‘Londongrad’

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49. Whilst the Russian elite have developed ties with a number of countries in recent years, it would appear that the UK has been viewed as a particularly favourable destination for Russian oligarchs and their money. It is widely recognised that the key to London’s appeal was the exploitation of the UK’s investor visa scheme, introduced in 1994, followed by the promotion of a light and limited touch to regulation, with London’s strong capital
and housing markets offering sound investment opportunities. The UK’s rule of law and judicial system were also seen as a draw. The UK welcomed Russian money, and few questions – if any – were asked about the provenance of this considerable wealth. It appears
that the UK Government at the time held the belief (more perhaps in hope than expectation) that developing links with major Russian companies would promote good governance by encouraging ethical and transparent practices, and the adoption of a law-based commercial environment.

50. What is now clear is that it was in fact counter-productive, in that it offered ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London ‘laundromat’. The money was also invested in extending patronage and building influence across a wide sphere of the British establishment – PR firms, charities, political interests, academia and cultural institutions were all willing beneficiaries of Russian money, contributing to a ‘reputation laundering’ process. In brief, Russian influence in the UK is ‘the new normal’, and there are a lot of Russians with very close links to Putin who are well integrated into the UK business and social scene, and accepted because of their wealth. This level of integration – in ‘Londongrad’ in particular – means that any measures now being taken by the Government are not preventative but rather constitute damage limitation.

51. It is not just the oligarchs either: the arrival of Russian money resulted in a growth industry of enablers – individuals and organisations who manage and lobby for the Russian
elite in the UK. Lawyers, accountants, estate agents and PR professionals have played a role, wittingly or unwittingly, in the extension of Russian influence which is often linked to
promoting the nefarious interests of the Russian state. A large private security industry has developed in the UK to service the needs of the Russian elite, in which British companies
protect the oligarchs and their families, seek kompromat56 on competitors, and on occasion help launder money through offshore shell companies and fabricate ‘due diligence’ reports, while lawyers provide litigation support. William Browder told the Committee that:
Russian state interests, working in conjunction with and through criminal private interests, set up a ‘buffer’ of Westerners who become de facto Russian state agents, many unwittingly, but others with a reason to know exactly what they are doing and
for whom. As a result, UK actors have to deal with Russian criminal interests masked as state interests, and Russian state interests masked by their Western agents.

52. The links of the Russian elite to the UK – especially where this involves business and investment – provide access to UK companies and political figures, and thereby a means for broad Russian influence in the UK. To a certain extent, this cannot be untangled and the priority now must be to mitigate the risk and ensure that, where hostile activity is uncovered, the tools exist to tackle it at source.

53. The extent to which Russian expatriates are using their access to UK businesses and politicians to exert influence in the UK is: it is widely recognised that Russian intelligence and business are completely intertwined. The Government must, take the
necessary measures to counter the threat and challenge the impunity of Putin-linked elites. Legislation is a key step, and is addressed later in this Report.

54. Several members of the Russian elite who are closely linked to Putin are identified as being involved with charitable and/or political organisations in the UK, having donated to political parties, with a public profile which positions them to assist Russian influence operations. It is notable that a number of Members of the House of Lords have business interests linked to Russia, or work directly for major Russian companies linked to the Russian state – these relationships should be carefully scrutinised, given the potential for the Russian state to exploit them. It is important that the Code of Conduct for Members of the House of Lords, and the Register of Lords’ interests, including financial interests, provide the necessary transparency and are enforced. In this respect, we note that the Code of Conduct for Members of Parliament requires that MPs register individual payments of
more than £100 which they receive for any employment outside the House – this does not apply to the House of Lords, and consideration should be given to introducing such a requirement. A ‘Foreign Agents Registration Act’ (an issue which is addressed in the section on Legislation) would also be helpful in this respect.

55. The Government effort on the disruption of Russian illicit financial activity in the UK is led and co-ordinated by the National Crime Agency (NCA). Its work also encompasses the investigation of UK-based professional enablers in the financial and property sectors, with the aim of hardening the UK financial and property markets from the proceeds of crime, and challenging any perception that the UK is a safe haven for illicit funds. The extent to which this money has now been invested, and reinvested, calls into question the efficacy of the recently introduced Unexplained Wealth Orders when applied to the investigation of individuals with such long-established – and to all intents and purposes now apparently legitimate – financial interests in the UK. Whilst the Orders appear to provide the NCA with more clout and greater powers, the reality is that it is highly probable that the oligarchy will have the financial means to ensure their lawyers – a key
group of professional enablers – find ways to circumvent this legislation (we return to this issue later in the Report). By contrast, the NCA lacks the resources required in terms of financial investigators, technical experts and legal expertise – this must be rectified.


Grenfell and the greed for profits

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Rydon, the main contractor on the Grenfell Tower refurbishment secretly “pocketed” £126,000 while switching the cladding to cheaper, more combustible materials, the inquiry into the deadly fire at the building has heard.

Rydon was bidding for the project in March 2014 when it told the landlord of the council block that it could save £293,368 by switching from the originally specified zinc cladding to plastic-filled aluminium panels, which the inquiry has heard had “significantly worse” fire performance.
At the time, the Kensington and Chelsea Tenants’ Management Organisation (KCTMO) was trying to cut more than £800,000 from the costs and had told Rydon it was “in pole position” to win the contract.
Rydon knew that the actual saving from the switch would be £419,627, but kept this from the client and “took some of the savings for themselves”, possibly as additional profit, Simon Lawrence, Rydon’s contract manager, admitted. The switch to the aluminium composite cladding panels, which since the fire have been banned on tall buildings, was the biggest part of more than £800,000 of savings 
Rydon promised five times to appoint fire safety advisers but failed to do so. Instead, it relied on the building control department at Royal Borough of Kensington and Chelsea council, which owned the block, to advise on whether there were any safety problems. Rydon did not tell the client or the architect it was not hiring a fire expert despite having said it would do so in meetings in April, June, July, September and October 2014 as works were getting under way. The absence of a fire engineer on the team meant the cladding was chosen without consulting a specialist fire safety consultant.
Rydon was also under further pressure to save money on the job because one of its employees, Frank Smith, had underpriced the total works by £212,000. Rydon was looking for ways to “compensate” for the mistake, internal company emails showed.
Richard Millett QC, counsel to the inquiry, asked Lawrence: “Was the plan in Rydon to keep the TMO in the dark about the real extent of the savings on the ACM panels and then pocket the difference to make up for Frank Smith’s £210,000 estimating error?”
Lawrence, who admitted he had known about the plan to take the savings, replied: “That could be the reason for it.”
Millett asked: “Why was it not Rydon’s responsibility to alert the TMO that Harley had advised that far greater savings could be achieved than you were letting on?”
Lawrence said: “It probably went into risk or into additional profit.”
 Chris Holt, Rydon’s site manager, asked Lawrence about the need to address fire safety, he was reassured that it was in hand. Holt said: “I was aware that as the refurbishment was to a residential block of flats, one of the main risk factors would be fire safety. When I started on the project I spoke to Simon Lawrence and asked whether I was required to consider aspects of fire safety in my role. Simon informed me that it was not part of my role and had been dealt with.”

DWP – “irrational, unjust and unlawful.”

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A working single parent who was benefit-capped and left up to £463 a month worse off because of the “irrational” way universal credit calculated her monthly earnings has won a high court victory against the Department for Work and Pensions.



 Justice Garnham said the system treated Sharon Pantellerisco, a 41-year-old care worker from Southport, as if she were not working, and punished her by arbitrarily reducing her overall universal credit award through the benefit cap.



 In effect, Pantellerisco had been penalised financially because her four-weekly pay cycle did not fit in with the design of universal credit. No “reasonable” secretary of state for work and pensions would have allowed the system to operate as it did in this case, the judge said.



 Pantellerisco, who has four children, worked 16 hours a week, receiving the “national living wage”, but was paid on a four-weekly basis, an arrangement that clashed with universal credit rules that calculate earnings over a calendar month. This meant her income for most universal credit assessment periods was deemed to be too low, subjecting her to the benefit cap, which in turn resulted in her benefit income being docked by up to 20% a month. This left her stressed, depressed and struggling to feed and buy clothes for her children. 



 Carla Clarke, a solicitor for Child Poverty Action Group, which brought the case, said: “A system that determines the amount of social security low-paid working claimants are entitled to on the arbitrary basis of whether they are paid monthly or four-weekly can only be irrational, unjust and unlawful.”



 https://www.theguardian.com/society/2020/jul/20/universal-credit-earnings-calculations-unlawful-judge-says

Capitalism cannot be regulated

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Big business and banks are just as corrupt and eager to shovel profits to senior executives 10 years after the landmark banking reform legislation known as Dodd-Frank as they were during the 2008 crisis, a new report warns, because the bill’s regulations on executive pay remain unimplemented.



  It has remained unimplemented—nine years after the deadline Congress set—thanks to lobbying from the banking industry, the report found. Section 956 calls for a ban on all “inappropriate” pay structures that could lead to “excessive risk taking.” 



 Meanwhile, money that Congress allocated to bail out bank creditors in 2008 effectively went to bankers, while more than 10 million lost their homes, their jobs and their savings.



 “White collar crime pays, and until Congress enacts the rules to change it, we’ll continue to see top executives raking in off catastrophes of their own making,” report author Bartlett Naylor, financial policy advocate at Public Citizen, said.

The report lists billions in bonus cash paid out to executives over the past decade despite Dodd-Frank’s regulatory framework banning such cash-outs. 


“It’s 2008 all over again,” said Naylor. “Congress is bailing out Big Business and enriching CEOs while workers scrape by as the economy lurches downward in a pandemic.”



Pure Water? Pure Profit

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When Margaret Thatcher sold off the water industry in 1989, the government wrote off all debts. But according to the analysis by David Hall and Karol Yearwood of the public services international research unit of Greenwich University, the nine privatised companies in England have amassed debts of £48bn over the past three decades – almost as much as the sum paid out to shareholders. The debt cost them £1.3bn in interest last year. In the past 10 years, the companies have paid out £17bn in dividends and directors’ pay has soared. The earnings of the nine water companies’ highest-paid directors rose by 8.8% last year, to a total of £12.9m. The highest paid CEOs were at Severn Trent, with a salary package of £2.4m, and United Utilities, a salary package of £2.3m. In comparison, the highest paid director of publicly owned Scottish Water earned £366,000. Scottish Water, which is publicly owned, has invested nearly 35% more per household in infrastructure since 2002 than the privatised English water companies, according to the analysis. It charges users 14% less and does not pay dividends.



 Dieter Helm, a professor of economic policy at Oxford University, said water companies could not be blamed for exploiting the system.

“The water companies behaved exactly how we believe a commercial company does behave,” he said. “The question is, do we expect capitalists to behave like capitalists? What we have seen is a complete regulatory failure to control the companies.”

English water companies have handed more than £2bn a year on average to shareholders since they were privatised three decades ago, according to analysis for the Guardian.
The payouts in dividends to shareholders of parent companies between 1991 and 2019 amount to £57bn – nearly half the sum they spent on maintaining and improving the country’s pipes and treatment plants in that period. Hall concludes the companies have borrowed to pay dividends, rather than to invest in infrastructure projects. The £123bn of capital expenditure spent by the companies has all been financed by customer bills, the analysis states.
“A large amount of debt has been borrowed. But since the revenue from user charges covered capital expenditure, this debt has been used to finance dividends rather than capital expenditure,” Hall said.
Critics say while continuing to pay huge dividends they have failed to carry out significant national infrastructure works to improve the water and sewerage system. Rather than improving, it had deteriorated, with more serious pollution incidents that damaged wildlife, the local environment and in the worst cases public health.
Water companies in England discharged raw sewage into rivers on more than 200,000 occasions last year. The analysis reveals untreated human waste was released into streams and rivers for more than 1.5m hours in 2019. The scale of the sewage releases in 2019 reveals what one industry insider said was the frequent and routine nature of discharging untreated effluent from storm overflows.  According to this insider, the discharges released “a horrible septic mix of nasties into the rivers”. He said the industry had for years ignored warnings about the growing scale of spills from combined sewer overflows (CSOs) – storm pipes that allow rainwater, untreated sewage and runoff to discharge into waterways. A recent study revealed the quantity of E coli coming out of CSOs was between 1,000 and 10,000 times higher than that coming from treated sewage from wastewater treatment plants.
The Environment Agency issues permits to allow water companies to release untreated human waste, which includes excrement, condoms and toilet paper, from CSOs after extreme weather events, such as torrential rain, to stop water backing up and flooding homes. More than 60 discharges a year from a storm overflow should trigger an investigation by the agency but the data reveals some storm overflows have released discharges hundreds of times. The Environment Agency relies on water companies to self-monitor their CSOs. The campaign group Windrush against Sewage Pollution said the system was little more than a “licence to pollute”.
Campaigner Ashley Smith said: “The industry has been given a way to prop up failed infrastructure and it has exploited this enthusiastically. The inability of the Environment Agency to prosecute or even drive improvement has led us to where we are today – in a complete shambles with pollution rife and unchecked.”
Dr Andrew Singer, a senior scientist at the UK Centre for Ecology and Hydrology, said the pollution impact of CSO discharge was a risk to ecological and human health.

“morally bankrupt” and “devoid of humanity.”

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 A suit was filed in the U.S. District Court for the District of Minnesota by Pharmaceutical Research and Manufacturers of America (PhRMA) to block Minnesota’s Alec Smith Insulin Affordability Act. The law in question is named for an uninsured 26-year-old diabetic who died in 2017 of complications from rationing his insulin because he couldn’t afford the medicine and related supplies after aging off his mother’s health insurance.

Under the law, people with diabetes who can’t afford the essential medicine will be able to get 30-day supplies with no more than a $35 co-pay. A separate income-based program is established for those with needs that extend beyond that. Drug makers are required to participate. If they don’t, they would face a series of escalating fines.


State Sen. Matt Little, a member of the Minnesota Democratic–Farmer–Labor Party (DFL), decried the move as “morally bankrupt” and “devoid of humanity.” In a tweet, Little also vowed: “I will spend my entire life fighting these soulless companies. No one should get sick or die from an inability to afford life-sustaining insulin.”

Who Judges the Judges?

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State and local judges draw little scrutiny even though their courtrooms are the bedrock of the American criminal justice system, touching the lives of millions of people every year. The country’s approximately 1,700 federal judges hear 400,000 cases annually. The nearly 30,000 state, county and municipal court judges handle a far bigger docket: more than 100 million new cases each year, from traffic to divorce to murder. Their titles range from justice of the peace to state supreme court justice. Their powers are vast and varied – from determining whether a defendant should be jailed to deciding who deserves custody of a child. Each U.S. state has an oversight agency that investigates misconduct complaints against judges. The authority of the oversight agencies is distinct from the power held by appellate courts, which can reverse a judge’s legal ruling and order a new trial. Judicial commissions cannot change verdicts. Rather, they can investigate complaints about the behavior of judges and pursue discipline ranging from reprimand to removal. the clout of these commissions is limited, and their authority differs from state to state. To remove a judge, all but a handful of states require approval of a panel that includes other judges. And most states seldom exercise the full extent of those disciplinary powers. As a result, the system tends to err on the side of protecting the rights and reputations of judges while overlooking the impact courtroom wrongdoing has on those most affected by it



 State and local judges have repeatedly escaped public accountability for misdeeds that have victimized thousands. Nine of 10 kept their jobs, a Reuters investigation found – including an Alabama judge who unlawfully jailed hundreds of poor people, many of them Black, over traffic fines. He once sentenced a single mother of three to 496 days behind bars for failing to pay traffic tickets. The sentence was so stiff it exceeded the jail time Alabama allows for negligent homicide. Johnson’s three children were cast into foster care while she was incarcerated. One daughter was molested, state records show. Another was physically abused. 

“Judge Hayes took away my life and didn’t care how my children suffered,” said Johnson. “My girls will never be the same.”



 In 2016, the state agency that oversees judges charged Judge Les Hayes with violating Alabama’s code of judicial conduct. According to the Judicial Inquiry Commission, Hayes broke state and federal laws by jailing Johnson and hundreds of other Montgomery residents too poor to pay fines. Among those jailed: a plumber struggling to make rent, a mother who skipped meals to cover the medical bills of her disabled son, and a hotel housekeeper working her way through college. Hayes, a judge since 2000, admitted in court documents to violating 10 different parts of the state’s judicial conduct code. One of the counts was a breach of a judge’s most essential duty: failing to “respect and comply with the law.”



 Despite the severity of the ruling, Hayes wasn’t barred from serving as a judge. Instead, the judicial commission and Hayes reached a deal. The former Eagle Scout would serve an 11-month unpaid suspension. Then he could return to the bench. Until he was disciplined, Hayes said in an interview with Reuters, “I never thought I was doing something wrong.” 



 Hayes is among thousands of state and local judges across America who were allowed to keep positions of extraordinary power and prestige after violating judicial ethics rules or breaking laws they pledged to uphold, a Reuters investigation found. Judges have made racist statements, lied to state officials and forced defendants to languish in jail without a lawyer – and then returned to the bench, sometimes with little more than a rebuke from the state agencies overseeing their conduct. Recent media reports have documented failures in judicial oversight in South Carolina, Louisiana and Illinois. Reuters went further. In the first comprehensive accounting of judicial misconduct nationally, Reuters reviewed 1,509 cases from the last dozen years – 2008 through 2019 – in which judges resigned, retired or were publicly disciplined following accusations of misconduct. In addition, reporters identified another 3,613 cases from 2008 through 2018 in which states disciplined wayward judges but kept hidden from the public key details of their offenses – including the identities of the judges themselves.



 All told, 9 of every 10 judges were allowed to return to the bench after they were sanctioned for misconduct. They included a Maryland judge who, after his arrest for driving drunk, was allowed to return to the bench provided he took a Breathalyzer test before each appearance. In Indiana, three judges attending a conference last spring got drunk and sparked a 3 a.m. brawl outside a fast-food restaurant that ended with two of the judges shot. Although the state supreme court found the three judges had “discredited the entire Indiana judiciary,” each returned to the bench after a suspension. In Texas, a judge burst in on jurors deliberating the case of a woman charged with sex trafficking and declared that God told him the defendant was innocent. The offending judge received a warning and returned to the bench. The defendant was convicted after a new judge took over the case.



 “When you see cases like that, the public starts to wonder about the integrity and honesty of the system,” said Steve Scheckman, a lawyer who directed Louisiana’s oversight agency and served as deputy director of New York’s. “It looks like a good ol’ boys club.”



 Stephen Gillers, a law professor at New York University who writes about judicial ethics said, the public “would be appalled at some of the lenient treatment judges get” for substantial transgressions. 



 Judge Cullman Kim Chaney, remained on the bench for three years after being accused of violating the same nepotism rules he was tasked with enforcing on the oversight commission. In at least 200 cases, court records show, Judge Chaney chose his own son to serve as a court-appointed defense lawyer for the indigent, enabling the younger Chaney to earn at least $105,000 in fees over two years.



 In Pennsylvania, the state examined the convictions of more than 3,500 teenagers sentenced by two judges. The judges were convicted of taking kickbacks as part of a scheme to fill a private juvenile detention center. In 2009, the Pennsylvania Supreme Court appointed senior judge Arthur Grim to lead a victim review, and the state later expunged criminal records for 2,251 juveniles.  



 Most states afford judges accused of misconduct a gentle kind of justice. Perhaps no state better illustrates the shortcomings of America’s system for overseeing judges than Alabama. As in most states, Alabama’s nine-member Judicial Inquiry Commission is a mix of lawyers, judges and laypeople. All are appointed. Their deliberations are secret and they operate under some of the most judge-friendly rules in the nation. Alabama’s rules make even filing a complaint against a judge difficult. The complaint must be notarized, which means that in theory, anyone who makes misstatements about the judge can be prosecuted for perjury. Complaints about wrongdoing must be made in writing; those that arrive by phone, email or without a notary stamp are not investigated, although senders are notified why their complaints have been summarily rejected. Anonymous written complaints are shredded. These rules can leave lawyers and litigants fearing retaliation, commission director Jenny Garrett noted in response to written questions.



 “It’s a ridiculous system that protects judges and makes it easy for them to intimidate anyone with a legitimate complaint,” said Sue Bell Cobb, chief justice of the Alabama Supreme Court from 2007 to 2011. In 2009, she unsuccessfully championed changes to the process and commissioned an American Bar Association report that offered a scathing review of Alabama’s rules.   In most other states, commission staff members can start investigating a judge upon receiving a phone call or email, even anonymous ones, or after learning of questionable conduct from a news report or court filing. In Alabama, staff will not begin an investigation without approval from the commission itself, which convenes about every seven weeks. By rule, the commission also must keep a judge who is under scrutiny fully informed throughout an investigation. If a subpoena is issued, the judge receives a simultaneous copy, raising fears about witness intimidation. If a witness gives investigators a statement, the judge receives a transcript. In the U.S. justice system, such deference to individuals under investigation is extremely rare.



  “Why the need for special rules for judges?” said Michael Levy, a Washington lawyer who has represented clients in high-profile criminal, corporate, congressional and securities investigations. “If judges think it’s fair and appropriate to investigate others for crimes or misconduct without providing those subjects or targets with copies of witness statements and subpoenas, why don’t judges think it’s fair to investigate judges in the same way?”



 https://www.reuters.com/investigates/special-report/usa-judges-misconduct/

American Despair (book review)

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 Life expectancy in the United States has recently fallen for three years in a row—a reversal not seen since 1918 or in any other wealthy nation in modern times. 



 In the past two decades, deaths of despair from suicide, drug overdose, and alcoholism have risen dramatically, and now claim hundreds of thousands of American lives each year—and they’re still rising.



 In their book ‘Deaths of Despair and the Future of Capitalism’  Anne Case and Angus Deaton paints a troubling portrait of the American dream in decline. For the white working class, today’s America has become a land of broken families and few prospects. As the college educated become healthier and wealthier, adults without a degree are literally dying from pain and despair. 



 Case and Deaton tie the crisis to the weakening position of labor, the growing power of corporations, and, above all, to a rapacious health-care sector that redistributes working-class wages into the pockets of the wealthy. Capitalism, which over two centuries lifted countless people out of poverty, is now destroying the lives of blue-collar America.



 https://press.princeton.edu/books/hardcover/9780691190785/deaths-of-despair-and-the-future-of-capitalism

Universal Credit – Sanctions to return

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In March the government announced that the requirement for people receiving universal credit to prove that they are looking for work – which would currently apply to more than 2 million people on the benefit – would be paused for three months due to the coronavirus pandemic. The government has now refused to extend the suspension on benefit sanctions beyond June.



  Lifting the ban now threatens to place millions of people in an “untenable situation”.  People who were shielding or suffered from underlying health conditions would face an “uphill struggle” to find suitable work – and may potentially accept jobs that place their health at risk in order to avoid benefit sanctions.



 There were also mounting concerns that ongoing disruption to schools and childcare options mean people may need to care for their children during the time they could otherwise spend working or applying for jobs, which could result in them being sanctioned.

Alison Garnham, chief executive of Child Poverty Action Group, told The Independent that it was “way too soon” to end the suspension of conditionality and sanctions for people claiming universal credit.
“The assumption that people need to be pushed into job search through the threat of reducing their already low income is ridiculous when what they really need is support.” 
Brian Dow, deputy chief executive at Rethink Mental Illness, echoed her concerns, and added, “Given the sharp rise in unemployment and substantial fall in job vacancies, reinstating it would only exacerbate the anxiety and stress of those who have been supported by universal credit during the pandemic, including those managing long term health conditions or a severe mental illness.”


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