Fighting kleptocracy in London, a global capital for dirty money

In a chic Kensington cafe, Roman Borisovich told WikiTribune that London is “the corruption capital of the world,” estimating that the city has the highest concentration of dirty money anywhere on the planet.

The veteran anti-corruption campaigner and former Russian chief financial officer said the bulk of the hidden capital that has flooded into the UK in recent years – around £1bn a month, according to one Deutsche Bank report – is invested in property in London.

“It is much more difficult to obtain financial assets or assets other than real estate with dirty money in this country,” Borisovich said. The ease of bringing massive wealth into the UK is a colonial vestige, he added, a holdover from the time when administrators would make money in India or West Africa before bringing it home.

Borisovich rose to moderate fame after starring in a 2015 Channel 4 film, From Russia With Cash, when he posed as “Boris,” a corrupt Russian government minister looking to purchase upmarket properties in London’s most exclusive boroughs. The exposé caused uproar when estate agents caught on hidden camera continued to work with and advise Boris, even though he repeatedly made it clear that he was apparently skimming money from government contracts.

Borisovich told WikiTribune that he helped create From Russia With Cash for “shock and awe” purposes, to highlight the ease with which foreign plutocrats can abuse the UK property market. The documentary also helped Borisovich launch an anti-corruption organization, the Committee for Legislation Against Money Laundering in Property by Kleptocrats, or ClampK.

ClampK emerged out of Borisovich’s backing of Alexei Navalny, a fiery and controversial anti-corruption campaigner who has emerged as the de facto leader of the opposition to Russian President Vladimir Putin. “In our conversations in Moscow, [Navalny] expressed bewilderment, anger even, at the fact that anonymous companies are used to hide Russian illicit wealth in London, in plain sight,” Borisovich said. He added that while Navalny had been “very successful in finding corrupt Russian bureaucrats’ properties in Miami, New York, and the south of France, London was a nut he couldn’t crack because of the secrecy of jurisdictions.”

Borisovich is careful to stress that despite his origins, ClampK does not focus exclusively on post-Soviet corruption. He leads London “kleptocracy tours” – bus rides for journalists and politicians past multi-million pound mansions allegedly purchased with dirty money. He points out that their secretive owners are not just Russian and Kazakh, but also Nigerian and Chinese.

Borisovich was keen to point out that the purchase of high-end properties by foreign billionaires, who frequently leave their properties unoccupied, isn’t an issue that exists in isolation from the wider context of London housing. One consequence is the “lights-out London” (The Guardian) phenomenon, where absentee owners stifle their neighborhoods’ local economies.

“If you go to some spots in central London, like Ennismore Gardens [in exclusive Knightsbridge], you see a place where 100 percent of the local economy has been killed because there are no permanent residents anymore,” he said. “There used to be four pubs; there used to be 7/11s; there used to be dry-cleaners. Everything that you used, walking out of your building, there’s none of that – it’s completely dead. Now it’s a concrete desert.”

Foreign ownership also has a knock-on effect on house prices across the market. Money laundered in ritzy mansions worth tens of millions “makes price levels everywhere more expensive,” Borisovich said.

Borisovich argues that some of the effects of foreign cash on the property market could be alleviated with more stringent checks on the source of money. One of ClampK’s primary objectives is to challenge the attitude of the authorities, which he said is to abdicate responsibility by stating: “If their own countries don’t think that they’re criminals, why should we get involved?”

Yet this failure to take responsibility overlooks a crucial point about corruption in Russia, Borisovich said. “The kleptocracies of the modern age, especially absolute kleptocracies like Russia, they don’t punish – they actually support their thieves.” He supports a more proactive approach to money laundering: “We need to be able to judge by our own standards. If we decide this money is illegally gotten, it doesn’t belong here.”

ClampK is “slowly but surely” making progress on this, Borisovich said. His organization strongly supports the UK Criminal Finances Act, which received Royal Assent in April, giving the British government greater powers to probe companies suspected of money laundering. The Act also introduced “unexplained wealth orders,” which require those suspected of serious crime or corruption to explain the sources of their wealth.

Borisovich said the new tools are “very powerful” and that the government is “making steps in the right direction” but the efforts are still inadequate. For example, he said that the 160 properties across the UK owned “by high corruption risk individuals, including those who have been charged and convicted with corruption offences,” referenced in a Transparency International report from March, should mean grounds for immediately issuing 160 unexplained wealth orders.

Borisovich is also concerned that the UK government may be unwilling to appear hostile to potential overseas investment, even if it is ill-gotten, due to the ongoing Brexit negotiations.

Borisovich is most pessimistic on the prospects of reform in Russia. While he had only praise for his former associate Navalny, who intends to run in next year’s presidential elections, he believes Navalny’s candidacy is a virtual nonstarter. The anti-corruption campaigner has been barred from running due to a previous conviction for embezzlement.

Though Navalny and Borisovich remain personally on good terms, Navalny has distanced himself from ClampK. Risking too significant an association with a foreign campaign would distract from Navalny’s core anti-Putin message, Borisovich said.

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