Tom Tugendhat long ago sounded the alarm about the influence of dirty Russian money in London. Back in 2018, the House of Commons’ foreign affairs select committee, which he chairs, warned that the UK “is not serious about confronting the full spectrum of President Vladimir Putin’s offensive measures”. Since then, not enough has changed.
With Russia on the brink of invading Ukraine, Tugendhat is hopeful that his fears about Putin’s influence at home will now be tackled. “Dirty money has been an issue for decades but its poison is seeping deeper into our system,” he says. “We’ve done nothing to stop it. Instead we’ve threatened vague sanctions on individuals whose assets are hidden and have more than enough to accept losing some now and again.”
His own prescriptions are tough: closing British markets to Russian firms; expelling families linked to the Putin regime; investing in reducing Europe’s dependence on Russian gas; funding free media in Russia; offering more assistance to those threatened by Putin; plus swiftly dealing with dirty money and corruption in London. The last is the most critical — if the Russian laundromat is not shutdown, any future UK economic sanctions risk being undermined.
Disquiet about Russia’s influence in London is rising among some senior Tories. Last year, the government extended Magnitsky sanctions to tackle money laundering. But the present crisis has underscored why several MPs feel more needs to be done. One minister likens the mood to the party’s shifting stance on China: “Five years ago, we were too soft on China and realised the error of our ways. The same is happening now with Russia.”
Bob Seely, a Conservative MP and member of the foreign affairs committee, calls on the government to produce a longer-term plan for Russia. “We need to understand how neo-authoritarian states use the full spectrum of state power . . .”
Foreign secretary Liz Truss has adopted a more strident tone towards the country since she took over the Foreign Office, even if some seasoned diplomats questioned her “Instagram diplomacy” trip to Moscow. She has told oligarchs that they will have “nowhere to hide” if Ukraine is invaded and the UK’s sanctions package would be the “toughest sanction regime against Russia we have ever had.”
Yet such tough talk must be set against the long delay in the publication of the House of Commons Intelligence and Security Committee’s report on Russia. And since Boris Johnson became prime minister in July 2019, the Conservative party has received substantial donations from individuals with Russia ties. Labour has questioned “the adequacy of the processes” with which these donors are vetted.
Lubov Chernukhin, the wife of a former Russian minister, for example has given the party £1.7mn over the past decade (her lawyer says donations have “never been tainted by Kremlin or any other influence”).
Sir Malcolm Rifkind, the former foreign and defence secretary, thinks there is no Russian influence on British policymaking through donations, noting “all donors have to be British citizens”. But he adds, “any donors should still, in my view, be refused if they have a dodgy reputation — Russian or not. Otherwise, the Conservative party faces real reputational damage”.
Rifkind agrees that dirty money laundering in London is the biggest issue to be tackled. “It’s not whether there’s a desire to control it, it’s whether it’s technically possible. We’re dealing with some pretty smart people who know how to fiddle the system.”
The Conservative party insists that all donations comply fully with the law. “It would be wrong to suggest malign motive on behalf of individuals simply because of the country of their birth”, a spokesperson says.
Whether the party shifts who funds it or not, it is clear that it must be squeaky clean if it wants to do the same to London. Tugendhat is hopeful that his party and country are waking up. “Whether it’s sanctions or finally clamping down on property ownership, this is the perfect opportunity to clean up our own act,” he says. “The tensions are going to keep simmering and Russia will try and make us look weak. We have to show we’re not.”