Has the ‘Cold War’ been succeeded by a metaphorical ‘Gold War’? Martin Dewhirst reviews Tom Burgis’ ‘Kleptopia: How Dirty Money is Conquering the World’

4 October 2020

By Martin Dewhirst

Martin Dewhirst reviews: Tom Burgis, Kleptopia: How Dirty Money is Conquering the World. William Collins, London, 2020.  xviii + 446 pp.  £20.

Trying to keep tabs on the widespread violation of human rights in Russia takes up so much time that an individual researcher is in danger of not being sufficiently aware of the human rights situation in most other countries.  True, one can easily check from time to time how well or badly the Russian Federation is doing in areas such as freedom of the media and transparency of business activities, but these tables lack many of the details one needs in order to arrive at really unambiguous conclusions.  For instance, it is difficult to compare the number of lies and ‘alternative facts’ (see chapter 39 of this book) aired publicly in 2019 by the American and Russian Presidents, and to decide which of the two is the greater danger to peace.

Your reviewer would like to praise not only the author but also the publisher of this remarkable study of worldwide, and possibly unstoppable, corruption.  It’s not the first such monograph, so it’s reassuring that several experts who provided earlier assessments of the power exerted by dirty money have had no qualms about publicly praising Burgis’s research: Misha Glenny, Roberto Saviano, Jon Snow, Jane Mayer.  Like most experts, Burgis thinks that the Cold War is over (p. 314), but unlike them he has inspired me to suggest a neat, snappy term for what has succeeded it (see below).  He shows how and why such financial and commercial institutions as the Swiss banking system, the City of London and business organisations like BP and the mysterious BSI have been rather quickly losing their erstwhile good reputations.  What do BSI’s initials stand for?  We are told that it ‘was not a bank.  It was a facilitator for a transnational kleptocracy, operating a short walk from the Bank of England’ (p. 330).  We may not believe that money (or addiction to money) is the root of all evil, but it is certainly playing an unprecedented role in current politics, as Burgis demonstrates in his wide-ranging study, focusing more on Kazakhstan than on Russia, concentrating on London, where ‘due diligence’ often seems to be a bad joke, but also taking in several countries in Africa, the Middle East and, of course, the USA. 

So far as Russia is concerned, it should be emphasised that corruption there would have remained at a much lower level but for the collaboration of people who had left the Soviet Union with ill-informed, naive or unscrupulous Westerners (many of whom may well have initially thought they were only cooperating with the Kremlin).  One such person, Boris Birshtein, is quoted as saying, ‘I started with Brezhnev’ (p. 95), but I suspect that this all began under Khrushchev (though Robert Maxwell, for instance, isn’t even mentioned).  This collaboration expanded exponentially during the Gorbachev period, when the KGB was moving large sums of money to the West in anticipation of the collapse of the Soviet regime. Burgis adds to our knowledge of individuals such as Alexander Machkevitch, Semyon Mogilevich and Felix Sater and also of Western politicians such as George Osborne and Tony Blair, who (or whose advisers) were happy to do business with similar people without enquiring too deeply into their integrity.  After all, Russia was now building capitalism, not communism, so why not? And Putin has been and still is on pretty good terms with the General Secretary of the Chinese Communist Party and now President, Xi Jinping (whose family’s impressive wealth is addressed on pages 319-20), despite the fact that China is now officially building ‘socialism with Chinese characteristics’, not capitalism.

But was Russia after 1991 in reality building a ‘gangster state’ (pp. 16, 99)?  Ernst Fraenkel had written about the Nazi ‘dual state’: ‘the concurrent existence of a “normative state” that generally respects its own laws, and a “prerogative state” that violates the very same laws’ (see pp. 36-38 and 268).  In Russia by 1993 corruption, ‘the use of public office for private gain, was not some threat to the system; it was the system’ (p. 100).  Nazarbaev, the President of Kazakhstan until recently, ‘had learned that Westerners could be just as adept as he was in turning money into power and power back into money’ (p. 162).

If you haven’t the time currently to read the whole book (though it is a real page-turner), I suggest you start with chapters 22, 29 and 40.  According to Nazarbaev, the ‘notion of being loyal to an abstract, loyal to the law – to the point, even, of placing that loyalty above your obligations to those who paid you, those who had bought you – this was so preposterous it could only be a cover for darker motives’ (pp. 172-73).  As for Mr. Mogilevich, known as the Brainy Don, he was [and is – MD] the ‘personification of the Red Mafiya that was eclipsing even the Cosa Nostra. […] his interests and those of the Kremlin seemed to be fusing.  Either the state was being criminalised or the criminals were taking over the state: the effect was the same’ (p. 182).

Since 2014, Ukraine has been a special case.  ‘The only thing more corrupt than a kleptocratic dictatorship was [and is – MD] a kleptocratic democracy: there were so many more people who could demand to be bought off, and it was much harder simply to imprison or otherwise eliminate them’ (p. 221).  ‘Putin and his brother dictators in the other ex-Soviet republics wanted to use control of natural resources to magnify their influence abroad, be it by shaking down BP, listing mining companies in London or turning off gas supplies to Ukraine whenever its leaders leaned overly Westward’ (p. 222).  So Ukraine became a ‘flourishing kleptocracy’ (p. 224), rather than an emerging democracy, and this tied in well with both the Kremlin’s kleptocratic purposes and its [very important – MD] geopolitical goals (p. 226).  At the same time, in the City of London and other places, ‘while tax evasion sucked money out, money laundering pumped money in’ (p. 241).

The City’s regulator seemed to be ‘on the side of the crooks’ (p. 243).

According to Burgis (p. 273), after Cameron lost the Brexit referendum, the ‘anti-corruption agenda, like his premiership and much else, promptly ceased’.  In America too, ‘the world had changed’.  People in the ‘reality-based community’ had simply ‘not understood how dirty money had changed everything – nor how it had transformed Donald Trump’ (pp. 311-12).  The task now was ‘to complete the process of turning power that had been turned into money back into power’ (p. 314).

Also in 2016, the so-called ‘Panama Papers’ revealed that at least 140 political leaders all over the world held money in front companies.  These leaders ‘had chosen to store [some of – MD] their money not among their compatriots but within the global financial secrecy system.  It was as though monetising public office was no longer an aberration but the purpose of seeking that office. […] Around the world, corruption has become the primary mechanism by which power functions’ (pp. 328-29).  The kleptocrats, the ‘true globalists’, are rivals, but ‘ultimately they are engaged in a common endeavour: to seize power through fear and the force of money, and then to privatise that power’.  Perhaps the only antidote is honesty? (p. 338.)  But surely that is not enough?

If BSI is the antihero of this book, there is a hero, of whom you may well never have heard: Nigel Wilkins, a quixotic individual, perhaps, but whose favourite author was not Cervantes but Thomas Hardy (‘Done because we are too menny’ –  see p. 5 for the context).  Wilkins died in 2017.  He was not only honest but extremely determined and unrelenting.  However, there are also organisations like Transparency International, Global Witness and Amnesty International.  But was it, in fact, always thus?  Tacitus referred to gold and power as the chief causes of war.  Quite a lot of people have always striven for both G and P.

This book made me ask whether the ‘Cold War’ has been succeeded by a metaphorical Gold War’.  If it’s money that makes the world go round, does the present struggle boil down to one between clean money and filthy lucre?  It’s evidently impossible to return to a literal Gold Standard or to a ‘Golden Age’, and many institutions don’t deserve to win even a bronze, let alone a silver.  Is there nothing new under the sun? 1 Timothy 6:10 suggests that it is not money that is the root of all evil, but the love of money, so perhaps capitalism is still the best system that is feasible?  Burgis divides his monograph into three parts, ‘Crisis’, ‘Chrysalis’ and ‘Metamorphosis’.  He writes about oligarchs, kleptocrats and plutocrats. (I like the last term, because in Russian the noun plut can often be translated as rogue, and as we know from history and literature, there have been and still are many rather attractive rogues, including some named by Burgis.)  Also, incidentally, I think the Russian noun vor is often best translated not as thief, but as crook.  The book begins, pp. xi – xii, with ‘A Note on Truth’, but unfortunately the author doesn’t mention that Russian has two concepts of truth, with the emotional but not necessarily deliverable pravda usually taking precedence over the bitter and more intellectual istina.  Perhaps we are heading not towards a Kleptopia, but towards a Plutopia? Or both?  At any rate Utopia, like Communism, is completely out, of course.

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