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The power of money: how autocrats use London to strike foes worldwide
23 Jun 2021

By Franz Wild, Isobel Koshiw, Jane Bradley, and Andrew Higgins, The Bureau of Investigative Journalism, 18 June 2021

The Bureau of Investigative Journalism — Olena Tyshchenko, a lawyer based in Britain, was facing years in a crowded Russian prison cell, when a chance at freedom came via an unexpected source.

An English lawyer named Chris Hardman, a partner at Hogan Lovells, one of the biggest law firms in the world, flew into Moscow while his firm helped draft a tantalising offer: Tyshchenko could be freed if she provided information that could be used to help his client in a sprawling web of litigation in London.

The twist is that Tyshchenko was one of the lawyers on the other side. To win her freedom, she would have to turn on her client. It was a ruthless exchange. But the Moscow prison had been ruthless, too, and she reluctantly agreed. In a later interview, she said that what seemed “most abnormal” was that lawyers opposing her in a trial in London could play a role in her fate in Russia.

“They are extremely aggressive,” she added.

A Moscow prison. A London courtroom. One is part of a Russian legal system widely considered corrupt and subordinate to the Kremlin. The other is a symbol of an English legal system respected around the world. Yet after Hardman returned to London, an English judge would accept into the case the evidence obtained from the Moscow prison.

The episode is a vivid illustration of how the brutal politics of authoritarian countries like Russia and Kazakhstan have spilled into England’s legal system, with lawyers and private investigators in London raking in huge fees and engaging in questionable tactics in the service of autocratic foreign governments.

An investigation by The New York Times and the Bureau of Investigative Journalism — involving a review of hundreds of pages of case documents, leaked records and more than 80 interviews with insiders, experts and witnesses — reveals how London’s courts are being used by autocrats to wage legal warfare against people who have fled their countries after falling out of favour over politics or money.

Four out of the past six years, litigants from Russia and Kazakhstan have been involved in more civil cases in England than have any other foreigners. Authoritarian governments, or related state entities, are often pitted against wealthy tycoons who have fallen from favour and fled. Neither side elicits much pity — but both pay generous legal fees.

Filing litigation in London can bring legitimacy for claims by autocratic governments, whose own legal systems are so tainted that their decisions carry little weight outside their borders. England also offers advantages: Judges have broad latitude to accept evidence, even if it is produced by corrupt security services or compromised foreign legal systems. London’s own private intelligence firms are unregulated, largely unrestrained and sometimes willing to use borderline methods for deep-pocketed clients.

In one example, our investigation found that private detectives working on a case with Hardman’s firm, Hogan Lovells, travelled to France to try to pay a potential witness to testify against an enemy of President Vladimir Putin of Russia.

But perhaps the biggest advantage is how lawyers like Hardman enabled their clients to pursue their foes by winning what one judge called a legal “nuclear weapon” — court orders freezing a defendant’s assets worldwide. These orders are similar to the ones the US government uses against terrorists or arms dealers, except they emerge from civil proceedings.

Much of this is initially secret, with orders in many cases issued before the target is aware or has been found liable in a trial. Even lawyers specialising in the freezing orders are uncertain how many are issued. But the fact that London lawyers, judges and private investigators are now deeply immersed in the savage political battles of the post-Soviet world is eliciting concern.

“We’re being asked in the UK to adjudicate on political dynamics that English courts don’t fully understand,” said Tom Mayne, a researcher at Exeter University, who focuses on how English courts handle corruption cases related to the former Soviet Union. “It seems like an abuse of English law courts, because we’re basically reinforcing the status quo of the regimes in these kleptocratic countries.”

Lawmakers in Britain are increasingly expressing alarm over Russian influence, warning in a parliamentary report last year that a growing industry of London professionals, including lawyers and private investigators, has emerged “to service the needs” of the Russian elite.

“As the Russia Report laid bare, an industry of enablers has grown up in our capital city to protect and sustain the interests of corrupt elites,” said Lisa Nandy, the shadow foreign secretary. “The court system has now become the latest battleground as they seek to use the institutions of an open society to defend ill-gotten gains.”

Hardman and his protégés at Hogan Lovells have been industry leaders in representing powerful clients from the former Soviet Union, routinely working with Diligence, a London private intelligence firm with a reputation for aggressive surveillance. The firms are teamed up on behalf of Russia’s Deposit Insurance Agency in pursuit of Sergei Pugachev, a one-time confidant of Putin now accused by the state of stealing billions from a Russian bank, which he denies.

Another example is a bitter and sensational legal battle that originated in the brutal, autocratic politics of Kazakhstan and involves a state-owned bank, a fugitive tycoon and allegations of stolen billions. The much-publicised dispute began 12 years ago in London, involves numerous lawyers on both sides and is focused on Mukhtar Ablyazov, a former insider in Kazakhstan’s kleptocratic elites who said he was singled out for prosecution after he fell out of favour for political reasons.

Tyshchenko was a lawyer for a company related to Ablyazov. She had gone to Moscow in August 2013 but was grabbed from her luxury hotel near the Kremlin, tossed in prison and accused of helping Ablyazov hide assets. Russian authorities blessed the deal with Hardman’s client that set her free. She denied any wrongdoing, but the affidavit that she later provided to Hardman became evidence in a case that saw an English judge issue a freezing order against Ablyazov’s son-in-law.

Read more at The Bureau of Investigative Journalism

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