Caught Red Handed: Russian Financing Scheme in Italy Highlights Europe’s Vulnerabilities

A Pattern of Interference
In other European countries, gaps in election finance laws have allowed the Russian government to make its contributions legally. In 2016, the French ban on foreign donations to political parties was circumvented when a €9.4 million Russian contribution to far-right Marine Le Pen’s presidential campaign was structured as a loan. In the United Kingdom, the Conservative Party has received hundreds of thousands of pounds in total from shell companies linked to Russian interests and state-affiliated actors, skirting the Electoral Commission, which relies on parties to self-police that the ultimate source of their funds is within the United Kingdom.

The La Lega case is but one of many instances in which Russia has found an eager partner in Europe’s populist right. Also in the United Kingdom, Brexit leader Arron Banks was reportedly offered mining investments by a Kremlin-connected oligarch. And in the Czech Republic, Russian gas firm Lukoil paid off a $1.4 million fine on behalf of presidential advisor Martin Nejedly.

The La Lega case demonstrates what ASD Senior Fellow Kristine Berzina describes as the opacity of the energy sector and its suitability for concealing illicit foreign contributions. Dominance in the European energy industry offers Russia the opportunity to interfere in Western democracies at multiple stages in the delivery process: using local companies as delivery intermediaries in order to enrich favored local elites, laundering money through energy firms to conduct political financing, and using projects such as Nord Stream 2 to strengthen Russia’s political and economic leverage over European countries.

Russia seeks to take advantage of legal loopholes, and in some cases breaks European and American laws, to pursue its foreign policy goals. That some European populists have shown few qualms in helping them do so represents a major long-term threat to European cohesion. Josh Rudolph notes that some far-right parties are willing to make a Faustian pact with the Kremlin to the detriment of their country’s own interests and sovereignty, allowing “the Westward march of Russian attempts to undermine free democracies.” In response, European and North American policymakers should pinpoint loopholes in financing law to close, and should also be more assiduous in enforcing laws that are already on the books. Government inaction and bureaucratic inertia are cracks in the rule of law that Russia can and will continue to use to its advantage.

Thomas Morley is a research assistant with the Alliance for Securing Democracy at GMF. Etienne Soula is a research assistant with the Alliance for Securing Democracy in GMF’s Brussels office. The article, originally posted to the website of the German Marshall Fund of the United States, is published here courtesy of the GMFUS.