The Treasury must explain how the Russian founder of a mercenary army was given permission to circumvent sanctions, to attempt to silence a British journalist, Labour has said.
In a letter to Jeremy Hunt, seen by the Guardian, the shadow chief secretary to the Treasury, Pat McFadden, said that No 11 had to say why it had granted the permission and whether similar allowances had been made for other sanctioned oligarchs to use libel lawsuits.
The revelations, published on OpenDemocracy, concern a libel case brought by Yevgeny Prigozhin, a key ally of Vladimir Putin, against Eliot Higgins, the founder of the investigative group Bellingcat.
The documents and leaked emails show how Prigozhin’s lawyers were given permission by the Office of Financial Sanctions Implementation (OFSI), a department inside the Treasury, to represent him despite the fact he was under sanctions.
For years Prigozhin denied all links to the Wagner group of mercenaries and brought a case against Higgins, but last year admitted he founded Wagner in 2014.
Discreet Law, a London firm led by Roger Gherson, received government approval to engage with Prigozhin, Open Democracy reported. McFadden said that Hunt, the chancellor, should explain how this was allowed to happen. No 10 has said all the decisions were made by officials without ministerial involvement.
McFadden said: “It is completely unacceptable that one of Putin’s allies was able to use the Treasury to attempt to subvert sanctions and silence a critical journalist. The chancellor must immediately explain how this was allowed to happen, and what steps he will take in the future to ensure that wealthy oligarchs are unable to use the Treasury or any government department as a weapon in this way.”
In a statement No 10 said there was a process whereby a sanctioned individual could apply for a licence to pay for legal costs by drawing on their assets.
“Clearly, having a fully functioning legal system enabling people to defend themselves is part of a function democracy, and therefore there is, in limited circumstances, the possibility for the OFSI to grant access to funds to use the legal system in the way it was designed,” the spokesman said.
In his letter McFadden said Wagner was “pursuing a murderous campaign against the people of Ukraine” and said that Prigozhin’s aim was “to silence Mr Higgins and his organisation, Bellingcat”.
He wrote: “The critical question is how could the Treasury have facilitated a legal action by the founder of the Kremlin associated Wagner group against a British journalist and do so while that person was a sanctioned individual?
“What questions have you asked of the OFSI since this story came to light? What actions has the Treasury taken to ensure it is not used as a weapon in SLAPP [strategic lawsuits against public participation] actions by wealthy oligarchs facilitated by legal firms here in the UK?
“Are there any other instances of the OFSI granting such permissions for oligarchs or other Kremlin associated individuals seeking to silence British journalists? What actions will the Treasury take to ensure this does not happen again?”
Lawyers from Discreet stopped representing Prigozhin in March 2022, a month after Russia launched a full-scale invasion of Ukraine. But Higgins has said he was left with estimated costs of £70,000.