As Published in the Mail on Sunday:
“Vladimir Putin has made a killing. I am not referring to the vicious and sadistic destruction of Alexander Litvinenko’s life by intelligence agents under Putin’s command. I am speaking of the incredible wealth – probably in excess of $40billion – that Putin and his cronies have stolen from Russia since the KGB placed him as adviser to the mayor of St Petersburg in 1990.
Putin was one of the KGB active reserve officers placed in positions of political and economic influence throughout Russia’s post-Soviet economy. Many of these were to become the ‘siloviki’, men of force, who were to be the power in the land decades later.
Within two years of his arrival in St Petersburg, investigators accused Putin of misappropriating $93million of metals and recommended he be sacked. It did not even slow his ascent through the political ranks of St Petersburg, then Moscow, en route to being director of the FSB – the successor to the KGB – then prime minister, then president.
Throughout this time, Putin’s cronies became fabulously rich as a result of the astonishing rape of the Russian nation’s wealth. Few in the West understand quite what a kleptocratic monster the Russian state has become. The asset-stripping that took place after the Soviet Union’s collapse and enriched many oligarchs happened under the control of the KGB-installed siloviki. Putin is the leading member of the siloviki, and the main beneficiary of its actions.
Tomorrow night, the BBC will broadcast Panorama: Putin’s Secret Riches, which tells the story of his ascent to president with that reputed $40billion in his command.
This matters to Britain because it is the key to dealing with the monstrous behaviour of Putin’s Russia, assassinating people on the streets of London. It gives us a way to deal with a Russian leadership that appears beyond control.
This is important because the response of the British state has been wholly inadequate.
Putin will today be thinking all his calculations worked out. This most macho of leaders will be smirking at what he will view as a predictably weak response by Britain. Our reaction to having people murdered in our capital has been to levy irrelevant punishments against the two killers who were the pawns in the game, and shrug our shoulders about the head of Russian security services, Nikolai Patrushev, and the president who almost certainly authorised it.
The actions against Andrei Lugovoi and Dmitry Kovtun – freezing assets we cannot reach, and stopping them from travelling where they will not go – are futile. The killers have no reason to leave Russia, where they will be cosseted by the state. Lugovoi is a Russian MP and was given a medal for ‘services to the motherland’ by Putin only last year.
That we responded so weakly to the only ever judicial finding that a foreign government ordered the killing of a British citizen on UK soil is astonishing.
But Putin will have calculated the British response would be weak a couple of years ago when the Government tried to resist a judicial inquiry in favour of a simple inquest. It did so using an argument of ‘international considerations’, which actually meant ‘do not upset the Russians’.
The danger we now face is that Putin will believe he can get away with anything. We are not simply talking about him ordering the murder of anybody he dislikes. In the past few years Putin separated South Ossetia from Georgia, and is slowly absorbing it and Abkhazia into Russia. He has annexed Crimea and he has fomented a civil war in eastern Ukraine, shooting down a civil airliner in the process. The response of the West has been entirely incompetent.
The idea that he will pay more attention to us on who to bomb in Syria, or what to do in Ukraine, if we fail to respond is wrong. He will merely see us as weak and that will embolden him further. So what can we do? The most important action we can take is to hit Putin where it hurts – in his wallet.
Putin cannot admit to his wealth, of course. Even the Russian population would be horrified and he cares about ratings. So he could not complain about the attack.
The wealth is held by proxies, often concealed in layered offshore trusts and bank accounts. In the first six months of last year, more than $2 billion of Russian money was moved to the Bahamas, and there are many other tax havens that hide Russian funds, including some British overseas territories.
Along with the City of London, where the Russians also hide their wealth, these mean that Britain has more power to make things difficult for Putin than any country except the US.
The US Treasury claimed that Putin had a stake in Gunvor, an oil-trading company based in Switzerland, through his friend Gennady Timchemko. The US Treasury put Timchemko on a sanctions list, and he sold his share in Gunvor and ran back to Moscow. We should extend this tactic.
We should look at the assets of every friend of Putin. There are Russian billionaires in London whose fortunes are of dubious origin. It is time that they were subject to close inspection. We should identify every Russian associated with any of the killings the Russians have carried out over the years, freeze their assets and impose the most comprehensive travel ban possible. Given how we have supported our allies with terrorism, we should expect them to support us in dealing with state-sponsored terror such as this.
Neither should we confine ourselves to the Litvinenko killing. The Russian state is associated with a number of suspicious deaths abroad, as well as more than 100 murders of opponents at home. We and our European allies should join the Americans in having a ‘Magnitsky list’ – banning travel of a number of Russian officials.
Finally, when dealing with someone like Putin it’s always worth having a sanction in reserve. There have been calls to move the 2018 World Cup from Russia. David Cameron said we should not penalise Russia’s people. Perhaps not, but the profits and the plaudits will accrue to Putin and his cronies.
One more international misbehaviour, and it should go.”