The Corruption of Maxwell’s House

Luckily for British authorities, the public’s preoccupation with Princess Diana’s marital woes has overshadowed their puzzling tardiness in trying to unravel the tangled and corrupt empire of the late publishing tycoon Robert Maxwell.

Now the British government has launched an extensive investigation into the global web of companies controlled by Maxwell before his mysterious drowning last November. Until his death, Maxwell routinely stole money from his companies and their pension funds to prop up his tottering empire, now bankrupt.

Authorities are scrambling to sort through the Maxwell fraud, which could leave as many as 30,000 present and past employees without pension benefits. Recently the Financial Times newspaper reported that the British government had intelligence information before the Maxwell empire failed that suggested serious wrongdoing. Some British banks individually became concerned about late payments from Maxwell the summer before his death, but they did not discuss those concerns with authorities.

In the latest twist, Maxwell’s two sons, Kevin, 33 and Ian, 36, and American financial adviser Larry Trachtenberg, 38, were arrested on charges of conspiring to defraud by raiding pension funds of millions of dollars. Kevin is alleged to have used the New York Daily News, purchased by Maxwell in 1991, as a conduit for illegal transfers of funds.

The magnitude of Maxwell’s illegal maneuverings raises questions about British oversight of global companies.