Beautiful Virgin Islands

Saturday, Feb 22, 2025

We were leaked the Panama Papers. Here’s how to bring down Putin’s cronies

We were leaked the Panama Papers. Here’s how to bring down Putin’s cronies

The jurisdictions that help kleptocrats live in luxury on stolen assets must stop shielding corrupt elites
Seven years ago, an anonymous source who went by the name “John Doe” provided us with the data that became the Panama Papers – 2.6 terabytes of leaked documents from the Panamanian law firm Mossack Fonseca. The leak turned out to have quite an impressive Russian component. We found shell companies connected to Vladimir Putin’s judo friends, Boris and Arkady Rotenberg, to the oligarch Alisher Usmanov and the wife of the Kremlin spokesman Dmitry Peskov. But, most significantly, we stumbled across Sergej Roldugin, a professional cellist and godfather of Putin’s eldest daughter, who had a central role in a network of secret offshore deals and vast loans worth $2bn, described at the time as the key to tracing Putin’s hidden fortune.

All this hidden wealth mattered when we published the Panama Papers in 2016, two years after Russia had annexed the Crimean peninsula. Now, after the full-scale invasion of Ukraine, it matters more than ever. Lawmakers in the UK, the EU, the US and Canada have sanctioned Russian banks, Russian companies and individuals close to Putin. This includes Russian oligarchs, as well as Putin’s friends, supporters and admirers who have helped facilitate his kleptocracy by hiding his wealth in accounts under their own names or just championing his kleptocracy for their own illicit enrichment. Individuals like the cellist Sergej Roldugin, the Rotenberg brothers and Usmanov.

Now, the western world has decided that they want Putin’s friends to be sanctioned for the kleptocracy and harm they have facilitated and from which they have benefited. Prosecutors and investigators as well as special police units are now hunting for the riches of Putin’s friends. They are seizing yachts, grounding planes and confiscating lavish villas. Yet what they will find is probably only the tip of the iceberg. To really hit Putin and his friends where it hurts, one must go to Switzerland, to Panama, Cyprus and the British Virgin Islands. Unfortunately, investigators will probably not get much help there – as secrecy is what those countries sell.

Economists like to call them tax havens or secrecy jurisdictions. But “black holes” would be more appropriate for these places where greedy lawyers, tax advisers, consultants and other crooks help the rich and powerful to hide or, as they put it, “fence” their assets. These willing helpers assist the oligarchs to make their fortunes vanish from the view of law enforcement.

When we received the leak that became the Panama Papers, we found – apart from Roldugin – dozens of filthy rich Russians. When we received the Paradise Papers, another offshore data leak, the names of oligarchs Roman Abramovich, Alisher Usmanov and Oleg Deripaska appeared in the data, as did Olga Shuvalova, the wife of Russia’s first deputy prime minister. More than a year ago we got hold of the Suisse Secrets, yet another leak, and there was the sister of Alisher Usmanov and a fortune of about 2bn Swiss francs.

Sanctions are a powerful tool in foreign policy. Some even call them a “tool of modern war”. We understand the idea to put pressure on Putin’s inner circle and Russia’s economy. But why stop there? Let’s address the problem and not only its symptoms. Let’s change the system so governments do not have to rely on sanctions to prevent Putin and other kleptocracies from gaining more power.

First and foremost, secrecy jurisdictions themselves need to be targeted. It is not enough to go after the profiteers of these countries, but the jurisdictions themselves. If necessary, the black holes themselves need to be sanctioned – to bring change not only to the war in Ukraine, but worldwide.

Russia’s oligarchs are not the only ones who enjoy a luxury lifestyle financed with stolen money. Kleptocracy and corruption are far from a uniquely Russian phenomenon.

Think Venezuela. Think China. Think Angola.

Addressing the systemic causes of kleptocracy and corruption will inevitably mean targeting both the legal structures and professionals in the west that facilitate kleptocracy: law firms, consultants and asset managers in Zurich, London and New York who regularly lend a helping hand to kleptocrats. They profit from jurisdictions like the Cayman islands and Switzerland – and yes, the US – which still offer secrecy on a grand scale. They profit from jurisdictions without public registries of who owns real estate and companies.

Defenders of secrecy claim their rights to privacy matter most. But let us face the facts: financial secrecy is the engine of global corruption and kleptocracy. It makes it too easy for corrupt elites to plunder whole continents, for traffickers of drugs and people to launder their money, and it helps to finance brutal wars. It helps Putin and his friends.

Fortunately, in late 2020, the United States government finally passed legislation that requires a beneficial ownership registry for US companies. Similar registries exist in dozens of countries, because forcing companies to reveal who ultimately benefits from them makes it far more difficult for kleptocrats and their cronies to hide their illicit money. But the US legislation, the Corporate Transparency Act, does not go far enough. It forces the ultimate beneficial owners to be revealed only to the authorities and only under certain circumstances.

But not to the public. And this is a huge mistake.

As long as we rely on authorities and law enforcement alone, kleptocrats, autocrats and Putin’s friends will have an easier time evading sanctions and continuing to hide their ill-gotten gains. Mutual legal assistance between national law enforcement agencies takes years, and does not penetrate the numerous layers of secrecy used by evildoers around the globe. Journalists and civil society groups have proven to be far more effective. They can collaborate quickly and effectively across borders, they can work with leaked data (something law enforcement still has to learn) and connect it with publicly available data. New government task forces set up late in the day to chase Putin’s cronies’ cash will be insufficient. Governments should open up the registries: company registries, ship registries, plane registries, real estate registries. Give the investigative power to the people – and we bet: you will not be disappointed.

Above all, let’s finally get rid of those black holes.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Good News: Senate Confirms Kash Patel as FBI Director
Officials from the U.S. and Hungary Engage in Talks on Economic Collaboration and Sanctions Strategy
James Bond Franchise Transitions to Amazon MGM Studios
Technology Giants Ramp Up Lobbying Initiatives Against Strict EU Regulations
Alibaba Exceeds Quarterly Projections Fueled by Growth in Cloud and AI
Tequila Sector Faces Surplus Crisis as Agave Prices Dive Sharply
Residents of Flintshire Mobile Home Park Grapple with Maintenance Issues and Uncertain Future
Ronan Keating Criticizes Irish Justice System Following Fatal Crash Involving His Brother
Gordon Ramsay's Lucky Cat Restaurant Faces Unprecedented Theft
Israeli Family Mourns Loss of Peace Advocate Oded Lifschitz as Body Returned from Gaza
Former UK Defense Chief Calls for Enhanced European Support for Ukraine
Pope Francis Admitted to Hospital in Rome Amid Rising Succession Speculation
Senate Republican Leader Mitch McConnell, at the age of 83, Declares His Retirement.
Whistleblower Reveals Whitehall’s Focus on Kabul Animal Airlift Amid Crisis
Politicians Who Deliberately Lie Could Face Removal from Office in Wales
Scottish Labour Faces Challenges Ahead of 2026 Holyrood Elections
Leftwing Activists Less Likely to Work with Political Rivals, Study Finds
Boris Johnson to Host 'An Evening with Boris Johnson' at Edinburgh's Usher Hall
Planned Change in British Citizenship Rules Faces First Legal Challenge
Northumberland Postal Worker Sentenced for Sexual Assaults During Deliveries
British Journalist Missing in Brazil for 11 Days
Tesco Fixes Website Glitch That Disrupted Online Grocery Orders
Amnesty International Critiques UK's Predictive Policing Practices
Burglar Jailed After Falling into Home-Made Trap in Blyth
Sellafield Nuclear Site Exits Special Measures for Physical Security Amid Ongoing Cybersecurity Concerns
Avian Influenza Impact on Seals in Norfolk: Four Deaths Confirmed
First Arrest Under Scotland's Abortion Clinic Buffer Zone Law Amidst International Controversy
Meghan Markle Rebrands Lifestyle Venture as 'As Ever' Ahead of Netflix Series Launch
Inter-Island Ferry Services Between Guernsey and Jersey Set to Expand
Significant Proportion of Cancer Patients in England and Wales Not Receiving Recommended Treatments
Final Consultation Launched for Vyrnwy Frankton Power Line Project
Drug Misuse Deaths in Scotland Rise by 12% in 2023
Failed £100 Million Cocaine Smuggling Operation in the Scottish Highlands
Central Cee Equals MOBO Awards Record; Bashy and Ayra Starr Among Top Honorees
EastEnders: Four Decades of Challenging Social Norms
Jonathan Bailey Channels 'Succession' in Bold Richard II Performance
Northern Ireland's First Astronaut Engages in Rigorous Spacewalk Training
Former Postman Sentenced for Series of Sexual Offences in Northumberland
Record Surge in Anti-Muslim Hate Crimes Across the UK in 2024
Omagh Bombing Inquiry Concludes Commemorative Hearings with Survivor Testimonies
UK Government Introduces 'Ronan's Law' to Combat Online Knife Sales to Minors
Metal Detectorists Unearth 15th-Century Coin Hoard in Scottish Borders
Woman Charged in 1978 Death of Five-Year-Old Girl in South London
Expanding Sinkhole in Godstone, Surrey, Forces Evacuations and Road Closures
Bangor University Announces Plans to Cut 200 Jobs Amid £15 Million Savings Target
British Journalist Charlotte Peet Reported Missing in Brazil
UK Inflation Rises to 3% in January Amid Higher Food Prices and School Fees
Starmer Defends Zelensky Amidst Trump's 'Dictator' Allegation
Zelensky Calls on World Leaders to Back Peace Efforts in Light of Strains with Trump
UK Prime minister, Mr. Keir Starmer, has stated that any peace agreement aimed at ending the conflict in Ukraine "MUST" include a US security guarantee to deter Russian aggression
×