the times | Tuesday March 15 2022 V2 3times2
Corruption Unit more than a third of
its entire annual budget. The UWO is
a powerful weapon, but if enforcement
agencies lack the resources they need
to deploy it, it will sit on a shelf
gathering dust. From the government’s
perspective, UWOs were a triumph,
garnering article after article about
their tough stance against kleptocrats
and their kleptobrats. From Butler
Britain’s perspective, they were a
triumph too: rich clients and their
children can continue to enjoy their
wealth without worrying about being
disturbed. From a law enforcement
perspective, however, they were a dud.
The NCA had planned to bring 200
UWOs over a decade and predicted a
total cost of around £1.5 million but
blew more than that on this single
case, which ended in a defeat that
may have doomed the UK’s entire
anti-money-laundering strategy.
Depressingly, this possibility was
predicted in 2017 when parliament
debated the UWOs. An amendment
tabled by Nigel Mills MP would have
capped the costs that respondents
could incur so they could not outgun
the NCA by engaging expensive
lawyers, all ultimately to be paid by
the taxpayer. The government rejected
this idea, arguing that the prospect of
being forced to pay the respondent’scosts in the event of an unsuccessful
UWO would be an important check
on the state abusing its new powers.
And so it has turned out. In fact, the
prospect has all but stopped the state
using the powers at all.
This is a story that will alarm
anyone thinking that the sanctions
against Roman Abramovich and other
Russians mark a change in the UK’s
position on accepting oligarchs’
wealth. It is a certainty that the
sanctions will be challenged in court.
Those same law enforcement agencies
who crumbled when their unexplained
wealth orders were challenged will be
forced to defend them. My prediction
is that they will fail.
The new economic crime bill will do
nothing to change this calculation,
since it contains nothing that will help
to drive kleptocratic wealth out of this
country (it is not, in fact, an economic
crime bill in any meaningful sense
anyway). Finally tackling the dirty
wealth that has polluted our economy
requires a recognition that tackling a
kleptocracy such as Putin’s is not
something that can be done on the
cheap: our frontline officers’ agencies
need the people, resources and tools to
face down the oligarchs’ lawyers.
No minister has yet acknowledged
this simple reality and, until they do,
I will not believe that Boris Johnson’s
government has any intention of
changing Britain from being a butler
to being a policeman. Until it does,
suspicious wealth will keep having a
home here.We’re not a
policeman, we’re
a butler — butler
to the world
been at least worth asking how the
daughter of the head of a country
where the average person earns £600
a month had managed to amass
enough wealth to buy a London
property empire valued by some
newspapers at £80 million. And if she
was going to rely on Kazakh court
documents to show that she had no
involvement in any of Aliyev’s crimes,
then wasn’t it at least worth
questioning the legitimacy of those
courts’ judgments, given that they
came from a judicial system ultimately
controlled by her dad? The NCA,
however, did not seem to feel it
warranted further investigation;
Dariga Nazarbayeva and her son
presented evidence to show they were
successful self-made entrepreneurs,
and the court agreed with them.
I know one academic expert on
corruption who was so bewildered by
the NCA’s capitulation that he
speculated — not entirely in jest —
that it must have been ordered from on
high: perhaps senior officers received
a call from Britain’s embassy in
Kazakhstan asking them to present a
deliberately weak case? I am sure that
did not happen, but the real reason for
the agency’s failure is more troubling.
The NCA simply doesn’t have the
resources to go up against a law firm
like Mishcon de Reya, and
neither do any of Britain’s law
enforcement agencies. They
have been starved for so long
that they are demoralised by
defeat and hollowed out by
the steady departure of their
officers (the NCA’s Command
and Control Centre loses its
entire workforce on average
every three years, and has
effectively become a training
ground for private sector
compliance officers, who
can earn salaries 20 to 30 per
cent higher).
In its report into Russian
interference in the UK
published in July 2020, a
month after the NCA’s request
to appeal the Nazarbayeva
decision was rejected,
parliament’s intelligence and
security committee quoted
NCA director-general Lynne
Owens as conceding that her
officers might not be able to use
UWOs against oligarchs at all
any more. “We are, bluntly, concerned
about the impact on our budget,
because these are wealthy people with
access to the best lawyers,” she said.
“I’ve got a very good legal team based
within the National Crime Agency but
had a lot of resource dedicated out of
my relatively small resource envelope
on that work.” Translation: Britain, a
G7 country with an economy worth
nearly $3 trillion, is not prepared to
pay its law enforcement agencies
enough to investigate dirty money.
The NCA’s International Corruption
Unit has an annual budget of just over
£4.3 million. A judge ordered it to pay
half a million pounds immediately to
cover the legal costs incurred by
Dariga Nazarbayeva and Nurali, and it
is expected to have to pay a million
more before it is done. Even before
paying its own costs, therefore, this
case alone will cost the InternationalDariga Nazarbayeva,
whose ex-husband,
Rakhat Aliyev, was
at the centre of an
unexplained wealth
order case. UWOs
were dubbed the
McMafia law, after
the McMafia TV
show, toplike going after a top-ranking
kleptocrat, but he had been notorious
for using his position as head of
Kazakhstan’s security service to extort
wealth and steal businesses, so his was
precisely the kind of “McMafia
money” London should not be
sheltering. At last there was the kind
of action that the government had
promised. If dirty money, even if it
belonged to a sundered offshoot of the
ruling family of an oil-rich kleptocratic
state, could be driven out of London,
it would be a signal that Britain was
getting out of the butlering business.
You will probably not be too
surprised to discover all did not go as
the optimists wished.
Ownership of the properties
involved — two houses and two
apartments — was disguised behind
two Panamanian foundations, a
foundation registered on the Dutch
island of Curaçao and a shell company
registered on the obscure British
island of Anguilla. The UWOs,
therefore, were directed at these shell
structures plus the solicitor who
appeared to run the foundations
rather than at any named tycoon, but
the NCA’s supporting documents
made clear its investigators suspected
the properties had been bought with
Aliyev’s cash. Shortly after a court
agreed to issue the UWOs, however,
the NCA received a 268-page letter
from the famously potent London law
firm Mishcon de Reya (tagline: “It’s
business. But it’s personal”) informing
them that the properties had not been
owned by Rakhat Aliyev at all.
Instead, both of the apartments and
one of the houses belonged to his
ex-wife, Dariga Nazarbayeva, while the
other house belonged to their son
Nurali. They had purchased the
properties after she and Aliyev’sdivorce had been
finalised, the letter
said, so the source
of the money
could not have
been Aliyev.
Mishcon de
Reya contested
everything that the
NCA was trying to
do, bringing in an
expert to demolish
its understanding
of the structure of
Panamanian
foundations and
providing Kazakh
court documents
to prove that its
clients’ wealth
was entirely
independent of
Aliyev’s. Reading
the final judgment is like
reading the report of a match between
Manchester City and Hereford FC: the
embattled non-league side did its best,
but its players were swept aside.
“The NCA case presented at the
ex parte hearing was flawed by
inadequate investigation into some
obvious lines of enquiry,” the judge
concluded in April 2020 in an
extremely critical assessment.
“Furthermore, I consider that the
NCA failed to carry out a fair-minded
evaluation of the new information
provided.” She discharged the UWOs,
and thus ended any bid by the NCA
to confiscate the properties.
It was a total defeat, a humiliation,
made all the worse by the fact there
were so many open goals presented
to the NCA, which its investigators
apparently failed to notice. Even if the
properties did not belong to Aliyev but
to his ex-wife, it surely would haveCOVER: CAMERA PRESS; REX FEATURES; ALAMY. BELOW: REUTERSoligarchs? We’ve tried that before
Extracted from Butler
to the World by Oliver
Bullough, published
by Profile Books, £20