Let’s Make Putin’s London Cronies Sweat

Our failure to face up to the Russian ruler could have dire consequences

Dispatches Europe Military NATO Politics Russia
“Nothing happens that we do not know about”: Portraits of Putin and Stalin overlook the pro-Russian headquarters in Donetsk, Ukraine (photo: Andrew Burton/Getty Images)

Vladimir Putin’s mysterious disappearance from public view for 11 days last month came just as a belated consensus was emerging in Western capitals that his regime presents us with a serious problem. In truth—surprising as it may be to our diplomats—the problem long predates Putin, and will continue even after his re-emergence scotched speculation about the Russian President’s political and physical survival.

Back in 1994 the late Estonian President, Lennart Meri, made a prophetic speech at a conference on Baltic Sea cooperation in Hamburg, decrying the trend in Russian foreign and internal policy since the collapse of the Soviet Union. He highlighted Russia’s self-proclaimed right to intervene to protect “compatriots” abroad. Russia’s delegation (including a greyly unmemorable official from St Petersburg who later became president of Russia) walked out. Even earlier, in 1993, a brilliant Russian émigré called Viktor Yasman had published a prescient academic paper outlining a sinister new ideology, Eurasianism, based on anti-Westernism, Soviet nostalgia, nationalism and extreme Orthodox religiosity. More recently, opposition leaders such as my friend the late Boris Nemtsov told the West in the bleakest terms that Russia was heading towards dictatorship, that it was prepared to use force at home and abroad, and that our financial system was a vital part of the regime’s money-laundering.

We ignored these abundant and accurate warnings; instead we patronised and belittled their authors. We preferred the warm glow of the end of the Cold War, the prospect of Europe seemingly whole, free, and at peace—and making money in the “emerging market” of the ex-Soviet empire. In truth, the new Russia was a sham democracy awash with corruption. It skated over the Stalinist legacy, ignoring, not atoning for, the crimes perpetrated in captive nations in past decades. Indeed, it retained a belief that these places were destined—whether they liked it or not—to be Russia’s sphere of interest. Nor was the terror-machine of the KGB uprooted. It had merely mutated.

The arrival of an ex-KGB officer in the Kremlin in 2000, and since then of hundreds of billions of dollars in oil and gas revenues to the national treasury, has stoked Russian revisionism to the point that even Western foreign policy experts can see it. Repression at home and aggression abroad are now the dark stars by which the Kremlin sets its course. They obscure the real story of the Putin years: waste, incompetence, pomposity and—above all—colossal theft.

Though the emerging consensus accepts that Russia now a menace, not just a nuisance, it is still too complacent. It believes that sanctions are working, that problems are essentially confined to Ukraine, and that a combination of diplomacy and patience will win the day. It fails to ask three crucial questions. What does Russia want? Why is it winning? And what can we do to stop it?

The Putin regime is more than just the personality of its leader. He may be toppled or sidelined, but the criminal-capitalist business model that has taken root during his reign is all too durable. Clans may fight each other—a row between his Chechen satrapy and securocrats in Moscow began boiling up during his absence.

But for all its feuds, the regime wants above all to stay in power. It does not want to be toppled by a popular revolt stoked from abroad or to be constrained by a rules-based international order enforced by a united alliance of other countries.

Its first priority is therefore to create a cordon sanitaire on its borders, in which (in the words of a senior Russian who once confided in me) “nothing happens we do not know about, and nothing happens that we do not like.” That does not mean military conquest. It means creating a soft hegemony based on the use of corruption, propaganda, economic dependence, divide-and-rule tactics, subversion and sabre-rattling. Though Russia is no longer a global superpower, it is still able to bully any individual country on its western and southern borders.

That is a springboard to the other objective: to end the era of Western dominance in world affairs, and particularly in European security. Russia sees (and stokes) growing anti-Americanism in Europe. It notes the Obama administration’s disengaged and timorous foreign policy, and the growing impatience among American policymakers with European ingratitude when it comes to defence. Nato is hollowed out; the European Union divided and distracted.

The looming target for Russia now is the Baltic states. Unlike Ukraine, Estonia, Latvia and Lithuania are core members of the Western alliance. If one or more of these frontline states can be humiliated with impunity, it will be the end of Nato. That could happen with startling speed: imagine that one morning Russia stages a provocation—say involving a train in transit across Lithuania to Kaliningrad. In the afternoon it declares a no-fly zone to stop Nato bringing in reinforcements, and in the evening announces that it has loaded its battlefield nuclear warheads onto their delivery systems and will use them if provoked. Would President Obama respond in kind? If he doesn’t, Nato is over by breakfast.

That dismal prospect is still ahead. But Russia is already systematically testing our willpower and finding it wanting. Russian warplanes repeatedly violate Baltic airspace. A senior Estonian official, Eston Kohver, was kidnapped and is now hostage in Moscow. Mendacious, vicious propaganda spews over the border, portraying the Baltic states as fascist, friendless failures.

Russia is winning because it is strong-willed, not because it is strong. Unlike the West, the Putin regime is prepared to take risks, accept economic pain, threaten the use of force (and on occasion carry out those threats), and use a brazen and well-financed propaganda machine to cover its tracks. It has already proved that it can destabilise Ukraine, perhaps fatally, and get away with it. The European security order, dating back to the Helsinki Final Act, and consolidated in the Paris Charter of 1990, is in shreds. Russia has shown that might is right. Big countries do the deals they can. Small countries do the deals they must. The dire consequences of that are still sinking in.

The West’s response should not focus too much on the Baltic states or Ukraine. We cannot expect our weakest allies to shoulder our burdens. Their woes are symptoms of the problem, not its source. However many weapons we deliver to Ukraine, we are only delaying that tormented country’s military defeat. Even if we build a Maginot Line in the Baltic, we cannot make those three brave and beleaguered countries credibly defensible in isolation. The only way to assure their freedom and ours is to focus on Russia—and on our own weaknesses.

Russia’s tactics shift seamlessly between statecraft, the dark arts and commercial pressure. But we in the West prize our separation of powers. Our intelligence and security services like secrecy. Our journalists like independence. Our businesses put their shareholders first. Our judicial system detests political interference. Those boundaries are admirable in their way—but they hamper our response to an adversary which ignores them.

When I investigated Anna Chapman, the Russian spy arrested in America in 2010, I found that she had run  a company in London using the stolen identity of a Kent electrician, Steve Sugden. Her company seemed to be involved in both money-laundering and intelligence work. But neither the police, nor MI5, nor Companies House, nor our financial regulator thought it was their job to clear the matter up, and repair the damage done to Mr Sugden. “Our job is catching spies, not criminals,” a spook told me with some asperity. But what if the spies are also criminals? And perhaps playing other roles too, as propagandists, business people or energy traders? During the Cold War we did practise better teamwork. We realised then that we faced an existential threat. We need to realise that we are again in ideological competition with an adversary who wants to bend us to his will. This time the threat is not Communism, but authoritarian crony capitalism.

We could do a lot more with visas: not just the members of the Russian elite, but their spouses, siblings, parents and offspring should be barred from visiting North America and Europe. They cannot have it both ways: if they preach and practise anti-Westernism at home, they cannot expect to frolic, shop, save and study in the decadent hellholes of London, Paris, Berlin and New York.

Next, freeze their assets. Hundreds of billions of dollars have been looted from the Russian people. If we can freeze the assets of drug barons and warlords, we can do the same to the phonies and cronies of the Putin regime. America has made a commendable nibble on both visas and assets, but we could do far more. It would help us recover the moral high ground, defend our public life from the pernicious effects of foreign money, and terrify the Kremlin.

But most of all we need to go after their pinstriped accomplices: the lawyers, bankers and accountants who have been instrumental in stashing the Kremlin’s ill-gotten gains in the West. It should be a matter of lasting shame that we—especially in Britain—prostituted our financial and legal system to our enemies. America is now bringing the might of its criminal justice system to bear on a notorious company with close Kremlin ties which I cannot mention for legal reasons. This is causing an outbreak of nervous sweats among the deeply compromised British financiers who helped it to gain a seeming respectability.

We should do likewise. It will be embarrassing and painful. But it is better that our bankers shed sweat and tears now than that we and our allies shed blood later.