And I guess now is when all that Russian money laundering pays off?
The Russian ruble fell as low as 111 to the U.S. dollar from 83 on Friday, a drop of more than 20% and, if sustained, the biggest single-day fall on record. But trading was spotty, with local onshore markets frozen by the central bank and markets outside Russia reluctant to trade the currency.
Our pals over at Electoral-Vote have a piece up on why the sanctions are not stronger, and you might be surprised to learn that, well, our own plutocrats have something to do with it:
The real problem, as we pointed out over the weekend, is that many rich and powerful Americans are deeply involved with Russian kleptocrats and going after the Russians would of necessity also catch their American enablers. For example, Donald Trump Jr. once said: “In terms of high-end product influx into the U.S., Russians make up a pretty disproportionate cross-section of a lot of our assets.” Going after the Russian kleptocrats would invariably mean going their partners, like the Trumps. And it is not only in the U.S. A Trump skyscraper in Toronto was also built with Russian money. And it is not only the Trumps. Many high-end real estate projects are full of laundered Russian money and going after them would expose American, Canadian, British and other enablers, none of whom will cooperate with any investigation. In the U.K. the money laundering is probably even worse than in the U.S. Boris Johnson might be hesitant to turn that stone over for fear what he might find. It would include many of his friends and top supporters.
Another problem is that some of the laundered money might be in off-shore tax havens like the Cayman Islands and the Bahamas. The U.S. could easily bully them into cooperating by banning all flights to and from them and kicking them off the SWIFT network. However, going after tax havens would also require tackling domestic corruption, which would be a long and difficult process since all of the folks affected can afford top-notch legal help.
I’m totally fine with going after tax cheats, money launderers, and other collaborators. We have these laws on the books for a reason, it seems bizarre to me to give all these crooks a pass when we have a real, national security issue on our hands.
The Axios email thingie:
Cutting Russia off from the international financial system has been referred to in recent days as “the nuclear option.” Some of that has already happened, and the West has committed to even more:
- Russia’s largest banks are now unable to operate in the dollar-based financial system.
- Today, Russia’s Central Bank raised its key rate from 9.5% to 20% in a desperate attempt to prevent a run on banks.
- Russian banks’ ability to easily transact in dollars and euros will be severely hampered when they get removed from SWIFT, the financial-messaging system that undergirds nearly all international money transfers.
UPDATE 1: Swiss Banks!
Switzerland, a favorite destination for Russian oligarchs and their money, announced on Monday that it would freeze Russian financial assets in the country, setting aside a deeply rooted tradition of neutrality to join the European Union and a growing number of nations seeking to penalize Russia for the invasion of Ukraine.
Switzerland said it was departing from its usual policy of neutrality because of ‘the unprecedented military attack by Russia on a sovereign European state,’ but expressed a willingness to help mediate in the conflict. It also joined European neighbors in closing its airspace to Russian aircraft, except for humanitarian or diplomatic purposes.