Stop the Untouchables. Justice for Sergei Magnitsky.

Time to staunch the flow of dirty money from Russia

European Voice

What to do in the face of 12 more years of Putin? Follow the money, for a start.

The bombast and luxury were spectacular, but the foreign guestlist was on the sparse side. Two former European leaders, Gerhard Schröder and Silvio Berlusconi, were there to see Vladimir Putin inaugurated as Russia’s president in Moscow on 7 May, but almost nobody else from abroad.

That highlights the friendlessness of the Putin regime. But even if foreigners had turned up, what would they have said? Europe and the United States are finding it hard to know what to do as they face perhaps 12 more years of Putin.

One school of thought counsels rapprochement. We have to deal with Russia as it is, rather than as we would like it to be. In Britain, this camp is urging Prime Minister David Cameron to take the opportunity of Putin’s visit to the London Olympics in June to try a British ‘re-set’.

That approach is the triumph of hope over experience. The dire outcome of the American ‘re-set’ highlights the difficulty of trying a fresh start. The Russian regime, burdened with the distorting and paranoid prism of the KGB mind-set, pockets concessions rather than reciprocating them. Indeed, nothing being said or done in Moscow suggests that a softer line will bear fruit. The chief of the Russian general staff recently threatened a pre-emptive strike against US missile-defence installations in Europe.

Another school is ‘business as usual’. That is the approach of Germany and Poland. They have no illusions about Putin (and did not make the US’s error of wasting time and energy dealing with his token stand-in from 2008 to 2012, Dmitry Medvedev). Putin may or may not survive his full term. The regime may even tweak its business model. The main thing is to be sober and realistic, neither provoking nor conceding.

That is wrong too. One reason is that it leaves the countries in Russia’s shadow dangerously exposed. People in this camp have no worries about humiliating Georgia. They are loathe to stand up to Russia if it interferes in the internal politics of the Baltic states. They tend to be overly sanguine about the tide of dirty Russian money swilling through the West’s financial markets.

That is bad not only because the money corrupts those it touches. This stance also makes the West complicit in the misdeeds of the Russian regime. An interesting new note in the opposition protests in Moscow recently is anti-Westernism. Europe and the US are in fact propping up the regime, so goes the argument, because it has invested so many hundreds of billions of dollars in the Western financial system.

This is paradoxical in a sense: Putin thinks the protestors are Western puppets, just as they think he is part of a plutocratic and rapacious global elite. But it is not absurd. Although Western governments may in some cases discreetly wish the protestors well, their efforts are trivial compared with those of banks, law firms, PR companies and others who have their snouts firmly in the Kremlin trough.

Laundering Russian money in the West is lucrative. But it is risky too. What happens when the regime changes? New rulers in Moscow (perhaps liberal, more likely with a nationalist tinge) will have some hard questions for countries that have connived in the looting of the past decade.

The West’s best policy, as the brave and brilliant Russian commentator Lilia Shevtsova points out, would be to “practise what you preach”. Recent steps against Belarus, and a move taken by Swiss investigators arising out of the $230 million (€178m) fraud uncovered by the murdered lawyer Sergei Magnitsky, show what can be done. But so many bigger and juicier targets remain untouched.

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