RISK ALERT: ESG, Compliance and RICO On Collision Course

Oooohhh this could be awkward. As somebody who looks at risk and writes about it on a daily basis, there are a very select number of developing situations which can hide in plain sight over a period of years, suddenly explode on to our screens and then trigger an embarrassing clean-up strategy. The obvious example would be the Ukraine war, given it was first invaded by “little green men” in 2014, not 2022. Indeed, neither the 2018 Salisbury poisonings nor the 2016 interference in US elections were able to move governments or corporates to act against an increasingly brazen Kremlin crime gang, until Russian paratroopers were literally hovering over Kyiv airport 545 days ago. As additional illustrations, the Credit Suisse collapse was a recent financial market example of multi-year inaction and, of course, our planet’s journey from global warming to “global boiling” is a very current reminder of risk leadership paralysis. Now, I increasingly believe there is another risk event developing but is being framed or hidden in an entirely ‘normalised’ manner. First, let’s introduce the key protagonists.

There is a very large organisation in the United States which is legally registered and known to the Inland Revenue Service, the Department of Justice(DOJ), the US Chamber of Commerce and Capitol Hill. The activities of the organisation are cyclical with annual revenues ranging from $2 billion to $5 billion and its commercial relationships and spending would typically be concentrated in the media, legal, consulting and events management sectors. However, there are thousands of businesses and millions of US citizens who would also be considered connected parties to this organisation on a commercial or voluntary basis. And, that might be a problem. Imagine you are a connected party, or a provider of finance, goods or services to an organisation which has been worryingly caught up in the following legal developments:


  • Financial fraud, misuse of funds


  • Obstruction of justice


  • Corruption of judicial figures and witnesses


  • Defamation of corporate entities and individuals


  • Criminal damage to property


  • Assault of law enforcement officers


  • Corruption of government


  • Criminal breaches of data protection codes


The illegality is potentially at a national or multiple state level so the investigation and prosecution of the organisation could involve high degrees of complexity. Thankfully, United States federal law has since 1970 provided its DOJ with a series of prosecutorial tools specifically designed to deal with the unlawful activities of those engaged in organised crime. The Racketeer Influenced and Corrupt Organizations Act (RICO) is particularly powerful in its conspiracy provisions which allows prosecution of a series of unrelated actions, but with a common criminal objective. So, RICO can tie large numbers of individuals to a criminal conspiracy, where even a failure to report illegality could be a crime. And, this is where things could get really awkward. The media and its legions of air-time hungry oxygen thieves are totally fixated on whether a failed casino owner will be able to run for presidential office again, rather than the startling implications of the RICO charges he will be arraigned on in Atlanta, Georgia, this week. Allow me to RICO expand….

The District Attorney for Fulton County, Georgia, is the highly regarded Fani Willis and she is casting the RICO net over a much bigger beast than Donald Trump. The felony charges against Trump and 18 co-conspirators amount to a total 41 counts under the RICO Act. However, there are intriguingly a further 30 unindicted co-conspirators referenced in the Fulton County indictment. Now, think carefully about the mix of known individuals already charged and you might begin to see a bigger risk picture emerge. Here’s a quick reminder of who’s meeting RICO reality with their mobster boss:


  • Republican Party (GOP) White House officials in the Trump administration including Rudy Giuliani and Chief of Staff, Mark Meadows.
  • Republican Party (GOP) officials in government departments like Jeffrey Clarke (Justice)
  • Republican Party (GOP) lawyers including John Eastman, Kenneth Chesebro, Sydney Powell and Jenna Ellis.
  • Republican Party (GOP) officials in Georgia who put their names to fake elector documents including former Georgia GOP Chairman David Shafer, Shawn Still and Cathleen Latham.


I deliberately reference the Republican Party (GOP) in each group above because this is currently the big “risk miss”. It is very clear that Donald Trump is the leader of a significant cabal within the GOP who are being charged collectively as a criminal enterprise engaged in organised crime under RICO statutes. That is massive – the GOP as a political entity with annual commercial revenues of up to $5 billion is inextricably linked with multiple criminal activities. We have listed criminal damage and assault as potential legal liabilities which will receive most scrutiny from Special Counsel, Jack Smith, in his indictment for the Jan 6th  assault on Capitol Hill and conspiracy to defraud the US of a democratic transfer of power. More than 1,100 people have already been charged in relation to the January 6th insurrection but it is highly likely Mr. Smith and his DOJ colleagues will establish a clear nexus between senior GOP officials and the “foot soldiers” who violently charged the gates of American democracy.

That plot to disenfranchise 81 million voters, if proven in court, would be the tipping point for the wider international and national realisation that the GOP is effectively a criminal organisation. There will potentially be a GOP ‘establishment’ attempt to blame Trump and a small gang of rogues but the scale of the conspiracy across the GOP/Trump administration, many of its senior officials,  its legal teams and local state officials will make that plea very difficult. The pathetic GOP leadership ‘hostage’ figures of Kevin McCarthy and Mitch McConnell are hardly going to convince either. In fact, leadership in cleaning house is likely to come from the following:


  • Corporates: “ESG” has been described as a failed approach in recent commentary but one thing is well established in corporate board rooms. From a compliance perspective, RICO and organised crime is not something you want in your supply chain, investment or sponsorship activities. There will be anxious discussions already in the board rooms of major media, consultancy and legal firms. However, there’s one sector where the regulations and regulators are already very clear…
  • Banking: RICO, organised crime and dubious associations should have been ringing Anti-Money Laundering (AML) alarm bells in bank compliance departments but criminal convictions will leave no wiggle room in Wall Street or anywhere else. Closer to home, there seems to be some regulatory concern about ATM failures but, to me, the far more interesting question is how AML checks were conducted at the banking counter-parties for the Trump Doonbeg and Turnberry resorts??
  • Ratings: Ratings agencies are hugely important to the cost of debt. So, when ratings agency Fitch, downgrades US debt because of a “steady deterioration in standards of governance” we should pay attention. The prospect of a criminal organisation being close to power in Washington and effectively in control of the highest judicial court in the land could lead to some classic ratings agency horse-bolting analysis. But, on a more serious note, states perceived to be under GOP control are already suffering higher pension and insurance costs (see Florida and Texas). Who knows what the additional financial penalties would be for those unfortunate to live in states governed by an organised crime gang.


Clearly, RICO convictions which include senior GOP figures (48 convicted for Watergate, this time could be hundreds) will require action from corporate and banking leaders. For the avoidance of doubt, corporates, banks and professional services firms will discreetly seek to cut ties with the GOP to avoid criminal risk contagion. In many ways, the Trump show is already over. The media, of course, want to make it look like the presidential race will be tight with Trumpy thrills and spills along the way. However, this only wins eyeballs. The truth is Trump and his organised crime co-conspirator, the GOP, are highly likely to lose the 2024 election in a landslide. Like Brexit, there might be a survey/poll reluctance to admit a wrong ‘un but the data looks ugly on these issues:


  • Female healthcare – the classic “dog who caught the car” scenario as women voters push back vehemently on the GOP-engineered conservative Supreme Court decision to reverse Roe vs Wade in the Dobbs case.
  • Mid-term & state elections – the very poor GOP showings at recent votes in key “red” or swing states like Kansas, Michigan, Ohio and Wisconsin have demonstrated the significant shift in women and young voters.
  • Bidenomics – embarrassing for GOP representatives who voted against the relevant legislation in Congress but the reality is a manufacturing investment boom with  “Jobs Biden” creating even more jobs in GOP-controlled states.
  • Demographics – the ageing GOP voting base is dying and the youth vote is motivated/angry re GOP climate denial and female healthcare rights.
  • GOP in-fighting – independent and moderate GOP voters must wince every time Marjorie Taylor Greene, Lauren Bobert, Matt Gaetz and the lunatic fringe appear on their TV screens to abuse their colleagues.
  • Criminal silence – in a scene straight from “Succession”, out of 44 former members of the Trump Cabinet just 4 have openly endorsed Trumpolini’s presidential bid in 2024. All are real-time witnesses to criminality in the years 2016-2020 and are about to find out that writing a tell-all book doesn’t quite cut it in RICO land for criminal immunity.


Don’t expect the media to flog those facts and spoil the delusion just yet. Of course, if you’re a Trump supporter, apparently 71% of you already trust the Orange Toddler more than family, friends, the media or clergy. Truth Social indeed. So, for the rest of us, we gotta hope the Truth really hurts this time.

Stay Connected
Latest News