UK seeks investors for nuclear plant as it eases out China’s CGN

March 4, 2022


The British government is seeking financial advisers to raise billions of pounds for the proposed Sizewell C nuclear plant in Suffolk as ministers close in on a tacit agreement with Beijing to remove Chinese state-backed energy group CGN from the £20bn project.

A new company would replace the joint venture between French utility EDF and CGN that is developing the £20bn Sizewell C plant in Suffolk, according to people familiar with the government’s plans. EDF holds 80 per cent under the current structure with the remainder held by the Chinese group.

Under the revised plans, both the UK government and developer EDF would take a 20 per cent stake each in the new vehicle and end CGN’s involvement in the project, reflecting how diplomatic relations between Beijing and London have deteriorated in recent years.

The government this week launched the search for investment bankers to find investors for the remaining 60 per cent stake, according to people with knowledge of the situation.

The new company would be chaired by Stephen Billingham, a City veteran who was previously finance director of British Energy, the group that owned Britain’s operational fleet of nuclear reactors before it was bought by EDF in 2008.

As part of the settlement, CGN is expected to remain a partner in Hinkley Point C, a 3.2 gigawatt nuclear power station under construction by EDF in Somerset in south-west England. It is the first and only one of a planned new generation of nuclear reactors under construction.

The Chinese company is financing a third of the costs to build the plant, which is nine years behind schedule. Its knowledge is also considered critical to the project because of its experience of the European Pressurised Reactor (EPR) technology, a Franco-German design, used in Hinkley Point C. CGN was the first to build working EPRs at a plant in Taishan in China.

The need to push ahead with Sizewell C, which will also use EPR technology, has taken on new urgency with the war in Ukraine adding to already high gas prices that are feeding through into more expensive domestic energy bills.

Business secretary Kwasi Kwarteng has insisted that Britain’s reliance on gas imports will fall in the long-term as the government encourages more renewable energy and new nuclear power stations.

Pressure to build more nuclear plants has also increased after EDF, which owns the country’s existing fleet along with Centrica, had to close several plants early. The remaining six operational power stations provide about 16 per cent of Britain’s generating capacity.

But this will drop further when Hinkley Point B in Somerset closes in July with four of the remaining five plants scheduled to shut by March 2028.

CGN’s involvement in Britain’s civil nuclear programme has come under intense scrutiny since the government announced a ban on Chinese telecoms equipment maker Huawei from its 5G mobile phone network in 2020 citing national security concerns.

CGN was also blacklisted by the US in 2019 over accusations of stealing US technology for military use. Simone Rossi, head of EDF’s UK arm, has said previously that US investors would be needed to finance Sizewell C, which would prove problematic were CGN to remain involved.

EDF and the UK government hope to attract private investors to Sizewell C via a “regulated asset base” model which is used to finance other infrastructure including gas networks and airports.

The model assures private investors a steady rate of return from an early stage but is controversial as consumers pay towards the financing of the project via a surcharge on their energy bills long before it is completed.

CGN and EDF Energy both declined to comment.

Source: Financial Times

Hong Kong Tycoon Victor Li Nears £15 Billion Sale of U.K. Power Assets to Private Investors

Dinesh Nair, Manuel Baigorri and Vinicy Chan
Thu, March 3, 2022


(Bloomberg) -- A consortium led by Macquarie Group Ltd. and KKR & Co. is in advanced talks to buy the U.K. electricity distribution business controlled by Hong Kong tycoon Victor Li, in what could be one of the sector’s largest deals this year, people familiar with the matter said.

The bidder group also includes APG, China Investment Corp., Ontario Teachers’ Pension Plan Board and PSP Investments, according to the people. A deal could value UK Power Networks at as much as 15 billion pounds ($20 billion) and an agreement may be reached in the coming weeks, they said.

UK Power Networks is jointly owned by the Li family’s CK Infrastructure Holdings Ltd. and fellow group companies Power Assets Holdings Ltd. and CK Asset Holdings Ltd.

Shares in CK Asset Holdings fell as much as 2.8% in Hong Kong on Friday, touching their lowest level in more than two months, according to data compiled by Bloomberg. CK Infrastructure shares climbed up to 1.6%, while Power Assets rose as much as 1.2%.

Deliberations are ongoing and there’s no certainty they’ll result in a deal, the people said, asking not to be identified discussing confidential information. The business could also still attract interest from other infrastructure investors and energy companies, the people said.

A representative for Li’s companies said the group often receives offers for different assets, declining to comment further. Representatives for APG, KKR, Macquarie, OTPP and PSP declined to comment, while a spokesperson for CIC couldn’t immediately provide comment.

Formerly owned by France’s Electricite de France SA, UK Power Networks owns and maintains electricity cables across London and the south east and east of England and serves about 8.3 million homes. It was acquired in 2010 by Li’s companies.

Distribution grids are the local networks that feed directly into homes and businesses, putting them at the heart of the energy transition. Higher allocations from pension and sovereign wealth funds and investors’ desire for long-term, stable returns have made infrastructure one of the hottest sectors for dealmaking.

Last year, National Grid Plc agreed to buy PPL Corp.’s U.K. electricity distribution business for 7.8 billion pounds as it prepares for a low-carbon future. As part of this push the London-listed utility is looking to offload its roughly $10 billion gas transmission business, which is drawing interest from Macquarie, Bloomberg News has reported.

Elsewhere, SSE Plc has lined up banks to lead the sale of minority stakes in two electricity networks valued at more than 10 billion pounds.

(Updates with share price moves in fourth paragraph.)

Most Read from Bloomberg Businessweek

CalPERS says has ceased new investment flows into Russia

Thu, March 3, 2022, 
By John McCrank

NEW YORK, March 3 (Reuters) - The California Public Employees' Retirement System, the largest U.S. pension fund, said on Thursday it has ceased all transactions in Russian publicly traded equity and has stopped the flow of any new investments into the country due to Russia's invasion of Ukraine.

CalPERS is also assessing its real estate investments in Russia, the fund operator said in a statement.

As of March 2, CalPERS owned around $420 million of Russian public stocks and $345 million in illiquid real estate assets, according to a letter the fund operator sent to California Governor Gavin Newsom seen by Reuters.

CalPERS' total investments in Russia represent about 0.17% of its total investment portfolio and it holds no Russian debt, the letter said.

Western sanctions on Moscow have prompted a wave of investors to announce they were cutting positions in Russia. Authorities in Russia, however, have banned local brokers from selling securities held by foreigners.

"It is important to note that current sanctions, market restrictions, and closure of local stock exchanges have placed significant constraints on CalPERS’ ability to liquidate its holdings," CalPERS said in the letter, signed by Theresa Taylor, president of the CalPERS Board of Administration.

The pension fund also said it was reviewing all its investments in emerging markets, including Russia, due to the impacts the crisis has had on all financial markets.

BlackRock, the world's largest asset manager, said it had suspended the purchase of all Russian securities in its active and index funds on Monday.

 (Reporting by John McCrank; Editing by Bernard Orr)

FRONT PAGE NEWS (NOT)
WSJ News Exclusive | IRS Is Audited Over Its Safeguards Against Favored Treatment of Big Business
March 3, 2022


The Internal Revenue Service’s watchdog is examining how the agency guards against favoring large businesses and global companies in compliance matters as part of a broad audit.

The U.S. Treasury Inspector General for Tax Administration, or Tigta, has reached out to people inside and outside the IRS for information since starting work on the audit late last year, according to a person familiar with the inquiry. Among the lines of inquiry is how the IRS handles conflicts of interest and the revolving door between the accounting industry and IRS, the person said.

Source: Wall Street Journal

C.I.A. Black Sites Are State Secrets, the Supreme Court Rules

March 3, 2022


WASHINGTON — The Supreme Court on Thursday shut down efforts by a detainee at Guantánamo Bay to obtain information from two former C.I.A. contractors involved in torturing him, ruling that the inquiry would impermissibly expose state secrets.

Justice Stephen G. Breyer, writing for a badly fractured court, said the main question was whether the information sought by the detainee, known as Abu Zubaydah, would confirm the location of a C.I.A. black site, which is widely known to have been in Poland.

The justices split 6 to 3 on the question of whether the case could proceed. In dissent, Justice Neil M. Gorsuch, joined by Justice Sonia Sotomayor, said the government sought to avoid “further embarrassment for past misdeeds.”

“The facts are hard to face,” he wrote. “We know already that our government treated Zubaydah brutally — more than 80 waterboarding sessions, hundreds of hours of live burial and what it calls ‘rectal rehydration.’ Further evidence along the same lines may lie in the government’s vaults. But as embarrassing as these facts may be, there is no state secret here.”

“This court’s duty is to the rule of law and the search for truth,” Justice Gorsuch wrote. “We should not let shame obscure our vision.”

Justice Breyer, on the other hand, insisted that the question at issue was a limited one. “Obviously, the court condones neither terrorism nor torture,” he wrote, “but in this case we are required to decide only a narrow evidentiary dispute.”

He conceded that the location of the black site had been acknowledged by an international tribunal and a former president of Poland. But he wrote that official confirmation of the location of the torture by the United States government was a different matter.

“It stands to reason that a former C.I.A. insider’s confirmation of confidential cooperation between the C.I.A. and a foreign intelligence service could damage the C.I.A.’s clandestine relationships with foreign authorities,” he wrote. “Confirmation by such an insider is different in kind from speculation in the press or even by foreign courts because it leaves virtually no doubt as to the veracity of the information that has been confirmed.”

Abu Zubaydah sought to subpoena the contractors, James E. Mitchell and Bruce Jessen, in connection with a Polish criminal investigation. The inquiry was prompted by a determination by the European Court of Human Rights that he had been tortured in 2002 and 2003 at secret sites operated by the C.I.A., including one in Poland.

When the case, United States v. Husayn, No. 20-827, was argued in October, David F. Klein, a lawyer for Abu Zubaydah said he was not seeking testimony about the location of the black site. “I’m not planning to ask, ‘Did it happen in Poland?’” he said.

Rather, Mr. Klein said, he sought information about his client’s treatment.

“What happened inside Abu Zubaydah’s cell between December 2002 and September 2003?” he asked, giving the dates during which his client was understood to be held in Poland. “How was Abu Zubaydah fed? What was his medical condition? What was his cell like? And, yes, was he tortured?”

Justice Breyer wrote that questions like those “would inevitably tend to confirm or deny whether the C.I.A. operated a detention site located in Poland.”

In a concurring opinion endorsing Justice Breyer’s bottom line but not his reasoning, Justice Clarence Thomas, joined by Justice Samuel A. Alito Jr., wrote that the executive branch was entitled to even more deference than the majority had given it.

Justice Elena Kagan, in a partial dissent in the case, said she agreed that the location of the black site must be protected but said the case could nonetheless proceed.

“I would allow Zubaydah to amend his requests to remove all Poland-specific references,” she wrote, “so that he can obtain testimony about his detention — in whatever country it took place.”

In his dissent, Justice Gorsuch, who had defended the Bush administration’s detention policies as a Justice Department official in 2005 and 2006, said there was no point in barring testimony about the location of the site. “We should not be ignorant as judges of what we know to be true as citizens,” he wrote.

“The location of the C.I.A.’s detention site has been acknowledged by the former Polish president, investigated by the Council of Europe, and proven ‘beyond reasonable doubt’ to the European Court of Human Rights,” he wrote. “Doubtless, these disclosures may have done damage to national security interests. But nothing in the record of this case suggests that requiring the government to acknowledge what the world already knows to be true would invite a reasonable danger of additional harm to national security.”

Abu Zubaydah, whose real name is Zayn al-Abidin Muhammad Husayn, was captured in Pakistan in March 2002 and was initially thought be a high-level member of Al Qaeda. A 2014 report from the Senate Select Committee on Intelligence said “the C.I.A. later concluded that Abu Zubaydah was not a member of Al Qaeda.”

He was the first prisoner held by the C.I.A. after the Sept. 11, 2001, attacks to undergo so-called enhanced interrogation techniques, which were based on a list of suggestions drawn up for use on him by Dr. Mitchell and Dr. Jessen, both psychologists.

Dr. Mitchell has testified that he and Dr. Jessen, who had experience with an Air Force program that taught pilots how to resist torture, were hired by the C.I.A. to consult on the interrogation of Abu Zubaydah. They were ultimately assigned to carry out the techniques on him in the summer of 2002.

A federal judge granted the government’s motion to block the subpoena, saying that “proceeding with discovery would present an unacceptable risk of disclosing state secrets.”

But a divided three-judge panel of the U.S. Court of Appeals for the Ninth Circuit, in San Francisco, ruled that it might be possible to segregate information protected by the state secrets privilege, which bans disclosures that could endanger national security, from other materials.

The full Ninth Circuit declined to rehear the panel’s decision, over the dissents of 12 judges who said the ruling was riddled with “grave legal errors” and posed “a serious risk to our national security.”

Source: NY Times

Chess: Russia stripped of 150-nation Olympiad while Carlsen overcomes Covid

March 3, 2022


Chess has followed football and Formula1 in stripping Russia of the right to host its flagship team event, the 150-nation Olympiad, which was scheduled for Moscow in July. India, where the game has boomed with a profusion of teenage talents, has submitted its guarantee of $10m to the global chess body Fide.

Fide has also ended its backing from Russian state sponsors including the gas supplier Gazprom, the fertiliser giant PhosAgro, and the mining firm Nornickel.

However, Nigel Short, who is effectively Fide’s acting president in current conditions, stated that the organisation’s budget had expanded fivefold to more than €13m since its new administration led by Arkady Dvorkovich took over in 2018, and that its current programmes would not be affected by the absence of Russian backing.

Russian and Belarus players will be prohibited from competing with national flags, while the 2016 world title challenger Sergey Karjakin, who has made public statements justifying the invasion, is being referred to Fide’s disciplinary commission. Karjakin is also being ostracised by top tournaments. Norway Chess in Stavanger, which he has won twice, announced his exclusion.

Five Russian grandmasters, playing under the Fide flag, are currently competing as individuals at Belgrade in the Fide Grand Prix. The final Grand Prix leg in Berlin also looks likely to be played normally, but the problem event is the eight-player Candidates at Madrid in June, for which the controversial Karjakin is qualified.

Meanwhile, Norway’s world champion Magnus Carlsen sails on, defeating both Covid and his old rival Ian Nepomniachtchi en route to a 4.5-2.5 final victory in the online $150,000 Airthings Masters, the opening event of the 2022 $1.6m Meltwater Champions Tour.

Just as in their classical world title match in Dubai, the Russian, who had tweeted his opposition to the war in Ukraine, held his own well for five games then collapsed at critical moments.

2459
John Emms v Chris Ward, British championship 2015. White to move and win. Material is level in this pawn endgame, and at first glance the position is blocked with no way through. Can you find White’s instructive winning plan?
Click here for solution

Source: Financial Times

UK lacks ‘credible plan’ to drive net zero transition, Lords report warns

“There is no point planning a carbon-free energy future if you haven’t got a clue how you will get there or how it will be paid for”

March 4, 2022



The UK will miss its net zero carbon targets because the government has failed to introduce “credible plans” to drive investment in key alternative technologies, such as heat pumps, a parliamentary report has warned.

Ministers have not yet explained how the transition will be funded or what policies and financial incentives they will use to deliver on their targets to reduce emissions, the study by the House of Lords industry and regulators committee said. Britain has committed to decarbonise the power grid by the mid-2030s and reaching net zero carbon emissions overall by 2050.

“There is no point planning a carbon-free energy future if you haven’t got a clue how you will get there or how it will be paid for,” said Lord Clive Hollick, the Labour peer who chairs the committee.

The report urged the government to review its opposition to the use of state borrowing, warning that the amount that can realistically be raised via surcharges on energy bills would not be enough to pay for the net zero transition.

Piling costs on to energy bills would also put unfair pressure on consumers already bearing the brunt of soaring energy prices and would fall disproportionally on low-income groups, the committee said.

The government’s proposed funding model to pay for new nuclear power stations, known as the regulated asset base model, which imposes levies on household bills from the moment construction starts would only add to impending cost of energy, the report warned.

“Bills are regressive as the poor pay more of their income on energy costs . . . the government should look again at using greater public borrowing to fund what are huge and long-term infrastructure costs,” it said.

The Climate Change Committee, the government’s environmental adviser, has estimated it would cost £50bn annually from 2030 to meet the cost of the transition to net zero.

Ministers must resolve key issues such as how to incentivise households to replace gas boilers with heat pumps and what the plans are for the 6mn homes where heat pumps may be unsuitable, the report said.

The committee also called for measures that would aid the net zero target to be explicitly added to Ofgem’s statutory duties. However, it concluded that the energy regulator should not be given a more strategic role in planning the transition.

Instead, to deliver the changes, a transformation task force should be established within the Cabinet Office and report to the prime minister. It should co-ordinate all departments and set out a clear road map for the implementation of energy policies, the report recommended.

It also added to the criticism of Ofgem for its poor oversight of the energy market, after a spike in gas prices led to the collapse of at least 29 suppliers. The report said Ofgem’s failures had “created greater cost and uncertainty for consumers.”

The report urged the regulator to adapt the price controls it applies to energy companies to ensure that they can invest in new infrastructure before it is needed.

Ofgem said it had “played a key role in driving down carbon emissions over the last 20 years” and would continue to work with the government to meet the net zero targets.

The government said: “We will meet the net zero target by 2050 and are on track to do so. Detailed measures are set out in our comprehensive Net Zero Strategy, which has been widely welcomed by a range of experts, including the independent Climate Change Committee.”

Source: Financial Times

UK’s energy overhaul must confront abject failures on efficiency
March 3, 2022



In the aftermath of the 1973 oil price shock, governments around the world scrutinised energy in a new light. Many put resources into the development of wind turbine technology and other emerging energy sources.

The UK created its first Department of Energy. It instituted a new focus on efficiency, urging consumers to “switch off”, and started an Industrial Energy Thrift Scheme to gather data on energy use and provide advice on making savings.

This should be another such moment — a “wake-up call to move away from rogue regimes and towards new technology”, says former Gazprom trader Adi Imsirovic, now at the Oxford Institute for Energy Studies.

Russia’s invasion of Ukraine is prompting a rapid rethink of energy policies around Europe. Soaring wholesale gas prices, now 10 times their level a year ago, could send UK households’ energy bills towards £3,000 a year when the new price cap is set for October.

In a week that a UN report warned of a “brief but rapidly closing” window to adapt to climate change, those considerations push in the same direction as net-zero policies: towards more renewable energy, greater efforts to decarbonise households and industry, and enhanced energy efficiency. The latter shouldn’t be an afterthought in policy — but generally is.

Business and energy secretary Kwasi Kwarteng last week focused on supply when talking UK energy security. He argued that the UK needed more cheap renewables, to invest in new nuclear energy and to back North Sea production. The latter, he rightly noted, does little to affect the international market prices to which the UK is exposed.

Nor does shale gas, which even if it could overcome significant geological uncertainty and public scepticism (unlikely) would require many years and thousands of wells to make a meaningful contribution. Efficiency, which can reduce fossil-fuel use and save household budgets fastest, was just Kwarteng’s postscript: he noted the government was spending £6.6bn on upgrades this parliament.

Those programmes are targeted predominantly on social housing and public buildings. They are entirely inadequate: Element Energy reckons that closer to £5bn a year is needed over the next decade to get the UK’s ageing, leaky housing stock ready for low-carbon heating technology such as heat pumps.

Deadlines to stop installing gas boilers in new homes, and to stop replacing existing ones, are arguably too distant. But insulating UK houses is a prerequisite for whatever comes next, and makes good sense in the meantime.

Yet there is no mass-market effort to retrofit the UK’s homes, where 63 per cent of houses can be brought up to standard for less than £1,000 on Element’s figures. And domestic heating accounted for nearly 40 per cent of UK gas demand in 2020.

This area is marked out by repeated, miserable policy failure. Since a shift in regulatory requirements under the coalition government, annual efficiency installations have fallen 90 per cent, according to the Resolution Foundation.

CONSERVATIVE POLICIES AUSTERITY ECONOMICS

The Cameron government’s Green Deal, a complex and uncompetitive financing arrangement, aimed to insulate 14m homes by 2020 but issued only 14,000 loans. The decision in 2013 to cut “the green crap”, as David Cameron was reported to have said and which included tighter standards for home energy efficiency, was costing households £2.5bn annually and rising, CarbonBrief reckoned earlier this year.

The latest embarrassment to effective policy was the 2020 Green Homes Grant, an administrative nightmare that managed 47,500 upgrades compared with a 600,000 target.

One problem has been an aversion to allocating public money towards schemes — something that will be needed to help the poorest owner-occupiers who are most squeezed by rising energy prices and tend to live in less efficient properties. But repeated policy changes and dwindling activity have also just gutted the skills and supply chain for this type of work. And, says Rebecca Teasdale at Baringa, even those who can afford it need to be helped by “making the process simple — ideally via a one-stop shop”.

The bombardment of Ukraine and the isolation of Russia means that energy prices are likely to remain high. Concerns about security, climate change and the cost of living crisis are pointing in the same direction. Addressing persistent failure on efficiency should be an urgent part of the answer.

helen.thomas@ft.com
@helentbiz
Source: Financial Times

HETERONORMATIVE MALE VIOLENCE IN DRAG

Moon Witch, Spider King — Marlon James continues his Dark Star saga
March 3, 2022


In 2015, Marlon James won the Man Booker Prize for his novel A Brief History of Seven Killings, a historical fiction about the attempted assassination of Bob Marley in 1976.

His subsequent swerve into the fantasy genre with the publication in 2019 of Black Leopard, Red Wolf, the first instalment of his Dark Star trilogy, was unexpected but won him legions of new fans. Although the book’s dizzying, circuitous plot left many perplexed, the attention it garnered served to demonstrate that the conventional divide between literary and genre fiction is a moot point.

With Moon Witch, Spider King, the second volume of his African fantasy saga, James opts for a more linear, less digressive structure, and cements his status as a wildly inventive and lyrical storyteller.

Like an ancient African Lisbeth Salander, Sogolon dedicates her lonesomeness to meting out lethal rough justice to men who harm women

When James first announced the Dark Star trilogy, he called it an “African Game of Thrones”. He later recanted, saying the description was a joke. While that throwaway line might help orient the story, along with Tolkien’s The Lord of the Rings and Stan Lee’s The X-Men, there’s no doubt that these are Marlon James novels. The setting is a pre-colonial, iron-age Africa in which memory is slippery and unreliable narrators obfuscate the truth. It’s a theme that is emphasised by the repeated refrain in Moon Witch: “here is truth”. Misdirection and dissimulation are the trilogy’s narrative sleight of hand; the intended result is that each instalment tells the story from the perspective of a different protagonist and they can be read in any order.

In Black Leopard, Tracker, a bounty hunter with a preternatural ability to trail anyone by scent, tells an unseen inquisitor his fragmented version of the quest to find a mysterious boy, who may or may not be heir to the North Kingdom. Included in Tracker’s motley crew of travelling companions is his antagonist, Sogolon, the 177-year-old Moon Witch. She stands out among the female characters, many of whom are little more than witches, whores and pawns in a game of political one-upmanship — and who find themselves on the receiving end of much of James’s trademark violence.

In this second instalment, Sogolon offers her own take on the story, and with it a compelling riposte to accusations that James only writes misogynistic characters. Moon Witch is no less violent than Black Leopard but, seen from Sogolon’s point of view, the violence mostly feels like a legitimate function of storytelling — and a further subversion of the fantasy genre’s stereotypically heteronormative and Eurocentric tropes.

There’s a lot more to Moon Witch than just Sogolon’s version of the premise on which the first novel hangs, and she has her own dubious motivations for joining the search. This second volume is both a bildungsroman and a thriller that begins more than 150 years before the events of the first volume. In fact, Sogolon’s story doesn’t intersect with Tracker’s until about 100 pages before the end of this 656-page book. We meet our anti-heroine when she is a “no name” little girl, consigned to live in a termite hill by three older brothers who blame her for their mother’s death in childbirth. It’s the bleak beginning to a hard-knock life, but the doggedness that is the defining trait of her personality — and also her Achilles heel — is there early on: “And if toe fall off, she will run on heel, and if heel fall off, she will run on knee and if knee fall off she will crawl.”

When Sogolon manages to escape, her latent magical powers — which she calls “wind (not wind)” — are revealed when she inadvertently kills a man trying to rape her. It’s the start of an epic odyssey, backgrounded by generations-long tensions and wars between the avaricious kings in Fasisi, the capital of the North Kingdom, and the mad kings of Wakadishu, the South Kingdom’s central city.

Always underestimated, Sogolon is variously a thief, rape victim, a fight-club competitor, the common-law wife of a shape-shifting lion, a mother, a prisoner, a recluse among gorillas and monkeys, a bounty hunter and eventually the Moon Witch. Like an ancient African Lisbeth Salander, she dedicates her lonesomeness to meting out lethal rough justice to men who harm women. Sogolon maintains, “man is doing what they feel they must do, and woman is making do”. But over the decades, her spiky, wilful, bloodthirsty tenacity often works to her detriment and to the advantage of her nemesis, the Aesi, chancellor to one of the northern kings.

As gripping as the novel is, it’s a long and tough read. Sometimes it even feels confrontational: the author’s frequent knowing refrain is “let us make this quick”. James’s story is a dense, sprawling phantasmagoria made even more labyrinthine by his stream-of-consciousness idiosyncrasies and sudden time leaps. It’s a confident writer who uses African words and phrases without the need for exposition and sustains a diction that mimics the present-tense grammatical syntax of many west African languages.

But Moon Witch rewards a reader’s perseverance and makes you wonder exactly who’ll play fast and loose with the truth in the final instalment, if you have the stomach and staying power to seek it out.

Moon Witch, Spider King by Marlon James, Hamish Hamilton £20/Penguin Publishing Group $30, 656 pages

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Source: Financial Times

How London and the US became safe havens for dirty money
March 3, 2022

Dawn over the City of London © Evening Standard / eyevine

When Liz Truss recently stood up in parliament to announce a “hit list of oligarchs” the UK foreign secretary said that she wanted “a situation where they cannot access their funds, their trade cannot flow, their ships cannot dock and their planes cannot land”. Her speech, along with others from the floor of the House of Commons slamming oligarchs and their associates, was just one prominent example of how Vladimir Putin’s savage attack on Ukraine has brutally brought to the fore the phenomenon known as “Londongrad”.

The warm home the British establishment and its financial system provide for dirty money from the post-Soviet sphere and elsewhere may finally begin to be seen as the embarrassment — and worse — that it constitutes. Take Dmitry Firtash, exposed in 2006 as the part-owner of the company handling Russia’s Ukrainian gas shipments which long gave Moscow a stranglehold over Kyiv. After he spent money lavishly on everything from luxury houses to Cambridge scholarships and political donations, Firtash’s UK social status seemed to have no limits — he was feted by parliamentarians and shook hands with the Duke of Edinburgh — until he was arrested in Austria on an FBI indictment for corruption.

Much excellent reporting in the past decade has revealed how corrupt elites from around the world launder looted money in the west. Yet the focus has been on the looting as much as on the laundering. The hows and whys of rich countries’ transformation into autocrats’ handmaids — or in Oliver Bullough’s powerful metaphor, butlers — have not received the attention they deserve. A number of new books have set out to change that — and their timing, sadly, could not be better, as tightening sanctions on Putin’s cronies becomes a weapon of choice in the west’s pushback against his aggression.

In Butler to the World, Bullough takes the UK to task. Jeeves, the unflappable butler of PG Wodehouse’s Bertie Wooster series, much loved by thousands of British and Anglophile readers, may not be an obvious angle of attack. But Bullough’s aim is sharp: “As written by Wodehouse it’s jolly funny, but [if] you focus on Jeeves’s actions rather than on his smooth-talking, soft-shoed manner, you end up with something extremely dark: a mercenary, a fixer-for-hire.” And that is just what, Bullough explains, Britain has become in its willingness to service all comers as long as they pay enough.

Bullough takes his metaphors seriously, to the point of enrolling in a school for actual butlers (he was kicked out after flower decoration class, once he was rumbled as a money-laundering researcher). Butlering goes far beyond accepting deposits from the world’s corrupt: it extends to procuring (palatial) housing for them, educating their children, honouring them in every way from naming rights at Britain’s world-class universities to royal patronage, as well as catering to all the minor needs the super-rich might need.

All this started, in Bullough’s highly readable account, with Britain’s disastrous military adventurism in Suez in 1956, when it joined France and Israel to try to dislodge Egypt’s nationalisation of the canal. This ended in humiliation when US opposition exposed British strategic postwar impotence. His thesis is that after strategic withdrawal, “butlering” became the answer to US secretary of state Dean Acheson’s challenge that Britain had “lost an empire, but not yet found a role”. The role would be to facilitate money flows around the world, no questions asked.

Several factors came together to make this happen. Bullough describes a postwar City of London determined to insulate itself from government regulation, ready to embrace innovations that would mean good business for financiers. He also highlights how in a world of hard currency shortage — withholding dollars was the means by which Washington made London give up Suez — there was a lot to like in allowing cross-border money flows that escaped national regulation. For Bullough, whose earlier book Moneyland explored corruption in the global financial system, the midcentury emergence of the eurodollar system of offshore dollar transfers and of Britain’s butlering role are two sides of the same dirty coin.



Then there was the imperial wind-down. “If Westminster was the head of the British empire,” Bullough writes, “the City [of London] was its heart, pumping money out into financial arteries that stretched to every continent and every city on earth.” In Bullough’s telling, “butlering” came to the rescue of British finance. Butler to the World bulges with stories of how past or remaining outposts of the empire, from the British Virgin Islands to Gibraltar, reinvented themselves as places to secrete away money or escape onerous rules.

American Kleptocracy, by corruption researcher Casey Michel, gives the US the same treatment as Bullough gives the UK. Reading the two together makes one a little sceptical of Bullough’s thesis that the UK is uniquely depraved in catering to dirty money. As Michel shows, some of the world’s deepest tax havens are US states, including not just Delaware (inventor of the shell company, according to the author) but also Nevada, South Dakota and Wyoming.

Like Bullough, Michel masterfully recounts the tragicomic outcomes when outré autocrats meet serviceable financial and legal systems — such as the “dictator bling” of Teodoro Nguema Obiang Mangue, son of Equatorial Guinea’s detestable president and notorious for his dozens of luxury cars and boats, friendships with US pop stars, and magpie-like collection of Michael Jackson memorabilia.

Michel gives Washington a more mixed assessment than the state governments — which in this context is a relative compliment. But Washington, too, is guilty of leaving too many loopholes in otherwise decent anti-money laundering laws for a number of transactions and professions, most notoriously real estate. Just one example from Michel’s book: in “Trump SoHo . . . the New York construct most closely affiliated with the entire Trump family . . . a staggering 77 per cent of unit sales went to buyers who fit money laundering profiles”.



These two books will leave no reader in any doubt that the US and the UK have a large class of “enablers”, or service providers such as bankers, lawyers, real estate agents, accountants and PR advisers needed to give dirty money a good home. That term gives the title to another book in this genre, Enablers, where the international financier class is taken to task by Frank Vogl, a former economic journalist and communications adviser to financial institutions who laments what has become of the professions he has spent a lifetime working for.

The US enabling class may be the most dangerous, given its influence in the politics of a more powerful country. But the US has successful heroes in Michel’s account. They range from the late senator Carl Levin, who attached anti-money laundering provisions to the Patriot Act after 9/11, to the dogged investigators who traced Obiang’s money and a justice department unit for confiscating kleptocrats’ assets. More recently, a bipartisan congressional vote banned anonymous shell companies last year, and the Biden administration has committed itself to an anti-corruption agenda.


Old peculiarities of British law, from Scottish limited partnerships to private criminal prosecutions, became perfect instruments for crooks to hide their money and silence their critics



Bullough’s heroes, in contrast, are few and far between, and much less powerful than Michel’s: backbenchers without the staffing US legislators enjoy, or underresourced regulators. Bullough makes a good case that there is something particularly conducive to “butlering” in Britain’s peculiar set-up. The country’s unwritten social codes; its upper class’s exclusive solidarity and unspoken obsession with money; the common law tradition and resistance to codified rules — all conspire to frustrate crackdowns or even the willingness to crack down.

In Britain’s financial elite, “chaps don’t tell other chaps how to behave,” writes the author. And so old peculiarities of British law, from Scottish limited partnerships to private criminal prosecutions, became perfect instruments for crooks to hide their money and silence their critics.

Bullough and Michel both deserve praise for going beyond moralising and pointing out how an industry geared to enabling the corrupt is not just unsavoury but can hurt a country’s real economic prospects. In his account Michel shows how derelict factories in America’s rust belt bizarrely became conduits for laundering dirty money. Twenty-something investors from an orthodox Jewish community in Miami would turn up, bereft of industrial or corporate experience but flush with cash which US authorities say derived from Ukrainian corruption. They would pay over the odds for metal plants and buildings in backwater communities desperate for outside investment.

But these communities languished as the new owners proved indifferent to development; all they needed was the safety and discretion offered by obscure US land and property holdings.

The attack on Ukraine shows America’s and Britain’s enabling industries (though they are not alone) are plainly international security risks. It is mind-numbing that it should take war in Europe to make politicians aware of this. All the more credit to writers who keep lifting the veil on the unseemly parts of the financial services industry and urging us all not to avert our eyes. There are signs governments are being galvanised into ending their addiction to dirty money inflows.

Upon reading these books, you realise that we still fall far short of this, despite current sanctions. This reader, at least, will not believe things have changed until he sees it.

Butler to the World: How Britain Became the Servant of Tycoons, Tax Dodgers, Kleptocrats and Criminals by Oliver Bullough, Profile, £20, 288 pages

American Kleptocracy: How the US Created the World’s Greatest Money Laundering Scheme in History by Casey Michel, St Martin’s Press, $29.99/ Scribe UK, £18.99, 368 pages

The Enablers: How the West Supports Kleptocrats and Corruption — Endangering Our Democracy by Frank Vogl, Rowman & Littlefield, $32/£25, 216 pages

Martin Sandbu is the FT’s European economics commentator

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Source: Financial Times

Fact and Mythmaking Blend in Ukraine's Information War

Stuart A. Thompson and Davey Alba
Thu, March 3, 2022, 

A quiet embankment along the Dnieper River in Kyiv, as Russia's invasion of Ukraine began on the morning of Thursday, Feb. 24, 2022. (Brendan Hoffman/The New York Times).

Just days into the Russian invasion of Ukraine, a pilot with a mysterious nickname was quickly becoming the conflict’s first wartime hero. Named the Ghost of Kyiv, the ace fighter had apparently single-handedly shot down several Russian fighter jets.

The story was shared by the official Ukraine Twitter account Feb. 27 in a thrilling montage video set to thumping music, showing the fighter swooping through the Ukrainian skies as enemy planes exploded around him. The Security Service of Ukraine, the country’s main security agency, also relayed the tale on its official Telegram channel, which has over 700,000 subscribers.

The story of a single pilot beating the superior Russian air force found wide appeal online, thanks to the official Ukraine accounts and many others. Videos of the so-called Ghost of Kyiv had more than 9.3 million views on Twitter, and the pilot was mentioned in thousands of Facebook groups reaching up to 717 million followers. On YouTube, videos promoting the Ukrainian fighter collected 6.5 million views, while TikTok videos with the hashtag #ghostofkyiv reached 200 million views.

There was just one problem: The Ghost of Kyiv may be a myth.

While there are reports of some Russian planes getting destroyed in combat, there is no information linking them to a single Ukrainian pilot. One of the first videos that went viral, which was included in the montage shared by the official Ukraine Twitter account, was actually a computer rendering from a combat flight simulator originally uploaded by a YouTube user with just 3,000 subscribers. And a photo supposedly confirming the fighter’s existence, shared by a former president of Ukraine, Petro Poroshenko, was from a 2019 Twitter post by the Ukrainian defense ministry.

           IT'S BEEN DONE BEFORE

During the summer of 1914 in a crucial battle in Mons Belgium British troops claimed to have seen St. George and a group of Longbowmen in the skies, which they claimed to have turned the battle in their favour.

This is known as the Legend of Mons, and occult horror author Arthur Machen claimed at the time that it was based on his short story called the Bowman which had been published in the popular press of the day. However historian A.J.P Taylor believed the story and recorded it in his history of WWI.

The fact that the tale and trench rumours of Angels of Mons appeared the summer before may have had a subconcious effect on the soldiers in the trenches facing the first industrialized war of mass murder. 

          LA REVUE GAUCHE - Left Comment: WWI Xmas Mutiny (plawiuk.blogspot.com)

When fact-checking website Snopes published an article debunking the video, some social media users pushed back.

“Why can’t we just let people believe some things?” one Twitter user replied. “If the Russians believe it, it brings fear. If the Ukrainians believe it, it gives them hope.”

In the information war over the invasion of Ukraine, some of the country’s official accounts have pushed stories with questionable veracity, spreading anecdotes, gripping on-the-ground accounts and even some unverified information that was later proved false, in a rapid jumble of fact and myth.

The claims by Ukraine do not compare to the falsehoods being spread by Russia, like laying the groundwork for a “false flag” operation in the lead-up to the invasion, which the Biden administration sought to derail. As the invasion neared, Russia falsely claimed that it was responding to Ukrainian aggression and liberating citizens from fascists and neo-Nazis. And since the assault began, Russia made baseless claims that Ukrainians had indiscriminately bombed hospitals and killed civilians.

Instead, Ukraine’s online propaganda is largely focused on its heroes and martyrs, characters that help dramatize tales of Ukrainian fortitude and Russian aggression.

But the Ukrainian claims on social media have also raised thorny questions about how false and unproven content should be handled during war — when lives are at stake and a Western ally is fighting for its survival against a powerful invading force.

“Ukraine is involved in pretty classic propaganda,” said Laura Edelson, a computer scientist studying misinformation at New York University. “They are telling stories that support their narrative. Sometimes false information is making its way in there, too, and more of it is getting through because of the overall environment.”

Anecdotes detailing Ukrainian bravery or Russian brutality are crucial to the country’s war plan, according to experts, and they are part of established war doctrine that values winning not just individual skirmishes but also the hearts and minds of citizens and international observers.

That is especially important during this conflict, as Ukrainians try to keep morale high among the fighters and marshal global support for their cause.

“If Ukraine had no messages of the righteousness of its cause, the popularity of its cause, the valor of its heroes, the suffering of its populace, then it would lose,” said Peter W. Singer, a strategist and senior fellow at New America, a think tank in Washington. “Not just the information war, but it would lose the overall war.”

In previous wars, combatants would try to sabotage enemy communication and limit the spread of wartime propaganda, even cutting physical communication lines like telegraph cables. But there are fewer such cables in the internet age, so in addition to downing communication towers and disrupting pockets of internet access, the modern strategy also involves flooding the internet with viral messages that drown out opposing narratives.

That digital battle moved at startling speed, experts noted, using an array of social media accounts, official websites and news conferences streamed online to spread Ukraine’s message.

“You have to have the message that goes the most viral,” Singer said.

That was the case with another report from Ukraine involving a remarkable confrontation on Snake Island, an outpost in the Black Sea. According to an audio recording released by Pravda, a Ukrainian newspaper, and later verified by Ukraine officials, 13 border guards were offered a frightening ultimatum by an advancing Russian military unit: surrender or face an attack. The Ukrainians responded instead with an expletive, before apparently being killed.

Audio of the exchange went viral on social media, and the clip posted Feb. 24 by Pravda received more than 3.5 million views on YouTube. President Volodymyr Zelenskyy of Ukraine personally announced the deaths in a video, saying they would each be awarded the title Hero of Ukraine.

But just days later, Ukrainian officials confirmed in a Facebook post that the men were still alive, taken prisoner by Russian forces.

Social media has become the main conduit for pushing the information, verified or not, giving tech companies a role in the information war too. The fake Ghost of Kyiv video, for instance, was flagged as “out of context” by Twitter, but the montage posted to Ukraine’s official Twitter account received no such flag. The false photo posted by Poroshenko, the former Ukrainian president, also had no flag.

While Twitter monitors its service for harmful content, including manipulated or mislabeled videos, it said that tweets simply mentioning the Ghost of Kyiv do not violate its rules.

“When we identify content and accounts that violate the Twitter Rules, we’ll take enforcement action,” the company said.

In exercising discretion over how unverified or false content is moderated, social media companies have decided to “pick a side,” according to Alex Stamos, director of the Stanford Internet Observatory and a former head of security at Facebook.

“I think this demonstrates the limits of ‘fact-checking’ in a fast-moving battle with real lives at stake,” Stamos said. He added that technology platforms never created rules against misinformation overall, instead targeting specific behaviors, actors and content.

That leaves the truth behind some wartime narratives, like an apparent assassination plot against Zelenskyy or simply the number of troops killed in battle, fairly elusive, even as official accounts and news media share the information.

Those narratives have continued as the war marches on, revealing the contours of an information war aimed not just at Western audiences but also Russian citizens. At the United Nations on Monday, the Ukrainian ambassador, Sergiy Kyslytsya, shared a series of text messages that he said were retrieved from the phone of dead Russian soldier.

“Mama, I’m in Ukraine. There is a real war raging here. I’m afraid,” the Russian soldier apparently wrote, according to Kyslytsya’s account, which he read in Russian. The tale seemed to evoke a narrative advanced by officials and shared extensively on social media that Russian soldiers are poorly trained, too young and don’t want to be fighting their Ukrainian neighbors. “We are bombing all of the cities together, even targeting civilians.”

The story, whether true or not, appears tailor-made for Russian civilians — particularly parents fretting over the fate of their enlisted children, experts said.

“This is an age-old tactic that the Ukrainians are trying to use, and that is to draw the attention of the mothers and the families in Russia away from the more grandiose aims for war, onto, instead, the human costs of war,” said Ian Garner, a historian focusing on Russia who has followed Russian-language propaganda during the conflict. “We know that this is really effective.”

Official Ukrainian accounts have also uploaded dozens of videos purportedly showing Russian prisoners of war, some with bloody bandages covering their arms or face. In the videos, the prisoners are heard denouncing the invasion. The videos may raise questions about whether Ukraine is violating the Geneva Conventions, which has rules about sharing images of war prisoners.

Russia has also engaged in its own form of mythmaking, but experts say it has been far less effective. Rather than targeting international observers with emotional appeals, Russia has focused on swaying its own population to build support for the battle, according to Garner.

Since Russian state media is still calling the conflict a “special military operation” and not a war — in line with the description used by President Vladimir Putin of Russia — state broadcasters are left “trying to talk about a war that is apparently not happening,” Garner said.

The Russian government “can’t play to its strongest narratives of individual sacrifice,” he added, instead relying on stories of Ukrainians bombing hospitals and civilians, providing no evidence.

Ukraine’s efforts to amplify its own messages also leave little room for Russia to dominate the conversation, according to Singer, the strategist from New America.

“A key to information warfare in the age of social media is to recognize that the audience is both target of and participant in it,” Singer said. He added that social media users were “hopefully sharing out those messages, which makes them combatants of a sort as well.”

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