Streetwise Professor

August 28, 2008

Lawfare in the WaPo

Filed under: Economics,Military,Politics,Russia — The Professor @ 10:02 am

In the WaPo David Rivkin and Carlos Ramos-Mrosovsky (now that’s an interesting name) second the SWP recommendation that we “cry ‘havoc’ and let slip the dogs of accounting.” They write:

The shady cadre running modern Russia has embraced globalization. These “Chekist oligarchs” — to distinguish them from the Western-oriented robber barons who rose in the 1990s, only to be purged by Putin — increasingly dominate lists of the world’s richest individuals. They invest their ill-gotten wealth abroad and maintain opulent residences in London, Paris and the Cote d’Azur. They educate their children at Western universities and even collect Western sports teams.

These tycoons bankrolled Putin’s rise and are the medium by which he has consolidated control over Russia’s vast wealth. Putin and his cronies have used the levers of state power (including trumped-up prosecutions and official intimidation) to enrich themselves and crush rivals. Complex financial mechanisms — often involving major international financial institutions — are in place to launder vast sums for reinvestment abroad. Western banks seeking to profit and curry favor with Russia’s rulers have rushed to underwrite the dubious transactions used to place Russia’s natural resources under Kremlin control.

The oligarchy’s widespread corruption, disrespect for the rule of law and embrace of globalization make it a perfect target for Western “soft power.” Whenever they have jurisdiction to do so — which should be often — U.S. and E.U. regulators should examine the business transactions of people close to Putin’s regime for money laundering or for securities, tax and other economic irregularities. Asset tracing and long statutes of limitation should enable Western authorities to examine years’ worth of business activities. The U.S. Justice Department should aggressively prosecute any instances of Kremlin-connected market manipulation, fraud, tax evasion and money laundering that fall within its reach.

Sounds familiar–and sounds good.

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