Russia bolsters its kleptocratic ranks in stifling international media
Around the time my last book came out, I created a Google alert for my own name, so I could see if anyone had reviewed it. I never got round to canceling it (it’s not like I’m in the news very often) and this week it turned up something genuinely odd. Apparently, a Dutch journalist has written a novel about money laundering, made me a character, and sent me to the Bilderberg conference, the annual networking event for the world’s most powerful people (and magnet for conspiracy theorists). Truth be told, this came as quite a surprise.
There are some pretty wild conspiracy theories about at the moment –on that note, I really enjoyed Gabriel Gatehouse’s podcast The Coming Storm, if you’re looking for a listening fix– and I get informed by anonymous folks on Twitter surprisingly often that I’m working on behalf of Bill Browder and/or George Soros to undermine Donald Trump by supporting anti-corruption groups in Ukraine. Under the circumstances, therefore, I want to put on the record that I have never had anything to do with the Bilderberg Group. This story is entirely fictional, so please don’t write me into any more baroque theories. I am not part of a sinister cabal attempting to take over the world.
But then again, that’s just what I’d expect me to say. If I were secretly a cog in the globalist ruling machine, I’d hardly admit it to a journalist like myself, would I? My denying it just makes this pernicious conspiracy more menacing. I need to get to the bottom of what I’m up to before it’s too late.
Speaking of conspiracy theories, I can remember when RT – or Russia Today as it was originally known – first went on air. I was living in Moscow at the time, and a large group of fresh-faced young Brits came over to launch the channel. They were just out of journalism school and seemed far more focused on partying than working. The first day or two were a fiasco: the wrong stories got screened, the signal dropped out, the volume failed. Initial excitement about the Kremlin getting back into the propaganda game died away, and we stopped paying attention.
By 2010 or so, it had found its niche, as the home of whataboutism, where journalists made a colossal fuss about Western governments occasionally behaving in ways that were entirely routine in Russia: dispersing protests, arresting whistleblowers, invading other countries, etc. It’s a little hard to know quite how many people actually watch RT, because it appears to inflate its views on YouTube, or read the output of its sister news agency Sputnik, but governments certainly take them seriously.
- “The Kremlin has used these outlets to interfere in elections, undermine democracy, and threaten the rules-based international order,” noted this State Department report from January. “American media consumers exposed to RT content are 15 percent less likely to support an active foreign policy, 20 percent more likely to believe the United States is doing too much to solve global problems, and 10 percent more likely to value perceived national interests over the interests of U.S. allies.”
I do have questions about correlation not being as the same as causation when I see those kind of percentages but I suppose if even a small proportion of people end up believing the Kremlin’s version of what’s happening in Ukraine for example, instead of the truth, that could help influence Western governments’ calculations. The latest RT scandal began with German regulators’ decision to block its German-language channel from using a Serbian license to broadcast via satellite into Germany.
The response from Moscow was initially confusing, since RT’s editor-in-chief denied anything substantive had happened and that the channel would carry on as before, while the foreign ministry said that it was a disgrace and that Russia would retaliate against German broadcasters. Deutsche Welle attempted to avert this outcome by publishing a rather winning column laying out all of the ways that it was different to RT, but without success. Russia unceremoniously kicked Deutsche Welle out of the country.
- “The broadcasting ban on Deutsche Welle in Russia and the closure of its office in Moscow are wholly unacceptable,” said German Federal Minister for Culture and Media Claudia Roth. “DW is also an independent organization. This means that, unlike RT DE, the German state does not exert any influence on programming. I therefore urge the Russian side not to exploit RT’s licensing problems for political purposes.”
What has this got to do with oligarchy? Well, it strikes me that Russia has established a useful precedent here. If Russia’s propaganda outlets spread egregious propaganda or broadcast without a proper license, and Western country’s regulators take action, they will now need to think not just about the rules they’re tasked with upholding but also about the safety of their own nationals in Moscow working for institutions like the BBC, Radio Liberty of Agence France-Press.
- “If Germany escalates, we will respond in the same way. If Germany goes for a normalization of the situation, we will respond in the same way, we’re just as ready to normalize the situation,” said Russian foreign ministry spokeswoman Maria Zakharova.
Nice journalists you have there, it would be a shame if something happened to them.
WHO SANCTIONS THE SANCTIONERS?
I’ve been keeping an eye on the proposals for sanctions against Russia should it invade Ukraine (again), and was amused by a debate at the United Nations Security Council last week, which was a masterclass in passive aggression. Russia was in the chair and took the opportunity to put across its viewpoint that the only legitimate sanctions are those approved by the Security Council, and thus over which it would have a veto.
- “It is especially unacceptable when some states, while demanding to observe their sanctions, impose restrictions on economic actors of third countries who operate within their national legislations. Such extra-territorial use of sanctions contradicts the basic norms of international legitimacy,” said First Deputy Permanent Representative Dmitry Polyanskiy.
I found it impossible not to italicize the words “some states” there, so as to mimic the tone that my wife and I adopt when cross with each other (“well, if some people will leave the light on…”), and was delighted to see that, not to be outdone, the US ambassador responded in kind (“well, if certain people are going to leave the toilet seat up…”).
- “Too often, the Security Council’s routine work on sanctions is blocked or undermined by our own members. Certain Council members have blocked critical designations of peace process spoilers, high profile terrorists, human rights abusers, and sanctions evaders,” said Ambassador Linda Thomas-Greenfield.
In all the squabbling, however, it’s important not to lose sight of the important question, which is whether sanctions actually work, and this piece from Foreign Policy is particularly interesting on that. It lays out the history of sanctions, how the respective enthusiasm for them of Americans and Europeans has switched over the past century, but also how rarely sanctions achieve their aims.
- “The United States has an unrivalled ability to use its dollar hegemony against its adversaries, even against the wishes of its European and Asian allies. But its ability to impose steep costs on rival states has not been matched by a corresponding success in changing their behavior,” the article notes.
- “While in the 1985-1995 period, at a moment of great relative Western power, the chances of sanctions success were still around 35 to 40 percent, by 2016 this had fallen below 20 percent. In other words, while the use of sanctions has surged, their odds of success have plummeted.”
The author of that article has written a fascinating-looking book on the subject, which I have just this minute bought for my kindle, and also given this interview, which explicitly drew out the lessons to be learned for Russia from his research.
- “There are strongly diminishing returns. You can see that most clearly with Russia now. Russia has already been under quite serious sanctions for the last eight years. It caused a recession, they’ve had to re-stabilize the economy, it carries real costs for them – but they’ve now actually done all this sanctions-proofing,” Nicholas Mulder said.
So if they don’t work, why do politicians keep using them? That’s where the problem lies, as laid out with admirable clarity by the U.K.’s House of Commons library.
- “Most politicians are keen to be seen taking action and the argument that there is nothing that politicians can do about a situation is not particularly popular. Sanctions allow leaders to show that they have taken some sort of action over a situation that they or the public don’t like,” a briefing document from 2015 states.
Personally, I think there is something politicians can do, it’s just that they’re choosing not to do it. Governments should concentrate on the steady, laborious work of resourcing their law enforcement bodies properly, and giving them the political cover they need so they can investigate and prosecute those among their citizens who are helping foreign kleptocrats move their money around. The best time to start doing that was 50 years ago, the second-best time is right now, so they should get on with it.
Their failure to do this is one of the reasons why sanctions are failing to influence the Russian leadership group, which is incredibly sophisticated in hiding its assets behind offshore structures. You can’t sanction something if you don’t know who owns it, and you can’t sanction someone if you don’t know what they own, which is why opaque ownership via shell companies is such a disaster. So, I would like to see concerted effort to impose transparency of ownership on all property and companies, so we can see who owns what. Then law enforcement agencies could target kleptocrats as soon as they move their assets to Western countries, rather than waiting for the government they help prop up to invade someone, and then imposing sanctions.
On that note, this is a fascinating piece of research from the OCCRP, about the large number of often very young children with substantial ownership stakes in Luxembourg companies.
- “A one-year-old Mongolian toddler who owns part of a major coal company in the Gobi Desert. An eleven-year-old Azerbaijani profiting from state contracts with Turkmenistan and China. A Russian teenager who counted investments in Canadian and Californian pension systems among her billions of dollars of assets. These are just a handful of the nearly 300 minors who owned or controlled significant stakes in Luxembourg companies as of 2020.”
We have in short got a very long way to go before we can say we know who actually controls what, but I’m delighted that the OCCRP continues to hoe its row. Check out the full archive of articles from its work in Luxembourg.
WHAT I’M READING
I got hold of an advance copy of Dipo Faloyin’s Africa is Not a Country, which I devoured over the weekend. It’s hilarious and heartfelt and very thoughtful and has made me reconsider how I need to think about Africa. I’d recommend you pre-order it, you’ll find yourself laughing at his descriptions of Jollof rice, and accidentally having your mind opened.