By Toby Oliver-Clarke, BA History
The fallout from the release of the Pandora Papers has continued to raise questions over the conduct of some of the world’s most wealthy and influential people. More importantly, thirty-four Tory Ministers and MPs now face questions over donations given by a Russian oligarch, Viktor Fedotov. Fedotov was previously linked to alleged corruption scandals and organised crime.
Fedotov (74) is a billionaire with properties in the UK and Russia and has been embroiled in corruption scandals since 2003. Fedotov stands accused of making £72 million from a series of offshore financial accounts and embezzling money from the Russian firm Aquind.
Documents, published by a consortium of journalists led by The Guardian and BBC revealed that along with receiving generous donations by Fedotov, Tory ministers lobbied on behalf of Aquind, a firm co-owned by Fedotov. This was an apparent attempt at securing a lucrative undersea electricity project between Portsmouth and Normandy in France.
The Papers revealed correspondence since October 2019 in which a £1.1 million donation was made to The Conservative Party. It was presumably given to ensure that the Conservative government lobbied the European Commission, reiterating support for a number of Aquind projects.
Additionally, Conservative MP David Morries was recently found to have broken parliamentary rules when he delivered a speech in the House of Commons in which he spoke favourably of Aquind. The speech was delivered only weeks after Morries had received a £10,000 donation from the company. Following the release of this correspondence, Veteran journalist Peter Oborne questioned ‘why Aquind feels it needs to go to such elaborate efforts and spend so much money, and so much time to get access to the Conservative party?’
In response a spokesman for The Conservative Party insisted that ‘fundraising is a legitimate part of the democratic process. Government policy is in no way influenced by the donations the party receives.’
“The controversy surrounding The Conservative Party is made all the more serious by Fedotov’s alleged links to embezzlement and corruption.”
The controversy surrounding The Conservative Party is made all the more serious by Fedotov’s alleged links to embezzlement and corruption. Vniist – another one of Fedotov’s businesses – acted as a contractor on Transneft’s enormous Eastern Siberia- Pacific Ocean pipeline project. The allegations of corruption were first made public by Russian opposition activist and politician Alexei Navalny. Navalny is a Russian anti-corruption activist; he alleged that an embezzlement scheme worth $4bn was being conducted by the contractors of Transneft, one of the contractors being Vniist.
To substantiate these claims, Navalny released a report in which executives of Transneft (the firm which had contracted Vniist) discussed how a ‘scheme was artificially created’ to benefit the scheme’s contractors. The foremost contractor named in the report was Vniist, which the report alleges stole upwards of 3.8 billion roubles (£80m).
The Pandora Papers allege that the profits gained from this embezzlement were siphoned off through a series of financial arrangements and secret offshore accounts. Documents from the Pandora Papers details how in June 2003, three businessmen including Fedotov established three offshore trusts in New Zealand naming themselves and their family members as sole beneficiaries.
After just two years, the trusts came to control a complex financial system which spanned various tax havens including the British Virgin Islands Malta and Luxembourg. Prominent lawyers hired by The Guardian newspaper claimed that the complex system of tax and financial structures was purposely created to conceal any links between the trusts and their owners.
In light of the claims published in the Pandora Papers, Mr. Fedotov denied any allegation of wrongdoing and insisted that he had ‘never had an interest in British politics, and has operated in an open and transparent manner throughout the course of his career.’
Despite the alleged lobbying by Aquind, the Department for Business Energy and Industrial Strategy has yet to come to a decision on whether the company will be granted the contract to lay cables between Portsmouth and Normandy. An official spokesman added that the decision will be made ‘solely’ by Business Secretary Kwasi Kwarteng.
Photo Caption: Business Secretary Kwasi Kwarteng exits 10 Downing street (Credit: The Daily Telegraph).