Final Word

Where the Gupta laundromat comes from?


Last week’s news that the controversial Gupta family are “selling” their South African interest led many to theories of the motives behind it – one it being a money laundering exercise.

How it got me to writing this week’s edition of Final Word, which I as often as possible, attempt to link to contemporary issues, started with laundry in the oldest and most basic sense of the word.

Early morning, with sunshine predicted for most of the day, my wife was sorting washing because this time of year in Cape Town you cannot waste sunshine as far as washing clothes are concerned. I interrupted her flow by begging her to help me think of an idea for the column.

In a tone of voice, which some would state capture of a special kind, her reflex reply was “what about laundry?!

Minutes before I was reading about the Gupta-deals, and immediately the question came to mind: How and when did the term money laundering come about?

It took me on an interesting journey through the history of how the term for what dictionaries describe as “the process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions” (Oxford English Dictionary).

Laundry first

But, let me first attend to the ‘command’ of my personal ‘government of the day,’ and look at the origins of the word laundry, under the dictionary definitions of “articles of clothing, linens, etc., that have been or are to be washed; a business establishment where clothes, linens, etc., are laundered; and a room or area, as in a home or apartment building, reserved for doing the family washing.”

As often is the case with common words, different sources differ about exact dates, but it seems save to say that it arrived in the English language somewhere in the second half of the 14th century from the Old French word lavanderie, from Latin lavandaria, the plural of lavandarium ("things to be washed") from the root word lavare ("to wash.")

It is from this same root that we get the modern word lavatory, from which some of my friends I’m sure in the context of alleged Gupta money laundering could come up with so clever jokes.

As a verb, it dates back to 1880, and in the figurative sense, as in making a laundry list of things to do, it was first recorded in 1958.   

Al of this however, according to some sources the might have been another step between Old French and English with the word lavender, which meant “a washerwoman” dating back to the 13th century.

If, however, you thought there is a link between the nice fresh smell of clean washing and the sweet-smelling shrub called lavender you are wrong. The plant got its name from a root word meaning “bluish” in reference to the colour the shrubs blooms, and which gave us the modern word “livid.” 

How the money landed in the laundry

The process of concealing ill begotten material gain, is probably as old as mankind itself, or at least older than money as means of payment for products, services, or token of value. Some sources claiming it dates back at least 6 000 years.

We do know for sure that in the year 67 A.D. Pompey undertook an expedition against the pirates in the Mediterranean that deprived Rome of its dues. The pirates were also pioneers in the practice of laundering gold, and their target was the European commercial vessels that crossed the Atlantic Ocean during the 16th and 18th Centuries.

It is uncertain when for the first time some form of money was used for the first time, but It is known that money was born out of the need to settle some of the inconveniences of the mechanism of barter, and that many other objects were used as a mean of exchange. The striking of metallic coins, however, was initiated around the year 580 A.D.

Some sources claim that the figurative use of ‘launder” in the term money laundering was first used at the beginning of the 20th century for operations that in some ways were intended to “sanitize” income derived from illicit activity, thus allowing it to legally enter the monetary flow of the economy.

According to others, the process of concealing the origins of money obtained illegally, by passing it through a complex sequence of banking transfers or commercial transactions,” only first appeared in the early 1960s.

Interestingly in the context of some present-day South African political-related news, the term only became widely known during the Watergate investigations of the 1970s, in which suitcases full of cash played a role in forcing the resignation of President Richard Nixon of the USA.

Money laundering per se being declared a crime, besides covering up underlying crimes, only happened in 1986 in the USA, and then quickly spread throughout the world.

Final word

We are not in a position to judge if the selling of some of their South African assets to apparent so-called shelf companies in Switzerland, and elsewhere is indeed part of an elaborate money laundering operation. What we do, however know is that it for sure does not smell like lavender.

by Piet Coetzer

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Final Word

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