23 Jul 2020
Britain has left it too late to untangle the web of Russian influence that permeates the upper ranks of the political and business establishment, the Russia report claims.
Wealthy and powerful Russians — some linked to President Putin, others who have fled his regime — are deeply entrenched in British society through property ownership, contributions to political parties and donations to academia, charity and cultural life. The government’s so-called McMafia powers to investigate alleged “dirty money” are of little use in tracing the origins of Russian billions that have been invested in the UK for decades in real estate, business and luxury goods.
The report by parliament’s intelligence and security committee (ISC) in effect charts what journalists, transparency campaigners and film-makers have been reporting for years — that the influence of powerful people who made their fortunes in the aftermath of the collapse of the Soviet Union is firmly embedded.
“Russian influence in the UK is ‘the new normal’,” the report says. “There are a lot of Russians with very close links to Putin who are well integrated into the UK business and social scene, and accepted because of their wealth. This level of integration — in ‘Londongrad’ in particular — means that any measures now being taken by the government are not preventative but rather constitute damage limitation.”
The document also notes the presence of significant numbers “of Russians . . . who are on the opposing side [from President Putin]” and are targeted by Moscow’s intelligence services. It adds: “Since Putin came to power in 1999, a number of critics of Putin and the Russian government have sought sanctuary in the UK, fearing politically motivated charges and harassment.”
The beginning of high level Russian influence is traced to the mid-1990s when the government sought to attract high-net-worth individuals. The attraction grew in 2008 when Labour introduced the tier 1 investor regime — “golden visas” that gave residency in return for seven-figure investments.
The ISC says those with money were attracted by “a light and limited touch to regulation, with London’s strong capital and housing markets offering sound investment opportunities”.
The report adds: “The UK welcomed Russian money, and few questions — if any — were asked about the provenance of this considerable wealth. It appears that the UK government at the time held the belief (more perhaps in hope than expectation) that developing links with major Russian companies would promote good governance.
“What is now clear is that it was in fact counter-productive, in that it offered ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London ‘laundromat’.”
Some of those wealthy Russians cemented their place in Britain quickly by making establishment connections. The report says: “Several members of the Russian elite who are closely linked to Putin are identified as being involved with charitable and/or political organisations in the UK, having donated to political parties, with a public profile which positions them to assist Russian influence operations.”
Industry of enablers
Integration was facilitated, the report says, by an “industry of enablers” made up of lawyers, accountants, and PR and estate agents who have played a role “wittingly or unwittingly, in the extension of Russian influence which is often linked to promoting the nefarious interests of the Russian state”.
The committee also questions the roles of members of the House of Lords who have business interests in Russia or work for major Russian companies with Kremlin links. It says that “these relationships should be carefully scrutinised, given the potential for the Russian state to exploit them” and calls for a review of the code of conduct for peers and their register of interests.
The committee says that peers, like MPs, should be required to declare any employment outside of parliament that brings payment of more than £100.
Alongside the besuited professionals there are security firms providing bodyguard and investigative services for the wealthiest Russians. The report says: “A large private security industry has developed in the UK to service the needs of the Russian elite, in which British companies protect the oligarchs and their families, seek kompromat [compromising material] on competitors and, on occasion, help launder money through offshore shell companies and fabricate ‘due diligence’ reports, while lawyers provide litigation support.”
By Sean O’Neill, The Times, 22 July 2020
Read more at The Times
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