Why London turns a blind eye to Russia’s adventurism

The Guardian

Threats to Russia over its actions in Ukraine are undermined by the warm welcome its billionaires continue to receive in the west.

The kleptocracies that have replaced the old Soviet empire are vulnerable, I wrote on these pages as the Ukraine crisis began. The freezing of their assets was a non-violent response to the threat to the integrity of a sovereign state that had not committed genocide or developed weapons of mass destruction; that had not threatened to invade a neighbour or provided any other casus belli beyond having a revolution against a fantastically corrupt government.

We might have threatened Putin’s elite support and made his backers realise that they had to choose between supporting Russian adventurism or holding on to their loot. I believed we had a fair idea of what their choice would have been.

Russia is exposed. Putin’s central bank estimated that two-thirds of the $56bn moved out of Russia in 2012 might have been the proceeds of crimes, bribes to state officials and tax fraud. English bankers and lawyers, British and Dutch tax havens in the Caribbean, and estate agents in Mayfair, the Cote d’Azur and Manhattan launder the loot.

Never mind asset freezes and visa bans; a vigorous investigation into immoral earnings by the European and north American authorities would have spread panic among the crime bosses. David Cameron sniffed weakness. He warned Moscow at the beginning of March that Russia would pay “significant costs” if it did not back down.

The crisis escalates today as Crimea votes on an anschluss with Russia under the eyes of Putin’s troops. The failure to date to impose sanctions on or make believable threats against Russian assets tells us much about Britain and the wider west, none of it flattering.

It isn’t certain what choice our rulers will make if they have to choose between opposing Russian adventurism and holding on to Russian loot. Cameron may surprise us. But as things stand, it appears that the love of money is not confined to the Kremlin. Those who covet it, those who have pocketed or hope to pocket it, are as much in its thrall as the oligarchs who possess it.

Consider the extent of Russian financial power in Britain. Soviet-born billionaires occupy three of the top five slots in the Sunday Times Rich List. One owns the satirically titled Independent newspaper and the London Evening Standard. Another owns Chelsea Football Club. More Russians have received special “tier one” investor visas than the citizens of any other country. The first-class visas allow the British state, which bellows about its toughness on immigration, to sell residency rights at £1m a pop.

BP, a struggling corporation with many connections to Downing Street, needs Putin’s favours. The Deepwater Horizon disaster of 2010 forced the company to freeze dividends and sell assets worth $38bn, including half of all its offshore platforms and refineries, to meet the $42bn costs of the clean-up. The company’s involvement in Russia adds nearly 1m barrels a day to its oil production. So dependent on Moscow’s goodwill has it become that the Economist speculated that it “now exerts pressure on the British government to pursue a Russia-friendly policy”.

Analysts find it harder to be precise about the scale of Russian money flowing through the British financial system: the City and accountability are not even nodding acquaintances. But Thomson Reuters calculated that companies from Russia and former Soviet states have raised $82.6bn in London in the past two decades, large chunks of which the City creamed off as fees.

The “English” courts are easier to monitor because cases must take place in public. Lawyers often compare themselves to taxi drivers, who will carry anyone who can pay the fare. I find a comparison to an older profession more satisfying. Whichever one you care to use, Russian money proves its truth. The lowest moment in recent history of the libel courts came when eminent solicitors and one of London’s most expensive QCs tried to sue the London-based investment fund manager Bill Browder.

He first developed the use of asset freezes as a weapon against Putin, in his case because Russian gangsters and state officials were complicit in the murder of his lawyer, Sergei Magnitsky. Our legal profession was not bothered in the slightest that Magnitsky was a better and braver lawyer than they would or could ever be; a man who had died in a Moscow prison for the “crime” of exposing a gigantic tax fraud. That their case that a former Russian secret policeman had the right to sue Browder in London was deemed by the judge to be hopeless did not appear to concern them either. They still picked up hundreds of thousands of pounds in fees.

Between March 2008 and March 2013, 61.6% of litigants fighting in London commercial courts came from outside England and Wales. As I’ve said before, the government is denying access to justice to the native poor and working class with its legal aid cuts. Extortionate legal fees have become too much for the middle class to bear. But as it closes the courts to the British, the coalition is following a deliberate policy of turning them over to the global oligarchy, in the hope that fat fees for QCs will produce tax revenues for the Treasury.

If you look at the luxury market, the picture is the same. Art, prime London property, the finances of several Premier League clubs and the private schools are trapped in a dependency culture. As is the British right.

The Eurosceptic dream can sound attractive when you have had one beer too many. Let us turn our back on the collective security of the European Union, be the great trading nation we once were, and send our ships out on to the wide blue oceans. They forget that Victorian Britain was a great power as well as a great trading nation. It was strong enough to put security interests beyond economic interests. Today, Cameron worries not only about losing Russian business, but the chilling example sanctions would set to the buyers from China and other dictatorships shopping in London. Would they be so willing to spend if they saw the authorities using Moscow gold as a weapon in a diplomatic crisis?

A comparison with 1914 is instructive. At the start of the First World War, Herbert Asquith and David Lloyd George were so determined to maintain the European balance of power they were prepared to risk bankrupting the British empire. We will find out later today whether David Cameron and George Osborne are prepared to risk bankrupting a Mayfair estate agent a century on. займ на карту без отказов круглосуточно займ на карту без отказов круглосуточно https://zp-pdl.com/best-payday-loans.php https://www.zp-pdl.com займ на карту онлайн

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