Incorruptible Putin

The biggest surprise about the Russian reaction to the Panama Papers leaks came in the form of a poster that depicted Russian President Vladimir Putin as the drug-addled protagonist played by Johnny Depp in the movie version of Hunter S. Thompson’s Fear and Loathing in Las Vegas—complete with Panama hat, aviator sunglasses, and cigarette holder. Adorning a central Moscow bus stop for several hours before the authorities had it removed, the poster read, “What Panama?”

The rare public display of defiance mainly served to draw attention to the apathy of the general public—it comes as no surprise in a country where state propaganda fuels widespread suspicion that most foreign developments are plots against Mother Russia. Even as Western fiction, however, revelations from the leaked documents would strain credulity; above all, information revealed that the handful of individuals from Putin’s inner circle who moved at least $2 billion through Caribbean offshore companies included Sergei Roldugin, an obscure cellist from St. Petersburg who is the godfather of one of Putin’s daughters.

The president’s response was more incredible still. Dismissing the accusations against Roldugin as part of a U.S. plot to undermine Russian unity by impugning a humble musician, he said his old friend had only deposited cash that he had honestly earned on the side and intended to use to buy instruments to donate to charity.

When a justification of that level of hilarity suffices for dismissing such damning, if circumstantial, evidence of massive corruption—and that in a time when Putin has already saddled the country with a prolonged recession, international isolation, and repression—there is little hope that society will ever be moved to wake up and slough off a tyrant who appears to derive power from the brazenness of his denials.

Asked about the prospects that, with matters so grim, the beleaguered opposition may finally manage to sway Russians, those among the handful of Putin's remaining critics typically respond with curses and repetition of the long-standing consensus that the independent politicians are hopeless, useless, defeated.

Perhaps. The opposition’s valiant, long-suffering leaders have been neutralized with imprisonment, exile, ridicule, and murder. The movement received another body blow earlier this month when a Russian state television channel aired video of another leading standard-bearer, former Prime Minister Mikhail Kasyanov, from a hidden camera that showed the married father of two apparently having sex with his assistant. Even worse for a movement whose bitter internecine bickering has made the Kremlin’s task far easier, he was also shown badmouthing other opposition leaders, one of whom subsequently demanded that Kasyanov withdraw from their coalition.

Another television channel followed up days later by broadcasting a letter that it claimed proved that U.S. and British intelligence services had recruited the anticorruption crusader Alexei Navalny with the help of U.S. fund manager and Putin critic William Browder. In another display of either bald-facedness or appalling unprofessionalism, however, the documents that the station offered as evidence were riddled with glaring English-language errors that native speakers would never make—but that Russians commonly do.

Such incompetence would be comic were the aims not so harmful. With Putin and his inner circle amassing ill-gotten billions, relying on authoritarianism and propaganda that makes the old communist-era variety appear polished and reasonable, it is more important than ever for Western countries to do what they can to undermine Moscow’s game.

The U.S. Treasury says it is already searching through the millions of Panama Papers documents for information about anyone who may have helped the Kremlin evade Western sanctions. Their names may be added to the blacklist in June, when European Union countries are set to vote on whether to extend their sanctions. But there is more to be done. People such as Roldugin (the cellist) and others believed to be helping the Putin regime squirrel away billions should be subjected to asset freezes and visa bans, and the Kremlin must generally be treated like the criminal organization it is.

Among those calling for such measures, Alexander von Hahn—a Russian baron whose ancestors included a governor of the imperial bank under Tsar Nicholas II—characterizes Putin as a direct heir of the illegitimate Bolshevik regime. Von Hahn, who lives in Germany, is launching a group called the Russian Council, named after the organization established by the White Army leader General Pyotr Wrangel following the 1917 Russian Revolution to serve as a provisional government for anti-Bolshevik forces. That legacy, von Hahn says, can serve as the basis for establishing the legitimacy of a post-Putin government. “We need to pick a place for a new starting point to reestablish the core rights of Russian citizens,” he says.

Although he admits that looking to the deeply flawed precedent of tsarist-era leaders is controversial—not least for attracting the interest of nationalist groups—his exhortations to separate the interests of the Russian people from those of the Kremlin’s current rulers taps into the wider belief that the current course represents a dead end. “Elections don’t work in Russia,” he says. “The opposition can’t offer anything, it just keeps repeating the same things over and over.”

The likelihood of that message breaking through Russia's great wall of propaganda is virtually nil, which makes it is especially relevant for foreign governments. The Panama Papers have further exposed how easily international troublemakers such as Putin can circumvent the global sanctions on which Western countries and international organizations have relied. More than mere self-enrichment for the rich and powerful, tax evasion and the hiding of massive wealth help undo the European project. That's because it is helping enable a regime that is financing radical nationalist groups in Europe, using Russia’s vast energy supplies to threaten and bribe Western leaders, and fanning frozen conflicts to manipulate its neighbors. The reckless overflights by Russian fighter jets just 30 feet above a U.S. destroyer in the Baltic Sea last week provided another reminder that Putin’s wealth is also a matter of Western security.

There are already signs that the Panama Papers are becoming a catalyst for combating one of the scourges of our time. Iceland’s prime minister has resigned, and the G-20 powers have promised to remove provisions for the secrecy of shell companies enabling tax evasion and money laundering. Freezing the assets of the Putin cronies named in the Panama Papers—and others—would boost the effect of the existing sanctions that, along with low oil prices, are wreaking havoc on the Russian economy. That would be a start; Western countries must also finally combat the huge amount of money laundering carried out through real estate deals in New York City, London, Miami, and elsewhere.

Just because most Russians accept Putin’s brazen crimes doesn’t mean others in the free world should throw up their hands, too.