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Rich Russians have been squirreling money away in the U.K. and U.S.


Yachts, luxury apartments, private planes, even a soccer team are just some of the possessions that Russian billionaires could lose as the U.S., U.K. and the European Union all level sanctions on business leaders with close ties to Vladimir Putin. Even neutral Switzerland is freezing the bank accounts of wealthy Russians. So how did so much Russian money end up in Western countries? Tom Burgis is a reporter with the Financial Times and author of "Kleptopia: How Dirty Money Is Conquering The World." He joins us from London. Thanks so much for being with us.

TOM BURGIS: It's a real pleasure to be with you. Thanks.

SIMON: And help us understand how the U.K., U.S., EU became such attractive places for oligarchs to park their money.

BURGIS: Well, it's really to do with the rule of law. So kleptocrats, those who seize power in a state, seize control of a state and then use those state powers to loot, plunder public money, gather themselves an enormous fortune - and you keep this power through lawlessness, right? You mustn't allow the rule of law to take hold in your own country, or you'd be toast. But what you want for your own wealth is to transform it into legitimate riches - right? - just as you want to transform your rule. So it seems like you're a statesman, and you can stride around the world in that disguise. So what you do is you put your wealth into camouflage, right? You use it in an anonymously owned company. And safely disguised, you march your wealth into the West, where there's the rule of law, and you park it there.

SIMON: Well, was there some feeling - and I am thinking, you know, particularly of real estate operators in Mayfair in London or people, you know, companies that own condo towers in New York or developments along the left bank in Paris - was there some feeling - oh, this is great? This is a lot of money coming into our economy. We should be happy.

BURGIS: Oh, yeah, absolutely. I mean, this money was welcomed with open arms. There was recently some great undercover reporting done in New York when a state agent - real estate agent after real estate agent was wide open to taking what was obviously corrupt money. There's an entire industry that has grown incredibly wealthy servicing this international kleptocracy - not just Russians, of course, but kleptocrats from across the world.

SIMON: The U.S. is a country where we famously believe, follow the money. How do you disguise so much money?

BURGIS: Right. I mean, basically, we're talking about the ability to set up a company. It's just a company or something similar, but it doesn't really do anything. It's not making rubber chickens or selling apples or oranges. It's a few pieces of paper in the British Virgin Islands or Gibraltar or sometimes - in fact, often - Delaware. And that company can act like a person, yeah? It can hire lawyers. It can open bank accounts. It can buy and sell things. But the person behind it is completely invisible.

SIMON: You've referred to the financial secrecy that holds all of this together as the greatest threat to democracy. Help us understand that.

BURGIS: I think the greatest threat to democracy is kleptocracy - right? - the rule of the few through corruption that is spreading around the world and extending its tentacles into Western democracies. But now, trillions and trillions and trillions of dollars are in this offshore secrecy system where their owner is disguised. I mean, that's actually an extraordinary idea. We've become so used to it that I think we've become inured to it. But that is astonishing, that someone can buy the most expensive houses in London, can shift money to the financial system that ends up in - even sometimes in political donations, and can do so without revealing their face.

So in the U.K., for instance, you know, there's a big raft of sanctions proposed. We've only got the initial names that are going on that list. But the government doesn't propose fundamentally to break with this policy of permitting financial secrecy. And so, you know, just - let's just think in basic terms about that, about the practicalities. If a few of Putin's cronies are designated for sanctions and it becomes difficult for them to do business in the West, well, he'll get new ones because the secrecy system remains. We've seen this before in the kleptocracies that have come under pressure. The danger if we don't address financial secrecy, I think, is that we treat the symptoms and not the disease.

SIMON: Tom Burgis, a reporter with the Financial Times and author of "Kleptopia: How Dirty Money Is Conquering The World," thank you so much for being with us.

BURGIS: Thank you very much indeed.

(SOUNDBITE OF SOLANGE SONG, "GOD GIVEN NAME") Transcript provided by NPR, Copyright NPR.

Scott Simon is one of America's most admired writers and broadcasters. He is the host of Weekend Edition Saturday and is one of the hosts of NPR's morning news podcast Up First. He has reported from all fifty states, five continents, and ten wars, from El Salvador to Sarajevo to Afghanistan and Iraq. His books have chronicled character and characters, in war and peace, sports and art, tragedy and comedy.