"Global Laundromat" has the Guardian in a Spin

by Kit

The latest “breaking” story from the Guardian and Luke Harding is hitting the headlines. Almost exactly 1 year after the explosive anti-climax that was “The Panama Papers”, Harding and the coterie of NGOs for which he acts as de-facto spokesperson have a big announcement to make: Banks launder money, and some of it is Russian.

We are nearing the anniversary of the release of the Panama Papers, a “big story” involving years of work, hundreds of leaked documents, a team of exceptional journalists (and Luke Harding) and a dramatic reveal: “Sometimes, very rich people use legal loopholes to avoid paying their taxes.”

The list of implicated parties included heads of state, celebrities, athletes, David Cameron’s dad and a cellist that knows Vladimir Putin. We all remember who the Guardian decided to focus on, and we all know why.

Today the same crack-team (and Luke Harding) are releasing the long-awaited sequel to their original hit. “The global Laundromat”, it’s called. It’s a product of a years-long investigation into money laundering in ex-Soviet states, using British shell companies. I can’t comment on the truth of these allegations, because we don’t get to see the evidence, we are simply tell us it’s true “according to letters The Guardian has seen”, and “reports shown to the Guardian”…and other variations on that theme.

They may well be true. Big business and billionaires take part in shady and/or illegal business practices all the time. Just as was the case in the Panama Papers, they tell us something we all already know to be true, and then act like it was a surprise.

There’s a lot to like here. The simultaneous publication of four different articles on the subject, all practically identical. The implication that it is “breaking news”, when their prize factoid is three years old, and the scheme itself hasn’t operated since 2014. The fact that Luke Harding has to publicly declare the US government’s involvement, to stop people like us from pointing it out and making them look silly (like last time). The persistent use of the old Harding trick of simply dotting your story with plenty of “could haves” and “speculations suggests”. It’s all good stuff.

Where it becomes hilariously cack-handed in their agenda-pushing is in trying to force tenuous links to the Kremlin and, of course, Vladimir Putin in particular.

Last year they plastered their front page with pictures of Putin and videos about Putin and editorials about corruption in Russia…despite having to admit in the text:

…the president’s name does not appear in any of the records…

This year they can’t even go that far. They fall to the level of implication. Talking around inconvenient facts on the one hand, and then wildly speculating on the other. Leaving deliberate dots for the reader to join up, whilst never having the courage of their convictions to make plain their insinuations (probably for fear of being sued and/or corrected in the alt-media).

Much like the Panama Papers launch, there’s an awful lot of verbiage to work through, implications are thick on the ground, evidence less so. No direct sources are named, it is always “a ex-banker living in exile said”, or “a Russian business-man said”. Gorge on words and starve of meaning seems to be the message of the day.

Some interesting bullet points I pulled out:

Now we can reveal Britain’s role in this scheme – and how vast sums of potentially tainted money flowed into and out of western banks, including HSBC and the Royal Bank of Scotland, without raising any alarm.

This is taken from this piece, one of the four long reads The Guardian is currently devoting to this topic. You can tell it’s a Harding creation because of the prose…for want of a better word…style. It might seem inconsequential at first, but note the use of the phrase “potentially tainted”, that means there is no proof of any wrong-doing at all. It means, the money is “potentially” untainted. As in just totally legal money being used to buy things.

Normally speaking I would expect a crime to at least have definitely happened before a paper put it in their headlines. But maybe I’m being old-fashioned.

The ingenious scheme has its origins in Russia. Put simply, it was a way for Kremlin insiders and other well-known Russians to shift cash abroad.

Not a single “Kremlin insider” is named in any of the four stories currently running on this issue.

Before it was rumbled, the scheme was one of several mafia operations that have allowed the rich to spirit money out of the country to spend in the west.

There’s no evidence to back-up this statement, not a single connection to the mafia is ever mentioned again. But even so it’s worth noting. The money is leaving Russia and coming here. Remember that, because it will be important later on.

“Money laundering is the biggest business in Russia,” one former Moscow banker, now living in exile, explained. “You steal from the budget. You’ve got this dirty money. You have to do something with it.”

The source here, the “former banker living in exile”, is naturally unnamed. As an educated guess it’s probably Sergei Pugachev, a banker and oligarch who has fled both Russia and Britain on charges of embezzling and money laundering. Harding has interviewed him before, it would make sense if he became Harding’s primary source on Russian banking.
Pugachev fled Russia after the government seized his assets and charged him with various financial crimes. That’s an important pattern that will repeat, and has repeated, many times over.

Here we come to the “Putin connection”, are you ready?

It features Russian banks, Moldovan oligarchs, and a network of fake UK companies fronted by fake or “nominee” directors, many of them in Ukraine. It had impeccable Moscow connections. Vladimir Putin’s cousin Igor sat on the board of a bank which held accounts that laundered billions.

His cousin worked at one of the banks that held accounts that may have laundered money. That’s it. These are connections that Harding considers “impeccable”. Is there any evidence connecting the two cousins? Phone calls? Photographs? If any exists, none is presented.

Interestingly, Igor Putin is actually a member of an opposition political party in Russia, which supported an alternative presidential candidate in 2012.

You can put the above quote together with another statement, from this article, to see just how completely meaningless it is:

Accounts held at 19 Russian banks were involved in the scheme. In 2014, it was reported that one financial institution was the Russian Land Bank (RZB). A bank board member at the time was Igor Putin.

Yes nineteen, nineteen(!), different Russian banks are “involved” with the scheme, and the “impeccable Moscow connections” are that Putin’s cousin worked at one of them. At least five different British banks were involved, HSBC, Barclays, Lloyds TSB, NatWest and RSB. It’s hard to imagine that every cousin, of every board member, of every bank is currently under investigation by Scotland Yard.

In fact, nobody is under investigation by Scotland Yard, at all. Every single reference to a criminal investigation is talking about Latvia, Moldova…and Russia.

Once the goods had been cleared the UK firms were liquidated. No duty was paid. Often, Russia’s tax inspectors then took the UK companies to court.

In practice, the Laundromat made possible three different crimes inside Russia: tax evasion, evasion of customs duty and money laundering. In 2013 grey import schemes cost the state $40bn, a Russian parliament committee said.

…alleged ringleader Alexander Grigoriev was detained in November 2015 while eating in a Moscow restaurant…In 2014-15, [Russian] regulators stripped Grigoriev of his banking licences amid concerns that funds were mysteriously vanishing…Russian police sources told Kommersant that Grigoriev was one of a number of prominent people who used the Laundromat to move $46bn in liquid assets out of Russia.

In three separate paragraphs, dotted throughout the four different articles he has contributed to, Harding makes reference to three different Russian governmental efforts to control illegal movement of money: Taking foreign companies to court, parliamentary enquiries, and the arrest and suspension of (alleged) criminal bankers.

He makes no such mention of any British efforts to do the same, because there were none.

The FSB, the Russian security service Harding routinely refers to as “the successor to the KGB” (in fact, in one article today he simply calls them the KGB), have apparently launched an investigation into this scheme. How does Harding address this issue? Very simply:

The Russian investigation into Laundromat has been cursory.

There are suspicions the FSB’s real goal was merely to find out how much investigators knew.

…officers from Russia’s FSB spy agency visited detectives in Moldova. They took away records. It is unclear if this was a genuine investigation or an attempt to discover how much the Moldovans knew. Probably the latter.

No sources are linked to back up these assertions. He completely dismisses, without evidence or argument, the FSB investigations.

He doesn’t dismiss the intentions of Britain’s NCA investigations…because, once again, there were none.

A step back, and a gentle examination, paints a rather different picture from the one with which the Guardian is trying to present us. It shows us Russian oligarchs and bankers shifting vast sums of money OUT of Russia and INTO the EU. Now why would this be?

Logic would suggest that money flows FROM regulation INTO corruption. That’s a natural physical force, like water running downhill. Like osmosis. Russia, since the end of the chaotic Yeltsin era, has been going through a slow process of de-oligarchisation, even Shaun Walker (grudgingly) admitted that.

The aforementioned Sergei Pugachev can attest to it (he does so, often and loudly).

The Russian government has jailed billionaires for embezzling. Russia prosecutes bankers, and demands companies pay their taxes. Is the same true of Britain? Did a single banker see the inside of jail cell after the 2008 crash? Have Amazon, Google or Vodafone been brought to court for their massive tax evasion?

What you’re looking at here, like the Panama Papers, is just further evidence of that which we already know, that the deregulated bank and business sectors in the UK can be abused by the super wealthy for their own personal gain. And, like the Panama Papers, it was deliberately misrepresented by “investigative journalists” in order to exaggerate any connection with the Russian government, and just generally shine a poor light on Russia.

So, who is behind this revelation?

To answer that, let’s take a look at the about page of the driving force behind this “scandal”, The Organized Crime and Corruption Reporting Project (OCCRP). The following is taken directly from their own website:

OCCRP is supported by grants by the Open Society Foundation, Google Digital News Initiative, the Skoll Foundation, the Sigrid Rausing Trust, Google Jigsaw, the National Endowment for Democracy and the Knight Foundation. OCCRP also receives developmental funds for improving journalism from the United States Agency for International Development (USAID) through the International Center for Journalists (ICFJ), the United States Department of State and the Swiss Confederation.

The bolded are all very familiar to us here at OffG, and should be to anyone that has followed our work on US-back NGOs. They form an argument on their own, you don’t need me to tell you what it means.

All this really tells us, so far, is that the US government, their corporate allies and puppet NGOs have spent years of their time, and God knows how much of their near-limitless resources, trying to tie the current Russian administration to any kind of criminal corruption. What have they found?

A cellist legally avoiding his taxes and that Russian oligarch’s think their ill-gotten gains are safer in British banks, than Russian ones. A rather damning fact, when you think about it.

This is the result of years of work from the world’s business and intelligence elites (and Luke Harding), and it is, frankly, pitiful.

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