THE TRANSATLANTIC MAGAZINE
THE TRANSATLANTIC MAGAZINE
In a debate on Economic Crime Law Enforcement in the House of Commons July 7, Labour MP Dame Margaret Hodge criticized ‘dirty’ Russian money flowing through Britain’s financial institutions, and the UK government’s failure to deal with the problem.
She said that it was shocking that it took the war in Ukraine to make the UK Government to start thinking about the serious threat from “the spiralling menace of illicit finance and all that goes with it”.
“We earned the reputation on which our superb, successful financial sector was built by being a trusted jurisdiction, and we must maintain that. Today, we are in danger of losing that trust,” she said.
She commented that the United States is one country that had lost trust in London: “The US sees us as a high-risk jurisdiction similar to Cyprus, and ‘Londongrad’ is becoming a popular term among many. We have moved off our perch as the world’s leaders in fighting economic crime. Moody’s has downgraded us, and we are slipping down the ranks of Transparency International’s corruption perception index. Everything is moving in the wrong direction.”
Dame Margaret said that Russia was a source of a lot of the ‘dirty money’ as well as more illegal activity including murders: “Much illicit finance, but not all, comes from Russia, through Russian companies and Russian individuals. As various Select Committee reports on the subject show, for too long we have turned a blind eye to the threat that Putin’s kleptocratic regime poses to our economy. Why did we do nothing after the assassination of Alexander Litvinenko in 2006, or after the poisoning of Sergei Skripal in 2018? Those were two brutal attacks on British soil.”
She said that Buzzfeed News had reported that between 2003 and 2016 there were 14 more suspicious deaths in the UK of individuals who were hostile to the Russian state and highlighted three of them: “Stephen Curtis, the British lawyer who helped the laundering of money—potentially billions of pounds—in the UK for wealthy Russian oligarchs, died in a helicopter crash in 2004. Alexander Perepilichnyy blew the whistle on a multimillion-pound Government fraud in Russia. He flew to Britain, and died of a so-called heart attack when jogging near his home in Surrey in 2012. The coroner’s inquest said that he died of natural causes, but evidence given, I gather, behind closed doors for national security reasons said that there was no natural cause determined. Some suspect that he was poisoned. Boris Berezovsky, who made his wealth during the collapse of the Soviet Union, was famous because he was key in supporting Putin and getting him into power in Russia. In 2013, he was found hanged in his home.
“Those are only three of 14 cases, but in all of them the police concluded that the deaths were not suspicious. There was no investigation, or indeed any suggestion that those were Russian state-sanctioned murders, although the US intelligence services told our police that they thought the deaths were likely sanctioned by the Kremlin. Were the police just incompetent? I doubt it. Was there pressure from somewhere else—from either our security services or our Government—to turn a blind eye to the possibility that those were state-sanctioned murders? American intelligence officials told Buzzfeed journalists that Russian killers had been able to kill in Britain with impunity. They said that one of the reasons for the reticence of enforcement agencies to act was ‘a desire to preserve the billions of pounds of Russian money that pour into British banks and properties each year.’”
She pointed out that the US has been more effective at dealing with such problems. Following the introduction of The Bribery Act in 2010, there have been 99 criminal convictions and six deferred prosecution agreements. The USA, with a similar legislative framework, has had 236 convictions in the same period. She said she believed that the UK has never pursued a criminal prosecution against a bank for money laundering or sanctions busting: “We use civil measures, but never criminal ones. In 2019, we had civil fines of £260 million. In the same year, the Americans pursued criminal action against and secured £2.5 billion from just six banks, and they secured £5 billion in civil fines.”
Dame Margaret, who has been Member of Parliament for Barking in East London since 1994, will stand down at the next election.
