Much has been written about the levels of Russian interference in American public life, with the protracted Muller investigation sapping political energies throughout the first half of the Trump presidency. The outcome has left room for Trump’s accusers and defenders to claim justification for their respective arguments, though it is clear from recent intelligence testimony to Congress that the security services remain very concerned about what they see as continued Russian influence operations. The arguments look set to rumble on in the US.
By contrast, however, there is a curious official reserve about Russian influence in British public life. Even after a couple of major Select Committee reports, the Conservative government does not appear minded to prioritise the matters arising. The much-delayed Intelligence and Security Committee’s (ISC) work on the subject (hereafter the Russia Report) attracted only muted public interest and press coverage in the mainstream media, and then only for a few days before the media news round moved on. Indeed, arguably the most interesting feature of the report resides not simply in its content, troubling as that is, but in its handling by the British government.
The ISC Russia Report is only the latest official review of Russian influence in Britain, following on the heels of the House of Commons’ Foreign Affairs Committee’s 2018 report on Russian corruption in London. The latter report focused on the pernicious effects of financial corruption rather than the wider focus of state-led interference. The combined effect of the two reports, however, is to portray serious, well-founded and persistent concerns around the depth and breadth of Russian influence on British political life, from attempted electoral and Brexit interference to the scourge of large-scale money laundering and associated corruption.
Let us note here that the Cold War is long gone and that Russia has been a significant market player throughout Europe for several decades. The country’s vast natural resources have made it a key contributor to the economic life of the European continent, particularly its Eastern half, and beyond. Those resources have generated vast wealth, much of it in the hands of individual oligarchs, and it is no surprise that much of that wealth should find its way to London, arguably the world’s major financial centre. Further, the influx of Russian wealth to the UK has been actively welcomed by the City of London and the governing political establishment.
That said, vast wealth brings considerable influence, and it behoves the host country to understand the nature of the relationship with this “new money”. The newly-published FinCEN files serve to show, if further proof were needed, that the UK has been and remains a favoured destination for Russian money. While much of it is perfectly legal investment, there are justified and grave concerns about the access and influence which such money affords. One example, that of the Chernukhin donation (£1.7m) to the ruling Conservative party, illustrates clearly how Russian money buys personal access to the very top of the British government, notwithstanding the questionable nature of the source of Vladimir Chernukhin’s wealth and his obvious past political connections.
There was a time in recent memory when the very notion of Russian influence, much less interference, in British public life would have been regarded with horror by a British government of any stripe. Official and popular outrage would have ensued. It is therefore instructive to note the manner in which the current Conservative government has handled the publication of the ISC Russia Report – postponement pending the General Election; delay pending formation of the new Intelligence and Security Committee; widespread redaction notwithstanding the views of the Chairman of the original committee; and attempting (unsuccessfully) to foist its choice of Chairman upon the new Committee.
One of the Foreign Affairs Committee’s key witnesses in 2018 averred that, in its approach to Russian influence in the UK, the British government appeared to give more weight to its own political considerations than to those of national security. It is understandable that government energies today are being poured into fighting COVID-19 and in handling the business of Brexit. However, the protracted delay in publishing the Russia Report, and the downplaying evident in the official government response, stand in marked contrast to the US investigations and suggest that political considerations continue to hold sway in Westminster. In turn, this does not augur well for the prospects of meaningful action to counter foreign influence in British life.
The latest FinCEN files leaks may be more properly a matter for the financial sector to address, but they illustrate what a tiny percentage of banks’ Suspicious Activity Reports (SARs) are actually investigated by the authorities. This renders the enormous amount of time and effort expended on SARs out of all proportion to their investigative impact. There is surely scope here to revisit a regulatory regime which, in practice, prioritises the mass production of SARs over targeted, intelligence-led investigations when dealing with countries which banks consider to be high-risk jurisdictions. It will be instructive to note how the British government intends to proceed as the drip-feed of FinCEN revelations ensues, and whether the ruling Conservative party is minded to take any action to remove, limit, or at least make fully transparent its links to Russian cash.
Mark McGuigan is TSG’s geopolitical risk advisor specializing in the CEE region. An Executive-in-Residence at the Geneva Centre for Security Policy, he is a former financial sector intelligence consultant and an ex-RAF officer. He writes here in a personal capacity. TSG is a research (including due diligence) specialist, also offering Ethics Compliance and Advisory services to its clients. TSG offers expertise in Eastern Europe, as well as East Asia.