The new York times: Russian Dirty money and British politics

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ИноСМИ: Грязные русские деньги и британская политика

Near Kensington Palace is a quiet alley, which stretches from Kensington high street to Notting hill gate. Cyclists and pedestrians can move through it freely, but car access is restricted. The police allows only some machines — often with diplomatic plates. Kensington Palace gardens (the so-called alley) belongs to the crown. The street was laid out in 1840-ies in the place of the Palace gardens, most of the houses in the street are monuments of architecture. Before they lived wealthy aristocrats, and then there began to appear the Embassy. Now on CNG, as abbreviated as alley Londoners, located diplomatic missions of Israel, France, Czech Republic, Japan, Saudi Arabia. Three majestic Palace is the Embassy of Russia (before starting with the 1930-ies there was a Soviet Embassy).

House number 16

Two decades ago the authorities have considered the development of private residences on CNG in the house with apartments, which would bring the district’s income, however, at the beginning of the Millennium, the concept has changed. In 2004, Indian steel tycoon Lakshmi Mittal bought a house that had belonged to the founder of the famous news Agency to Baron Reuter (Paul Julius von Reuter), paying, as they say, 57 million pounds. A year later an adjacent building, which previously enjoyed by the Russian Embassy, bought for 41 million pounds of Russian-American financier Leonard Blavatnik. Opposite at number 16 in 2009, lives Roman Abramovich, a Russian oligarch and the owner of London football club “Chelsea”. Pyatnadcatiletnij a Victorian town house he bought for an astronomical 97 million pounds.

Recently, Abramovich has received permission for the renovation of his residence, after which its area increased by 25% and will amount to 2, 000 square meters. To the house the annexe the pool. As stated filed in the municipal district Council bid, “the new design will be an important architectural addition to the historic building, actively appealing to the broader cultural and urban heritage of the city.”

Among all the owners of houses on KPG that is Abramovich, not in the press who boast of their wealth, the father of seven children, the owner of one of the major London football clubs and a favorite of Vladimir Putin, is the greatest curiosity of the British. Especially now.

The British shocked

For at least two decades, the presence of Russians in London was considered an exotic item of British multiculturalism. Sobering came March 4 of this year, when on the bench in Salisbury has found former Russian agent Sergei Skripal and his daughter Julia, came to visit his father. Both were unconscious.

“History Skripal shocked the British, tells me the British journalist mark Hollingsworth (with Mark Hollingsworth), who wrote the book “Londongrad”. For many it was some kind of surrealism: from nowhere Russian agents, a mysterious killer, unusual poison, and all this in a small quiet English town. The British did not expect that may face something similar. Of course, they know that we have the Russian mafia, which controls part of the market of sexual services and trafficking of drugs, which committed financial crimes, and the oligarchs are buying homes, but all this did not happen in the public eye or considered a curious oddity, but this time the events affected ordinary people. Several people ended up in hospital, British police officer was on the verge of death.”

After the assassination Skrobala some facts have begun to emerge in the whole picture, which used the British did not see or did not want to see. Russian oligarchs, mafia, dirty money, lobbyists and the media, carrying out orders of the Kremlin, were parts of one system. Political assassinations were present in it before, but only now the Brits realized that killer from Russia (including acting on behalf of the state) can feel in their country freely. Otherwise, they would not dare to attempt.

Death by mistake

“Russian money was present in the UK in the Soviet era, explains to me a former correspondent of the weekly “Economist” in Eastern Europe, Edward Lucas (Edward Lucas). — They are transferred through the Isle of man and Cyprus from the international Department of the Communist party or KGB, to pay the costs of the agents, lobbyists and criminals, creating the beginnings of the mafia. Even then, the Russians tried to gain a foothold in the London market of sexual services, in arms trade and metals. A serious threat that no one believed. Just besides the Chinese triads, Japanese Yakuza, Colombian or Jamaican gangs there was one more criminal grouping which should look to the police. When the Soviet Union broke up, everybody relaxed even more, because Russia Yeltsin proclaimed a friendly democratic government, but the main threat has been the return to power of the Communists — continues Lucas. — Understanding the enormous role played in Russia, organized crime appeared only at the end of Yeltsin’s rule”.

The British took a cautious stance, but don’t ignore the presence of the Russians completely. The services responsible for security, began to realize the scale of the problem in the 1990s. In 1993, the head of Scotland Yard special operations David VENESS (David Veness) warned that the Russian mafia was brought to the UK large stockpiles, this may provoke a wave of crimes involving firearms. In 1994, in a RAID on a British Bank for the first time was used a Kalashnikov. It happened in the town of Kendal in the heart of the Lake district. Some of the crimes were politically motivated.

A great resonance was caused by the murder Geophysics Karen reed (Karen Reed), committed in April 1994 in the town of Woking near London. She was killed by mistake: the killers hunted for her sister, an employee of “Bi-Bi-si” (BBC), which that night was not at home. There is a version that the customer of a crime was made by the leadership of Chechnya, who decided to avenge the brutal murder of two Chechen agents that occurred a few months earlier.

The business was good

In the next decade, the British regularly recognize the consequences of the presence of Russians in the UK. In 2006 in London poisoned by polonium the former KGB and FSB Alexander Litvinenko. The British believe that the order was given to Putin personally, and the executor was a colleague of Litvinenko on FSB Andrei Lugovoi. Two years later under mysterious circumstances died the Georgian oligarch Badri Patarkatsishvili is a friend of the most famous at the time “runaway” from Russia with Boris Berezovsky. In 2013, the Berezovsky found dead in his home near London. First mentioned suicide, but in 2014, a British coroner rendered a verdict that exact cause of death of a businessman can not be called.

How did you respond to it the British? Calmly. The media enjoyed the situation: they could tell blood-curdling stories, which (with rare exceptions) did not affect the indigenous British, and at the same time (it was the other side of the coin) to tell about how the Russians for a lot of money buying everything that you can buy.

In 2003, Abramovich became the owner of London club Chelsea, investing in English football billions of pounds. In 2009, former KGB officer Alexander Lebedev acquired the popular London newspaper “evening standard” (Evening Standard), moving the publication from the crisis. Three years earlier on the London stock exchange debut the company Rosneft, which is controlled by Putin’s people that allowed to get rich by many investors (including the British). In 2017, the exchange, the company appeared “EN plus” (En+ Group), owned by another close to the Kremlin oligarch Oleg Deripaska. The business was good.

“The city of London seen in the Russian money coming from offshore, a gift from heaven. We have been doing for the Russians what was previously done for the Saudis, and later began to make for the Chinese: reinvested their money, no questions asked. In 2005, I wrote for the publication “the Economist” (The Economist) text called “Glitzkrieg” (a reference to the word “blitzkrieg”, “glitz” means in English gloss, luxury — approx. Tygodnik Powszechny), who considered it too harsh. But I just noticed that rich Russians create their own in the UK reputation: buying football clubs, leading business members of the Royal family, allocating money to activity art galleries and other noble goals, they become part of the establishment,” explains Edward Lucas.

Britain in the role of Laundry

The turning point was the purchase of Chelsea by Abramovich. Then all the boundaries collapsed. “The United Kingdom has become a center for the laundering of Russian money, — tells the employee of the organization “transparency international” (Transparency International), Rachel Davis (Rachel Davies). — We are launching the red carpet to criminals who want to place money from us”

Suppose I were a Russian oligarch, who is going to buy a house in Kensington for £ 10 million, but wants information about the owner remains a mystery. What I need to do? “There are different options. For example, you start a company in the virgin Islands or some other place in British overseas territories, then you create a subsidiary company, for example, in the Cayman Islands. Then she buys a house in London. If the property is sold to a foreign company that is not obliged to open the name of the owner. No cadastral registers, neither the police nor the authorities of the area in which you bought the house, there will be no information about who it belongs to. Suppose you were the Minister of the Russian government and your annual salary is equivalent to £ 20,000, but you buy a mansion for $ 10 million, continues Davies. — Thanks to the above described steps, no one will be able to compare your income with the value of the house and ask where you got the money.”

Expensive real estate

Such questions do ask a few. In 2015, Roman Borisovich, and Duane Arthur (Arthur Doohan), two ex-banker-turned-corruption fighter and created the “Campaign for laws against money laundering by kleptocrats through the property” (ClampK), made for the British “Fourth channel” the film “From Russia with cash” (the title refers to one of the series of James bond “From Russia with love” — approx. Tygodnik Powszechny).

The film was journalistic provocation. Miller portrayed official from the Russian Ministry of health, who met with realtors to discuss the purchase of a home in London (the Russians prefer to invest in real estate). Miller told them that he was a Russian civil servant who earned the money illegally. None of the five agents had not attempted to dissuade him from buying, on the contrary, they offered him to use the services of banks, law firms and accountants, which will help to avoid publicity.

According to estimates by the British Department of the organization “transparency international”, the people whose identity is impossible to establish, own in the the United Kingdom property in the amount of 4.4 million pounds, and about 170 000 objects purchased with funds that have a suspicious origin. Most of these houses are located in the Western and Central parts of London: Kensington, Chelsea, Westminster, Belgravia. Among the owners there are not only Russians, but also citizens of Kazakhstan, Azerbaijan, Nigeria, China and Arab countries. This information organization, which is engaged in the fight against corruption in the property market, obtained from public sources: court documents, cadastral registers and the media.

To make public the facts of corruption has also helped acclaimed publications like “Panamanian archive” or “heavenly records”. As told by Rachel Davies, one of those leaks, it became known that in 2014, a company purchased two homes within a five-minute walk from the building of the Ministry of defence. According to Russian opposition leader Alexei Navalny, this company belongs to Deputy Prime Minister Igor Shuvalov. The house cost the buyer to 11.4 million pounds: so the officer would have earned in a hundred years.

With the connivance of the authorities

However, compared to other mansions, they were not so much. Alisher Usmanov (steel and gas magnate) owns a house in Hampstead, standing 47 million pounds. Andrey Guriev, the owner of the company, ranked second in the world in the production of phosphate fertilizers, in London, owns property worth over 350 million pounds. Andrey Goncharenko, head of one of divisions of Gazprom, has bought four homes in Central London for 250 million (including the mansion, which is considered the most expensive in the UK, “Hanover Lodge” in the area of Regents Park for 120 million pounds).

Such purchases have an impact on the entire industry: real estate prices soar. As a result, the British, who spent his entire life in this area can’t stay there, and the potential (British) buyers are not in a position to do something there to buy, because expensive not only gorgeous, but an ordinary house.

“With the connivance of the British authorities in the country formed a system in which the indigenous people, honestly working and paying taxes, can no longer buy a house because of the Russian or African gangsters overpriced. Power for many years closed to the situation of the eye, is absurd, — says Arthur Duane. — In addition, in these mansions usually no one lives, he adds. — I know the building in Belgravia, which I bought 10 years ago. During all this time the owners spent no more than two months. House leaves the market, and its price is increasing. This is absolute madness”.

Bill Browder fights

“Thieves, robbing their own people, seek to keep money in the safest place in the world where the law protects the right of ownership. This is a paradox, says the American-British investor bill Browder (William Browder). UK-specific state: there is clear property rights, there is respect for the law, but there turn a blind eye to dirty money. I don’t understand where does this psychology.”

Browder, whom I met in the city, at the office of his investment Fund, is an interesting figure. Since 1996, he managed the investment Fund in Moscow, which invested in Russian companies. When he decided to open the discovered instances of corruption, Russian authorities had destroyed his Foundation, without the knowledge of the Browder company has registered subsidiaries and used them to steal $ 300 million from the budget. Lawyer Sergei Magnitsky, who discovered massive fraud, was arrested and then killed in prison by the Russian intelligence services. The whole story Browder has described in his book “Red notice”.

Now Browder has been fighting for the fact that those responsible for Magnitsky’s death be punished. The name of his lawyer called adopted in several countries, the law allowing to impose sanctions against officials implicated in human rights violations. At the end of 2017 Browder in absentia condemned in Russia for 9 years of imprisonment, finding him guilty in deliberate bankruptcy and tax evasion.

Russian money and British politics

I asked Browder if he was afraid for his life. “I am protected by the openness with which I act,’ he replied. — As you can see, the special protection I have. But I have no illusions and know that if the Russians wanted, they would have killed me. Once I’m alive, it means they have not yet found a way to do this and go unpunished.”

Why in London so easy to launder money?

“The police does not open cases against people who violate financial laws. I say this not as an observer but as someone who has repeatedly tried to persuade the authorities to investigate the Magnitsky case. Sergey found that the funds that left Russia in 15 other States, had illegal origin. Many of these countries, particularly Poland, have been investigating. UK to take this step refuses, even though there was transferred most of the money.

The question of how the Russian money influence on British public life, Browder replied: “more likely they have an impact on politics. The influence of the Russians on the economy — the marginal phenomenon. If you compare the volume of Russian investment volume of British GDP, you can see that here, in fact, nothing to talk about. They are present only in the market of expensive real estate. Almost all Russian money is concentrated in Central London. But they are close to Parliament: many realtors, lawyers, art dealers from these areas is a well — known parliamentarians, at the same time they support the gangsters and help them to invest. The location of these houses creates a wide field for corruption and influence on politicians.”

This is not just speculation, Browder leads by example. “One of the main participants of the criminal scheme, which found Magnitsky was a Russian lawyer Andrei Pavlov. Due to the fact that hackers gained access to his correspondence, we know, looked like “conspiracy”, with which my company was trying to destroy it, putting the blame for stealing money from the budget for me and Sergei. From letters Pavlova, it also follows that he was associated with representatives of the British establishment: he was paying them for something that they slowed down the adoption of the law named after Magnitsky.”
And the British did?
— With enthusiasm. They received from him a lot of money and fulfilled the political order.
— We are talking about members of Parliament?
And The House Of Lords.

Is Russia a “toxic”

Now the fight against money laundering could complicate Brakcet.

“Because of Brexia Britain at risk of getting a dependence on foreign capital, says Edward Lucas. — We want to attract foreign investors, and it may be that several billion dollars from Russia will play a more important role than now. I hope that we will be able to cope with this threat. We see that after the attempt on Skripal, intelligence agencies have increased vigilance. A new strategy for the UK States that the government puts on the first place of safety, not economic benefit.”

Legislative innovations appeared before the assassination Skripal. In January of 2018 entered into force the law on disclosure of sources of income: the police got a tool that allows you to pursue gangsters investing in the UK stolen money. While it was initiated only one investigation in respect of a person who bought two houses for 20 million pounds.

“Putin and his entourage are only interested in money, they don’t pay attention to organizations like ours, they probably just laugh at us. They believe that the West will not dare to directly oppose them, because he will suffer. While all of that is: we allowed them to launder money and reputation,” says Arthur Duane.

“City will always strive to earn. It is immoral environment, its essence is to make more money. However, we were able to fight off her desire to cooperate with Iran or North Korea, perhaps the same thing will happen with Russia?— asks Lucas. — The Russians need us more than they do us, he adds. They’re looking for capital, and it is now more difficult, so they will have to shift to Dubai or Shanghai, but this will increase transaction costs. I think we’ll see the debuts of Russian companies on the London stock exchange or the events in London of mergers with the participation of Russian firms”.

When the money are evil

Maybe these hopes have a chance to make excuses, but you need to recognize that the money from suspicious sources is evil, and must not be touched. British investors will have to radically change their thinking. Before the British gets the choice to accept the presence of dirty money from Russia (and other countries), fully aware of the consequences, or admit that they are doing evil not only in the countries from which they come, but where they fall.

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