Swedish public broadcaster revealed on Wednesday last how Swedbank might have facilitated extensive and systemic money laundering that went on for nearly a decade and was tied to the Baltic units of Danske Bank.
In light of this baffling news, we met with Vadim Kleiner who, together with his colleague Bill Browder, has been shedding light on criminal money of Russian origin that moved to Europe through various laundromat schemes. He says that money laundering scandals must culminate in punishments for bank executives responsible as it is the only way to cleanse the financial system.
Information available to the press suggests Swedbank has also facilitated the movement of $26 million tied to the Magnitsky affair. Has Hermitage Capital Management investigated transactions at Swedbank? Do you have relevant material?
Yes, we have corresponding data, but we have not had time to look into it. Our team is small, while we have quite a few projects, but we will definitely go after transactions that took place in Swedbank next.
The Estonian Financial Supervision Authority said regarding Swedbank suspicions that they are currently media speculation no investigative organ has confirmed. This seems peculiar, considering the entire Danske case unfurled as a result of cooperation between Hermitage and journalists.
Yes. These are empty words from the watchdog. Journalists have been doing a great job over the past few years, especially if we look at the achievements of investigative groups, if only regarding the so-called Panama papers. What followed is absolutely unprecedented. It is clear investigative organs should investigate claims by journalists.
Hints should be taken especially seriously now as the Danske case has vividly demonstrated banking is not as clean as it was believed. Roots of the problem go much deeper. Look if only at the sheer amount of money and how long it was allowed to move through the bank.
Danske will be shutting down its businesses in the Baltics and Russia.
This is only the beginning for Danske Bank. It is hard to tell how many years the investigation will take before those responsible for money laundering are prosecuted. I believe that proceedings concerning Danske Estonia alone are not enough. The parent bank should also be held accountable. Even Danske’s own report showed several violations.
People seem to want to see bank managers charged. It is impossible for a CEO to have no idea what is happening at their bank.
The investigative process first needs a confession from a single employee and can move on from there.
We believe bankers always know what is happening at their bank. An exercise in theory: if you are a banker and your bank is used to launder money, what do you do? You take a cut. You know exactly who is behind accounts and who your clients are. You need to know all of these things in order to know how much to take.
Our experience with the Estonian prosecution can hardly be described as positive. We sent them a report of criminal conduct that did spark an investigation, but it was suddenly terminated in 2013. We were given no explanation. I hope it will be different this time.
You have helped investigative organs in several countries. It seems your work has produced better results than that of authorities.
We have interest and motivation. We are also not constrained by state borders that is one disadvantage authorities have. Their biggest concern is always how to investigate the movement of money in other countries. We see the global picture, which is why we have said that an international working group is needed to investigate money laundering. We have suggested it to Europol, but it is nowhere to be seen.
Is communicating with investigative agencies the most difficult part of your work?
We have encountered a lot of obstacles in these nine years. It is very difficult to contribute if you are not an investigative agency. Were we such an agency, the people responsible would already be locked up.
Lack of a predicate offense is constantly given as the reason why investigations get stuck. Our situation is completely different. The predicate offense is the reason we’re looking into this matter in the first place.
We have evidence of a predicate offense, and we managed to get it in spite of opposition from Russia’s corrupt regime. Several investigative organs have already walked that path and would gladly help Estonian and Danish colleagues.
We have helped the prosecutions of several countries, which makes it even more peculiar the Estonian prosecution terminated its investigation back then. Moreover, we do not just share hints with investigators. We have a thorough collection of data on how the money moved.
We have information on every legal entity, bank accounts and documents to prove every single transfer. We are talking about thousands of pages that prove how the money was illegally moved.
What could have been the reason behind the prosecution’s decision to terminate the investigation in 2013?
I have no idea. The only coincidence was that the investigation was killed immediately after we filed a complaint concerning money tied to Maksim Liksutov and Sergei Roldugin. (Liksutov is a Moscow deputy mayor with Estonian roots and Roldugin a close friend to Vladimir Putin – ed.) It is also peculiar that the prosecutor in charge was replaced immediately before the investigation was brought to a halt.
How big will this scandal get?
It is difficult to say as it has already taken on unprecedented dimensions. The most interesting thing is that it revolves around Nordic banks that have always been thought of as trustworthy.
The important thing right now is for someone to be convicted of money laundering. It would be a devastating blow to European banking if a scandal of this magnitude would go unpunished. It also entails a security risk. Suspicious funds on this scale can be used to influence elections.
Representatives of the European Commission have said some of the money that moved through Danske was used to fund information operations. At the same time, they said they had no concrete evidence.
No-no, we have evidence. We have evidence that some of the money was used to pay for lobbying, also against the Magnitsky Act. That money was used to hire thousands of lobbyists in USA.