Tuesday

14th Aug 2018

Dirty Russian money buying influence in EU, MEPs warn

  • Germany's Deutsche Bank stands accused of helping Russian clients to move up to $10 billion in shady funds (Photo: Reuters)

MEPs from the main groups in the European Parliament have raised the alarm over illicit Russian money in Europe and its use to influence European politics.

They said in a letter to EU foreign relations chief Federica Mogherini that “over $200 million [€189mn] of illicit proceeds” from a Russian tax fraud “was laundered through Europe” and that “there is information that shows that the money has been used to influence European politics, media, and civil society to prevent consequences for Russian human rights violators”.

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They also said the $200 million was “just the tip of the iceberg” and that the same group behind that fraud “is linked to similar crimes worth over $1 billion”.

The tax fraud was first uncovered by Sergei Magnitsky, a Russian auditor who later died in prison in 2009.

The larger, $1 billion scam, which involved fraudulent VAT refunds by the same group of Russian tax officials and mafia enforcers, was documented by Novaya Gazeta, a Russian newspaper, and by the OCCRP, a club of investigative reporters in eastern Europe.

Bill Browder, a British hedge fund manager who was Magnitsky’s former employer, amassed evidence showing that the funds were laundered in several EU banks.

His campaign has prompted ongoing investigations by authorities in the US, Switzerland, France, Luxembourg, Cyprus, Estonia, Latvia, Moldova, Lithuania, and Poland.

The subsequent so-called Panama Papers leak also showed that $800,000 of the stolen Russian taxpayers’ money was funnelled to Russian leader Vladimir Putin’s friend, a cellist named Sergei Roldugin.

The MEPs’ letter to Mogherini on “the laundering of proceeds of Russian organised crime in Europe” said EU states should impose visa bans and asset freezes on 32 Russians implicated in the Magnitsky affair.

The letter, dated 5 December, was made public on Tuesday (13 December).

Mogherini’s office told EUobserver that “we got the letter and a response will be sent in due course”.

The MEPs’ warning comes ahead of elections next year in France and Germany, where anti-EU parties, such as the National Front in France and the AfD in Germany, both of which stand accused of receiving Russian money, aim to run for power.

British and German spy chiefs have warned that Russia was trying to sway the outcome of EU votes the same way that it did the US elections.

The EU parliament, in a recent report, also said that Russia’s anti-EU propaganda campaign was a threat to democracy.

'Destructive steps'

Mogherini’s foreign service, which has resisted previous calls to list the Magnitsky affair culprits, declined to say whether it shared those concerns when asked by EUobserver on Tuesday.

The MEPs’ letter accused the EU of having done little to improve the human rights situation in Russia.

It said Mogherini’s earlier pledges to put pressure on Moscow over rights abuses had “failed” and that further inaction “shows a weakness of Europe and encourages Vladimir Putin to take more provocative and destructive steps”.

It was signed by 51 MEPs from the centre-right EPP group, the centre-left S&D group, the liberal Alde group, the Greens, and the right-wing ECR group.

Signatories included the Green group’s German co-leader Rebecca Harms and the ECR’s Anna Fotyga, a former Polish foreign minister who wrote the parliament’s Russian propaganda report.

Browder’s campaign has led the US to blacklist corrupt Russian officials and prompted Estonia, last week, to also adopt a US-type law on bans of corrupt foreigners.

Sanctions talks

“It’s time for the European Union to do its part by enacting the will of its members to stop criminals with blood on their hands from reaping the benefits of Europe”, Browder said.

The EU has imposed a separate set of sanctions on Russia over its invasion of Ukraine.

French president Francois Hollande recently said in Berlin that he agreed with German chancellor Angela Merkel that the duration of economic sanctions should be extended for a further six months in January.

Italy had been critical of the measures.

Russia’s support for the Syrian regime’s massacre of civilians in Aleppo showed signs of having alienated its friends in Rome, however.

Paolo Gentiloni, the incoming Italian prime minister, said on Tuesday that the Syria crisis was coming to “define relations between the EU and Russia” and that EU leaders would discuss the situation at their summit later this week.

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