Russia and the Brexit

Wladimir Putin and Gerhard Schröder 2002
Wladimir Putin und Gerhard Schröder 2002

How do the Russian elites benefit from the Brexit? Are there any connections between the Panama Papers, possible sources of funding of the EU-exit-movements and the Soviet money laundering expertise? An interview with Karen Dawisha by Felix Riefer

Karen Dawisha is the Walter E. Havighurst Professor of Political Science in the Department of Political Science at Miami University in Oxford, Ohio, and the Director of the University’s Havighurst Center for Russian and Post-Soviet Studies.

/ What does the Brexit mean for Russia, for the Russian elites?

Karen Dawisha: What they hope is that it will diminish both, the British role in the EU and through that role it will diminish the US-role. They see the US operating in the EU primarily through the Brits. Which is not exactly the correct case. I think it was demonstrated under the Obama presidency that the relationship with Merkel is certainly a huge challenger to British preeminence in American calculations. The Americans regard Germany as the major player, in particularly with Eastern Europe.

The Russians also belief that without Britain – and that is probably the case – the strong and steady refuse to lift sanctions will be undermined. German business interest has been particularly hard hit and one can only imagine that German business would wish the sanctions to be reduced.

/ What is to expect next? Is Russia going to support all the other possible “exit-movements” within the EU?

Dawisha: They would like nothing better. Since the collapse of the Soviet Union the Russians would prefer to deal bilaterally with each strong member state of Europe instead of dealing with them collectively. Since the size of the European economy collectively is many, many times the size of the Russian economy. The Russians have an economy that is smaller than that of South Korea. One of the great benefits of the EU existing is to provide enormous power of the EU against all the other negotiating partners, including the Americans and the Chinese.

There are certain areas where the Russians would benefit from having individual countries within the EU to break off. It will certainly strengthen pro-Russian parties within the EU countries and it will also weaken those states, that Russia would like to put pressure on, as the Baltics and Poland. So, weakening the EU is a major strategic interest of Russia, for sure.

Porträt Karen Dawisha
Karen Dawisha

/ Which areas are specifically targeted?

Dawisha: First of all, we have Russian interest in energy contracts with various EU countries, including Germany of course. And not just oil and gas, but also nuclear as in Hungary or refining capacity in the Balkans. Limiting the success of let’s say Lithuanian efforts to become free of dependence upon Russia through the development of liquefied natural gas terminals. The Russians would love to disrupt the unified response of the EU. They are getting help in that by having lucrative relations with various EU politicians, like your former chancellor Gerhard Schröder and many others.

/ Looking at the new North Stream 2 project

Dawisha: North Stream 2 will go forward probably because of the involvement of Finnish, Swedish and German elites as financial beneficiaries of these contracts. North Stream 2 is definitely involved.

/ Elites in this case are not the government?

Dawisha: Yes, but former government officials. Former prime ministers, former chancellors. And maybe future, the Finish prime minister may appear as an advisor in this kind of projects in the future.

/ How should we look at these projects? Is this business or is this already corruption?

Dawisha: This is a major problem that all Western countries confront. There is a revolving door between serving in a government and assisting private companies, foreign or own, the moment that officials leave office. For example, Tony Blair. He has started to work as an advisor for the Kazakhstani authorities. Sometimes it is known that they have been helpful to these interest groups like chancellor Schröder was to Putin before he stepped down as chancellor.

Sometimes it is not clear why a prime minister is promoting a particular policy, until two or three years after he leaves office it becomes apparent that he has become an advisor to that company or that country’s own leaders. And he probably was promised large sums or calculated that he might receive such sums before he left office. That is corruption.

Cover - Karen Dawisha - Putins Kleptocracy - Who owns russia
Cover – Karen Dawisha – Putins Kleptocracy

/ You wrote a book called „Putins Kleptocracy. Who owns Russia„. Here you are describing inter alia the KGB offshore business.

Dawisha: There were a lot of people trained by the KGB to set up such accounts. They ran these accounts illegally to support in a hidden way communist parties or terror groups like Baader-Meinhof in Germany or Contras in Nicaragua. They also funded the World Communist Movement in a way that hid the Soviet Union’s actual involvement. But of course they were controlling them through their money.

This large number of people, who got extremely specialized in the hidden movement of funds, has continued to be very adept. That is actually one of the unfortunate conclusions of the Panama Papers. At least to the extent that we can understand that it is going to be an enormous effort to unravel who is in charge of these accounts. And maybe we won’t be able to succeed, because the money is very well hidden. It’s subject to what they call in the money laundering world “layering”.

/ Are there any connections to the Russian elites?

Dawisha: Quite rarely in the Panama Papers we have an actual passport photocopy as the one of the Putin’s friend, the Cellist Sergej Roldugin. Most accounts are set up by other accounts and we don’t know the actual owner.
All other people of Putin’s inner circle are absent in the Panama Papers, but this does not mean that they aren’t there. For example, there is a company which has a Russian trail where it is clear that the person who owns it and has this kind of money, is close to the Russian elites. They have signed the initial account in a jurisdiction where you don’t have to list the official owner. Thus, the actual benefactor remains unknown.

/ To close the brackets: Is this money also supporting other EU-exit-movements? Or has the situation changed since the Soviet days, when subversive movements were financed by the Soviet Union?

Dawisha: Well, we know that Marine Le Pen in France has a loan from a bank tight to the Russians. Based on that particular case, I think it would be fair to assume that other parties are similarly supported, but we don’t have the evidence.

But you know, it’s not like Nigel Farage in the UK is going to admit in his tax returns that he has got an apartment of which the keys were given to him by a Russian oligarch and that he was able to sell it for half a million pounds.

I am not suggesting that that’s a real case. It is hypothetical, but there is a lot of transfer of wealth, which takes place now without any money changing hands. For example, you could buy a piece of art for two million and simply hand it to somebody and they could sell it on the private art market and no one would ever know it.

/ Prof. Dawisha, thank you for the interview!

The German version of this article can be found here.

Bild 1: Putin und Schröder 2002. Urheber: Presidential Press and Information Office – Lizenz: Creative Commons Namensnennung 3.0 Unported (CC BY 3.0).
Bild 2: Porträt Karen Dawisha. Urheber: Mr. Dawisha. Lizenz: Creative Commons Namensnennung – Weitergabe unter gleichen Bedingungen 3.0 Unported (CC BY-SA 3.0).
Bild 3: Buchcover Karen Dawisha – Putins Kleptocracy – Who owns russia. © Verlag Simon & Schuster.

Lesen Sie mehr bei /
Dossier Brexit – Is the UK better off in or out?
Prognose 2016: Realitäts-Check für Russland und den Westen
Sein oder Nichtsein? – Das russische Paradoxon