Dirty money, dirty politics

A week ago, the British House of Commons Select Committee on Foreign Affairs issued a report entitled ‘Moscow’s Gold: Russian Corruption in the UK.’  Given the title, one might imagine that this was all about corruption and the role played by Russian ‘dirty money’ in the British economy. In reality, the report conflates legal and illegal activity, and contains one statement which, in my opinion, verges on the libellous and constitutes an attempt to intimidate British companies from engaging in legitimate business. In this way, it goes beyond the usual criticism of Russia and into altogether more dangerous territory.

The fact that Russians have invested billions of pounds in the British economy is well known. The probability that some of this money comes from corrupt activities within the Russian Federation is also widely accepted. To the extent that the latter is true, this is a matter of proper concern to the British authorities, and it is right that something be done to clamp down on money laundering. The report ‘Moscow’s Gold’ makes much broader claims, however. It says that ‘There is a direct relationship between the oligarchs’ wealth and the ability of President Putin to executive his aggressive foreign policy.’ Supposedly, the ‘dirty’ money invested by ‘oligarchs’ with ties to the Kremlin can be used to undermine British democracy and for other aggressive activities. The report claims that ‘These assets, on which the Kremlin can call at any time, both directly and indirectly support President Putin’s campaign to subvert the international rules-based system.’

The committee fails to support this claim with firm evidence. The best that it can come up with is a statement by Mark Galeotti about what Galeotti calls ‘small-scale stuff’ in the Balkans, such as funding for websites. No evidence of any ‘large-scale stuff’ is produced, and absolutely no evidence to suggest that the Kremlin is in fact using dirty money invested in the UK for the ends claimed by the report. In any case, even if Russian oligarchs are indeed using their money to such ends, no evidence is provided to show that it is actually dirty money rather than legally invested money. In other words, the issue of corruption is conflated with something entire distinct.

The report likewise conflates corruption with perfectly legal business and financial deals, such as the flotation of Russian companies on the London stock exchange (in particular the Russian company EN+ in 2017) and the selling of Russian sovereign bonds in the British financial market. It may be the case, as the report says, that it makes no sense for the UK to permit such actions at a time when it is simultaneously imposing sanctions on Russia, but that is an entirely separate matter from that of corruption and money laundering.

And that leads me onto the thing which really struck me about this document. This was a statement about the British law firm Linklaters, which managed the flotation of EN+. Shortly before this, the report says ‘Both the EN+ IPO [Initial Public Offering] and the sale of Russian debt in London appear to have been carried out in accordance with the relevant rules and regulatory systems, and there is no obvious evidence of impropriety in a legal sense.’ Yet, it then goes on to say the following:

We asked Linklaters to appear before the committee to explain their involvement in the flotation of EN+ … They refused. We regret their unwillingness to engage with our inquiry and must leave others to judge whether their work at ‘the forefront of financial, corporate and commercial developments in Russia’ has left them so entwined in the corruption of the Kremlin and its supporters that they are no longer able to meet the standards expected of a UK-regulated law firm.

This is quite outrageous, and also cowardly. The committee in effect accuses Linklaters of corruption, while avoiding complaints of libel by use of the weasel words ‘we leave to others to judge’ – a way of making an accusation while claiming that one hasn’t. What’s so outrageous about the statement is that comes straight after a confession that the EN+ flotation was completely above board. Linklaters didn’t do anything wrong, and the House of Commons committee knows it. Nevertheless, it sees fit to suggest that the company is ‘no longer able to meet the standards expected of a UK-regulated law firm.’

The implication here is that any company which has extensive dealings with Russian enterprises is ‘entwined in the corruption of the Kremlin’ and so unfit to do business. I cannot interpret this as anything other than an attempt by the committee to threaten British companies and intimidate them into dropping their lawful activities. I consider this disgraceful.

The committee’s attitude can be seen again towards the end of the report, when it writes that ‘instead of participating in the rules-based system, President Putin’s regime uses asymmetric methods to achieve its goals, and others – so-called useful idiots – magnify that effect by supporting its propaganda. So, there you have it. People who do with business with Russia are to be publicly shamed as unworthy of the standards expected of the British people, while those who would dare to point this sort of thing out are to be denounced as ‘useful idiots’. Having any dealings with Russia makes one a Kremlin stooge.

What the British House of Commons ignores is that lots of British citizens have perfectly legitimate reasons to do business with Russia, and do so in an entire legal and proper way. And others also have very good reasons to question public policy regarding Russia. None of them deserved to be insulted in this way by their elected representatives. The authors of this report should be ashamed of themselves.

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6 thoughts on “Dirty money, dirty politics”

  1. This report says more about Britain’s political class then Russia. The British establishment have been is shock since Brexit, which most of them did not want. Britain’s politicians are feeling a bit vulnerable and floundering around for a unifying factor. Britain’s economy is also threatened by a self inflicted wound, while the worst case scenario predicted under so called project fear has not happened (yet?), investment is below what it should be and the realisation of lost influence is now beginning to be felt.

    There is therefore a desire among the establishment to have a common enemy, a bogeyman against who the country could unite. Step forward Britain’s traditional bugbear, the bear, Russia. Defining Russia as the root of all that is bad, however ridiculous it may be, enables Britain’s politicians to indulge in virtue signalling grandstanding, while most of the remainder of the world looks on in bemusement. Britain’s solipsistic idea of leading an anti Russian alliance is frankly rather sad if it wasn’t potentially so dangerous

    Linklaters by doing normal business with the bogeyman is therefore not playing the game. The rule of law is actually a bit selective – re the Windrush scandal, Birmingham six etc – and people who are in the bogeyman group will find that normal rules don’t apply to them. I wonder what the UK will try to do to Roman Abramovich now that he has also got Israeli citizenship?

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    1. “I wonder what the UK will try to do to Roman Abramovich now that he has also got Israeli citizenship?”

      The entire kipesh over Abramovich getting his British visa annulled, then flying to Israel to get his long awaited citizenship and flying back 3 hours later, reminded me of this anecdote:

      Two Jews are bragging about the piety of their Rebbes:
      A: “My Orthodox rebbe is soooo pious! He was walking once, and there was a big lake in his path. He prayed and the lake parted before him like the Red Sea before Moses!”

      B: “Bah, that’s nothing! My Reform rebbe is more pious! He was walking once on Shabbos and there was a wallet crammed full of cash in his path. He prayed and Shabbos turned into a Thursday for him. He took the wallet, prayed once more – and it was Shabbos once again!”

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  2. Question for Britain

    Who let in all this so called dirty Russian money ?

    Why did the UK make it so easy for cash to come into the Country with no checks on where it came from ?

    Why did the UK allow this “dirty money “ to be invested in newspapers , football clubs,housing?

    Will those known to have arrest warrantsout for them back on Russia be sent back along with the money ?

    The UK needs to look thernselves the governments conduct needs to be examined

    Liked by 1 person

  3. The replacement of Crispin Blunt by neocon Tugenendhat as Chair of the Foreign Affairs Select Committee is a great traversty. Whether Tugenendhat is an agent of the Israeli state I will leave others to judge.

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