It has taken a TV series for HMG to cotton on: Russian money doesn’t just smell; it poisons. We seem to be ready to abandon Vespasian’s principle of pecunia non olet.
I haven’t watched a single episode of McMafia, and nor am I likely ever to do so. But hey, if it takes popular entertainment to spur our government into action, then long live popular entertainment.
HMG is ready to invoke unexplained wealth orders (UWOs) to seize the UK assets of rich Russians suspected of having profited from the proceeds of crime. This goes further than simply compiling a list of such people, as the US government has done.
Predictably, the ‘oligarchs’ are running scared, while their shills are raising a hue and cry. The gist of their protests is no longer that good people are suspected of being gangsters. It’s that good gangsters are suspected of being gangsters.
Actually, figuring out which Russian billionaires have acquired their lucre in criminal ways is easy: they all have. It’s like tossing a grenade into a room full of murderers. You can’t miss.
Even the Swiss are beginning to act, and not even their worst enemy can accuse them of being overly fastidious in opening their banks to criminal loot.
After London’s own Roman Abramovich found himself on the US list, he realised, with his unerring survival instinct, that Britain would soon follow suit. To give himself a bolt hole he applied for Swiss residency. However, having then found out that his application would be rejected, he hastily withdrew it.
Some 60 other Russian gangsters in London have asked Putin if they could please return home without being arrested. This suggests they fear exactly that fate should they remain in the UK.
The practice of refusing to accept dirty money isn’t new. Back in the 80s I met two Russians in New York, who had made millions forging works of art. Yet they continued to live in Queens because their every attempt to buy, or even rent, properties in upmarket Manhattan condominiums had failed. Their money smelled.
The other day I talked to a rich young Russian, who shuttles between London and Moscow. Although no champion of Putin, he was waxing indignant about what he called “an act of war”.
He’s a junior partner in a firm whose senior partner merited inclusion in the US list. When I voiced approval of that measure, my interlocutor accused me of tarring all rich Russians with the same brush. His company, for example, had nothing to do with organised crime.
“Do you pay protection money?” I asked. He gave an evasive answer (“Not me personally…”) that made it clear that they did. “This makes you at least an accomplice of organised crime,” was my unkind comment.
Most people to be subjected to the UWOs are guilty of more than just paying protection. For, when the whole economy is criminalised, it’s only possible to make vast amounts by criminal means.
Paul Klebnikov, who later found himself on the receiving end of rather extreme literary criticism administered with submachine guns in the centre of Moscow, wrote a book The Godfather of the Kremlin: Boris Berezovsky and the Looting of Russia. In it he described the criminal activities of the eponymous hero and his then partner, later enemy, Abramovich.
The two of them were buying up companies wholesale, trying to corner a segment of the energy market. One factory owner flatly refused to sell. The next day he fell out of his window, after which the deal went through smoothly.
Klebnikov didn’t use the word ‘murder’, but he used many other words that left no doubt about the moral profile of the two gentlemen, who eventually moved to London.
Both of them were Yeltsyn’s closest advisors, in which capacity they recommended Putin as his successor. The partners thought they’d be able to control the KGB man, but he turned the tables on them.
When Putin became, well, Putin, Abramovich wisely fell in with him, but Berezovsky fell out. The former became Putin’s London friend and moneybag, while the latter became his London enemy. In due course Berezovsky was found hanged under unexplained circumstances. I’d suggest they’re about as unexplained as the oligarchs’ wealth.
Putin and his gang must be credited with creating history’s unique state. Fascisoid dictatorships had existed before, as had states run by secret police or those in cahoots with organised crime.
One can think of a few governments here and there that combined a couple of those elements. But only Putin’s junta has managed to fuse them all together.
In common with all faschisoid regimes, the Russian economy is subjugated to politics, and Russian politics is subjugated to its leader. Yet Putin’s regime differs from Mussolini’s, Stalin’s or Hitler’s. They stamped out organised crime; Putin is its absolute godfather.
In common with traditional gang chieftains, he uses global criminal activity as a way of creating a coterie of close accomplices who owe their wealth to him personally. Even if they had made their money before Putin took over, they’re only allowed to keep it as a reward for absolute loyalty.
Just like Russian tsars were the ultimate owners of all Russia by patrimonial right, so is Putin the ultimate freeholder of all Russia’s wealth. The nominal owners can only have a leasehold contingent on good behaviour. When they begin to misbehave, their wealth can be repossessed in a second.
Hence every sizeable business in Russia pays protection money, which eventually zigzags its way up to the Kremlin, having shed bits and pieces along the way. Putin’s personal wealth is variously estimated between 50 and 250 billion US, which is nice, as far as by-products of politics go.
But by-products they are: the ‘oligarchs’ are allowed to rob Russia blind in exchange for their blind obedience. Putin feeds off organised crime, and organised crime feeds off Putin. Together they’ve created the only totally criminalised major economy in history.
Putin likes to describe himself as a Russian traditionalist, and in this aspect at least he’s not far wrong. Malfeasance was always tolerated, indeed encouraged, in Russia even under the tsars.
In a well-known anecdote, Alexander I once asked his court poet and historian Karamzin how the provincial officials were doing. “Thieving, Your Majesty,” replied Karamzin (“Ils volent, Sire” – Russian spirituality was at that time expressed in French.)
Russian public servants were paid derisory salaries, especially in the provinces. Catherine II stopped paying them altogether, correctly assuming they could handsomely survive off the fat of the land.
Yet, though those chaps could have misappropriated state funds and taken the odd bribe, they weren’t murderers – and neither did they run global criminal empires. Even savage satires, such as Gogol’s play Inspector General, never went beyond portraying local officials as anything worse than petty crooks.
Crooks today’s lot may be, but there’s nothing petty about them. US authorities estimate that a trillion dollars has been laundered through American banks, and about as much in the rest of the world.
With their characteristic myopia, Western bankers and governments accept pilfered billions with alacrity. They fail to realise that packaged with the visible short-term money come invisible long-term side effects.
A society can survive only so much poison injected into its veins. At some point the receiving organism may develop fatal effects. The toxic presence of hundreds (thousands?) of Russians throwing their ill-gotten loot at London’s property developers and banks corrupts Britain.
Once the point of no return is reached, the whole country may well become fatally infected, effectively turning into a fence and money launderer for Russian criminals.
I don’t know if HMG fully realises all this. More likely, political expedience is trumping any moral considerations. But in this case the two happily coincide.
I do hope that those stolen assets will be seized, detoxifying Britain. Who knows, perhaps the US Congress will prevail on Trump to do the same and go beyond just listing Putin’s caporegimi.