Nick Shaxson ■ Putin, the U.S. and the City of London: The Much-Too-Special-Relationship


City of London

From the New York Times, an article by former Moscow mayoral candidate Alexey Navalny that begins with the words “As I write this, I am under house arrest.” He argues:

“Western nations could deliver a serious blow to the luxurious lifestyles enjoyed by the Kremlin’s cronies who shuttle between Russia and the West. This means freezing the oligarchs’ financial assets and seizing their property.

Such sanctions should primarily target Mr. Putin’s inner circle, the Kremlin mafia who pillage the nation’s wealth. . . . Real sanctions, such as blocking access to their plush London apartments, will show that Mr. Putin’s folly comes with serious costs.”

Will this happen? Now take a look at this long article in The American Interest about the City of London, by today’s TJN blogger. It’s called The Much-Too-Special-Relationship, and broadens the picture far beyond Russia and the Ukraine, to focus on the ever-increasing range of security threats that the City of London poses to the United States. As the article notes:

“The truth is that the City of London is a greater potential threat to the national security of the United States than almost anyone supposes.”

It comes amid a growing chorus of voices – including one in the Wall Street Journal, calling out the City of London for, among other things, what Ben Judah recently described:

“Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.”

Here are three main angles, from The American Interest. First,

“The United Kingdom is the single most important player in a global system of offshore tax havens, and has facilitated and even enthusiastically—if discreetly—encouraged the élite looting of pretty much every country in the world, from Pakistan to Greece to Libya to Mexico, typically via U.S., British and Swiss banks. This is a national security issue par excellence, now revealed in its fullness through the Crimea affair, let’s call it. This British offshore system is a fast-growing cash cow for the City, which will fight to protect it.”

This is as we have always maintained, and nobody in the City or anywhere else has ever even tried seriously to say we are wrong. Second,

“The City of London has spent half a century building a business model based on thwarting and opposing U.S. laws and regulations. It is crucial to understand that this is a deliberate feature of the modern City, not an incidental side effect.”

Read all about that here. Third,

“The depth of Britain’s political capture by the City of London, which makes Britain a thoroughly untrustworthy ally not only with regard to Russia, but many other portfolios as well.”

The story involves not just Russia and Ukraine, but Saudi Arabia, China, Citibank, the BCCI affair, the compliant BBC, the Medellín drug cartel, the never-ending race to the bottom – and a range of very British jurisdictions from Jersey to Bermuda to the Cayman Islands.

It finishes like this:

“Turmoil and governance problems in Pakistan, Saudi Arabia, Greece or Egypt all have many causes, of course. Most are far beyond the reach of foreigners to have much influence. But here, in the arena of global  finance, lies one very significant area where the West potentially has reach. It can help bolster better governance by raising standards to help stem the looting. But for those who want to try it, they may find powerful players in the City of London, and even in the British establishment, standing in their way.”

We would (of course) strongly encourage you to read it. And if you haven’t, read Navalny’s article too. And if you haven’t already, then read this one too.

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