Lawfare and Investigative Journalism

David Davis Excerpts

Monday 17th October 2022 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

Before I call the right hon. Member for Haltemprice and Howden (Mr Davis), I thank him for informing the Table Office in advance of the case he intends to raise in his debate, which, I understand, is not sub judice. However, I remind all Members to be mindful of the sub judice resolution and to be careful to avoid raising any issues that could prejudice any future legal proceedings or those currently before the courts.

[Mr David Davis (Haltemprice and Howden) (Con)]

On 20 January, a number of us MPs initiated a debate on the use of lawfare by oligarchs and undemocratic states that seek to suppress free speech and scrutiny of their activity. The Ministry of Justice took up the question and has promised new legislation, and I am glad to see the new Minister about to lose his departmental virginity in this debate—it will not hurt; I will be gentle.

Today, I will speak about another outrageous case of lawfare that centres around the former Kazakh President Nursultan Nazarbayev. He was the autocratic ruler of Kazakhstan for three decades. His time in office was characterised by repression, torture and other human rights abuses. He was ousted from power in 2019, but remains a significant influence in the country. He was more or less able to anoint his successor as president, and met Vladimir Putin even after leaving office.

During his 29-year rule, Nazarbayev won elections with claimed results of more than 90% of votes cast, and the capital city was even renamed after him in 2019. The term “rigged dictatorship” comes to mind. As long ago as 1999, the western press aired concerns about assets held by Nazarbayev and his associates. In that year, The New Yorker reported that Swiss officials had found a bank account worth $85 million that was intended for the Kazakh Treasury, but was in fact held by Nazarbayev—$85 million, which turns out to be small change. Three years later, Nazarbayev’s critics in Kazakhstan accused him of hiding $1 billion in oil revenue in offshore accounts.

Now, the Nazarbayev Fund Private Fund, an ostensibly charitable organisation, and a related firm, Jusan Technologies Ltd, have between them started a lawfare campaign against four news bodies, including three based in Britain, which are the Bureau of Investigative Journalism, The Daily Telegraph and openDemocracy. The supposed provocation for that action was the news bodies’ reports on Nazarbayev and his associates, which revealed several ambiguities and a lack of transparency around his charitable foundations.

First, the Organised Crime and Corruption Reporting Project, a non-profit investigative news platform, published an investigation into charitable foundations set up during Nazarbayev’s rule. It revealed that companies connected to those charitable foundations and to his relatives had received bail-out and loan funding from his Government.

One such case involves the St Regis Astana, which is a hotel in the Kazakh capital that opened in 2017. The company that owns the hotel, the Turion Investment Group, has included among its shareholders Nazarbayev’s daughter and son in law. The hotel project was built with the help of a loan of $85 million from a state-owned development bank, which even the current President Tokayev conceded has become

“the personal bank of a select group of people representing financial, industrial, and construction groups.”

Let us remember that that is supposed to be a state bank.

In the early 2000s, Nazarbayev’s Presidential Affairs Department joined two Kazakh firms in developing a resort on the Turkish coast where Nazarbayev reportedly spends his own holidays. One of the private firms involved was owned by three businessmen who had previously handed cash to Nazarbayev’s university fund. In another instance, two of Nazarbayev’s foundations owned a landscaping business that received $6.5 million in Government contracts between 2012 and 2018.

After those revelations, openDemocracy covered the story and asked the simple question of whether an autocrat’s riches were being allowed into this country without due scrutiny. It was talking about Jusan Technologies, a firm that is incorporated in the United Kingdom and has nearly $8 billion in gross assets, yet had only one member of staff in the UK in 2020.

The Bureau of Investigative Journalism and The Daily Telegraph then collaborated to investigate Jusan Technologies. It appears that its registered office at the time was a brass-plate address shared with hundreds of other firms. Its assets have been held in several sectors, including banking, telecoms and retail, and in several countries, from Luxembourg and the UK to Kazakhstan itself. Until recently, it was controlled by three organisations, including the Nazarbayev fund via an intermediary organisation.

The Nazarbayev fund is allegedly run for the benefit of educational institutions in Kazakhstan and stipulates in its charter that Nazarbayev cannot benefit personally from the fund. Yet he remains the chairman of its executive body and has the power to change its rules. It is not clear why a fund ostensibly for education and the benefit of the Kazakh population needs assets in banking or retail.

The fund is also connected to senior Kazakh politicians. Nazarbayev’s former Deputy Prime Minister, Yerbol Orynbayev, was a director of Jusan Tech and owned 4.6% of the company. Moreover, the investigation shows that the First Heartland Jusan Bank, the largest asset owned by Jusan Technologies, has received more than $2 billion in bail-outs from the Kazakh Government. This is a company that has paid out $430 million in shareholder dividends in recent years. An oligarch married to one of Nazarbayev’s relatives owns 20% of the bank. It appears to be steeped in Nazarbayev’s influence.

While Jusan Technologies itself has now changed its ownership structure—it did so shortly before the reports were first published—the new structure is, if anything, even more opaque. The new owner is a non-profit organisation based in Nevada, a jurisdiction the secrecy laws of which have been criticised in the past, including in respect of the Pandora papers. That non-profit is owned by another non-profit, whose president is the chief executive of the Nazarbayev fund as well as Nazarbayev’s former Education Minister.

Frankly, Mr Deputy Speaker, if you are confused by this extraordinary cat’s cradle of different and interlocking organisations, you would not be alone. It is designed to be confusing and designed to be difficult to understand and opaque. Creating organisations of this level of opacity and complexity is not easy, but it is always done for a reason. In this case, the most likely reason is to conceal the extent of Nazarbayev’s control of this web of assets and wealth.

To come back to the point about lawfare, all the news outlets did was ask legitimate questions and try to shine a light on some apparent irregularities and the opaque nature of Nazarbayev’s foundations. They did not even make any allegations of impropriety or money laundering in the articles for which they are being attacked, yet they are now facing potential legal censure. The Bureau of Investigative Journalism and The Daily Telegraph alone have received three threatening legal letters in four months telling them to retract their claims and apologise, and a case has now been filed in the High Court.

[Christian Matheson (City of Chester) (Lab)]

I noticed that these cases had been filed, though not yet served, and I tabled a written question in this place about their effects on media freedom. I have to tell the House and the right hon. Gentleman that I was then contacted by lawyers for the company asking me to withdraw that question. What is his response to their asking me to withdraw a perfectly innocent parliamentary question?

[Mr Davis]

First, the lawyers clearly do not understand parliamentary privilege. Secondly, what they are doing—I will come back to this in a second—is trying to repress free speech and transparency in this country. This is a clear case of an ultra-wealthy individual using the British legal system to try to scare his critics into silence, and what the hon. Gentleman refers to is their trying to extend that to his actions—proper actions—in this House. The work of those who have been targeted is all the more important considering that Nazarbayev has himself had a law passed in Kazakhstan preventing him from being prosecuted there. What he is doing with this lawfare is trying to extend that protection to this country, which, frankly, is an outrage.

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Gentleman on bringing this debate forward. Does he not agree that we can never be in a position where the fear of the personal costs of litigation prevents truth from being revealed by journalists, who are putting their homes and their livelihoods on the line to highlight individuals who will in retaliation sue them until they have not a penny to spare, and that rather than simply saying that this is awful, as we all are, what we really need is the Government to present and bring to this House legislation to prevent it?

[Mr Davis]

I will come back to that very point in a moment, but as the hon. Gentleman implies, defending oneself against a libel claim, especially by an oligarch or other wealthy person, is often cripplingly expensive. In fact, it is typically cripplingly expensive. The risk is not losing the case, which is improbable in most of these cases. The penalty for exponents of free speech is the sheer cost of a vexatious process, which is what Nazarbayev wants.

[Dame Margaret Hodge (Barking) (Lab)]

I am grateful to the right hon. Gentleman for giving way and congratulate him on securing this debate and on making a fantastic speech. He has been a passionate and effective campaigner on the growing problem of egregious strategic lawsuits against public participation—SLAPPs—and has argued, along with the hon. Member for Isle of Wight (Bob Seely), for urgent action to stop these abuses.

I want to raise the case of Dmitry Leus, a UK resident of Russian-Turkmen origin, who is threatening libel action against Chatham House because of his inclusion in its excellent report, “The UK’s Kleptocracy Problem.” Leus was a Russian banker, convicted of money laundering in Russia in 2004, who arrived in the UK on a Cypriot passport. He has donated to the Conservative party and chaired his local Conservative association. He tried to donate £500,000 to the foundation of the then Prince Charles, but the donation was spurned when the charity learnt of his conviction. In July my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) said in this House that Leus is “absolutely dependent” on the Russian security services.

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[Mr Deputy Speaker]

I was extraordinarily generous.

[Mr Davis]

I thank the right hon. Lady for drawing the attention of the House to that case. I do not know the substance of it, but the fact is that these cases are best resolved transparently and in public, with fearless reporting, not with repression of free speech. Oligarchs will often bring these claims as they know their opponents will, as in this case, have to back down either through the threat of bankruptcy or because they become bankrupt as a result of the operation, and it is a good example of this problem.

That is why the Government earlier this year found that some journalists

“no longer publish information on certain individuals or topics—such as exposing serious wrong-doing or corruption—because of potential legal costs.”

That also applies to some newspapers and some organisations whose job it is to expose this sort of information.

With every letter and every stage of legal action, organisations like the Bureau of Investigative Journalism must divert resources and attention away from public interest reporting and towards defending themselves against bogus or trivial claims. The Bureau of Investigative Journalism has a small team, with just a few dozen staff. To defend itself, it has been forced to divert much of its reporting team and senior management, as well as significant financial resources, to dealing with these legal threats.

This kind of lawfare is a potentially existential threat to investigative journalism, and that is precisely what the claimants in these cases intend. These proceedings are not initiated to prove the organisations wrong—the oligarchs know that the organisations are right—but rather to financially and psychologically exhaust them into retraction. What Nazarbayev wants is to import into the UK the contempt for free speech shown in Kazakhstan during his three-decade rule. As the hon. Member for City of Chester (Christian Matheson) pointed out in his intervention, Nazarbayev is bringing to Britain what he imposed on Kazakhstan and we cannot allow that. This should offend the sensibilities of anyone who values a fair and equal justice system, as well as those who rightly appreciate the value of public interest reporting.

It is of some reassurance that the Government intend to reform the law around SLAPPs, but we must move more quickly. I say that directly to the Minister, who is an old friend of mine over the years; I am very pleased he is in his place and in the Department as he will do a fantastic job, but I say to him that we must move more quickly. There is no time to waste when even now we have oligarchs using SLAPPs to curb free speech and evade justice in our country. One of our ex-colleagues, Charlotte Leslie, is facing such a case at the moment. We as Members of Parliament have parliamentary privilege and so can speak without the threat of libel action, but that privilege brings with it a duty to speak up for those who cannot speak for fear of punishment by the likes of Nazarbayev.

In the wake of the war in Ukraine, the Government swiftly introduced sanctions on those with links to the Russian regime, making it harder for them to use our country as a money-laundering venue. It is high time that we applied that same urgency and purpose to addressing the damage that oligarchs are doing to our justice system and our free-speech values. For too long, we have facilitated oligarchs’ dirty money and corruption in the UK.

[Bob Seely (Isle of Wight) (Con)]

My right hon. Friend is making a great speech and incredibly good points about lawfare. We have the Economic Crime and Corporate Transparency Bill before the House, and it would be wonderful if the Minister, when he is on his feet in a few minutes, confirmed that lawfare will be part of that. We have a lawfare Bill written and ready to go, and the Government could adopt it. There are three elements to it: the abuse of privacy laws; various other factors; and the aggressive abuse of libel law. The problem is, whether we like it or not, we may make grandiose speeches about how free speech must be defended, but it is being attacked all the time. In the last few years, it has been relentlessly attacked by criminals, by oligarchs and by Russian proxies and other corrupt proxies in this country. We need laws brought in now, not at some time in the future.

[Mr Davis]

My hon. Friend is exactly right. Our friends and neighbours in the US and Europe are taking action, and we must not be left behind. If we do not act, we will let dangerous people off the hook while allowing journalists and researchers to be punished for doing their jobs. What we need now is a commitment from Ministers to bring forward either a free-standing SLAPPs Bill or measures that form a component of another Bill. I do not care which it is, but it must happen soon.

[Andy Slaughter (Hammersmith) (Lab)]

Will the right hon. Member give way?

[Mr Davis]

Briefly, because I have only seconds left.

[Andy Slaughter]

The right hon. Member is making an excellent speech and an excellent case for having anti-SLAPP legislation either as part of the economic crime Bill or as a stand-alone Bill. That needs to happen. There seems to be a general issue with costs, which are being used as a weapon in economic crime, in SLAPPs and in many other areas of law. It was an issue in Leveson as well. Do we not need to look at that and ensure that the courts can do their job unfettered by those outside influences that are causing the best legal system in the world to come into disrepute?

[Mr Davis]

The hon. Member is exactly right. There are a variety of other mechanisms that we could use. We could give judges the right to strike down egregious cases early. We could even look at the prospect of providing legal aid for journalists pursuing bona fide public interest issues. There are a variety of issues, and we should address all of them. This country is the global home of justice. Our justice system is admired around the world, but, if we are not careful, it will be corrupted, undermined, manipulated and abused by SLAPPS and people using SLAPPs.

I ask the Department and the Minister to take action, or to tell us that they will take action. Brits are rightly proud of how our legal system is a model for the world. If we are to ensure that that remains the case, we must act, and act soon.

[Mr Deputy Speaker (Mr Nigel Evans)]

I welcome the Minister to his new position.

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[Gareth Johnson]

I hear what the right hon. Lady is saying. I cannot give her the commitment that we will place that within the Economic Crime and Corporate Transparency Bill. There are two schools of thought on whether it can be placed in another piece of legislation, and thereby limited by the long title of that Bill, or whether it is better off dealt with in isolation, so it has more of a free rein. I can inform her and the House that the legislation is still, at this stage, being drafted. As a consequence, it is not oven-ready to go straight into another piece of legislation that is before the House now.

[Mr Davis]

Will the Minister give way?

[Bob Seely]

Will the Minister give way?

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[Gareth Johnson]

I hope, and I hope it is not a naïve hope, that hon. Members on both sides of the House will work with the Ministry of Justice on this, because we do intend to legislate on the issue.

[Mr David Davis]

Of course we do not want to get in the way of the Ministry of Justice, but the key issue is speed. If the Minister can, not necessarily today—I know Cabinet committees need to deal with this; we are all familiar with that—but at some point in the near future, say to us, “Yes, we are going to do it in this Session. Yes, we are going to do it soon,” he will find that the Economic Crime and Corporate Transparency Bill makes much easier progress than otherwise.

[Gareth Johnson]

I can give my right hon. Friend an assurance that we will do this as soon as the legislation is ready and as soon as parliamentary time allows it to happen.