As he lay dying Alexander Litvinenko solved his own murder and foresaw the future. A professional detective on his last case, with himself as the victim, he worked out that he had been poisoned in the Pine Bar of the Millennium Hotel in Mayfair, by another former KGB detective, Andrei Lugovoi. He had thought they were partners, investigating the connections between Putin’s Kremlin, organised crime and money laundering in Europe but, he now realised, Lugovoi was still taking orders from the people they were investigating. As Litvinenko’s hair came out in clumps, as he found it increasingly hard to open his mouth to talk, as he became yellow and shrivelled, he cursed himself for letting his guard down: he had assumed he was safe after receiving asylum and citizenship in the UK. But solving the crime, Litvinenko understood, was only the beginning. Would the British government risk undermining its financial interests by investigating his death properly?
‘Of course I understand the West wants to get gas and oil from Russia,’ he told inspectors from Scotland Yard who interviewed him in hospital, ‘but one shouldn’t be involved in political activity if one doesn’t have political beliefs. And beliefs can’t be traded for gas and oil. Because when a businessman is trading he’s trading with his money but when a politician is trading he is trading with the sovereignty of his country and the future of his children.’ The transcripts of Litvinenko’s interviews were released last year; he was clearly trying hard to win the police over to his cause. He was good at speeches. ‘In case there is from the top administrative pressure for political reasons,’ he said, ‘be firm … bring this case to the end.’ The men from Scotland Yard were impressed by his faith in them: ‘Last month I was granted British citizenship and I very much love this country. Possibly I may die, but I will die as a free person, and my son and wife are free people. And Britain is a great country.’
Litvinenko died four days later, on 23 November 2006. Six hours before it happened Scotland Yard got a phone call from the Atomic Weapons Establishment at Aldermaston. Their tests showed he was ‘terribly contaminated’ with polonium, a metal four hundred times more radioactive than uranium and which can only be manufactured in a nuclear plant. It had very nearly been the perfect assassination: polonium isn’t picked up by Geiger counters and doctors had followed many false leads – ricin? thallium? – in trying to identify the mystery poison. When polonium was first suggested by urine tests it was dismissed as an anomaly caused by the plastic container.
But now that polonium had been confirmed it was a cinch for investigators, dressed in radiation-proof suits, to follow the radioactive trail, with equipment capable of detecting alpha radiation, through Mayfair, Heathrow, and on the plane Lugovoi had flown in on from Moscow. The Avangard facility in Sarov is the only place that continues to produce polonium in the amounts used in the assassination. ‘You have to be a state or state organisation to get hold of polonium in [these] quantities,’ the British ambassador to Russia reported, as the UK sought to extradite Lugovoi and his sidekick, Dmitry Kovtun. Moscow refused, instead making Lugovoi a Duma deputy for the (far-right) Liberal Democratic Party – meaning he was immune from prosecution. Russia and the UK expelled a few of each other’s diplomats. Their secret services stopped co-operating. Gordon Brown refused all meetings with Putin.
In London, Litvinenko’s widow, Marina, was told by the Foreign Office to sit tight and wait while the UK tried to find a way to extradite the killers through back-channel negotiations. In 2010 she was still waiting. When Cameron became prime minister, Luke Harding writes in his gripping account of the Litvinenko case, his foreign policy objective ‘was quite simple: to sell stuff to foreigners’. London’s new role was to be ‘financial capital of the world’: the strategy for economic growth was to attract other people’s money. ‘Britain still sought the extradition of Lugovoi and Kovtun, of course. But, Cameron indicated, these bilateral differences could be “negotiated around” and shouldn’t prevent co-operation in other areas, especially trade.’ Cameron was perfectly aware of the nature of Putin’s regime. In 2010 WikiLeaks cables showed that a Spanish prosecutor had told US officials that Russia was a ‘virtual mafia state’, with the Kremlin controlling organised crime, which in turn exercised influence over ministers and senior officials. The Spanish prosecutors had partly based their investigation on Litvinenko’s research; and he had been due to go to Madrid to testify about the connections between the Kremlin and the Tambov gang, which specialises in – inter alia – drugs, arms smuggling and money laundering. (In a 488-page submission to the Audiencia Nacional last year, the prosecutors presented evidence that a leader of the Tambov gang, Gennady Petrov, had been a shareholder in the 1990s in Bank Rossiya, along with several close allies of Putin. After he became president, the bank was known as ‘Putin’s wallet’.) MI6 paid for some of Litvinenko’s work: £2000 a month from an unidentified bank account appears in his accounts among the family shopping at Sainsbury’s.
Cameron, however, had decided, as Harding writes, that ‘the large influx of Russians to Britain was good for business … Wealthy Russians buy property in London and the Home Counties, send their children to British private schools, and go shopping in Harrods (and Selfridges). Increasingly, Russians come to the UK to settle their legal disputes, commercial and matrimonial. All this is a boon to headmasters, divorce lawyers, estate agents and purveyors of sushi.’ The actual amount of (official) Russian investment in the UK is relatively small, but Russian wealth is concentrated in elite industries and helps send the larger strategic message that Britain is open for business with anyone. The official figures don’t reflect the money moved here anonymously through the extensive network of former colonies turned offshore tax havens: on its own the City of London is neck and neck with Wall Street as a financial centre, but if you include the offshore zones it’s estimated that a third of all international deposits and investments flow through Britain and its satellites. Moreover, according to the Financial Conduct Authority, most UK banks don’t enforce know-your-customer rules: the financial capital of the world doesn’t ask too many questions about where the money comes from. Deutsche Bank has calculated that $1.5 billion enters the UK each month without being recorded by official statistics, half of it from Russia.
In the summer of 2012, Cameron entertained Putin at Downing Street, and they watched the judo together at the Olympics. Later that year BP merged with the state-owned Russian giant Rosneft to create the world’s largest oil company, nicknamed Britneft. BP is responsible for one sixth of dividends in British pension fund schemes. Fearing the British government was trying to bury the case, Marina Litvinenko pushed for an inquest into her husband’s murder. Robert Owen, a High Court judge, promised an ‘open and fearless’ investigation. In 2013 the foreign secretary, William Hague, made an application for ‘public interest immunity’ – which meant that the government’s classified files on Litvinenko wouldn’t be available to the inquest and that Owen’s freedom to investigate was severely restricted. ‘The British government, like the Russian government, is conspiring to get the inquest closed down in exchange for substantial trade interests which we know Mr Cameron is pursuing,’ Litvinenko’s counsel, Ben Emmerson, said. In May 2013 Cameron flew to Sochi for talks with Putin and agreed that British intelligence would resume co-operation with the FSB for the first time since Litvinenko’s death. Chris Grayling, the justice secretary, refused to pay Marina Litvinenko’s legal costs.
Owen wrote to Theresa May, the home secretary, requesting a public inquiry: this would allow the chairman to consider secret material in closed hearings, balancing the government’s security concerns with the need for open justice. May rejected Owen’s request. She offered six reasons for her refusal, including public expense. Marina Litvinenko filed a claim for judicial review, asking the High Court to re-examine the government’s decision. In February 2014, three High Court judges ruled in her favour. They described May’s refusal as ‘irrational’ and ‘legally erroneous’ and requested that she reconsider.
In March 2014 Putin annexed Crimea, breaking the Budapest Memorandum, which Britain, among others, had signed in 1994 guaranteeing Ukraine’s territorial integrity in return for its abandoning nuclear weapons. A government adviser was photographed walking into No. 10 with a piece of paper stating that the UK should ‘not support, for now, trade sanctions … or close London’s financial centre to Russians’: ‘Many of the themes that featured in Litvinenko’s murder were here again,’ Harding writes, ‘played out on a bigger and more terrible canvas.’
Five days after the Malaysian tourist flight was shot down in eastern Ukraine, the Home Office announced that it would, after all, allow the inquiry into the Litvinenko murder. It had seemed that Marina Litvinenko was on her way to winning her campaign against the government anyway, but it’s hard not to shake the feeling that the Home Office threw in the towel because relations with Russia had got so bad that ‘business as usual’ was now a PR liability. On 30 July the EU issued a series of sanctions against oligarchs and businesses close to Putin, including Bank Rossiya. After ten years of government fog-blowing the Litvinenko investigation would finally be made public, much of it centred on the area of London that perhaps best displays the paradoxes of Britain’s 21st-century role as financial capital of the world: Mayfair, one of London’s wealthiest districts and the scene of the crime.
Whereas the City of London and Canary Wharf are full of multinational banks that could potentially relocate anywhere, Mayfair sells something uniquely British to the world. ‘In … Hanover Square,’ Harding writes, ‘boys and girls in red uniforms play games at the end of the school day, among plane trees and an exotic palm from the Canary Islands. It’s all rather English pastoral. The girls sport straw boaters … North of the square you find Grosvenor Street and a row of fashionable 18th-century Georgian townhouses. This was once the abode of earls, lords, admirals and the odd poet … The location radiates prestige, reliability, trustworthiness.’ Mayfair is also home to Putin’s exiled opposition. Hanover Square is Mikhail Khodorkovsky’s HQ, where he plans a new Russia for when Putin falls. Until he died in 2013 Down Street was where Boris Berezovsky plotted, or threatened to plot, anti-Putin revolutions. Berezovsky had played a significant role in Litvinenko’s fate. In 1998 Litvinenko, then an investigator into organised crime at the FSB, had betrayed ‘the firm’ when he went public with an FSB plot to murder Berezovsky, Russia’s most influential oligarch at the time and deputy secretary of the Security Council. The investigation led to the sacking of the FSB’s director, Nikolai Kovalyov. President Yeltsin made Putin, who had Berezovsky’s backing, the new head of the agency. But when Litvinenko showed Putin his research into links between the FSB and organised crime Putin dismissed it: Litvinenko later became convinced this was because he was involved in the same schemes himself. In 1999 Putin fired Litvinenko, telling a journalist that ‘FSB officers should not expose internal scandals to the public.’ Litvinenko was arrested for beating up a suspect, acquitted and then arrested again in the courtroom, with investigators openly telling his wife that he was being punished for betraying the agency. He fled to London, where he was given asylum. Berezovsky – now in exile himself – made him his security adviser and paid for his son to go to a private school.
Berezovsky, Khodorkovsky et al claim to be part of the same tradition as Alexander Herzen: political exiles who found shelter in Britain. It’s a legitimate claim in one sense, since both Berezovsky and Khodorkovsky faced politically motivated trials in Russia. But they also show up the other side of London’s role: its way of luring big money into the city. Before they saw the political light – or just fell out with Putin – both Berezovsky and Khodorkovsky made their money through rigged privatisations and asset-stripping, profits that London wealth managers, rent-a-peers and PR men were more than happy to legitimise. When the oligarchs’ companies were seized in Russia, London was delighted to take money from those who had ripped them off in turn. (Rosneft, aka Britneft, for instance, came into being after Putin’s ally Igor Sechin seized Khodorkovsky’s Yukos.) Mayfair has become attractive, Harding writes, to ‘successive influxes of the international super-rich. Arabs rich from oil, Greek shipping tycoons, African dictators: all find a home here, washed in by a global tide of credit crises, coups and recessions.’ Though ‘home’ is overstating it. Many of the houses stand empty: investments, bolt-holes or money-laundering vehicles. ‘It’s not entirely clear what many of the businesses based here do. Hedge funds? Corporate PR? Wealth management?’
On the day of his poisoning, 1 November 2006, Alexander Litvinenko proceeded down Old Bond Street, with its fashion and diamond boutiques and its sales assistants who speak Russian, Chinese and Arabic. He entered Berkeley Square at the south-east corner, where today you find the restaurant Sexy Fish, all lava-coloured couches, fountains streaming down the windows and a 13-foot Frank Gehry crocodile on the wall. Sexy Fish is the creation of Richard Caring, most famous for the Ivy, the restaurant in Soho that flaunts its exclusivity by being as apparently modest and downbeat as possible. That works for the posh English, but modern Mayfair money has another set of tastes to be pandered to. Crossing Berkeley Square, passing the Bentley dealership, Litvinenko wound into Grosvenor Square, long-time home to the vast US Embassy with its M16-toting security, and stepped through the door of the Millennium Hotel, where in 1815 news first reached the cabinet of Wellington’s victory at Waterloo.
The killer was wearing clothes from Harrods: a dark blue and orange cardigan, grey jeans, and a watch he liked to point out cost $50,000. Litvinenko had been with Lugovoi on the shopping trip: ‘Why do you need this Harrods?’ he asked his future killer. When Harding met Lugovoi in Moscow years later he found he was an Anglophile: he had bound copies of Conan Doyle on his wall; his son went to a British school in Moscow; his daughter had spent a year on an English course in Cambridge. He even brought his family with him on the trip to murder Litvinenko. After he had slipped him some polonium-laced tea in the Pine Bar, the Owen report suggests, Lugovoi introduced his victim to his son, who had just returned from a trip to Hamley’s. And then the family hurried off to watch the Arsenal-CSKA Moscow game at the Emirates.
This was Lugovoi and Kovtun’s third attempt to poison Litvinenko. On a previous trip they had aborted the mission, pouring the polonium down the sink of their Park Lane hotel. On another they enjoyed a night on the tiles, taking a rickshaw ride around Soho. They went on the pull (not too successfully) at Hey Jo on Jermyn Street, where the owner, ‘Lord’ Dave West, a former booze-cruise tycoon who bought his title on eBay, would sit (until his own, unrelated murder) in a pink suit at the end of the bar chatting up Russian girls on Facebook and persuading them to come over to work as ‘hostesses’ in his Mayfair almost-brothel.
Maybe the assassins needed the relaxation: earlier that day Lugovoi had almost managed to poison Litvinenko in the offices of Erinys, a ‘business intelligence’ outfit on Grosvenor Street. ‘Business intelligence’ companies are everywhere in Mayfair. Often run by (?former) spooks, they perform due diligence on businesses from ‘emerging economies’ – potential partners for Western companies; quite in keeping with Mayfair’s split identity, other, more marginal business intelligence companies can also be hired to write reports whitewashing corrupt oligarchs and help ease their way into London. Litvinenko worked regularly on due diligence reports about potential Russian partners. He was a thorough but obsessive and sometimes downright conspiracy-minded detective: he believed Romano Prodi to be a Russian asset and that al-Zarqawi’s time in custody with the FSB in Chechnya pointed to Russian involvement with the training of al-Qaida operatives. But he had also written highly professional reports in collaboration with other, more disciplined authors, most recently a document referred to in the Owen inquiry which showed that Putin’s ally Viktor Ivanov, the head of Aeroflot and the Federal Narcotics Service, had been associated with Colombian drugs cartels in the 1990s. (Ivanov denies everything, though admits that his deputy had regular dealings with the Tambov gang’s Gennady Petrov.) According to its co-author, Yuri Shvets, the report cost Ivanov up to $15 million in kickbacks when the Western partner pulled out.
Litvinenko wanted Lugovoi to work with him and Erinys, and had set up a meeting with the outfit’s Russian-speaking head, Tim Reilly, in an office with leather chairs and an oak dining table covered in a green baize cloth. ‘Lugovoi arrived with shopping bags … [and] steered the conversation round to tea. He suggested they all drink some, joking that the English had cups of tea all the time. Reilly declined and told them he’d just drunk water from the cooler. Lugovoi was weirdly persistent. “They kept on saying to me – don’t you want any, won’t you have any?” Reilly recalled.’ (For a moment the Litvinenko murder story topples into a dark farce about Englishness: the cult of tea deployed as a murder strategy by foreign agents against investigators working for Her Majesty’s Government.) ‘After making tea, Reilly … disappeared off to the loo,’ Harding continues. ‘The forensic evidence suggests that either Lugovoi or Kovtun slipped it into Litvinenko’s cup of tea or water … For the next thirty minutes, the tea or glass of water sat in front of him, a little to his left – an invisible nuclear murder weapon. The conversation was of Gazprom. Lugovoi and Kovtun must have been barely listening; for them, the only question was: would Litvinenko drink?’
He didn’t, but when nuclear scientists examined the Erinys table they found it was ‘heaving’ with radioactive contamination. The polonium trail ran through the whole of Mayfair. It was on a shisha pipe that Lugovoi had smoked and on a door in the gents at Hey Jo. In Lugovoi’s hotel room on Park Lane there was polonium on the carpet and on a telephone directory in a cupboard. In the Millennium Hotel ‘polonium was a miasma, a strange creeping fog. It was found inside the dishwasher, on the floor, the till, the handle of a coffee strainer. There were traces on bottles of Martini and Tia Maria behind the bar, the ice cream scoop, a chopping board … and the piano stool.’ Harding doesn’t overcook the metaphor, but Mayfair and all it represents is portrayed here as something potentially, maybe inherently toxic. When does a soft power aimed at attracting investment start to undermine real power?
Altogether the inquiry looked at 720 locations where polonium traces were found, heard from 62 witnesses and read through 5000 pages of evidence. Appendix 12 – not included in the published report – contained the evidence given behind closed doors under the Official Secrets Act. It presumably included evidence from Litvinenko’s handler at MI6, whom he used to meet in the café at Waterstones on Piccadilly (since purchased by the oligarch Alexander Mamut); there were probably intercepts of telephone chatter picked up by the NSA or GCHQ. What exactly the evidence was we will never know, but it was enough for Owen to conclude that not only did Lugovoi and Kovtun kill Litvinenko but there was a ‘strong probability’ that they did so under the FSB’s direction and the execution was ‘probably approved’ by Putin.
These were stronger words than anyone expected. ‘I’m gobsmacked,’ said Robert Service, who had been the inquiry’s main background witness on Russian history and politics. ‘It shows the autonomy of the judicial process from politics.’ Marina Litvinenko felt vindicated. ‘It is unthinkable that the prime minister would do nothing in the face of the damning findings,’ she said. She was wrong. The government had known the secret evidence all along and it had not stopped them courting Putin. In Davos, where he was attending the World Economic Forum, Cameron explained that while Litvinenko’s murder was shocking it was necessary to keep working with the Kremlin ‘because we need a solution to the Syrian crisis’. (It’s a questionable and probably delusional argument. The US is unafraid of imposing sanctions on Russia and in any case Britain is hardly an important power in such global games: Moscow takes only the US and China, and sometimes Germany, seriously.) Marina Litvinenko proposed targeted sanctions against, among others, Putin, the head of the FSB, the prosecutor general and the chief investigator who had blocked Scotland Yard’s work in Russia, as well as companies involved in producing the poison. The government refused, but Litvinenko’s proposal is part of a larger movement of policy suggestions and campaigns that struggle with the consequences of being the financial capital of the world.
A week after the final verdict I took part in a ‘kleptocracy tour’: a bus ride around some of London’s most glitzy addresses. We drove past the £60 million pad near the V&A belonging to Dmytro Firtash (he has also bought a former tube stop next door for £50 million). Firtash, we were told, is the Ukrainian oligarch who was at the centre of a series of major gas deals between Russia and Ukraine. Moscow allowed him to buy gas at below market rates and he sold it on high. The profits from this and other deals helped him finance the government of Viktor Yanukovych, whose kleptocratic rule was only stopped by way of a revolution – until that, in turn, was countered by the Russian invasion. Firtash sponsors a Ukrainian Studies department at Cambridge and a British-Ukraine Society that – see the Register of Members’ Interests – paid for the culture minister, John Whittingdale, to visit Ukraine and Austria and provided the secretariat for the All-Party Parliamentary Group on Ukraine; Firtash has been rewarded with an honour by the Duke of Edinburgh.
The tour proceeded past the Russian Embassy off Kensington Park Gardens, London’s most expensive street, which smelled of magnolia and honeysuckle though spring hadn’t yet arrived in the rest of London. In 2012 the Russian embassy garden hosted the inaugural event for Conservative Friends of Russia, a group set up to help British-Russian ‘cultural understanding’ and business relations. Emails Harding saw from Sergei Nalobin, the Russian diplomat liaising with the organisation and the son of Litvinenko’s former boss at the FSB, showed that ‘Moscow’s goals went beyond mere cultural understanding. The Kremlin was keen … to mute criticism of Russia’s human rights record … [and] desperate to stop top officials from being denied entry to the UK as part of a US-style “Magnitsky list”.’ The Magnitsky bill, which is supported by MPs from both sides of the Commons but not by the government, would – like the equivalent American law, which was passed in 2012 – prevent corrupt Russian officials who abuse human rights from travelling to or investing in the UK. (Sergei Magnitsky, for whom the bill is named, was a Russian lawyer who was killed when he uncovered a $230 million tax fraud laundered through Europe, the US and the Middle East. One of the main whistleblowers, Alexander Perepilichny, set up his first meeting with Magnitsky’s colleagues at the Polo Bar in Mayfair, and died in 2012 while jogging near his mansion in Surrey. The death is still being investigated after tests conducted last year found traces of gelsemium, a poisonous plant popular among Russian and Chinese assassins, in Perepilichny’s system.) Conservative Friends of Russia was chaired by Sir Malcolm Rifkind and its celebrity speaker when it was relaunched as Westminster Russia Forum was Jack Straw. The two MPs were later caught on camera by Channel 4’s Dispatches offering to use their political connections on behalf of a fictitious Chinese company for £5000 a day. Rifkind said he could provide access to ‘every British ambassador in the world’. Straw boasted that he had used ‘charm and menace’ with the Ukrainian prime minister to change laws on behalf of a commodity firm that pays him £60,000 a year. Not so much Le Carré as Cash & Carry. Nalobin has since been expelled from the UK.
The tour bus headed up to Highgate and London’s largest residential house, Witanhurst, which squats above the city and whose real owner was hidden behind dozens of shell companies until a report in the New Yorker revealed it as belonging to a Russian senator who is viewed as so generally insignificant that no one could at first believe he was the real owner. More than 100,000 properties in the UK are owned by offshore companies, 36,000 of them in London, with the beneficial owners not disclosed in more than a third of cases; estimates of the total value of these assets vary from £120 billion to £400 billion. A recent documentary, From Russia with Cash, showed that a number of London’s elite estate agents were happy to take money from and arrange legal assistance for a Russian minister who told them openly that he had appropriated the money from Russia’s health budget.
The kleptocracy tour included talks by a range of speakers. There were Russian dissidents who wanted to uncover the money stolen by Putin allies in the hope of discrediting the regime; there were activists who saw closing down offshore tax havens as a step towards enforcing tax justice and stopping the global flow of dirty money; there was an economic liberal who believed that if globalisation was to work it had to make a distinction between crony and genuinely competitive businesses; there were campaigners for better enforcement of beneficial ownership laws; there were investigative journalists looking to bust MPs on the take. The tour was co-sponsored by the Hudson Institute, which describes itself as a centre-right think tank, based in Washington DC. Hudson has recently launched its Kleptocracy Initiative, to design ‘policies aimed at limiting the ability of hostile foreign actors to abscond with national assets and use those assets against both their own citizens and the United States and its allies’. Until recently the argument made in both DC and Whitehall was that economic integration between nations would help guarantee security. Litvinenko had always known this was naive: when you legitimise corrupt and criminal regimes, and become dependent on them, you embolden, not tame, their aggressive foreign policy.
The tour bus took us up Park Lane towards Speakers’ Corner. Litvinenko loved this bit of London and would take his son, Anatoly, here. Anatoly was 12 when his father died; he is now a very English-sounding undergraduate: ‘My dad loved England,’ he told the inquiry. ‘He felt extremely safe here.’ He also told his son that ‘you could trust British justice. You could stand up on a box and say anything.’