Spies need to be left out in the cold…

Edward Lucas certainly knows how to tell a story. He told quite a few during his address to the International Relations Society last Monday night, and not just any old stories either. They were spy stories, and, most importantly, they were new spy stories.

Take the tale of Herman Simm, “the most damaging spy in the history of NATO”, arrested in September 2008, who Lucas has interviewed extensively. A British-trained Estonian right at the top of his country’s defence ministry, he fed secrets to the Russians for over 15 years. During this time Estonia joined the NATO. “He managed to turn NATO inside out,” Lucas said. The message? “Don’t be complacent. Russia isn’t just another emerging economy.”

Lucas first started working in Russia because “it was a way to be paid to find out things I was really interested in.” He has worked for the BBC, The Independent, The Daily Mail and after working as The Economist‘s Moscow bureau chief for a number of years he became the newspaper’s International Editor. A writer of several books, he makes a witty and engaging speaker, and a charming interviewee. Yet his message is a serious one; Russia is dangerous and corrupt.

The idea that Russia is still seriously spying on the West will sound absurd to many people in this country. We may think that such antics are a feature of the Cold War days, or of James Bond. But not according to Lucas. Not only is Russia still spying on us, but the whole Russian political system is also entirely entrenched in Cold-War style corruption and organised crime that threatens the very future of the country itself.

Sergei Magnitsky’s name might be more familiar than Simm’s, but most people in this country still won’t have heard of him. They should have done, according to Lucas, since he uncovered a “colossal fraud” that showed that “Russia is still run by a sinister organised crime syndicate.” The details of the case are complex, but it involved a web of Russian contacts that stole the best part of $250m from the Russian taxpayer. Why should it matter to us? Well, for Lucas, the real tragedy of the case – aside from Magnitsky’s death – was that the money laundered from the case was transferred through our banking system. Unlike Cold War times, the West now seeks to profit from Russian misdemeanour; that’s the real scandal.

Western silence – Lucas claims that up until now, only the USA has taken meaningful action against Russia – is met by Russian hypocrisy. “On the one hand” says Lucas “the unifying principle is anti-westernism, and that’s the paradox… because on the other hand they need the West. This is where they keep their mistresses. This is where they send their children. This is where they keep their money… It’s a weird symbiotic relationship.”

Is pure criminality or old style Sovietism dictating the government’s direction? “It’s crooks and spooks, where the spooks are crooked and crooks are rather spookish. At one end it is spookishness and the idea that Russia’s a great power. At the other end it’s organised crime just trying to steal money.” Why can’t Russia sort the corruption out itself? “Because Russian officials have their own best interests at heart… and this is true not just of the high echelons of society but it goes all the way down to the humble parts of the administration.”

I put forward to Lucas the view that other former-Soviet states have de-corrupted over the years (according to Transparency International statistics), and therefore it mightn’t be unreasonable to assume that this will eventually happen to Russia. “Well there’s more tolerance of corruption when the cake is growing, so Putin has got away to some extent with a lot of polluting… the economic crisis sharpens fiscal contradictions, but that doesn’t mean you have to be less corrupt. It just means that you need to be more ruthless.”

How about the younger Soviet generation – maybe the children of the dissolution generation can push for reform of the country’s highest systems of government? Lucas admits that there is dissatisfaction at corruption, “but it doesn’t mean that people are willing to engage in the institutional and personal behaviour that you need for corruption to stop.”

I was, to be honest, surprised by just how dark Lucas painted the Russian picture. Clasping at straws a little, I asked him about journalism; was the freedom of the internet going to do positive things for corruption? “Well the Navalny (a top Russian blogger, on trial at the moment in Russia for fraud) case is a very serious case of selective oppression… if you’d have said two years ago that they would have put Navalny in jail, then people would have said ‘They wouldn’t dare.’ Well now he will go to jail… and it shows that the tactic of selective oppression is becoming more and more rigorous.” So that would be a no then.

Again, why should we care? “Because Russia launders money in the West, and in return the West doesn’t care about human rights. It doesn’t squeeze Russia for any of the bad things it does at home.”

Instead, “The City of London rolls onto its back and says ‘please tickle my tummy some more!’”

“You see, once you let dirty money in it washes around and makes everything else dirty too. We have allowed a kind of race to the bottom.”

Lucas told another story to demonstrate his point, this one about two oil companies: Yukos and Rosneft. While the experienced Russia-watcher will know the ins-and-outs of the whole affair, it’s worth going over the details, as Lucas did for the benefit of the less clued up of his audience. Yukos was an oil company that had $8 billion of “bog-standard western investment” in it. Somehow the assets of this company ended up in the hands of “a tiny little Russian oil company called Rosneft, which then becomes enormously rich. They then sought to get listed on the stock exchange (a move that would allow them to make even more money). Both New York and Frankfurt said ‘Sorry, you don’t pass our smell test’ and then the London stock exchange takes a roadshow to Moscow and show off what they euphemistically call ‘more flexible listing requirements’. Rosneft is listed in the most lucrative IPO ever on the London Stock Exchange. Every pin-striped snout is in the trough.”

An audience member raises an objection: can we actually do anything to prevent the flow of illicit Russian money into Britain? “Well I think we’ve got to [try] because if we want to maintain the integrity of our financial system, it can’t be based on money-laundering.”

So what should Britain do about Russia today? “Introduce the Magnitsky list (of members involved in the Magnitsky murder, recently banned from entering America by the US Congress). Clean up our financial system by applying stringent money laundering laws to all those people who abuse our financial system, not just Russians. We should vigorously prosecute all cases of Russian espionage and deport all Russian officials who engage in espionage and perhaps, most of all, support our allies. So if I could do one thing, I would – instead of stepping back from the front-line states – say to them ‘we’re with you’… If you want to defend the rule of law, political freedom and civilisation generally, the place to start is on the Estonian-Russian border.”

Lucas’ message is powerful, but I can’t help feel he blows out of all proportion the role of espionage in this great Russian assault on our liberties. It’s hard to believe Anna Chapman was ever a serious threat to the security of the West, either when she was living in London or New York. If not Anna Chapman, how about Donald Heathfield? Heard of him? No? A final one of Lucas’ stories then:

Donald Heathfield arrived in Canada with the birth certificate of the real Donald Heathfield, who had died as a small child. Educated in Canada and then at Harvard, he went on to have a really stellar career as a business consultant, advising some of the biggest investment companies in the world. He made friends with all sorts of people in Washington, was a professional member of the World Future Society and even wrote a textbook. Lucas: “Everyone I spoke to about him said he was brilliant. He would turn up at the company and only talk to the Chief Executive and financial and information officers… For everyone who basically thinks that the intelligence world is like James Bond, Heathfield’s way is the best way an intelligence officer should work, for he was not only getting information about what was going on, but also very good at spotting weaknesses.” Andrey Bezrukov, as Heathfield is really known, was deported back to Russia with Chapman, but showed really how threatening espionage can still be, working right at the heart of the capitalist system which did so much to bring communism down.

Lucas recognised Russia as a threat to the West in many ways. Firstly, it pours black-money into our economic systems. Secondly, it infiltrates those systems to see exactly how they work and find out what weaknesses can be exploited. And finally, it performs its own dark manoeuvres inside its borders and steals money from the West. Lucas makes a comprehensive and convincing case that Russia is still a threat. Maybe we should all be listening more closely.

‘Deception: Spies, Lies and How Russia Dupes the West’ by Edward Lucas is available to buy now.

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