How to stop the relentless wave of transnational criminal organizations (“TCOs”)? This was the question discussed at the Hudson Institute event “Dismantling Russian Transnational Crime Organizations: A conversation with José Grinda Gonzalez” on May 25, 2018. Judge Grinda is a Spanish special prosecutor for Spain’s Attorney General’s Office who is at the forefront of combating Kremlin-linked transnational criminal organizations in Europe. His office has the power to investigate money laundering, among other things, and is divided into a judicial office, a tax ministry unit, and a general intervention unit.
Transnational criminal organizations are not simple gangs operating in one or two fields of crime. These are highly sophisticated and effectively run businesses that span continents. The U.S. National Security Strategy stated that, “TCOs weaken our allies and partners by corrupting and undermining democratic institutions”, and that “some state adversaries use TCOs as instruments of national power.”
Judge Grinda explains that these organizations must legitimize themselves to become successful. He identifies four legitimacies that are vital to a TCO’s business. The first being economic. The more money TCOs can make, the more power and influence they will have within the local government. The second is achieving societal legitimacy. This entails having a presence within the community to be accepted by the public. One major way the TCO can do this is to buy a soccer team. The third legitimacy is politics. If TCOs are able to bribe and influence politicians to speak on their behalf, or change laws that benefit the TCO, then it can utilize those changes to increase profits and obtain power. For instance, Spain’s defense ministers discovered evidence of Russian involvement in Catalonia’s illegal separatist movement. The final legitimacy deals with money laundering. TCOs use law firms, banks, and institutions to defend themselves against criminal charges and hide their criminal activity. In Barcelona, the former head of police in charge of 16,000 officers was charged with having ties to a Russian TCO. This is clearly a complex system and reveals how difficult it can be to prosecute TCO members.
But progress has been made. In a Spanish case that dates back to 2008, a Russian MP and 17 other suspects have been tried earlier this year for their involvement with the Tambovskaya-Malyshevskaya gang based in St. Petersburg. This gang has money laundered more than $62 million of Russian mafia money and is led by Gennady Petrov. Petrov has deep ties to the Russian government, and he partnered with former Russian Defense Minister Anatoly Serdiukov to expand his empire. The two were friends and engaged in lucrative business deals and other organized criminal activities. Petrov also had contacts with a Russian Deputy Prime Minister, multiple cabinet ministers, legislators, oligarchs, the minister of health, and prominent businessmen. Spanish authorities arrested Petrov in 2008, but he later escaped and is considered at large in Russia.
Combating TCOs is difficult, but there are a few available ways of doing so in the U.S. and abroad. First, as discussed by the panel, the Foreign Agents Registration Act (“FARA”) must be enforced. This Act requires all U.S. lobbyists working with foreign governments or political entities to register with the Department of Justice (“DOJ”) and disclose the government’s activities. However, a FARA exemption allows lobbyists to file under the Lobbying Disclosure Act, and thus decreases enforcement of FARA, and increases the chances of foreign governments influencing U.S. lobbyists. Another option proposed by Ben Judah, a Hudson Institute Research Fellow, is ending U.S. anonymous companies that Russian kleptocrats use to circumvent law enforcement and bring billions of dollars into the U.S. Lastly, counter-kleptocracy initiatives can be adopted by Congress, NATO, and the European Union.
Regardless of the particular initiative, steps must be taken to abolish TCOs and either expel or arrest their members. As Judge Grinda stated, “just because we have a democracy does not mean we are immune to corruption.”
Max Raileanu is a legal intern at Berliner, Corcoran & Rowe LLP and a rising 3L at American University School of Law.