Russian integration has failed, admit UK intelligence bodies – and ‘Londongrad’ influence is the new normal

For decades, the UK thought it could influence Russia via its elite. It turned out the opposite was true

For decades, the UK government invested in a strategy to influence Russia’s political and business elite – closely integrating them into Britain, and especially its stock market, in the hope that laws, rights and rules would be reflected back home.

The long-awaited “Russia report” all but confirms the end of that quixotic strategy. If anything, it suggests the opposite was true: Russian business practices were exported much more successfully into the UK.

Globalised links between Moscow and “Londongrad” have, the report concludes, provided “ideal mechanisms” for dirty money and “building influence across … the British establishment”. Intelligence, state power and business have meanwhile become “completely intertwined” and near-impossible to untangle.

Russian influence in the UK has become the “new normal”, it concludes.

The document is mostly written in caution and redaction – the language of an intelligence report whittled down by the censors at GCHQ, MI5 and MI6, or the Secret Intelligence Service. It would be a stretch to say it contains an obvious smoking gun. It does not list any of the individuals mentioned in newspaper reports, for example – and it only obliquely mentions references to vulnerabilities around Conservative Party donors.

Possible embarrassment around potential Russian interference into the Brexit referendum is also avoided with the admittedly remarkable admission that the government didn’t actively investigate it.

But if the detail of the report failed to produce a major revelation for seasoned Russia watchers, it helped stand up several long-held assumptions.

For example, there was an admission by the National Crime Agency (NCA) that they simply don’t have the resources to do their jobs and investigate rich individuals.

Officially, the UK government is committed to removing the City of London of illicit money. Ministers and Foreign Office officials have, for example, frequently touted the supposed power of new legal instruments such as Unexplained Wealth Orders. These allow courts to freeze the assets of those who cannot document the legal origins of their funds.

But there has been a massive gap between rhetoric and action. To date, not a single case has been successfully brought against a Russian individual. The Independent understands one case collapsed earlier this year at the preparation stage due to spiralling fees and legal problems, at a cost of millions to the taxpayer.

We should have been suspicious of any ideology that makes a virtue out of making a whole load of cash 

Oliver Bullough, author of ‘Moneyland: The Inside Story of the Crooks and Kleptocrats Who Rule the World’

The Intelligence Committee assessment concedes such wealth orders are mostly useless when it comes to the Russian elite. “We are, bluntly, concerned about the impact on our budget, because these are wealthy people with access to the best lawyers,” it quotes the NCA as saying.

The report falls short of giving up on the UK’s 30-year-old strategy of engaging with Russia’s elite. Whitehall is still committed to “developing a Russia that chooses to cooperate, rather than challenge or confront,” it says.

But it also appeared to walk back the assertion that doing business in the UK can somehow trigger democratisation in Russia.

Oliver Bullough, author of Moneyland: The Inside Story of the Crooks and Kleptocrats Who Rule the World, says successive governments have willingly fooled themselves and turned a blind eye to corruption because of the money at stake.

“We should have been suspicious of any ideology that makes a virtue out of making a whole load of cash,” he says. “In fact, what we’ve been doing all along is providing kleptoservices to crooks, selling financial expertise that allow people to steal anything that isn’t nailed down. And now we’ve figured out it isn’t a great idea, but it’s also a bit too late.”

The intelligence report appears to concede that the “horse has bolted” on fully controlling the Kremlin’s “Londongrad” influence.

But it does offer suggestions about limiting the more egregious moments.

It proposes, for example, beefing up anti-corruption bodies like the National Crime Agency. It seems to propose a public inquiry and a lessons-learning exercise into alleged influence over Brexit.

It also proposes a new foreign agents register and a reworking of the Official Secrets Act, which it describes as “anachronistic”. (It does admittedly appear remarkable that it is not a crime under British law to be an undeclared international agent.)

Another group of recommendations calls for the better coordination of intelligence agencies – MI5, SIS, GCHQ and military intelligence – around Russia policy. Here, the cautious language of the report shields some quite astonishing allegations: that either the main intelligence services were too narrowly focussed on terrorism to be concerned by the Kremlin, or that they passively awaited orders from politicians that never came.

“It’s mostly fair criticism and the recommendations are simple to implement,” says Philip Ingram, a former intelligence officer. “But the criticism that no one took a lead on the very serious allegations of interference is shocking.”