Could cracking down on kleptocrats help Ukraine?


Russian oligarchs helped strengthen Vladimir Putin’s influence in the West.

Can the sanctions restore this pressure?

If you were doing a TV show about Britain’s complicated dealings with Kremlin-allied oligarchs and their money, last week’s scenes at 5 Belgrave Square in London would have been perfect for a cold open.

Scheherazade, one of the largest and most expensive yachts in the world, allegedly linked to Russian billionaires, is moored in the port of the small Italian town of Marina di Carrara. REUTERS/Jennifer Lorenzini

The square is one of London’s most luxurious addresses, once home to British aristocrats and captains of industry.

It usually has the atmosphere of Calm buffer found in neighborhoods where wealthy residents are rarely at home.

But earlier last week that silence was broken by activists dressed in black who occupied the cream-coloured mansion at No 5 and hung protest banners from the front balcony.

They proclaimed that they were seizing the house, which would belong to a Kremlin-allied aluminum tycoon named Oleg Deripaskaon behalf of Ukrainian refugees.

Police quickly arrived to evict them, in a show of force that many observers found ironic.

“There must have been 20 police outside the anarchist-occupied property in Belgrave Square, which I estimate to be around 20 more than ever to check where the money that bought it came from,” said Oliver Bullough, British author and journalist known for his investigations into corruption. , he wrote on Twitter.

The protest was a rare public outburst of a long-running struggle over the status of London as a place where people like Deripaska, who have acquired great wealth through their connections to corrupt post-Soviet governments, could launder their money and reputation without encountering scrutiny from government and regulators.

For years, anti-corruption experts have warned that accepting money from these individuals, often called “kleptocrats”, threatens British democracy and supports hostile autocratic regimes abroad, including in Russia.

But many London law firms, estate agents, charities and politicians have welcomed the kleptocrats with the open arms.

Now, after the Russian invasion of Ukraine, that has changed.

Public opinion has hardened against anyone associated with Putin.

The British government is cracking down, imposing sanctions on Deripaska, along with hundreds of others it has described as Putin’s oligarchs, political allies or propagandists, in a bid to insulate the Russian president from support. the elite.

But, experts say, it may be too littletoo late.

“Ten years ago, the situation was different”

Trying to analyze the relationship between the British elite and the Russian oligarchs, or between those oligarchs and the Kremlin, can be a bit like looking at a pointillist painting.

Up close, any one-on-one relationship or contact can seem ambiguous.

British politicians, businesses and charities tend to insist that their contacts with wealthy Russians are only business connections or personal friendships.

And Russian elites in London often bristle at claims that they might act on behalf of the Kremlin.

In many cases, these defenses are probably true.

But if you step back and take a wider look, a picture begins to take shape.

“The Russian elite’s ties to the UK, particularly in business and investment, provide access to British businessmen and politicians and are therefore a means for a great russian influence in the UK,” said a 2020 report from the UK Parliament’s Intelligence and Management Department.

“To some extent this cannot be resolved and the priority must now be to mitigate the risks.”

The time for prevention, experts say, was a long time ago.

At the time, Russia’s ties to Britain’s elite institutions were less widespread and suspicious assets were laundered and less thoroughly concealed.

“The time to crack down on kleptocratic money in the West was 15 years ago,” when the flow of money to Britain began to increase, said David Szakonyi, a political scientist at George Washington University and co -founder of the Anti-Western Data Initiative. Corruption.

Now he wonders if regulators will even be able to to find assets belonging to sanctioned persons, let alone freeze or seize them.

Starting sooner would also have given the repression a greater chance of changing the course of Putin’s regime, said Tena Prelec, a researcher at the London School of Economics who studies corruption and the rule of law in post-Soviet countries. .

“It takes time for authoritarianism to crystallize. Ten years ago, the situation in Russia was different,” he said.

“During those 10 years, you had a situation where Putin was able to suppress the opposition in such a firm way that there are now fewer opportunities for internal protests.”

It is impossible to say, with hindsight, whether a crackdown on kleptocratic assets would have halted this authoritarian turn.

But dissatisfied business elites are often a source of support
for opposition movements, said Erica De Bruin, a political scientist at Hamilton College.

If they support opposition candidates in the elections, this may lead to a diet change even in partially authoritarian systems.

Now, however, Putin’s level of political control makes that much less likely.

All eyes on the elites.

But could the assets of Russian elites in Britain and the channels of influence in British institutions that the Kremlin enjoyed through those connections be invested in and used as a weapon against Putin?

In recent weeks, Britain has imposed sanctions on Deripaska and other oligarchs as part of a sweeping package of measures aimed at crippling the Russian economy.

The idea that sanctions against elites could influence Putin is theoretically plausible.

Most dictators are overthrown by former allies of their own governments, so undermining elite support can be a powerful way to influence or weaken a hostile regime.

If the sanctionIf they have helped create a rift between Putin and the elites he relies on to hold and exercise power, it could affect his ability to wage war in Ukraine, and even the stability of his presidency.

In practice, however, individual sanctions are unlikely to have this effect. effect, experts say.

the oligarchs like Deripaska, Roman Abramovich and Mikhail Fridman they are very well known, but they made a fortune during the time of Putin’s predecessor, Boris Yeltsinand they were never part of Putin’s inner circle.

“Over the past few weeks, I’ve convinced myself that it’s as weak as the Yeltsin-era oligarchs have been in the post-Soviet era,” Szakonyi said.

“When they’re brought up for Putin in large gatherings, it’s more like a spectacle, to signal to the broader business community that these oligarchs are with Putin. I really downplay his ability to limit any foreign policy decision.

On the contrary, the core of Putin’s ruling coalition is made up of the “siloviki“, a group of officials who came into politics after serving in the KGB or other security services, and who now hold key positions in Russia’s intelligence services, military and other ministries, said Maria Popova, a political scientist at McGill University who studies authoritarianism in post-Soviet countries.

As with the Yeltsin-era oligarchs, many siloviki became extremely rich because of his ties to the government.

But because they are so closely tied to Putin, the loss of their assets in the West is unlikely to have an immediate effect on their loyalties.

Putin still has the power to distribute favors and assets in Russia, Szakonyi said.

And his elite allies likely fear that if Putin’s government were to fall, his successor would expropriate the wealth of the previous ruling class.

“There is a great understanding that whoever replaces Putin would potentially go after Putin’s friends and family,” he said.

The most important question for the elite’s loyalty to Putin and the long-term stability of his government is what will happen as the pain of broader sanctions against the Russian economy mounts.

Mass unrest, if it occurs, can cause elites to question the wisdom of remaining loyal to the government, particularly if they fear being scapegoated for its causes or not being protected from attacks. prosecution for repressing popular demonstrations.

But that prospect remains remote for now.

“We’re not going to see a revolution or an uprising anytime soon,” said Noah Buckley, a political scientist at Trinity College Dublin who studies authoritarian politics.

“But the crisis hasn’t really hit Russia yet. It remains to be seen how far that discontent will go, what I suspect it will go.”

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