Banks profit from dirty Russian money in some major ways, and here are just a few of the underhanded ways they do so…
There is no question that over the past several decades, American corporations have earned a reputation for capitulating to oppressive regimes such as China. For example, longtime JPMorgan Chase CEO Jamie Dimon had to offer a mea culpa because he made a minor joke in regards to the Chinese Communist Party and one of the main reasons for that is because Chinese authorities had recently given JPMorgan Chase the full discretion of one of their securities businesses, and this big bank was one of the first in the industry to do so.
As Russia continues its cataclysmic invasion of neighboring Ukraine, other world governments have enacted sanctions in an effort to cut off Russian financial organizations, restrict the abily for these institutions to obtain debt and equity, and target some of the Russian elites.
The American banking industry often finds itself windward from these overseas elites who are channeling dark money because they want to move these tainted funds without anyone who is still honest in their country asking questions.
The American think think the Atlantic Council is now describing how it has become clear that Russia has the planet’s largest volume of dark money ($1 trillion) and this can be described as “both in absolute terms and as a percentage of their national GDP.” It was roughly one-quarter of the funds that are controlled by Russian President Vladimir Putin and his allies. Couple this with the fact that “the Kremlin appears to be able to persuade dependent oligarchs to assist financially in its foreign policy undertakings.”
“These oligarchs hire the best lawyers, auditors, bankers, and lobbyists in the world to develop legal means to conceal and launder their funds,” the Atlantic Council explains. “They thus often have greater resources than the regulators tasked with maintaining the integrity of national financial systems.”
Sequentially, the Kremlin is able to use these funds in a manner that will pose an absolute national security threat to the United States by engaging in espionage, bribery, and terrorism, and by pushing disinformation.
In 2014, the Organized Crime and Corruption Reporting Project began covering what has been termed the “Global Laundromat.” According to the group, “it’s a complex system for laundering more than $20 billion in Russian money stolen from the government by corrupt politicians or earned through organized crime activity.” Criminals, mobsters, and other elites were able to move a tremendous amount of cash out of Russia because they could use banks in smaller countries such as Latvia and Moldova.
Just three years later, the OCCRP determined from leaked bank accounts that many of the most powerful investment banks throughout the world had received this laundered money. Citi was one such example, and they had processed payments to the tune of $37 million. Wells Fargo, JP Morgan Chase, and Bank of America also had suspicious transactions. There were plenty of other worldwide financial firms implicated, including UBS, HSBC, Barclays, Deutsche Bank, Lloyd’s, and Royal Bank of Scotland.
When pressed by CNN, most of the banks deflected. “We continually take steps to strengthen and enhance our anti-money laundering program,” vowed Citi. “The Bank has systems and processes in place to identify suspicious activity and report it to the appropriate government authorities,” insisted HSBC.”
More recently, the “FinCEN Files”, which is documentation from the financial crimes investigation division of the Department of the Treasury, revealed that there had been at least $2 trillion in seedy payments from these overseas institutions from 1999 to 2017.
These documents “expose the hollowness of banking safeguards, and the ease with which criminals have exploited them.” The banks’ own employees issued warnings; yet, “profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme” flowed through entities like HSBC, Standard Chartered, Deutsche Bank, JPMorgan Chase, and Bank of New York Mellon.
The documents implicated many Russian oligarchs, but one of them was Putin ally Oleg Deripaska, who has a net worth of $3 billion and earned most of his money through Basic Element, a Kremlin-backed industrial group with interests in energy, aluminum, construction, and agriculture. Thousands of financial transfers from this firm were flagged as suspicious.
Moreover, there are plenty of other Russian oligarchs that are in bed with Putin. Will these Russian sanctions work? Possibly, but not if these underhanded deals continue to happen behind the scenes.