When Josip Broz (later known as Tito) was a Moscow Comintern agent in inter-war Yugoslavia, his mission was to subvert his country’s social and political life with the aim of Marxist revolution. The ohrana secret police caught him in 1928 and he was tried and sent to Lepoglava prison for five years. In court, Broz refused to defend himself against charges including membership of an illegal organization and making bombs, claiming that he did not recognize the court as legitimate.
After his release Broz spent extended periods in the late 1930s staying at the Comintern’s Hotel Lux in Moscow. This was the height of the purges, and at least ten of his Communist Party of Yugoslavia (KPJ) comrades were arrested and liquidated by the NKVD. One of them was Milan Gorkić, the leader of the KPJ, who was executed by firing squad. For good measure, he was posthumously expelled from the Party and his wife Berta was also killed. Broz—who we now know had denounced Gorkić—became the leader of the KPJ.
The two contrasting incidents must have impressed deeply on Tito one of the central doctrines of the Comintern: that rotten and decadent democracies like Yugoslavia would inevitably fall because they were so weak that they lacked the resolve to deal with their enemies efficiently. Their openness was an obvious weapon to use against them—a gift to their adversaries.
The irony is that in the century since the Russian Revolution, the “soft” democracies have endured, and it is the communist system that has collapsed. But the inheritors of the NKVD mantle—the KGB-trained Kremlin elite—believe that the game is not yet over. Their method once again is to use what they believe to be the West’s weakness—decadence and above all, openness—as a weapon against it. With smirking denials, the Russian state is waging a war of hacking, disinformation, subversion and espionage throughout Europe and North America.
So far, so obvious. But the world has changed since the 1930s in ways that exponentially increase the potency of these long-established tools. The Comintern objective of spreading distrust of elites in democracies was an uphill task using rumours and unreadable radical newspapers. With force multipliers such as the internet, viral “fake news”, and legitimate-seeming outlets like RT and Sputnik, it is less so today.
A similar shift has occurred in the structure of Western polities, a shift that could have the effect of supercharging external subversion efforts. In the 1930s, Comintern agents in target states were frustrated by the stubborn refusal of the proletariat to rise up, and by the failure of revolutions to manifest amid social conditions that they viewed as ripe. Under Moscow’s guidance, the Comintern cells lowered their sights somewhat, proceeding to set up “popular fronts”—coalitions of communist, socialist and even bourgeois parties that could be used as vehicles to win elections. After an election win, the non-communist partners would be marginalized, the communists would establish a dictatorship of the proletariat, and no more elections would be held. And yet in Europe, only force of arms achieved communist governments, and the “popular front” scheme failed completely.
Today, by contrast, populations that are materially well off have grown disillusioned with their elites. In the face of their boredom and fury, traditional party structures and ideological political dividing lines are dissolving, and parties are starting to look obsolete as new players and “movements” appear, seemingly from the ether. Some steal the ground of existing parties, some use existing parties for their own ends, and some operate in completely different ways. Matt Bennett of the think tank Third Way put it well in a recent interview with the Financial Times: “Trump’s election made clear that marching up the ladder of elective office to the White House is no longer necessary.” The Comintern resorted to riding on the back of “popular fronts” simply because it had failed to generate its own political momentum. Today, by contrast, politicians materializing on the political scene like a genie from a bottle, unencumbered by experience or track record, seem to amuse and impress voters: Populists like Donald Trump, the various pro-Brexit groups, Italy’s Five Stars and Germany’s AfD are all evidence of this. With sufficient chutzpah, political instinct, and money, individuals or small groups can throw hitherto stable democratic states into upheaval.
Of these three ingredients, money is the most elusive. But here, yet another shift has occurred. Comintern agents were sustained by subsidies from Moscow, often in the shape of jewelry stolen from “former people”, and would occasionally rob banks. Such measures seem almost quaint in today’s world.
This week’s OCCRP/Guardian Laundromat revelations show just how much dirty Russian cash has entered the international financial system. Most of this money is related to proceeds of crime, tax evasion and capital flight. But undoubtedly some of it has fuelled political subversion operations. This investigation has identified $20 billion in criminal proceeds laundered into 96 countries through Caribbean offshore centers, as well as through Latvia, Moldova and elsewhere. The total, the journalists claim, could end up being as high as $80 billion if all the participants are identified. Detectives investigating the scheme have described the masterminds as linked to the Russian intelligence services.
Something similar in structure also emerged this week concerning President Trump’s former campaign manager, Paul Manafort. Serhii Leshchenko, the Ukrainian MP and investigative journalist, released documents showing that in 2009 Manafort received $750,000 from Ukrainian President Viktor Yanukovych’s Party of the Regions. Intriguingly, the invoicing states that the money is for computer equipment. The invoice was paid by a Belize-registered company and routed though a bank account in Krygyzstan. Manafort has said that the allegations based on the documents are “baseless”. And then on Thursday, it emerged that from 2006, Manafort was paid as much as $10 million a year by the aluminum magnate Oleg Deripaska to promote the Kremlin’s interests in the United States, Europe, countries of the former Soviet Union, and elsewhere–and moreover that the work was not declared under the Foreign Agents Registration Act (FARA) or the Lobbying Disclosure Act (LDA). The payment channels for this contract have yet to be disclosed.
The utility of offshore funds in political subversion has been almost universally overlooked, but they are not the only method of supporting proxies. The Russian state is also a prime player in untraceable, high-value commodities like platinum, gold and diamonds that lend themselves perfectly to covert transfer—an echo of the Comintern’s methods.
Combining these two developments—the new malleability of Western democracies and the dark pool of offshore wealth—creates a potent recipe for subversion. Françoise Thom, the Sorbonne historian, says, “the Russian strategy is to build up pro-Russian oligarchs to finance co-operative Moscow-oriented parties and ‘movements’, buy up media outlets, influence those in power and in some cases, to take power themselves. The aim is not only to ‘Finlandize’ Western states (i.e. to bring their foreign policy under Russian control) but also to ‘Putinize’ their domestic systems.”
As to why Russia would do this in the absence of any ideological aim, one answer is that it seeks to divide and therefore dominate swathes of the West. Another, according to Françoise Thom, is that “the Russian security organs have always perceived themselves as an instrument of pure power. Taking, retaining and expanding power domestically and internationally is their raison d’etre.” A third is that the Kremlin’s leaders believe that the U.S. has already subjected it to similar treatment in the shape of ‘color revolutions’ and the activities of George Soros. Their response is to directly attack Western democratic systems and in place of Soros, to send the financier Konstantin Malofeev into Ukraine, Serbia, Bulgaria, Greece and France.
Of course it would be rash to say that such events are already in train in Europe or the U.S.—there is no evidence for that yet (although Russian openly bankrolls the French National Front, something distinct from covert support). But certainly there is a standing invitation to subversion. In the former Soviet Union, broadly similar maneuvers have already been seen. In the case of Georgia, for example, the Presidency of the pro-Western reformer Mikhail Saakashvili, which lasted from 2004 to 2013, was a constant source of irritation to the Kremlin. He was defeated in the 2013 elections by Bidzina Ivanishvili, standing under the banner of a new party he had founded, Georgian Dream.
Ivanishvili is the richest man in Georgia, with a net worth of $4.8 billion according to Forbes. He made his fortune in Russia, alongside his partner Vitaly Malkin, in banking and metals. In Russia these strategic sectors—alongside aerospace, defense, oil and gas and mass media—are closely supervised by the security services; to enter, flourish and persist in these areas of the economy requires “permission”. If you run a successful furniture business or a car dealership in Russia, then you need a krisha, or “roof”—someone who will provide political and administrative top cover. But “permission” in strategic sectors goes much further than that, and implies being co-opted. For someone from the Caucasus, such “permission” in strategic sectors is rare and precious and—like for fully Russian oligarchs—denying requests from the Kremlin is extremely unwise.
After just 13 months, Ivanishvili resigned as Prime Minister, delegating the role to his longstanding lieutenant Irakli Garibashvili, who had previously been interior minister. In this role, Garibashvili had already started “reforming” what Russians call the power organizations—police, security services, border guards and armed forces. This in effect meant a soft purge of the younger, reformist officials that Saakashvili had appointed. In their place came men who took a more charitable view of Georgia’s large neighbor to the north. (It is striking to note that Saakashvili reported that his original breach with Putin, which came in 2004, was over the appointment of senior a Georgian security official who appears to have been the Kremlin’s man.) In addition, numerous senior officials from Saakashvili’s government were arrested and jailed.
Ivanishvili never offered Georgian voters a pro-Russian policy. Such a platform would have been electoral suicide; after all, Russia had invaded Georgia in 2008 and still occupied substantial territories in Abkhazia and South Ossetia. Instead he ran slick, well-funded campaigns that promised prosperity, and the prospect of good relations with both Russia and the EU. In practice, that meant Georgia’s internal structures were made more palatable to the Kremlin, while the ostensible pro-Western direction remained. In the Russian view, if the organizations that underpin political power are cooperative, then the EU Association Agreement signed in 2016 is tolerable (although undoubtedly NATO would not be).
Ivanishvili sold most of his Russian business interests in the 2000s, but retained opaque offshore structures. The Panama Papers revealed that he was director of a BVI company, Bosherton Overseas Corp, which was incorporated in 2006. He resigned as director in 2009, before assuming public office. But as the company still exists, and remains opaque beyond the information contained in the Panama Papers, there is no way of knowing if Ivanishvili is an owner or beneficiary.
Notionally, how would such a formula play out in Western states? While the fundamental scheme would be the same, it would operate differently in some important respects. The chosen proxies would of course need to be nationals of the target states, and should ideally have limited or no outward contact with Russia in their background. Russia’s services would look for suitable individuals on the basis of a psychological profile featuring traits such as narcissism, cynicism, avarice, amorality, thin skin, and a sense of grievance (ideally replenished on a regular basis). At the moment of entering into the pact, the recruit would likely be subject to some kind of compromise (kompromat), which is a useful stick, but primarily the recruit should follow the provided carrots with enthusiasm.
These potential proxies ideally fall into two broad categories. The first are individuals already in possession of very substantial businesses and assets. They would be drawn in by a combination of appeals to ambition and vanity and the provision of additional business opportunities, cash, credit lines and indulgence of their vices. The second type of recruit would be at an earlier stage in his or her business career, and would be propelled to wealth and prominence by a hidden hand. This second group would be more controllable, since they owe their whole fortunes to their benefactors.
If this theoretical analysis is correct, it is important to remember that these constitute audacious, expensive and long-range operations of the sort that would be unthinkable to Western intelligence agencies nowadays. This means that if such figures were to emerge in the next five-to-ten years, it is certain that they have already been recruited and supported for a similar period at the very least.
Addressing this vulnerability would require resolute action on a number of levels. But it would not and should not be conducted in the form of inquisition, which would be authoritarian and therefore self-defeating. Instead, the most effective defenses would be mostly administrative and bureaucratic in nature. Here’s a start:
- Reform political funding regulations to reflect this threat. Existing regimes already enshrine the principle that foreign or money or money of unknown origin should not be allowed into party funds. The problem is that their monitoring and enforcement measures are obsolete and ineffective. A fortified version of the safeguards used in Anti-Money Laundering (AML) regulations should be used, with regulators establishing units tasked with verifying declarations over a certain threshold. The Ultimate Beneficial Owner (UBO) of donated funds should be declared and verified. Most importantly, the burden of proof must fall on the donor. If they cannot satisfactorily demonstrate the origin of the funds, then those funds should be excluded.
- The new dimension of threat posed by offshore centers should be recognized. In addition to criminal money laundering, tax evasion and terrorist financing, these jurisdictions pose a grave national security threat to open democratic systems. In response, accelerated action to marginalize and ultimately do away with offshore centers is needed.
- Ensure that political “movements” that act as de facto parties are treated in law as parties and cannot be used to circumvent regulations. This would require yardsticks such as extent of funding, nature of activity and close connection to electoral candidates.
- Politicians and major funders alike should be required to make full wealth declarations, including disclosure of their tax returns and assets. Romania already applies this rule to parliamentarians in order to deter political corruption, and has seen some success. Similar methods would be effective in deterring political subversion. These declarations could be verified by the same electoral funding unit described above, staffed by experienced investigators and forensic accountants. Where there are discrepancies—for example when an individual cannot or will not provide enough evidence in their declaration to account for their apparent wealth—then the following point (#5) could be triggered.
- Where there are reasonable grounds to suspect that a political figure is financed by a hostile power, then a judge sitting in a closed national security court could mandate the security services, police and prosecutors to mount an investigation. The fact that financial support could be laundered in ways that leave no paper trail means this extra level of protection is needed. Intelligence services in democracies are naturally unwilling to involve themselves in matters of domestic politics, which is a good thing in most cases. They are doubly wary of doing so today because of the fiascos of the politicised and public Iraq WMD affair, and now the allegations against Donald Trump. This is why legislation to reinforce political funding oversight could include provisions for judge-mandated investigations, both to prevent politically-inspired fishing expeditions and to give the security services the protection they require when a credible threat is detected. Legislation should also underline that the offence of knowingly working as a foreign agent to subvert the political system counts as treason punishable by Draconian jail terms and confiscation of all suspect assets.
The purpose of these combined measures would be to disrupt and deter current and future operations by Russia, China or any other power. And if this analysis happens to be wide of the mark and no such plans exist, the measures outlined above would still be needed to ensuring that this remains the case. Either way, it should be emphasized that this threat can only be addressed by reform of institutions, regulations and laws. Witch hunts and gossip are neither helpful or seemly.
The intention of the type of intelligence operations set out above would not be to gather information but to shatter the Western world’s unity, power and credibility—in Russian intelligence terms “active measures”. Tito and his fellow Comintern revolutionaries understood very well the invitation offered by open societies, but they could not foresee the opportunities that technological, financial, social, and political changes would present. To combat that threat, clear-sighted and firm action is required, without undermining openness or the rule of law. The sooner the better.