Kleptocracy Watch | February 2, 2018

The week’s leading news and features on globalized corruption and the threat to democracy. Sign up for our daily version at KleptocracyInitiative.org.


U.S. now second biggest contributor to global financial secrecy:  The latest edition of the Financial Secrecy Index, released Tuesday, found that only Switzerland provides more loopholes for money launderers. (Tax Justice Network)

UK’s Unexplained Wealth Orders come into effect: “We have been combing through all existing case work and intelligence and have matters of interest that might transmogrify,” said Britain’s top fraud investigator. Five London properties could give investigators a head start…  (Reuters, TI)


Propaganda by proxy: “When foreign governments need help navigating the DC swamp, there’s a whole host of high-powered DC lobbying and well-connected public relations firms eager to help them—for a hefty fee,” writes Andrea Peterson. (POGO)


The oligarch list: The U.S. Treasury published a long-awaited list of political figures and oligarchs. But “instead of using the list as a means of deterring further bad behavior by the Russians, the list itself was as clear a sign as you could send of there being no intention to do anything at all,” writes Karina Orlova. The Treasury apparently relied on a Forbes article, reports John Hudson. (Bloomberg, TAI, BuzzFeed)

No new sanctions: Despite being required to do so under CAATSA, the Trump administration declined to impose new sanctions “because the legislation is, in fact, serving as a deterrent.” (Reuters)

Treasury against sovereign debt sanctions: Designations could have “negative spillover effects into global financial markets and businesses… [and] hinder the competitiveness of large U.S. asset managers,” according to a report. (Bloomberg)

Beyond CAATSA: “Sanctions are a start, but policymakers in Congress should focus their attention on creating new measures to counter Moscow,” writes Edoardo Saravalle. (The Hill)

From oligarch to kleptocrat: “Far from being the patriot he poses as, Putin is a parasite who has sucked his fortune out of Mother Russia,” writes Ruth May. (NYR)

Reiderstvo: “Innumerable business owners, company managers, lawyers and other professionals have spent years in detention and lost their assets, their health or even their lives to a widespread culture of prosecutorial excess,” writes Leonid Ragozin. (Bloomberg)

Veselnitskaya named in Swiss corruption case: “One of Switzerland’s top investigators has been fired after allegations of bribery, violating secrecy laws, and ‘unauthorized clandestine behavior’ in meeting with the very same Russian actors linked to the Trump Tower encounter,” writes Nico Hines. (Daily Beast)


How JD Power was acquired by a mysterious Chinese company: The CEO of S&P Global, JD Power’s previous owner, “hadn’t received information he expected about who owned XIO and where it was getting the money for the purchase,” writes Simon Clark. Now, “its executives and a billionaire Chinese tycoon are fighting over its assets in lawsuits in two jurisdictions, with details hidden from public view.” (WSJ)

CCP extends reach into foreign companies: “American and European companies involved in joint ventures with state-owned Chinese firms have been asked in recent months to give internal Communist Party cells an explicit role in decision-making,” writes Simon Denyer. (WaPo)

Australia’s counter-influence campaign: Clive Hamilton told MPs that Beijing uses its United Front Work Department to exert influence on Australian society. (Guardian)

China denies bugging African Union HQ: “Data from computers in the Chinese-built building had been transferred nightly to Chinese servers for five years… microphones hidden in desks and the walls were also detected and removed.” (Reuters)


Revealing Tehran’s kleptocrats: Senators Tom Cotton and Orrin Hatch introduced a bill to expose assets held by Iran’s corrupt leadership. A companion bill passed the House in December. (WFB)


Erdogan’s global purge: “Turkey is not unique in pursuing its opponents abroad…But this “global purge”… is remarkable in its speed, scale, and aggression,” writes Nate Schenkkan. (Foreign Affairs)


Saudi anti-corruption shakedown: “Money, power and princely standing offered no protection,” explains Laura King. But it’s back to business as usual for those released this week – or is it? (LA Times, Reuters)


South Korea bans secret cryptocurrency trading: Anonymous accounts will be converted to real-name accounts from today, in a bid to stop money laundering. The country uncovered $600 million in cryptocurrency crimes. (Bitcoin News, Reuters)

Cryptocurrency regulation: A handy guide to the very different approaches being taken by key jurisdictions worldwide. (Bitcoin Magazine)