Banks, Commerce, and Intrigue in Star Wars

As I continue to set up this new blog and decide how I want to handle frequency of new posts, I’ve decided to post some older blog entries from my days as a solo attorney. My posts on my law firm site already got a little weird–I can become a little preoccupied with my personal interests, what can I say. Below is one of those older posts, slightly revised and adapted for this new site.

I last discussed an arc from Season Five of The Clone Wars, and this time I’m talking about an arc from Season Six: Episodes 5-7, “An Old Friend,” “The Rise of Clovis,” and “Crisis at the Heart.” This arc marks the return of Rush Clovis, Senator Amidala’s ex-lover and traitor to the Republic, who was originally introduced in Season 2.

The story arc principally serves to highlight Anakin’s reckless passion and violent jealousy, traits that were already showcased enough in the films and in the last Clovis arc. Thus, these episodes essentially retread old ground and highlight the most despicable aspects of Anakin. When Anakin and Padme’s relationship already looks like that of a domestic abuser and his victim in the films, episodes of this sort certainly don’t help to suggest that there was anything endearing about their romance or marriage (and maybe that’s the point, although a hard one to accept).

I have a fair number of objections to the plot that propels the above-noted melodrama (lots of old spoilers following).


Clovis, now working for the independent InterGalactic Banking Clan (IGBC), suspects that funds are being mismanaged by the leadership so that the banks’ funds are nearly depleted (“An Old Friend”). Padme is sent to Scipio, the headquarters of the IGBC, to oversee the transfer of funds in a new loan. Clovis is able to gain Padme’s trust and cooperation in finding the truth when he is attacked while attempting to speak with her. Padme and Clovis come up with a plan that gets her the data but also gets her arrested; she gives the data surreptitiously to Clovis. Anakin is brought in by the Republic, and Padme is released into his care. Anakin and Padme then collect Clovis to get the data, and the three make a daring escape from a bounty hunter.


Back on Coruscant, Padme and Clovis are appointed to dig through the data in an investigation to determine the extent of the corruption (“The Rise of Clovis”). They find that multiple small transfers by the leaders of the IGBC, known as the Core Five, have exhausted most of the banks’ reserves. Clovis also finds evidence that shows that the Core Five have been lending money to the Separatists even though the Separatists have failed to pay interest on their loans. In the midst of their investigation, Clovis decides that the time is ideal to first attempt to subdue and then to attempt to overpower Padme; thankfully, this is interrupted by Anakin, who rather brutally beats Clovis into submission.


Anakin almost kills him, and dismisses Padme’s requests that he stop during the fight, so it’s clearly Dark Side; then again, he did stop a creepy known traitor from forcing himself on his wife, so the ethics of the situation are not as clear to me as Padme’s angry request for a temporary separation suggests. As Clovis is recovering, the attending medical droid reveals itself to be  an agent of Count Dooku, who tells Clovis that the Separatists have not been making payments on their loans because they refuse to support the corruption in the IGBC. Dooku says that if Clovis reveals that the Separatists are receiving loans without paying them back, it would lead to war on Scipio and the collapse of the banking system. Dooku’s counter-proposal is that Clovis reveal the corruption of the Core Five, supplemented with data provided by Dooku that will actually reveal the private banking accounts containing the embezzled funds. If Clovis does this and withholds the truth about the Separatists’ default, then the Separatists will once more pay the interest on their loans and endorse Clovis as new independent leader of the IGBC. Clovis does as requested and presents his evidence to the Galactic Senate, which ultimately also endorses him as new leader of the IGBC.


In the final episode of this arc, Dooku betrays Clovis, of course (“Crisis at the Heart”). Padme and a Separatist senator accompany Clovis to oversee the trial of the Core Five and Clovis’s placement as new leader of the IGBC. Clovis is privately contacted by Dooku after this, who tells him that the Separatists will not pay the interest on the loans after all unless Clovis increases the interest rates on the Republic’s loans. Clovis caves, fearing collapse of the banking system. And then, Dooku launches a Separatist invasion of Scipio just for good measure, giving the impression to the outside galaxy that Clovis and the IGBC have fully sided with the Confederacy. Dooku even uses the Force so that Padme’s blaster fires, killing the Separatist senator and eliminating yet another moderate voice from the Confederate coalition. Dooku withdraws his forces after a brief skirmish with the Republic, leaving the Confederacy ground troops to be mopped up by the clones. Anakin tracks down Clovis, who panics and holds Padme hostage. A downed fighter crashes into the tower holding Clovis’s office, and while Anakin is able to grab both Clovis and Padme before they fall to their deaths, he cannot pull them up from the ledge over which they dangle. Clovis chooses to sacrifice himself, releasing his grip.


In the aftermath of these events, the IGBC ceded control of the banks to the office of the Chancellor of the Galactic Republic. Chancellor Palpatine accepts, dishonestly promising that he will reinstate the banks to their previous condition after the end of the Clone Wars. The episode ends with much of the Senate chanting, “Long live the banks!”


These episodes do not provide the viewer with a greater understanding of how the InterGalactic Banking Clan operates in the Star Wars galaxy. If anything, they make the matter more confused. The IGBC first appears in Attack of the Clones: a pale-faced Muun smugly declares, “The Banking Clan will sign your treaty.


And that’s basically it. We don’t need greater context for the Banking Clan within the context of the films, although it always seemed a little bit weird that all these businesses would choose to ally with the guys looking to start a rogue state, rather than the admittedly corrupt Republic that has more or less bent over backward to meet the desires of the trade organizations, regardless of the occasional tariff dispute here and there.

The pseudo-canon Attack of the Clones novelization does attempt to provide greater context to that scene on Geonosis. In a longer speech within Chapter 19, Count Dooku assures the assembled trade guilds and megacorporations of the Confederacy’s “absolute commitment to capitalism . . . to the lower taxes, the reduced tariffs, and the eventual abolition of all trade barriers. Signing this treaty will bring you profits beyond your wildest imagination. What we are proposing is complete free trade.”

Obi-Wan reflects on the Confederate plan shortly thereafter:

With the money of the bankers and the commercial and trade guilds behind [Dooku], and this factory–and likely many others like it–churning out armies of battle droids, the potential danger was staggering.

I think this helps clarify the corporate role in the war. Rather than being outright combatants against the Republic, they were willing to supply funding, to produce battle droids, and to supply contracted preexisting forces to the war effort. The Republic surely wouldn’t look fondly on this, but a pretense of neutrality might be a little more plausible. Still, we don’t learn much more about the IGBC.

This final Clovis story arc, however, gives us a lot of information about the IGBC. And it doesn’t make a whole lot of sense. We know by the end of the episode (1) that the IGBC has a Senate representative; (2) that the IGBC has its leadership appointed at least in part by way of Senate approval; (3) that the IGBC is separate from the Republic government and is in fact a neutral party that loans to both sides of the war and that requires the endorsement of both governments; (4) that the IGBC historically was led by five leaders, then replaced by an interim single ruler, then simply nationalized by the Republic; and (5) that the IGBC was almost bankrupted by the embezzlement of funds by its five leaders. That last point might have been possible by the loosening of banking regulations that was a plot point of a much earlier Clone Wars arc (see the third-season episodes “Heroes on Both Sides” and “Pursuit of Peace”).

How could such a system work? Why would the Supreme Chancellor of the Galactic Republic agree to continue loaning funds to the Separatists–and if he wouldn’t, would this lead to complete financial collapse as the Separatists defaulted on their existing loans? For that matter, how has financial collapse not already occurred, since the Core Five apparently completely gutted the banks and the Separatists were already not paying back their loans? And just how much money did these Core Five withdraw?

For that matter, what exactly is a “credit,” anyway? We know that they are “Republic credits” thanks to The Phantom Menace. Presumably they aren’t tied to a hard currency like gold or silver; how is their value set and who mints them? And what’s the currency of the Separatist Alliance? Do they still use Republic credits?

And exactly how many banks are involved here? The leadership was the Core Five. Is this a board of directors, or are they individual representatives of large banks, or both? After all, we keep hearing about “banks” in the plural form. So presumably the Banking Clan then represents a coalition of banks, rather than a single financial institution. Right?

I assume that the Banking Clan and its Core Five is loosely modeled after the Federal Reserve and its five Members of the Board of Governors. The Federal Reserve System, or “the Fed,” consists of 12 regional reserve banks and constitutes a centralized banking system. The Fed is based out of D.C. It studies economic trends and sets monetary policy. The Fed is quasi-governmental and independent; it was originally created by act of Congress, and its Members of the Board are nominated by the President and confirmed by the Senate, but it makes decisions without approval from any other branch of government. I’m not even going to pretend that I have any sort of expertise involving the Fed; if you want to know more, CNBC has a pretty useful primer.

Regardless, even the little information I’ve provided above should make it pretty clear that the IGBC only bears the most passing resemblance to the Fed. It has five leading members, appears quasi-governmental, and superficially maintains independence. But its quasi-governmental structure is complicated; it does not have allegiance to any specific nation, as it works with both the Separatists and the Republic. Furthermore, it is an active lender; rather than dealing with monetary policy, its primary role seems to be as an investment bank. And remember that I mentioned that the IGBC was deregulated–this seems a painfully obvious allusion to the deregulation of banks leading up to our recent recession, where the IGBC is like any other “too big to fail” bank.

Star Wars is, from a certain point of view, a series of fables. It encourages fantastical allegory. But it does not always provide a clear vision or message; its allegory, no matter how on-the-nose, always seems to invite multiple, often competing, interpretations. Its metaphors are muddy. So it is with the IGBC. There appear to be messages about investment banking, predatory lending, the financial costs of war, the debt ceiling and rising national debts, the deregulation of banks and the recent financial crisis, the nature of corruption in large businesses, the difficulty of true independence, the Fed, and so on. But they are almost like buzzwords; they evoke a feeling without really meaning much of anything.

Because of this, it is very difficult (to me, at least) to piece together a realistic system that could have functioned at all from the various segments of lore tossed out about the Banking Clan. No matter how many volumes are written on Star Wars, the franchise’s disparate elements often elude any sensible, unified interpretation.

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