Is it a bird? Is it a plane? No, it’s Lord Agnew

Oliver Bullough


​​“Not all heroes wear capes” is a term regularly used on social media when an ordinary person does something marvelous. It’s a term I slightly struggle with, thanks to The Incredibles, where Edna eloquently explains why superheroes shouldn’t wear capes at all. Anyway, it did seem to apply to Lord Theodore Agnew this week after he, wearing the distinctly non-superheroic outfit of a grey suit, white shirt, heavy-rimmed glasses and a yellow, red and blue tie, spectacularly quit his job as a UK government minister live in the House of Lords in protest at Britain’s failure to do anything at all about financial crime.

  • “If my departure and bid for pariah status moves the machine to action, it will have been worth it,” he wrote (this link is one of those “gift links” so if you don’t subscribe to the FT and can open it, you’re one of the first three people to read the newsletter this week, for which thank you. If you can’t open it, I recommend subscribing to the FT, it’s great.).

I sincerely hope that he does not become a pariah because of his actions. He is sacrificing a career in government, because of his concerns about what that government is allowing to happen, and that is what every honorable public servant should do. And his concerns are not idle. It is no exaggeration to say that the U.K. is absolutely central to how international financial crime works. Decades of strategic under-regulation helped secure London’s centrality to how money moves, with knock-on effects elsewhere, since other countries had to weaken their rules to prevent all the business flowing to the U.K. Meanwhile, British offshore territories went further still, enabling everything from shell companies in the British Virgin Islands to gambling operators in Gibraltar.

By law enforcement agencies’ own estimates, hundreds of billions of pounds are now laundered through the City of London every year. That is money stolen from the citizens of developing nations, earned by drug cartels, embezzled by fraudsters, and Britain’s failure to stop that is having a devastating cost on the victims of criminals, kleptocrats and Mafiosi everywhere. There’s a great insight into how this works from this Moscow Times article, which explained why Russia’s business elite is keeping quiet about the Kremlin’s sabre-flapping on the Ukrainian border.

  • “After a couple of conversations with the guys directly involved in the Donbas, I transferred all my assets to dollars and sold my Russian stocks,” one official at a Moscow government department told The Moscow Times. “This was back in December when nobody expected anything.”

That is not a one off. More than half of Russia’s national wealth is owned offshore, and the entire ruling class has been doing what that official did and has been doing it for years. Why would anyone keep his wealth in a country that can be upended at any time because Vladimir Putin likes to get his gun off? It makes perfect sense for the officials, but it’s disastrous for Russia as a whole, as well as for the rest of the world, because it means Putin can indulge his three-quarter-life crisis without costing anyone with any clout any money. Government officials and business leaders aren’t worried about suffering personal loss, which removes one of the most important limits there is on an autocrat’s behavior. War is a spectator sport for Russia’s ruling class.

Last week, Spotlight on Corruption published its analysis of Britain’s failure to do anything to restrain these kinds of corrupt money flows, and it is shocking. Cuts in the budgets of lead law enforcement agencies have made the situation worse, while the threat from criminals and kleptocrats is growing.

  • “The U.K. spends an equivalent of just 0.042% of GDP (on a generous estimate) on funding core national-level economic crime enforcement bodies – despite the fact that economic crime costs the U.K. 14.5% of GDP (on a conservative estimate),” the report states.

We have been confident that this situation will improve, thanks to promises made by Prime Minister Boris Johnson at the White House’s Summit for Democracy at the end of last year. As a rule, Johnson’s promises aren’t worth half a handful of nothing, but this time he was talking to Joe Biden, the U.K.’s most significant ally, so it seemed unlikely that he would speak with the carelessness he reserves for everyone else.

  • “We will bring more openness to the purchase of properties in the U.K. by overseas entities and take forward new laws to safeguard our democratic processes and institutions from those who would do us harm,” he promised.

And this is what Lord Agnew was resigning over. The cabinet has decided not to put forward the Economic Crime Bill, which was supposed to put those promises into law, totally blindsiding everyone involved.

  • “The last week of my life has been spent watching it in slow motion, waving arms wildly, shouting, attempting to grab steering wheel,” one source told me. “I would say it’s beyond belief, but my bar for incredulity has shifted.”

All is not lost. It is possible the government will rethink, or indeed that Boris Johnson will stop being prime minister, and we get someone who only makes promises that they intend to keep. The prospect of the U.K. and U.S. working together to drive dirty money out of the global financial system is an appetizing one, on which the London think tank RUSI, which has been leading a transatlantic study group on how coordinated action might work, has just published some thoughts.

  • “A truly effective approach to combatting illicit finance on an international level requires parties to spend more effort on ‘walking the walk as opposed to talking the talk’ – replacing hollow promises with substantive reforms that can hold their own against a reality check,” the think tank writes.

Amen to that. The Biden administration has started to put together a coherent and rational response to kleptocracy, which could really undermine the ability of Putin and other kleptocrats to stage messy interventions into global affairs. It’s important to think about kleptocracy as something that infects everything – health, law enforcement, energy, infrastructure, etc. – and not just politics. This is an interesting piece by Josh Rudolph, who has just joined USAID’s anti-corruption task force, on how aid can be used to further efforts to undermine kleptocrats.

It is going to be hard to change thinking in aid organizations, which have traditionally had enough to tackle without having to worry about corruption too. But if all aid can be directed to improve not just people’s lives, but also to improve the systems in which those lives are lived, then the world will get better quickly.

  • “Getting this right offers the key to defending democracies from autocratic aggression, showing how democracy can deliver, and even helping bring foreign policy and domestic politics into alignment for the first time in a generation,” Rudolph writes.


As I write this, tension around Ukraine appears to be high but stable, with one interesting data point being that Putin himself hasn’t said a word about the crisis for weeks. I’m a little nervous about reading too much from commentators claiming to know what Putin is thinking, or why he’s taking whatever step he’s taken. As a rule, anyone who knows isn’t speaking, and anyone who’s speaking doesn’t know.

However, I do make an exception for Peter Pomerantsev, a contributing editor at Coda. He’s an old friend and extremely perceptive about what’s going on beneath the rug. (If you haven’t read his books, then I cannot stress highly enough to what extent you’re missing out.)

He has started bringing the language of psychoanalysis to bear on the difficulties that Russia has in tackling its uniquely complex past.

  •  “It’s tempting to think about Moscow’s foreign policy as reducible to rational self-interest, a demand for “spheres of influence” articulated in the sober logic of security and realist international relations, but its language also hints at something more intermingled with the intimacies of family dynamics,” he wrote in Time magazine.

His long-term policy proposal is for a sustained campaign to communicate with the Russian people, and to provide an alternative narrative to the rather excitable one presented in the Russian state media. I am heartened by how much effort Western broadcasters appear to be putting into original Russian-language content (I’m basing this opinion on how many of them I’ve been speaking to about it in the last few months), so perhaps they are already following his advice.

In the meantime, of course, something more traditional is required, and I sincerely hope that coordinated sanctions have been prepared to target those assets that Kremlin insiders think they’ve kept safe by putting them offshore.


It wasn’t that long ago that everyone was talking about Kazakhstan, which just goes to show that history is moving too fast for me these days. An interesting aspect to keep watching is whether the president is able to claw back any of the assets expropriated by the family of his predecessor over the decades that he was in office. Of course, there has been a lot of focus on London property, as well as assets elsewhere in Europe, and on the enablers who arranged the deals.

Here’s an interesting piece about how a fund manager got so involved in working with Nursultan Nazarbayev’s grandson that it proved too much even for Britain’s regulatory agencies. And this is another fascinating article about how Nazarbayev used charities to own a lot of his assets, which looks a bit like a Kazakh version of how trusts work in common law jurisdictions.

–    “Since the foundations are non-profits, Nazarbayev does not formally own their vast assets himself. However, legal experts contacted by OCCRP explained that, under Kazakhstani law, the founder of a private foundation has ultimate control over its assets.”

Among the assets are a private jet, banks, television channels, hotels, shopping malls, a golf course, a pasta factory, and much, much more. Cumulatively, they are worth around $8 billion, and are structured via companies in Luxembourg, the U.K. and elsewhere. There will be many more revelations of this nature as the tectonic plates shift in Central Asia, and it may prove uncomfortable, not just for the former ruling family, but also for his Western helpers.


If you’re involved in teaching corruption, I’d like to recommend Understanding Corruption, a book I recently read, thanks to an advance copy (it’s published in March). There is a lot of confusion about what corruption is, how it works, what to do about it, and this collection of essays does an admirable job of trying to cut through the confusion and lay out some ground rules. It’s written for an academic audience, and would be perfect for any students keen to explore what is – sadly – likely to be a policy growth area for the foreseeable future.