Propaganda War in Europe: The Far-Right Media

This investigation outlines in detail, and for the first time, the strategies that far-right parties use to seize control of the media and influence public opinion. The Freedom Party of Austria (FPÖ) is a model for Germany’s far-right and the rest of Europe.

Berlin, Jakob Kaiser-Haus, room 6630. Behind this door, in an unassuming building in Berlin’s government district, is a recording studio of the far-right Alternative für Deutschland (AfD) party. The room is small, filled with a blue partition signed with the AfD logo, a green screen, camera, and spotlights. Together with the help of the AfD newsroom Unter den Linden, it is here that the AfD want to produce the news broadcasts with which they hope to lure Germans away from the “Tagesschau”, the much-watched public news, and instead to the party-faithful AfD-News.

The equipment for this assault on the public news comes from Vienna. It was there that Joachim Paul, AfD parliamentarian in Rhineland-Palatinate, was for some time the so-called Mädchen für alles (“girl for everything”) at the far-right website unzensuriert.at, which sits in the house of a pan-German fraternity in Vienna. Back in Germany, AfDer Paul launched the online channel AfD Rheinland-Pfalz. Now AfD-News is coming for the whole of Germany. The model is FPÖ-TV, the internet broadcaster that the far-right FPÖ launched in Austria in 2012. Under “FPÖ-TV Direkt”, the Freedom Party has recently started offering a news program for mobile users.

“Far-right media presence is becoming more common across Europe. The political situation in each country may be different, but the strategy for taking over national media is surprisingly similar.”

Far-right media presence is becoming more common across Europe. The political situation in each country may be different, but the strategy for taking over national media is surprisingly similar: from the political opposition, build a media propaganda machine disguised as “alternative news”; once in government, bring public service broadcasters under control and go after independent, critical media. You can outline the strategy in seven steps:

First step: Build your own media empire

When Hungarian Prime Minister Viktor Orbán lost the Hungarian elections in 2002, he quickly found a culprit: the independent media, who had reported too critically on his Fidesz party. From the opposition, Orbán set out to build himself a loyal media. Fidesz-affiliated oligarchs played a central role, buying out independent newspapers and private broadcasters. Today, Fidesz loyalists dominate the Hungarian media market.

The FPÖ has been attempting to do the same in Austria, investing in media loyal to the party for over ten years. “We tried to make a virtue out of a certain communicative need,” said former FPÖ General Secretary Herbert Kickl in an interview.

The long-serving blue media (blue referring to the far right) Zur Zeit is a weekly newspaper founded in 1997 by FPÖ politician Andreas Mölzer. The paper racially denounced footballer David Alaba, slandered Life Ball founder Gery Keszler as a “professional faggot”, and recently called for revoking the right to vote from “anti-native groups” and for “reintroducing workhouses”. According to a statement released by the editors of Zur Zeit two weeks after its publication, the article “slipped” into the paper “by mistake”.

The online platform unzensuriert.at, which is closely linked to the FPÖ and whose CEO Walter Asperl is an employee of the FP-Parliamentary Club, incites against Muslims, refugees, and homosexuals. The magazine Info-Direkt, which is published in upper Austria, is a meeting place for the FPÖ and the far-right Identitarians. There you will find articles like Schluss mit dem Gutmenschenterror (“End the Terror Against Good Citizens”) or “Der Informationskrieg beginnt jetzt” (“The Information War Begins Now”). The year 2016 is when “system media” were “shot wounded”, says Info-Direkt. “In the information war, now is the time to attack, to break the mainstream opinion.” The far-right papers succeed in doing so with the help of the FPÖ, which buys ads in Info-Direkt with slogans like “Die Islamisierung gehört gestoppt” (“Islamisation Must top”).

When Falter, a centre-left Viennese newspaper, contacts Info-Direkt for its opinions, the far-right paper does not respond by email. Instead, Info-Direkt publishes an article with a picture of the Falter reporter who is inquiring. “Since we mistrust the mainstream media, we have decided to use our own media channels to answer the Falter,” writes Info-Direkt.

There is a lively exchange between Austrian and German media outlets. The online editor-in-chief of the Upper Austrian magazine Wochenblick, also a FPÖ-affiliated journal, previously worked for Blaue Narzisse and Sezession, which are two new AfD affiliated right-wing media outlets. Chris Ares, a nationalist rapper from Germany (“Du mein Deutschland, Lied für Chemnitz”; “you my Germany, song for Chemnitz”), is a German Identitarian and author at Info-Direkt.

At the 2016 Identitarian-organised congress “Verteidiger Europas” (“Defenders of Europe”) in Linz, Jürgen Elsässer, editor-in-chief of the German Compact magazine, was a speaker. At the congress there were information booths by magazines such as Compact, unzensuriert.at, Alles Roger?, and the “rechtsintellektuelle” (“right intellectual”) Sezession, whose creator Götz Kubitschek personally arrived with ten boxes of magazines in the trunk of his car. Info-Direkt later interviewed Paul Hampel, today’s Foreign Policy spokesman for the AfD. Manuel Ochsenreiter, a bustling, extremely right-wing journalist from Germany, spoke in turn as a “Middle East expert” about why Syria is safe enough to deport people there.

Wochenblick editor-in-chief Christian Seibert, in conversation with Falter, denies the allegation that his magazine is right-wing extremist. When reporting on migration, “mainstream journalism distorts the truth and we want to set a counterpoint,” he says.

In France, Marine Le Pen’s Rassemblement National (RN), as the Front National now calls itself, is taking a similar route. Last year, the press spokesman of Le Pen’s niece, Marion Maréchal, founded L’Incorrect, a glossy magazine for a young audience. The editorial line is clear: “Let’s take the juice out of 1968!”

L’Incorrect is not the only media outlet under the influence of Le Pen’s RN. The range of far-right media outlets, especially online, has reached such ubiquity in France that a name has been coined for it: “Fachosphère”, a fascist sphere in the internet. Fdesouche, for example, is an abbreviation for François Desouche. Like unzensuriert.at, Fdesouche incites openly against migrants and other minorities and has become one of the most popular platforms of the Fachosphère. According to the analysis site Alexa, in 2016, seven of the top ten most read political websites in France belonged to the far right.

According to the analysis site Alexa, in 2016, seven of the top ten most read political websites in France belonged to the far right.

Their influence in France now also extends to traditional conservative media. The conservative daily Le Figaro has Éric Zemmour as a columnist, a star of the right, whom Le Pen would like to see as Minister of Culture. Zemmour says publicly that employers have the right to reject Arabs or blacks, and has told French TV presenter Hapsatou Sy, whose mother is from Senegal, that her first name is “an insult to France”.

Second step: Stoke fear through fake news

Right-wing populists help each other out transnationally. On 20 March 2018, shortly before the Hungarian elections, Duna Médiaszolgáltató, the Hungarian public service broadcaster, looked to Germany. In a television report, a man on the street complained that he had to give up his home because migrants were settled in his neighborhood; a woman said Hamburg was so dangerous that she only leaves her house when armed with pepper spray.

The interviewees were, however, AfD politicians. The fraud was uncovered by Márta Orosz, a journalist from Hungary working at the investigative research center, Correctiv, in Germany. Orosz pointed towards at least seven instances where AfD politicians spoke on Hungarian state television without mentioning their party affiliation.

Orosz used to work as a Germany correspondent for the Hungarian public service broadcaster. However, when her editor in Budapest cut from her report on the 2017 German elections that “the ranks of the AfD also include right-wing extremists”, she quit.

In early 2016, another Hungarian state-owned TV channel, M1, sold images of sexual violence on the Egyptian Tahrir Square from 2012 as recordings of the Cologne New Year’s Eve incident. That Pentecost in June, the Hungarians learned from state news channels that the German city of Essen had to rename itself “Fasten” because of the Muslim month of Ramadan. Such a story had actually been published in Germany – but on a satirical platform.

The editors of the French far-right media also look abroad. In October 2018 a report appeared in the RN-related magazine L’Incorrect on the dramatic conditions in Vienna, which was so “globalized” that in some quarters German is not spoken. “Welcome to the second largest Turkish city after Istanbul!” ran the headline in L’Incorrect about the Viktor Adler market in Favoriten. “Around us, women in the hijab are pushing their prams.” In Hungary, on the other hand, “the sun shines even in autumn”. Because the country is “anything but a terrible dictatorship, as the Western media claim”.

Austria’s right-wing media reports, in turn, that Hungarians living in Germany or Sweden fled those countries “because of mass immigration” (unzensuriert.at); that Angela Merkel is “immigration crazy” (Info-Direkt); or Hungary’s Prime Minister Orbán “cooks an Easter ham for the Internet” (Wochenblick).

Third step: Defame your critics

Antoni Szpak is accused of having insulted the Polish people. When Poland’s President Andrej Duda thanked the founder of the arch-religious Catholic radio station Radio Maria for his support of the ruling party PiS, the satirist Szpak commented that “only in a stupid, narrow-minded country can such paranoia arise.” For this comment the public prosecutor “wants him in court for insulting the Polish people”, reported the Süddeutsche Zeitung.

The Polish state is also going after the well-known journalist Tomasz Piątek, columnist of the Gazeta Wyborcza. He published a well-regarded book about suspicious connections between Poland’s defense minister Antoni Macierewicz, the Russian mafia, and the intelligence services. Now the military prosecutor’s office is investigating whether Piątek used force against the Minister of Defense. While he is threatened with court proceedings in his home country, Piątek received the prestigious Leipzig Prize “for the Freedom and Future of the Media”. “Despite increasingly difficult conditions for journalists, Tomasz Piątek is not intimidated by threats in his investigative work,” the jury said.

In Hungary, political campaigning is done far below the belt. “Orbán wants to break my spirit,” said Gábor Vona, then chairman of the far-right Hungarian Jobbik party, who ran against Orbán to break his absolute majority. Fidesz-related media spread the rumor that Vona is homosexual, and it is inconceivable for conservative voters to support a gay candidate, especially in rural areas.

Journalists who are too critical of Orbán and his people end up on blacklists. Last April, the pro-Fidesz Hungarian newspaper Magyar Idök published the names of alleged anti-government journalists, including numerous foreign correspondents. Under the title “The People of the Speculator”, the weekly Figyelő, in turn, published the names of 200 alleged “mercenaries” of the Hungarian-born US billionaire George Soros. On the list were also the editors of the news portal Direkt36.hu, which had previously revealed corruption charges in Orbán’s government.

A “Soros network” was identified in Austria too by the the conspiracy theory-friendly, FPÖ-related magazine Alles roger?. The supposed heads of this network are the former Chancellor and Social Democratic Party leader Christian Kern, President Alexander Van der Bellen, former Chancellor Wolfgang Schüssel (ÖVP), as well as “Ostbahn-Kurti”, Willi Reserarits, Erste Bank CEO Andreas Treichl, the “left city newspaper Falter”, and NGOs like SOS Mitmensch. In the same issue, in which Alles roger? printed the “Soros secret plan” on the cover, the Interior Minister Herbert Kickl (FPÖ) gave an interview, and his ministry had bought an ad calling for candidates for the police service.

Fourth step: Use Facebook as an amplifier!

The new far-right media works best in combination with Facebook. If FPÖ boss Heinz-Christan Strache shares a contribution from unzensuriert.at, Wochenblick, or a similar page, this message reaches almost 790,000 Facebook followers with just one click.

The new far-right media works best in combination with Facebook. If FPÖ boss Heinz-Christan Strache shares a contribution, his message reaches almost 790,000 Facebook followers with just one click.

The virtual ping-pong of sharing works very well in interaction with so-called “Boulevard” magazines: popular dailies sold on the street. In an interview with the monthly magazine Fleisch, krone.at editor-in-chief Richard Schmitt said: “We are engaged in a standoff with media on the far right, with unzensuriert.at and other sites.” Though he also confirms how much his online news benefits from the high Facebook reach of the FPÖ boss: “If Strache shares a normal report from us on Facebook, then that increases our reach by 150 per cent. And the same goes the other way, of course, he also gets more traffic when we share his posts.”

The French RN boss Marine Le Pen has 1.5 million followers on Facebook; Italy’s Interior Minister and Lega boss, Matteo Salvini, has three million followers. Salvini focused the online strategy of his Lega on Facebook. The former daily newspaper of the party, La Padania, was discontinued in 2014; the Lega Radio Padania only broadcasts online. Everything runs through the Facebook profile of the boss.

On Facebook Salvini makes political speeches while his four-year-old daughter wanders through the picture; the Lega Interior Minister hops into the pool of a mafia mansion that has been confiscated by the police; or Salvina tells his three million fans via video message: “You pay me. I am only accountable to you.”

The Lega boss speaks less friendly about journalists. In 2013, the Corriere della Sera quoted him saying that his party was going to “give a good kick to one or another of these shabby, groveling journalists”.

In 2013, the Corriere della Sera quoted him saying that his party was going to “give a good kick to one or another of these shabby, groveling journalists”.

Salvini’s party-friend Strache, Austria’s Vice-Chancellor, goes a step further. He publicly advertises the parallel world of the right-wing media. Strache said as honorary speaker at the Political Ash Wednesday of the AfD in Bavaria in 2017: “No matter which newspaper I buy, no matter which TV station I turn on, the coverage is the same.” He went on to say that he understood why more and more people prefer “alternative media”.

Fifth step: Put freedom of the press under pressure

In Germany, the AfD repeatedly excludes journalists from party events because they are too critical from the AfD’s point of view. Reporters for the Frankfurter Allgemeine Zeitung, Der Spiegel, and the public broadcasters ARD and ZDF have all been barred. The AfD leaders don’t not like criticism from within the far-right media spectrum either. Because of overly critical coverage of the AfD, it was decided at the beginning of January 2017 at a meeting of European far-right parties, which took place in Germany, that the right-wing Compact magazine should “please stay away”.

In Austria, on the evening of the 2015 Vienna election, Falter magazine was prohibited from entering the FPÖ election tent. FPÖ General Secretary Kickl explained that freedom of the press means that the FPÖ selects which journalists may report on their election event. Meanwhile, Kickl is now Germany’s Interior Minister and has brought the former unzensuriert.at boss Alexander Höferl on as head of communications to the Ministry. Their interpretation of freedom of the press since became apparent in an e-mail, in which the spokesman for the ministry asked the state police to provide only the legal minimum of information to the “critical” media: Standard, Kurier, and Falter.

Sixth step: Get yourself a “public radio”

In Hungary and Poland, the right-wing populists forced public broadcasters to follow the party line upon taking power. Critical journalists found themselves on the street, and in their place loyal party members were heaved into the executive chairs. People like Daniel Papp made a career. The former press spokesman for the far-right party Jobbik recently became head of the Hungarian state radio. In 2011, he made headlines when he falsified a news report about the Green politician and Orbán critic Daniel Cohn-Bendit. Papp’s report showed how Cohn-Bendit, at a press conference, was confronted with the question of whether he felt that sexually harassing children was a fundamental European right. Then he left the room in silence. In fact, the Green politician had answered the question in detail.

Since Orbán restructured the state media, all news reports for all public broadcasters come from the state news agency MTI. Thus, diversity of content and perspective is excluded from the outset.

In addition, MTI makes its reports available to Hungarian private broadcasters free of charge. For commercial broadcasters and the government, this is a win-win situation. The private channels save costs by not having their own newsroom, and the government can spread its propaganda.

When, in the spring of 2017, more than 50,000 people protested peacefully in Warsaw against the judiciary reform planned by the ruling PiS party, which would disempower the independent judiciary, the state television smeared the events. It spoke of “aggression and rudeness” on Warsaw’s streets, that these were “the defenders of pedophiles”, warning against an “attempted coup d’état by the opposition”, that the “friends of Soros are trying to overthrow the Polish government”, and that “this street revolt is an attempt to bring Islamist migrants to Poland”.

What has already been full-ended in Hungary and Poland – where instead of public broadcasters you have propaganda channels of the government – is only beginning to happen in Austria and Italy.

Since October, Italy’s public broadcasting channel Rai has a new boss, Marcello Foa. The Italian media union FNSI called the decision a “death knell for the independence and self-government of public service broadcasting”. Foa is friends with Lega boss Salvini and has a good relationship with the populists of the Five-Star Movement, who rule the country together with the Lega. Foa attracted public attention in the past when in his blog Il Giornale he described gays as abnormal, vaccinations for children as dangerous, and the so-called mainstream media as liars. The liberal-conservative newspaper La Stampa characterised the new Rai boss as a “Putin supporter, Salvini supporter, and anything but moderate”. Foa has already announced that he will be replacing the management of Rai.

The populists of the Five Star Movement applauded the announcement. “We are now embarking on a genuine Rai cultural revolution to rid ourselves of the parasites,” rejoiced Italy’s Vice-Premier Luigi Di Maio.

In Austria too, public service broadcasting is to be rebuilt. The FPÖ would like to finance the ORF directly from the state budget. Then the ORF boss would have to knock on the government’s door every year to ask for funding. This is not what independence looks like.

Seventh step: Destroy your critics financially

Until the spring of 2016, Gazeta Wyborcza was well-read in Polish courts. The quality daily newspaper is one of the largest in the country. But as soon as the right-wing populist PiS came to power, the Justice Ministry ordered that the courts terminate their subscriptions to Wyborcza. Shortly thereafter, other ministries followed suit.

At the same time, Wyborcza began to receive no more advertisements from state-affiliated companies. Then it was private companies that no longer dared to advertise in Wyborcza. It is an open secret that no government contracts are awarded to companies that are affiliated to critical media. Due to these financial losses, Wyborcza had to let journalists go.

“It is an open secret that no government contracts are awarded to companies that are affiliated to critical media.”

In Hungary, the largest independent daily Népszabadság was taken over by a company owned by a Orbán loyalist and then simply shutdown. With the takeover of the publisher that printed Népszabadság, Orbán’s confidants could remove a critical newspaper from the market. The publisher also owned a dozen regional papers, which are popular in rural areas. The editors of these local papers were quickly replaced by government-friendly journalists. The impact this had was demonstrated by an online portal last year. It published the title pages of all these regional newspapers from the same day. All had the same picture of Orbán and with an identical article.

Then, in the spring of 2018, the independent daily Magyar Nemzet also disappeared. The newspaper, founded in 1938, had survived the Nazi occupation in the underground, as well as the censorship by the communist regime. When the Hungarian entrepreneur and Magyar Nemzet owner Lajos Simicska fell out with Orbán in 2015, Magyar Nemzet became an important government-critical voice in the country. After Orbán won the election for the third time in the spring of 2018, Simicska discontinued his support for the paper.

The Hungarian online news service Origo was turned over instead of turned off. In June 2014, the editor-in-chief of this highly successful news platform learned of his dismissal. “Restructuring measures” was the rationale the owner gave for the dismissal, a Hungarian subsidiary of German Telekom. Origo had previously published evidence of senior Fidesz politicians staying in luxury hotels financed by taxpayer money.

Today Origo’s content is rather different. For example, one video shows an elderly women in a church being shouted down with “Allahu akbar” calls. “Europe 2017 – do we really want this?” ran the headline. As the independent news magazine HVG revealed, the video was not a Muslim attack in Europe, but a robbery in an American church two years earlier. In Poland, the media remains more diverse because several papers are owned by foreign publishing houses. But even there, the Polish government is already planning serious changes. Last July, PiS MP Krystyna Pawłowicz announced in front of independent media in the Polish Parliament that “after the summer holidays, we will finally get involved with you”, reported Gazeta Wyborcza. A bill has not yet been made public, but independent papers could soon be required to limit the shares of foreign investors.

In Austria such developments are still far away. But here too the FPÖ is changing the government’s media policy. Instead of critical, independent media, far-right papers such as Wochenblick or Alles roger? are receiving state advertising contracts. And in November the FPÖ invited W3, the publisher of the far-right newspaper Zur Zeit, to parliament to award them the “Media Prize” of the liberal Dinghofer Institute. A ruling party that sheds honours on a newspaper that has called Adolf Hitler a “social revolutionary” and racially slandered the national team footballer David Alaba. In this instance, even the Poles and Hungarians can learn from Austria.

This article was created as part of “Europe’s Far Right”, a research project founded in spring 2018 in Berlin and currently includes five European countries. Falter is an Austrian partner in this network. The individual project partners are:

HVG Independent, a weekly magazine in Hungary

Libération Linksliberale daily newspaper with seat in Paris

taz Deutschlands linke daily newspaper with seat in Berlin

Gazeta Wyborcza Independent daily newspaper from Poland

Money laundering at Danske Bank

Family members of Russia’s President Putin and FSB, the Russian intelligence service, were allegedly behind efforts to launder money through Denmark’s biggest bank, claims a whistleblower who alerted top management at Danske Bank in 2013. This information, which has only now come to light, indicates that top management was aware of far more serious conditions than the bank has previously indicated.

Photo credit: Thomas Lekfeldt/Berlingske

Members of Russian president Vladimir Putin’s family and the Russian intelligence service FSB are alleged to have been behind substantial money laundering using accounts held with the Estonian branch of Denmark’s biggest bank. The information stems from a whistle-blowing report which was written by an executive within Danske Bank and sent directly to the bank’s top management in Copenhagen in December 2013.

According to the report, “apparently it was discovered” at Danske Bank’s Estonia branch in 2013 that certain individuals behind a suspicious company which held accounts at the bank and which was making “suspicious payments” also “included the Putin family and FSB”.

Berlingske has information that the alert included Vladimir Putin’s cousin, the businessman and politician Igor Putin, as well as a number of individuals closely linked to the top of the FSB. The detailed whistleblower report, which Berlingske has had access to, also warned Danske Bank’s management that the bank “may itself have committed a criminal offence”, “has likely breached numerous regulatory requirements”, “behaved unethically” and likely was “helping to launder money”.

The whistleblower also pointed to a “near total process failure” in the branch’s anti-money laundering controls. “Just when you thought this money laundering case couldn’t get any more serious for Danske Bank, it did,” says Jakob Dedenroth Bernhoft, an expert on anti-money laundering regulations and CEO of the advisory firm Revisorjura.dk who has been following the case closely.

“Just when you thought this money laundering case couldn’t get any more serious for Danske Bank, it did.”

“This new information shows that this is a completely unique case with foreign-policy ramifications that go almost far beyond anyone’s imagination,” he says.

The new information shows that Danske Bank’s top management knew as early as 2013 that there were far more serious breaches at the Estonian branch than what the bank has since indicated.

Until now, the top management has explained it was merely aware that anti-money laundering controls were too insufficient back then to prevent the Estonian branch from “potentially being used for money laundering”.

Only last year – after Berlingske revealed actual instances of money laundering – did CEO Thomas Borgen launch an extensive investigation, stating that the problems appeared “worse than feared”.

It is thus spectacular to find that, as early as 2013, the top management actually had detailed knowledge that the intelligence service of a foreign state and the family of Russia’s president were likely conducting suspicious money transactions with the help of the bank, says Ole Risager, a professor at Copenhagen Business School (CBS) approached by Berlingske to comment on the case.

“It’s self-evidently very serious if the management was told internally that the bank was probably laundering money for people in the Russian intelligence service,” he says.

“Why did they not start a major investigation back then? It seems odd that the management is only reacting now, after Berlingske’s revelations, if they already had such clear indications of extensive money laundering back then,” he states.

Ole Risager is also critical of the fact that this investigation is being conducted by Danske Bank itself, while neither the Danish financial services regulator, Finanstilsynet, nor the police financial crime unit, SØIK, have indicated that they are investigating the matter.

“In a society based on the rule of law authorities obviously need to launch an impartial and thorough investigation of the entire matter.”

Suspicious payments

The whistleblower‘s report was sent on 27 December 2013 to Danske Bank’s head office in Copenhagen and addressed to Mr. Robert Endersby who was then the head of the bank’s credit and risk management team and the right-hand man of CEO Thomas Borgen.

The report was also sent to Mr. Ivar Pae, head of Danske Bank’s Baltic activities, as well as the executives responsible for Danske Bank’s anti-money laundering efforts and the bank’s internal audit function.

None of them wished to make a statement to Berlingske.

The report describes the following turn of events:

In the summer of 2013 the Estonian branch became aware that a client with the branch, a UK-registered company by the name of Lantana Trade LLP, had made false representations in its financial accounts to the British authorities.

Among a number of issues, the company reported extremely low turnover figures and was registered as being inactive despite a daily flow of large sums of money through the company’s bank accounts.

According to the whistleblower’s report the company was also making “suspicious payments”, and the branch did not hold sufficient information concerning “who the beneficial owners were”.

The branch therefore started to investigate Lantana Trade LLP and about 20 associated companies which were frequently transferring large amounts to each other across accounts held with Danske Bank Estonia.

According to the whistleblower’s report, “apparently it was discovered that they included the Putin family and FSB”.

According to the whistleblower’s report, “apparently it was discovered that they included the Putin family and FSB”.

The report also points to these companies’ “beneficial owners having been involved with several Russian banks that had been closed down in recent years”.

The president’s cousin

Berlingske contacted several sources close to the matter to verify and expand on the information contained in the report. All sources spoke independently of each other.

According to these sources, the information relates specifically to a circle of individuals including Igor Putin, the businessman and politician who is a cousin of the Russian president, and people with close ties to the top of the Russian intelligence service FSB.

Berlingske has tried unsuccessfully to contact Igor Putin through his fund.

Several media have described how the same group of individuals spent a number of years taking over several small Russian banks, including Promsberbank based near Moscow.

Some of these banks subsequently went bankrupt or were closed down by the authorities after discovering large suspicious sums of money flowing out of these banks and out of Russia.

“Some of these banks subsequently went bankrupt or were closed down by the authorities after discovering large suspicious sums of money flowing out of these banks and out of Russia.”

Berlingske has learnt that this was the reason why Danske Bank’s Estonian branch received warnings from a Russian associate in 2013 to avoid any client linked to Promsberbank or the individuals behind this bank.

Hence it caused major concern at the Estonian branch when, later that year, it found clear links between companies in the Lantana group and Promsberbank, says one of Berlingske’s sources who is a former employee at Danske Bank Estonia.

The source has chosen to remain anonymous for fear of reprisals from Danske Bank and the people behind Promsberbank.

“Our internal investigation showed that Lantana Trade LLP was associated with highly-ranking employees in Promsberbank. The company and cash flows were controlled by the bank. It was not just rumors, by our opinion it was very valid information.”

Threats, fines and prison time

Danske Bank Estonia then immediately contacted Lantana’s Russian representatives to enquire about the owners’ identities, but according to several sources this request did not go down well.

One Danske Bank staff member was reported to have left an unpleasant meeting in Moscow in a state of shock. Shortly after, staff at the Estonian branch were contacted by Russian-speaking individuals who refused to state their identities and instead threatened staff: “The bank will sink after this” and “Do you really feel you can walk home safely at night?”

‘Staff at the Estonian branch were contacted by Russian-speaking individuals who refused to state their identities and instead threatened staff: “The bank will sink after this” and “Do you really feel you can walk home safely at night?”’

Shortly after, Danske Bank Estonia chose to shut down Lantana’s accounts and those of some 20 associated companies which were frequently exchanging suspiciously large amounts of money with each other and with Lantana through accounts at the branch.

It has since become clear that this group of clients was also behind other illegal activities.

Several of the approximately 20 companies – IC Financial Bridge, Cherryfield Management, Chadborg Trade and Ergoinvest – were at the centre of another international money laundering scandal which last year saw Deutsche Bank agree to substantial fines.

In that case, the companies were found to have carried out large-scale money laundering by engaging in a process known as mirror trading, involving the use of stock trades.

According to Bloomberg News and The New Yorker, Igor Putin and the same individuals associated with the FSB are also alleged to have been behind the fraud involving Deutsche Bank.

A Russian middleman, Alexei Kulikov, was also kicked out of Danske Bank Estonia along with the 20 companies. He is now in prison for his involvement in major fraud at Promsberbank. Berlingske has not received a response to a letter sent to him in prison. All 20 companies have since been closed down.

Well-known methods

Danske Bank has previously stated that its top management in Copenhagen was alerted to the money laundering problems in Estonia by a whistleblower, but the bank has consistently refused to publish any further details concerning these warnings.

CEO Thomas Borgen has given the following written response:

“We have launched a thorough investigation to get to the bottom of the events at that time in our Estonian branch. We are unable to comment the matter further, until the investigation has finalised. Furthermore, we are unable to comment on specific customers, but the entire portfolio in question (non-residents) has been closed down.”

Later in 2014, the whistleblower’s report led the bank to launch a major review in order to clean up the thousands of companies which held accounts with Danske Bank Estonia’s section for non-resident clients.

This work was only concluded towards the end of 2015 – a full two years after the Lantana group had been kicked out.

“As we have previously said, on the basis of what we know now, we should have done this faster. Today, we have a very different and stronger control setup in Estonia,” Thomas Borgen states.

Berlingske has not been able to confirm whether Danske Bank fully disclosed its information on these companies to the relevant authorities.

Madis Reimand, the head of Estonia’s Financial Intelligence Unit, said he is unable to comment on specific companies and transactions but recognizes the methods and mode of operation used in this case: “Generally speaking the purpose of such money laundering schemes is to move the funds out of Russia, to get the money in to the western financial system and do it in an untransparent and secretive manner.”

CBS professor Ole Risager has previously worked in the Baltic region as a senior economist with the International Monetary Fund and has extensive knowledge of the Baltic financial sector.

He calls it a “realistic and likely scenario that the money came from illegal activities”.

“The money may have been stolen from state companies or stem from bribery or extortion. It may also have been an attempt to bypass international sanctions which Russia’s rich oligarchs have been subjected to for a number of years,” he says.

“The money may have been stolen from state companies or stem from bribery or extortion.”

L. Burke Files, a partner of US advisory firm Financial Examinations and Evaluations and an expert on financial investigations, says that US authorities would likely be extremely interested in this case and probably have already started investigating it, as it involves large transactions denominated in US dollars.

“There has to be some individual culpability here – some had to choose to ignore the klaxon horn that this account and others raised. Someone chose not to look or to investigate,” he says.

Jakob Dedenroth, the Danish expert on anti-money laundering regulations, agrees: “If there is any truth to the whistleblower’s allegations, then it is not just a matter of the bank’s culpability but also whether the management at Danske Bank Estonia could be held directly responsible,” he says.

Berlingske has sought to get a comment from the whistleblower in question, who was then an executive with the bank. The whistleblower declined, referring to Danske Bank for any comments.

Berlingske also presented the matter to the Russian authorities through the Russian embassy in Copenhagen but did not receive a response.

Translation by Bibi Christensen.