foreign Exchange is handled by big international banks. Traders buy and sell currencies on behalf of clients. Foreign exchange enables international trade and investment from one country to another.
E.g A car company from one country imports car parts from another country. The parts that are being bought, must be purchased in the currency of the country that the car parts belong to. Foreign exchange traders will assist the car company with the exchange. The international banks make money off of this exchange.
Their aim: Finish the day with more money than you started. As the value of currency continually rises and falls, if you are clever (and sometimes just plain lucky) currency traders make a lot of profit on these trades.
A group of traders decided they wanted to make even more money than usual and decided to play against the rules.
It is possible to “fix” the market in order to make a profit. This is illegal.
The market runs 24 hours a day so it’s very difficult to see how much things are worth at any given time. To make it easier to know the value of things a picture is taken of how the market is doing. Before the scandal this was done 30 seconds before and after 4PM and was known as the 4PM fix or fix window.
Traders can affect market prices but placing lots of orders just before the 4PM fix. More orders changes the price value as the demand for a particular product has risen.
If you know an event like this is going to happen you can place your own orders and sales earlier in the day and make a profit when the price changes later on. Buy it while it’s cheap and then drive the price up, for example.
However trades made on their own don’t really make much of a difference to the market as there’s so much going on – you need a rush of similar trades with many people working together.
And that’s what members of the banks did. In one case HSBC traders worked with three other firms to drive the sterling-dollar rate lower. For those that don’t speak City talk: that’s the difference in value between the Pound and the Dollar.
They used confidential information from their clients to manipulate the market, making HSBC a tidy profit of $162,000.
It’s probably worth saying – buying currency you know is going to rise is not illegal. This is called “front running” and is legal in the foreign exchange market because it was thought no single trader could affect the market enough to make a profit. But colluding (coming to a secret understanding) with others to make it happen definitely is illegal.
These emails have a nasty habit of coming back to haunt you.
The traders, who called themselves “the three musketeers”, “the players” and “the A team” sent a series of messages via email and online chat rooms after manipulating the markets:
“Loved that mate… worked lovely… pity we couldn’t get it below the 00”, “Hooray nice teamwork” and of course “If you ain’t cheating, you ain’t trying”
The banks involved in the scandal were JP Morgan, Barclays, Citigroup, RBS and UBS, just in case you were wondering.
The movements in the market are so small that if you’re exchanging money for a holiday you probably won’t notice what’s happened.
However that didn’t stop people getting very angry:
— Tim Fenton (@PompeyTim69) May 20, 2015
— HYDROPONOLOGY (@HydroponicsHUGE) May 20, 2015
As a result of the scandal the 4PM fix window is being extended to five minutes, rather than 30 seconds. This should in theory make it a lot harder for traders to try to fix the markets.
In this case the biggest losers were the banks who will plead guilty to criminal charges and face the hefty fine. Also some of the employees involved in the Forex Scandal are now being sacked. Despite the punishments, events like this don’t make the banks look good and many of the public are wondering “Will they ever learn?!”
1. When she was 12 years old, young Hillary wrote to NASA asking for information about becoming an astronaut.
She was told the job was for men only.
2. When asked what attracted her to Bill Clinton (who proposed marriage many times before she finally accepted), she is reported to have said, “He wasn’t afraid of me.”
3. As First Lady of the United States, her major initiative, the Clinton health care plan of 1993, failed to gain approval from the U.S. Congress.
4. After the evidence of President Clinton’s affair with White House intern, Monica Lewinsky became incontrovertible, she issued a public statement reaffirming her commitment to their marriage. The public’s response was mixed.
5. On January 26, 1996, Clinton became the first First Lady to be subpoenaed to testify before a Federal grand jury. The Clintons had been accused of partaking in a failed business venture that also included fraud and conspiracy charges. After several Independent Counsels had investigated, a final report was issued in 2000 that stated there was insufficient evidence that either Clinton had engaged in criminal wrongdoing.
6. Clinton strongly supported the 2001 U.S. Military Action in Afghanistan, saying it was a chance to combat terrorism while improving the lives of Afghan women who suffered under the Taliban government.
7. She is the first woman ever to have run for public office, and also the first woman to run not just once (2008) but twice for a Presidential bid.
8. Hillary deals with defeat well, being the only political figure to lose a campaign and then work under their opposition. Hillary was Obama’s Secretary of State between 2009-2013.
9. If Hillary Clinton wins the initial Democratic Presidential bid and indeed wins the 2016 Presidential campaign, she will be the first female President of the United States of America.
10. What do others think? “Polarizing” is a word often associated with Hillary Clinton.
Decoded: Almost all of her views reflect her identification, in this instance it would be that of a Democratic outlook. Well we should hope so given that she is a Democrat.
So here’s to knowing a little bit more than you did five minutes ago, and being fully prepared to learn a lot more over the next year.
We decoded how the Presidential system works in the U.S. with a bright and beautiful infographic, see here.