Allegations about financial links between two Conservative MPs and former Soviet states sympathetic to Vladimir Putin aired during a foreign affairs select committee hearing, prompted the chair to urge witnesses to stop repeating them, saying it was not a kangaroo court.

The claims, made under parliamentary privilege on Wednesday, concerned Liam Fox, the trade secretary, and John Whittingdale, the former culture secretary.



The Conservative chair, Tom Tugendhat, called for an inquiry into the role of corrupt Russian money in the British economy in the wake of the poisoning of the Russian double agent Sergei Skripal in Salisbury.

Tugendhat has been leading the calls on Tory benches for the British government and prosecuting authorities to clamp down on Russian money laundering and, in particular, oligarchs close to Putin with major assets in the UK.

During the evidence session, Oliver Bullough, a journalist and author of books on Russian corruption, pointed to the fact that the trade secretary had been paid £5,700 for the Azerbaijani translation rights for his book plus more than £3,500 to attend the launch.

He said, having looked at the print run and the cover price, “there is no conceivable way this was a commercial proposition”.

Tugendhat interrupted Bullough, urging him to be very cautious, adding: “You do enjoy parliamentary privilege, but use it carefully and factually.”

Bullough then set out the cover price, print run and advance, before saying: “There may be an issue here I am not understanding, but in a Caesar’s wife way that is problematic.”

He then added that Whittingdale had accepted £3,000 to fly to Vienna. “I do not know how you spend £3,000 to fly to Vienna,” he said. The money, Bullough said, came from a Ukrainian oligarch’s foundation at the time he was battling extradition to the US on a FBI indictment.

Facebook Twitter Pinterest The former culture secretary, John Whittingdale. Photograph: PA

“I do think there is an issue if you expecting estate agents, lawyers and bankers not to accept this money if members of this house are accepting this money. I think this is something that could be addressed,” he said.

Bullough added he could have mentioned members of parties and was not seeking to make a party political point.

Tugendhat cut the discussion short saying that Whittingdale and Fox did not have a chance to reply, adding the witness could submit evidence in writing and then MPs could be given an ability to respond on an equal basis.

Speaking at the same committee, Tom Keatinge, a former investment banker and now director of the centre for financial crime at the thinktank RUSI, described the UK supervisory landscape as highly fragmented. He added that the Serious Organised Crime Agency, which was replaced by the National Crime Agency in 2013, had been hugely under-funded.

He said: “We are quite good at drugs and thugs and cash in the car park but at high-end money laundering with the best will in the world your average National Crime Agency officer is not going to understand the kind of structures that we used to put together at JP Morgan.”

Roman Borisovich, a former insurance executive and anti-corruption campaigner, said the lack of serious response by the UK over the years to Russian money laundering “had simply emboldened Russian kleptocratic elites to the extent that they think they own Britain”.

The UK’s decision to expel 23 diplomats “meant 123 Russian oligarchs have a party because their assets have been preserved and it is business as usual”.

Western allies expel scores of Russian diplomats over Skripal attack Read more

He said: “Money laundering should be a foreign policy issue, and not a criminal issue.”

Russia was an “autocratic system built on exporting wealth and is a system that has become aggressive against its neighbours. The process is undermining democracy. The money is being hidden in plain sight somewhere and nothing is being done about it.”

The British government, he said, has plenty of powers to act, including “unexplained wealth orders”, the Magnitsky Act, revoking the banking licence from Russian state-run banks such as VTB or to politely ask Gazprom to delist from the London Stock Exchange.

He said it was comical that, at exactly the same time the British government expelled Russian diplomats, the VTB bank – which Borisovich claimed was the embodiment of corruption – had launched a $4bn (£2.8bn) bond for Russia, containing a clause marketed for Russian kleptocrats abroad to help bring their money home.