By Patrick Alley, Co-Founder, Global Witness
In Joseph Heller’s iconic novel Catch-22, arch-capitalist First Lieutenant Milo Minderbinder’s money-making schemes include one where he finances a US bombing raid on a German-held road bridge whilst simultaneously selling anti-aircraft ammunition to the Germans. Brilliant. But only brilliant because this was fiction. Or was it?
By the time the EU announced a partial import ban on Russian oil at the end of May, EU member states had paid Russia a mouth-watering $56.9 billion for oil, gas and coal since the beginning of its invasion of Ukraine. That buys a lot of guns, tanks and rockets. Energy prices and fossil fuel companies’ profits have rocketed whilst Ukrainian cities have been rocketed, and citizens across the globe enter a period of immense economic hardship and food shortages. At the same time, the EU and others have pumped billions of dollars’ worth of arms into Ukraine – the most vicious of vicious circles.
To look at its advertising you wouldn’t think the fossil fuel business is one of the planet’s most malign industries. Colourful logos jostle with green credentials and boasts of wealth creation in some of the world’s poorest countries. In much the same way, tobacco companies glamourised smoking via macho cowboys and jet setters puffed away on superyachts, whilst one advertisement claimed that ‘More doctors smoke Camels than any other cigarette.’
Most of the cowboy models have since died of lung cancer while the photos on cigarette packets now look like outtakes from a particularly gruesome snuff movie. But Big Oil still gets away with it. The fact that it does showcases both the fatal threat fossil fuels pose to humanity’s future and the industry’s malign and pervasive influence in the global corridors of power.
“Corruption kills millions of people every year: they die from lack of food or basic healthcare, or in natural resource funded wars. Many of these wars are, as Ukraine’s leading climate scientist Svitlana Krakovska described the one unleashed on her country, fossil fuel wars. But one of corruption’s deadliest impacts is that it corrodes the heart of democracy.”
No Safe Havens
Twelve days after Russia began its invasion of Ukraine, we at Global Witness were approached by influential members of the Ukrainian diaspora asking us to undertake a campaign to stop Putin financing his war through fossil fuel exports. We agreed. For us it was a return to our roots, having investigated the role of natural resources funding conflicts since 1995, including exposing the blood diamond issue in the late 1990s. Although we didn’t predict the Russian invasion, we foresaw the risks to the EU’s energy supplies caused by the extreme corruption that pervades the former Soviet Union.
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In our 2006 report “It’s a Gas,” which documented oligarch capture and shady dealings in the gas supply chain, we called on the EU to “recognise that good governance in neighbouring countries in the former Soviet Union, the Middle East and North Africa which provide energy to Europe, whether as producers or transit countries, is inextricably linked to the security of Europe’s energy supplies.” So the EU can’t say it wasn’t warned.
Sixteen years later, as he announced another swathe of sanctions against Russian oligarchs in early March, UK Prime Minister Boris Johnson said, “There can be no safe havens for those who have supported Putin’s vicious assault on Ukraine.” By strange coincidence ‘No Safe Havens’ was the name of a long-running Global Witness campaign and the title of Chapter 7 in my recent book, Very Bad People.
The coincidence goes further because this chapter documents how for years the UK has in fact been the safe haven of choice for crooks, kleptocrats and oligarchs. Far from not being a safe haven for the corrupt, the UK is a uniquely hostile environment for investigative journalists, anti-corruption organisations and law enforcement trying to expose the corrupt. While the government’s ongoing crackdown is welcome and essential, the tragedy is that this didn’t happen years ago. And the reason it didn’t is because of the corruption of our own political system, and in that the UK is far from alone.
As the UK, the EU and the US went on a sanctions spree, seizing billions of dollars’ worth of property and superyachts and freezing bank accounts, the media feasted on the spectacle of the oligarchs scuttling for cover. But hold on. Weren’t these the same people that until March this year were lauded in the tabloid press and gossip columns for owning internationally famous football clubs, attending society parties and film premieres in jet-set hotspots, and courted by our politicians in the hope of generous political donations or an invite onto the boat?
Source: Global Witness
And why should we care what happens to a few ultra-rich peoples’ boats? Because the oligarchs’ mansions and superyachts are the visible indicator of political patronage, state capture and the power of vested interests. In short: corruption.
Corruption kills millions of people every year: they die from lack of food or basic healthcare, or in natural resource funded wars. Many of these wars are, as Ukraine’s leading climate scientist Svitlana Krakovska described the one unleashed on her country, fossil fuel wars. But one of corruption’s deadliest impacts is that it corrodes the heart of democracy.
Enter the Pinstripe Army
There are few better examples of state capture than Russia. In league with oligarchs and Russian organised crime, Putin has a stranglehold on the state — an unholy trinity of corruption, violence and fear. The fate of Russian opposition leader and anti-corruption campaigner Alexei Navalny, the liberal use of public assassinations at home and on foreign soil — not to mention seizing the Crimea — succeeded in dulling both internal dissent and highlighting international reluctance to seriously annoy an oil-rich cash cow. I don’t think these things are a coincidence — they are a strategy — and until Russian armour rolled over Ukrainian border this year it had been a successful one.
As Putin grew his power so, too, did London, becoming, despite stiff competition from the US and elsewhere, the global corruption hub. A Pinstripe Army of banks, law firms, PR companies and even its courts favoured the corrupt. And of course, as Frank Vogl recently explained in this very blog, those crooks that amass vast fortunes by looting their own countries need somewhere safe and glamorous to enjoy their spoils, with classy mansions to live in, top schools and universities to send their kids, and a whole pre-established service industry to protect their privacy and ensure their dodgy deals could be done in secrecy.
“The UK is a uniquely hostile environment for investigative journalists, anti-corruption organisations and law enforcement trying to expose the corrupt. While the government’s ongoing crackdown is welcome and essential, the tragedy is that this didn’t happen years ago. And the reason it didn’t is because of the corruption of our own political system, and in that the UK is far from alone.”
In 2015, one of our key investigations into foreign ownership of London property unearthed that a £150 million block of prime London real estate was owned by people close to the Secret Police Chief of Kazakhstan, a case so blatant that within days then-Prime Minister David Cameron announced that London was not ‘a place to stash your dodgy cash’ and proposed a public register of beneficial ownership of companies that own UK property. But then Cameron resigned over the Brexit vote and the political champion for the registry was gone.
In the intervening years, the National Crime Agency secured three Unexplained Wealth Orders relating to another three London properties worth £80 million owned by the Police Chief’s ex-wife and son. However, the UWOs were overturned in court. The judge on the case, Dame Beverly Lang, wrote that ‘notwithstanding his criminality, Rakhat Aliyev had been a successful businessman.’ My colleague Tom Mayne noted that this is akin to saying that, ‘notwithstanding his criminality, Harvey Weinstein was a successful ladies man.’ Justice Lang was hardly the first judge to have a credulous faith in the extraordinary entrepreneurial skills of the scions of dictators.
A major part of the problem is that until the Russian invasion of Ukraine, waves of politicians and others have been seduced by the oligarchs’ money. One doesn’t have to dig too deep to see that our politicians’ aversion to these people is new and probably no more than skin deep.
“As Putin needs to be defeated on the battlefields of Ukraine, we must rout the pinstripe army at home. Our democracy depends on it.”
In 2018 Tory Peer Greg Barker mediated with the US Treasury to lift US sanctions imposed on oligarch Oleg Deripaska. It just so happens that last year Global Witness, Corporate Accountability and Corporate Europe Observatory exposed that Barker was amongst the attendees at COP26 in Glasgow, as part of the official Russian delegation.
What the recent wave of sanctions have done is to interrupt the oligarchs’ attempts to become members of the Britain’s ruling elite. This is critically important. By buying the most exclusive houses, joining the best clubs, building political influence and sending their kids to top public schools and universities, the oligarchs buy respectability at the expense of the integrity of our society, and criminality becomes normalised.
The New Possible
I wrote in the Epilogue to Very Bad People: ‘Our anger was directed at the perpetrators and enablers of corrupt and destructive deals that impacted literally millions of people, yet who were able to amass enormous wealth and whose “achievements” and position meant they were revered by our perverse society, their greed and lust for power amply rewarded.’
We need to make sure the rewards for these people are closed down. Against all the indescribable horror it brings, Putin’s war also brings opportunity. Following fast on the heels of Covid, Russia’s invasion has galvanised politicians into taking actions considered impossible just a few months ago; there is no better time to pressure our political leaders to act against the corruption that has rotted our democracies.
Whilst some of the Russian elite are feeling the heat, the systems that helped them launder their money, set up their webs of secretly owned companies and protect their reputations are still in place, waiting for the political fervour to subside. Then this Pinstripe Army will raise their heads above the parapet and begin to reassert their control. As Putin needs to be defeated on the battlefields of Ukraine, we must rout the Pinstripe Army at home. Our democracy depends on it.
Patrick Alley is one of the three founders of Global Witness. Founded in 1993, Global Witness has become one of the world’s leading investigative organisations dedicated to routing out corruption & environmental and human rights abuses around the world, with Patrick taking part in over 50 field investigations in South East Asia, Africa, Latin America and Europe. Taking the findings to lawmakers and into the boardrooms of multinational companies, Patrick and his colleagues have challenged the assumption that you can’t change things.
Global Witness continues to challenge abuses of power, to protect human rights and secure the future of our planet, and to use the skills it has built up to tackle the greatest threat of our time – the climate crisis.
Alongside his two co-founders, Patrick received the 2014 Skoll Award for Social Entrepreneurship. Global Witness were nominated for the 2003 Nobel Peace Prize for their work exposing the murderous trade in Blood Diamonds.
Patrick’s book, Very Bad People – the Inside story of the Fight against the World’s Network of Corruption – published in 2022, describes the founding of Global Witness and covers some of its most dramatic investigations or, as Jeff Skoll put it: “Warlords, crooks, oil tycoons and dictators. A shocking, important and page-turning book that gives a unique insight into a hidden world of criminality.”