In 2014, Ukraine was in the depths of a health crisis, with infectious diseases and disastrous levels of cardiovascular conditions contributing to low life expectancy and general misery. Officials and their allies in the pharmaceutical industry were embezzling much of the state medical budget, leaving scant resources for doctors’ salaries, medicines or vital equipment.

What has followed has been one of the most successful hands-on anti-corruption interventions in history. Three international bodies took over procurement, and succeeded in cutting prices by 40 percent. Hosted as usual by investigative journalist Oliver Bullough, the first kleptoscope of 2019 looks at how this happened, what obstacles it faced, and whether it could be a blueprint for cleaning up corrupt administrations in other countries.

Speakers

Henry Marsh is a brain surgeon, and an award-winning author, whose 2014 memoir Do No Harm was a bestseller. His work in Ukraine was the subject of a BBC documentary The English Surgeon in 2007.

Tania Korotchenko is in charge of Crown Agents’ procurement work in Ukraine, and has worked with the health ministry to significantly reduce the prices it pays for key medications.

Fergus Drake is Chief Executive at Crown Agents, a not-for-profit international development company. He has over two decades of experience delivering humanitarian and development programmes around the world. Previously, Fergus was Executive Director of Global Programmes at Save the Children, has experience at HM Treasury in the UK and embedded in the Government of Rwanda with Tony Blair’s Africa Governance Initiative.

  Watch the video stream of Kleptoscope 11

Peter and Oliver will be joined by Dr. Elisabeth Schimpfossl, whose newly published Rich Russians, from Oligarchs to Bourgeoisie, takes a deep dive into the lives of the most famous group of super-rich on the planet.

Speakers

Oliver Bullough – chairs our Kleptoscope series that investigates corruption and dirty money in London. Bullough is an award-winning journalist and the author of two books about Russian history and politics, The Last Man in Russia and Let Our Fame be Great and now Moneyland, why thieves and crooks now rule the world and how to take it back. He is also an expert guide for the Kleptocracy Tours initiative, which exposes money laundering via property in London.

Peter Pomerantsev is a Soviet-born British journalist, author and TV producer. He is also a visiting Senior Fellow at the Institute of Global Affairs at the London School of Economics. He specialises in propaganda and media development, and has testified on the challenges of information war to the US House Foreign Affairs Committee, US Senate Foreign Relations Committee and the UK Parliament Defence Select Committee. He writes for publications including the Financial Times, London Review of Books, Politico, Atlantic and many others. His book on Russian propaganda, Nothing is True and Everything is Possible, won the 2016 Royal Society of Literature Ondaatje Prize, was nominated for the Samuel Johnson, Guardian First Book, Pushkin House and Gordon Burns Prizes. It is translated into over a dozen languages. He is working on his next book, which looks at developments in the ‘battle for hearts and minds’ across the world.

Dr. Elisabeth Schimpfossl  is Lecturer in Sociology and Policy at Aston University. Her research focuses on Russia’s new upper class, as well as media and journalism. Her book Rich Russians: From Oligarchs to Bourgeoisie (Oxford University Press) was published in May 2018.

Guy Shrubsole is a writer and campaigner on issues of land transparency, who runs the blog Who Owns England? 

Speakers

Since December John Penrose MP has been the government’s anti-corruption champion. Elected for Weston Super Mare in 2005, he drives delivery of Britain’s anti-corruption strategy, and seeks to bolster the nation’s effort against financial crime.

Margaret Hodge MP has become parliament’s most consistent and outspoken opponent of corruption and corporate tax dodging. Elected for Barking in 1994, she served as a minister in Tony Blair’s and Gordon Brown’s governments, before chairing the Public Accounts Committee when it launched ground-breaking investigations into a number of major corporations.

Susan Hawley is policy director at Corruption Watch, having previously worked at the Corner House and Christian Aid. Her investigative work resulted in the conviction of the first British company for overseas corruption in September 2009. Her detailed policy work has resulted in the creation and funding of an overseas corruption police unit and the inclusion of a new corporate offence with regard to overseas bribery in the recent Anti-bribery Act in the UK.

Kleptoscope returns with an evening focussed on Nigeria, a country criticised by former Prime Minister David Cameron as “fantastically corrupt”. Our panel of experts will address the roots of Nigerian corruption, ask why so much of the stolen money ends up in London, and discuss why more isn’t being done to give it back.

Host:

Oliver Bullough is an award-winning journalist and the author of two books about Russian history and politics, The Last Man in Russia and Let Our Fame be Great. He is also an expert guide for the Kleptocracy Tours initiative, which exposes money laundering via property in London.

Speakers:

Chibundu Onuzo is a Nigerian novelist, whose recently-published book Welcome to Lagos is a blackly-comic exploration of corrupt officials, scam artists, idealistic liberals and more in the greatest city in Africa. The Guardian praised its “Nollywood-like storylines and clever turns in plot”, while The Economist loved the way that the words of the “rich and poor, urban and rural, privileged and powerless, Muslim and Christian, Igbo and Yoruba collide to spectacular effect”.

Eva Anderson is a Senior Legal Research Officer at Transparency International’s Defence & Security Team. She has previously worked at Goldman Sachs, the Financial Services Authority, and as a forensic investigator at PriceWaterhouseCoopers. She is a qualified barrister, and an expert in the difficulties faced in attempting to recover the proceeds of corruption that have been stashed in the West.

Matthew Page was, until recently, the US intelligence community’s top Nigeria expert, advising the White House, the State Department, the Pentagon and more. His book Nigeria: what everyone needs to know will be published later this year by Oxford University Press.

After two successful Kleptoscope talks discussing the former Soviet Union and the Middle East, we come closer to home, with an exploration of Britain’s offshore tax havens. The Channel Islands, Cayman Islands and others pay host to enormous capital flows, as well as untold thousands of shell companies, but are they are they as dubious as they are painted?

Hosted by investigative journalist Oliver Bullough, Kleptoscope #3 will bust myths and uncover the facts about Britain’s big companies hiding away from view.

Oliver Bullough is an award-winning journalist and the author of two books about Russian history and politics, The Last Man in Russia and Let Our Fame be Great. He is also an expert guide for the Kleptocracy Tours initiative, which exposes money laundering via property in London.

Professor Ronan Palan is one of the world’s leading academic experts on tax havens . He will sketch out the dimensions of the offshore world.

Professor Anastasia Nesvetailova, also of City University, specialises in the way the finance industry uses offshore jurisdictions.

John Christensen worked as an economic adviser to the States of Jersey, before founding the Tax Justice Network. He is a top campaigner against tax havens, and has done more than almost anyone to put them in the international spotlight.

The panel, chaired by prominent investigative journalist Oliver Bullough, examined ground-breaking stories focusing on Arab Spring countries. They explored how kleptocrats from the region have used the services of the British capital to retain and launder their money.

Ala’a Shehabi of Bahrain Watch addressed the Frontline Club, explaining the extent corruption has plagued Bahrain. In recent years, extensive sections of the island’s surrounding waters have been dredged and reclaimed as land, with more than 65 km2 of Bahrain’s land having been privatised in the process ‘the sea was literally disappearing’.

Corrupt Bahraini officials and others exploited this land reclamation as a means to generate vast wealth, selling land and the developments built upon it for enormous profits. The wealth created in the process has since flowed into London, and is particularly prevalent in the capital’s housing market.

‘London is being used to… hide and stash dirty money away. It is a guaranteed safe investment… because it has an accelerating housing market and no one will know who you are. The minute we expose who these people are, the incentives to come to London will disappear,’ explained Shehabi.

Bahrain Watch has worked to expose the financial exploitation committed by the nation’s elites, and has had recent success in revealing the money flowing through the King’s own company ‘Premier Group’. 21 high-end London properties belong to the company’s portfolio, including The Four Seasons and The Marriot on Park Lane. Shehabi described the company as being involved in the ‘alchemy of making money from sand’.

Prior to receiving a leak detailing the corporate structure of the group the information pertaining to the company’s ownership structure and property holdings had been successfully obscured. When Bullough asked her about the difficulty of exposing financial malpractice in Bahrain before she obtained this data, Shehabi said ‘It was a web of information which had been completely obscured. Who owns the sea? This was never registered as public land.’

Shehabi points to the Arab uprising of 2011 as being a pivotal moment for the nation’s people in finally registering their discontent at the widespread corruption that had engulfed the island and its political class. However, she decried the failure of media coverage to pick up on this source of anger as a critical driving force for the political revolt, ‘that’s a story that hasn’t been properly told yet’.

Speaking passionately about the struggles she now encounters in trying to access her homeland, Shehabi concluded by referring to the important work she is now doing in London to combat the flow of wealth out of Bahrain and away from the nation’s own citizens.

Ben Cowdock of Transparency International outlined the sheer scale of the illicit money generated during the Arab Spring, much of which has since flowed through the UK. The National Crime Agency estimates that tens if not hundreds of billions of illicit cash flows through the UK each year.

The misappropriation of state budgets within certain Middle East states in recent years has resulted in huge sums of money being accumulated in the hands of a very select few individuals. Cowdock gave the striking example of Syrian state finances, with Bashar Al Assad’s cousin reportedly owning 60% of the national economy in 2011 according to Transparency International. Illicit money owned by such individuals has flowed into London in vast quantities following the Arab Spring.

Explaining why the capital is a hive of activity for the channelling of such funds, Cowdock said: ‘The UK is a safe haven for corrupt money. It’s a safe haven because it’s a global financial hub, so trillions of pounds come through the UK each year. It’s easy to hide that money within legitimate money. It’s a stable legal environment, you’re unlikely to have your assets taken off you by the government… and has a thriving property market so you’re able to buy gold blocks of bullion in the sky.’

Referring to the network of ‘professional enablers’ that exist within the UK, Cowdock detailed the money being made by professional services in London through the trade of illicit money via property. He highlighted legal firms, banks and estate agents as being just a few of the industries who are generating money as a result of this financial traffic, be that implicitly or explicitly.

The UK’s close links with overseas territories such as the British Virgin Islands and other notable tax havens has made it an increasingly attractive destination for illicit money. Cowdock spoke passionately about the need for the UK to bolster transparency, asset recovery systems and defences against such practice in the future if the capital and the nation as a whole is to combat the problem effectively.

Richard Brooks of Private Eye revealed to the audience the map Private Eye have put together detailing property acquired by overseas companies within the UK from 2005-2014. The map helps to track the flow of dirty money in the UK, designating the ownership details of the vast extent of real estate owned across the nation by foreign companies.

Brooks suggested many of these companies have links to offshore banking and investment programmes, which act as a channel and safe haven for illicit funds.

When asked by Oliver Bullough as to why we put up with such practices, Brooks replied jovially that the UK is keen not to put off entrepreneurs,’we are open for business remember.’

Brooks delighted the crowd when he revealed the case of an underground parking space in Kensington being owned by a company in St Lucia, detailing the truly absurd flow of capital and ownership structure in this instance. His point was well made, he documented to the audience extremely effectively the nature of the high-end property market in London and its murky finances using this and other examples.

Responding to a question pertaining to the importance of greater regulation in this area, Brooks made the moral case for a tighter legal framework, saying: ‘laws serve a purpose of saying we don’t think this is great, meaning such behaviour becomes less socially acceptable.’ Cowdock supported this view, arguing there is a need to ‘create larger disincentives for companies and individuals involved and raise awareness of the moral and financial cost of enabling and facilitating dodgy money transactions.’

When asked about comparisons within Europe regarding the issue of illicit money flows, Brooks revealed that ‘the EU has been a pretty positive force in the last few years regarding financial transparency. It’s certainly dragged along other countries like the UK.’ He expressed concern over the potential impact of Brexit in this area.

The panel united in calling for greater transparency of data from central government, better protections and incentives for whistle-blowers and enlarged anti-corruption budgets.

Cowdock finished: ‘dirty money follows the path of least resistance. Greater regulation raises the obstacles to its passage.’

*This was the second talk in the Frontline Club’s series of Kleptoscope events investigating corruption and dirty money in London: interrogating its origins, its launderers and how it gets spent. The first Kleptoscope event featured three ground-breaking stories focusing on the former Soviet Union, and explored how Russian kleptocrats have used the services of the British capital to retain and launder their money; how London’s property market has become a piggy bank for the world’s corrupt elite; and how ex-Soviet businessmen have covertly funded MPs and parliamentary groups, gaining preferential treatment as a result.

This talk will feature groundbreaking stories focusing on Arab Spring countries, exploring how kleptocrats from the region have used the services of the British capital to retain and launder their money.

Ala’a Shehabi, of Bahrain Watch, will reveal how Bahraini officials built luxury artificial islands in the sea, hid the transactions behind layers of offshore companies, then spent the proceeds on high-end real estate in London and how this fuelled the uprising in 2011 and subsequent repression in the country.

Ben Cowdock from Transparency International will present a new TI-UK report on dirty money in the UK, its role in the Arab Spring and the need for urgent reform in the UK’s asset recovery regime. He will address the UK’s role as a safe haven for corrupt money, giving an overview of the systemic weaknesses of the UK’s mechanisms against the laundering of corrupt funds.

Finally, Richard Brooks of Private Eye will demonstrate the map he and his colleagues created of all the properties in England and Wales that are owned offshore. The map gives crucial insights into the role of anonymous companies in distorting the British property market.

Oliver Bullough is an award-winning journalist and the author of two books about Russian history and politics, The Last Man in Russia and Let Our Fame be Great. He is also an expert guide for the Kleptocracy Tours initiative, which exposes money laundering via property in London.

The audience sat in stunned silence. Roman Borisovich continued, “there is an army of UK bankers, accountants, lawyers, trustees, and other professionals assisting Russian corruption.”

Facilitating such dubious financial transactions should be ‘socially unacceptable behaviour,’ he argued, ‘just like child pornography.’

September 14th marked the Frontline Club’s inaugural Kleptoscope; the first in a new series of events investigating corruption and dirty money in London.

“Klepto as in kleptocracy,” award-winning journalist Oliver Bullough explained, “scope as in looking at it under a microscope”. Their aim, he elaborated, was not just looking at those ‘stealing money from their budgets’, but also the ways in which that dirty money is laundered and then spent. Kleptoscope’s debut event certainly delivered on this promise.

Anti-corruption campaigner and ex-banker Roman Borisovich shared a former insider’s perspective. The UK, he argued, is the “single largest enabler of money laundering and corruption in the world.”

That dirty money, Chido Dunn of Global Witness claimed, is stashed in a ‘secret bank’. This bank, she said, is one without branches and employees, but which takes dirty money and cleans it: the London property market.

“If you were a corrupt politician and you wanted to buy a luxury property using stolen money,” Dunn asked, “how would you go about it?

Her explanation made it seem simple.

Imagine you’re a corrupt minister with the power to sell oil rights, Dunn urged. Using an anonymous company you’ve registered in the British Virgin Islands (‘Shady Incorporated’), you sell those rights to yourself at a fraction of their market value, and then sell them on for their full worth. With no trace left behind, you pocket the ‘profit’. But, Dunn asked, how do you clean that dirty money?

“Property is an excellent way to launder money,” she said, “you can drop a large amount at one time with very few questions asked and the value of that asset will steadily increase.”

‘Very few’ might even be an exaggeration. A excerpt ‘From Russia With Cash‘ screened at the event showed several London estate agents caught on camera blithely nodding along with Borisovich, who played the role of a corrupt oil minister, much to the entertainment of Kleptoscope’s audience.

But whilst the hapless estate agents’ actions were certainly laughable, the impacts of corruption clearly are not.

“Corruption threatens our economy and makes our country less safe’ explained Dunn. In Russia, Borisovich said with an air of resignation, corruption “has caused irreparable damage to the nation”

But, where does the money go from here? Describing the links between individuals associated with bribery, corruption, and violence in Ukraine and Azerbaijan and back-bench MPs in the UK, Bullough asked whether it is being used to buy influence and access. He couldn’t be certain that these links were crooked, he cautioned, “but it looks bad, it looks concerning.”

“By focussing the scope on these things” he reiterated, “hopefully we can push for greater and greater transparency so when the sunlight is shone on these deals we can say actually it was fine […] we need to know, this is a democracy.”