Blain’s Morning Porridge, Jan 20^th, 2026: Corruption and Justice – Action Required.

“America may be blind, but the world will see who is involved and complicit.”

The difference between successful democratic economies and autocracy is that the rule of law works better. Autocracies trend towards corruption and inefficiency. Insider dealing and corruption is a fact of the financial markets – punishing it is a matter of the enforcement of justice and the willingness to do so. Europe is acting over Epstein. What’s happening in the USA? 

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Friday is rant day. I can say what has to be said. Over the weekend I’ll be digging into the implications of Blue Owl gating its Alternative funds, and if that’s the Bear Stearns Moment warning of ructions ahead for Private Credit markets.

Investment is an exceptionally complex business. There are multiple considerations in terms of the risk/reward profile of any deal. The probabilities of success versus the likelihood of misadventure must be checked and reconciled against contracts, credit and data. Analysts dissect company accounts, statements and information on the parties to the trade. Lawyers have become MVPs (most valuable players) because successful investments are built upon a framework of law and order.

While a gentleman’s word may be worth something in terms of the credibility to open doors, and trust is fundamental in any deal discussions, without the backing of sound contracts, strong legal systems, and the enforcement of justice – you are just gambling versus human avarice. The strength of the judicial system is a critical support and consideration in any deal.

History shows the economies of nations with strong and fair judicial systems tend to perform more strongly than autocratic states, where the old adage absolute power corrupts absolutely oft proves the case, leading to widespread corruption and underperformance across the whole economy.

Yesterday was a WTF day in the UK. It’s not every day a Prince of the Blood is hauled off thru Traitor’s Gate.

The news was dominated by the arrest of the royal formerly known as Prince Andrew. Apparently, nothing else happened. Misconduct in Public Office is considered a great and unforgivable crime in the UK. The allegations that Mr Mountbatten-Windsor shared sensitive and confidential information on confidential meetings when he was the UK’s trade envoy, morally entangling himself in convicted paedophile Jeffery Epstein’s web of sexual and financial corruption, is a profound embarrassment to his family.

Humiliating, but the UK can say justice is being seen to be done. (If only it would be delivered as swiftly to the victims of the Post Office and Haemophilia scandals.)

When the younger brother of head of state was arrested on his birthday, King Charles said, “Let me state clearly: the law must take its course” and the prime minister chipped in with “nobody is above the law”. There is a very high likelihood justice will be delivered. The Royal Family has no choice but to be blind.

Mountbatten-Windsor will have his day in court. It will likely go rough for him. He is now singularly alone in the world, and unprepared for what may follow. The Princess Beatrice is said to remain close (good on her!) His ex-wife is as scuppered as he. It’s unclear that anyone else stands for him. The degree from which he has fallen from grace is unparalleled in modern history.

He was briefly a hero during the Falklands War, and for a while caused hearts to flutter as Randy Andy. But by nature, he was a rude and arrogant fool, suffering from an overwhelming sense of entitlement and demanding deference from all around him. As the over-indulged favourite child, he became the classic spoilt second son, but lacking wealth and power he bore grudges heavily, and thus became a target for bad actors looking for actionable weaknesses.

He was perfect for Jeffrey Epstein who identified that Mountbatten’s role as a trade envoy made him a useful idiot he could control and manipulate though the levers of money and sex. Hence the relationship between them.

Multiple questions follow yesterday’s arrest:

• The question we all want answered is who else did Epstein corrupt? That will be difficult because of the chaos around the promised release of heavily redacted files. You’d almost think people are trying to hide something?
• Epstein was caught. Who else controls similar (but better hidden) webs of corruption? And how are we going to uncover these, because they undoubtedly exist?

Mountbatten-Windsor could well end up sewing mailbag at his brother’s pleasure. I foresee a great Tragedy being written about him – the key to the tragic characters in Shakespeare is they are all the authors of their own destruction.

The takeaway is that in an Open and Just society our faults are more likely to be discovered and punished. That said, insider trading on information gleaned for networks has always been a feature of finance. I saw it in action in my early days in markets – how some people just knew, and in the scrabbles to win allocations that occurred around lucrative Japanese Equity Warrant deals. I recall a scandal involving a “hunting” accident at SEK.

The fact the Justice must be seen to be done is what matters. That’s a reason to invest in the UK and wherever English law is primary. (Scot’s Law, which I once had a passing familiarity with, is as strongly founded. I can still cite case law, having memorised much of Gloag and Henderson for my exams!)

It’s going to be really interesting to see who else will be unveiled as Epstein’s web is publicly unravelled. Already the scalps of Peter Mandelson and Jess Staley have been nailed to the doors in Britain. A former Norwegian premier, Thorbjon Jagland, has been arrested. The French are trawling the redacted files for evidence of wrongdoing. Across Europe, anyone named in the Epstein files – which is no proof of guilt – will be concerned as they face raised reputational risk. Arrests are said to be imminent as new information comes to light from the files.

Autocracy…. Is different. (You can probably guess where I am going here…)

There has been plenty of noise in the USA – but after AG Pam Bondi and FBI said they’d found no evidence of wrongdoing, no one has been judicially challenged. That failure is variously ascribed to “reasonable doubt” on proof, time limitations, and sidebars like the fact Epstein’s original 2008 agreement granted immunity to “potential co-conspirators”. In Europe evidence that Mountbatten, Mandelson and Jagland had indulged in corruption was swiftly uncovered by investigative journalists in the redacted files.

There is great suspicion the Swamp protects its own.

At the centre is the President himself. While we know the president said he severed links with Epstein over the poaching of Trump’s Mar-a-Lago staff many years ago, there is plenty of evidence they were previously close, and records of their talk about women are legion. It’s not unreasonable to ask how close Trump and multiple other names in the files were, and is there evidence of collusion, insider dealing or common purpose. Proving sexual crime requires very high burdens of proof, but evidence of financial wrongdoing – as has been uncovered in Europe – is a very effective way to initiate punishment.

It’s a version of the Al Capone solution. The Chicago gangster finally went to jail for tax evasion – not multiple murders he ordered, kidnappings, and other crimes.

It’s also fair to wonder if there is any real intention to dig deep into the Epstein midden. What might be exposed? Who has what to hide?

The USA has become a deeply polarised nation across multiple fronts. One of these is the rising controversy over the President’s business entanglements – oft described by his detractors as Grift.

There is a suspicion he acts to deflect and distract from questions on his probity. Will he go to war on Iran to dodge questions on his own relationship with Epstein, or to obscure the likelihood Epstein was not the only puppet master sucking inside information from corrupt business webs? Was this morning’s release of the UFO files another effort to distract?

And it’s also worth considering that Epstein was undoubtedly not the only bad actor of the modern financial age – he’s infamous because he got caught. Who wasn’t?

Andrew Mountbatten will have a challenging time explaining why a Kazak princeling bought his former home £3mm above the asking price. The President has never explained the rumours the Russians apparently overpaid/overvalued properties they financed. (The president has form in this regard: recall how Trump was found guilty of materially misrepresenting the values of properties he pledged as assets, and had substantial penalties were imposed against him.)

Trump has effectively dodged the many cases outstanding against him, creating de-facto presidential immunity, and these includes “crimes” of a sexual nature. He was found liable (in a civil trial) of the “digital” rape of E. Jean Carrol and is contesting the nearly $90mm damages awarded against him. He was criminally convicted of 34 felony counts of falsifying business records to cover up $130k hush-money payments to porn actress Stormy Daniels, a case that went to appeal and remains outstanding.

The undercurrent of grift around the president reflects ill upon the USA and its reputation for judicial enforcement.  If the president can do wrong without correction, who else has their fingers in the till? There are multiple areas of concern.

• President Trump has undone many of the traditional separations of the state between the executive, the judiciary and the legislature. By ignoring the checks and balances at the heart of the constitution, has he opened it to corruption?
• The President has received multiple gifts that appear to be inducements from foreign nations to favour them. These range from the gift of a jumbo-jet, a foreign power taking a silent 49% participation in his crypto businesses the day before the inauguration (and subsequently given rights to purchase Nvidia chips), right down to foreign delegations favouring Trump hotels on the advice of the administration. Is that corruption or just simple human avarice? He makes the FBI stay in his hotels, and charges them extra.
• Mr Trump has been accused of multiple pay-to-play scams – offering wealthy donors’ proximity as Mar-a-Lago members, to sponsor parades or parties, or rewarding holders of his crypto-meme-coins.
• World Liberty Financial appears to be a corporation conceived solely to monetize Trump’s political power by using crypto as the vector to channel wealth to him and his family.
• Trump’s version of diplomacy has pretty much dispensed with diplomats and is now dominated by his close friend Steve Witkoff and son-in-law Jared Kuschner. They are said to show no hesitancy wrapping personal deals around their roles as Trump’s plenipotentiaries. The optics of Witkoff, who is said to have financed his property empire with Russian funds, running a peace treaty over Ukraine look terrible.
• Trump has been accused of selling pardons and favouring his political allies, while directing state agencies to investigate opposition politicians.

If the president is entirely clean in regard to Epstein, then he should be enthusiastically demanding deeper investigations and prosecutions. Otherwise, it’s telling that Europe is doing so, but America is not.

To cite the bard: “There is something rotten in the state of Denmark, Horatio.”

Out of time, and have a great weekend…

Bill Blain

Author of the Morning Porridge

CEO Windshift Capital

Advisor – Spitfire Strategic Capital