Dirty money: how London became Russians’ laundromat, with no questions asked

Britain has left it too late to untangle the web of Russian influence that permeates its upper ranks, a UK parliamentary report says.

Russian President Vladimir Putin. Picture: AFP

Britain has left it too late to untangle the web of Russian influence that permeates the upper ranks of the political and business establishment, a UK parliamentary report says.

Wealthy and powerful Russians — some linked to President Vladimir 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 Britain for decades in real estate, business and luxury goods.

The report by parliament’s intelligence and security committee in effect charts what journalists, transparency campaigners and filmmakers 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 preventive but rather constitute damage limitation.”

The document also notes the presence of significant numbers “of Russians … who are on the opposing side (from Mr 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 the Labour government introduced “golden visas” that gave residency in return for seven-figure investments.

The committee 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”.

“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’,” the report says.

Some of those wealthy Russians cemented their place in Britain quickly by making establishment connections. “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.”

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 the extent of Russian influence is such that it “cannot be untangled and the priority must be to mitigate the risk and ensure that, where hostile activity is uncovered, the tools exist to tackle it”.

The committee highlighted concerns about the security of Russians opposed to Mr Putin who were monitored or kept under surveillance by Kremlin agents. It warns that Russia “may seek to identify or engineer opportunities to arrange an individual’s arrest and transfer to Russia to stand trial or, indeed, meet a worse fate”.

There have been a series of incidents — including the attempted murder of Sergei Skripal and his daughter, the murder of Alexander Litvinenko and the death of Boris Berezovsky — which have attracted suspicion and speculation. The committee says that it was concerned, especially after the Salisbury poisonings, whether the protection of those at potential risk had been given “sufficient priority” by the security agencies.

The committee also questions whether British intelligence agencies have “a clear picture of how many Russians there are in the UK who are at risk”.

The Times