It is not clear who first broke the story. It was probably first picked up in New York, but there are persistent rumours that the real leak came from London. There are tales of the London police trying to get resources to investigate the allegations but having insufficient money and manpower to do a thorough job.

The rumours suggest that London tried to interest USA agencies but were offered little help. Now it appears that at least two investigatory agencies in the USA were themselves interested and pursuing their own lines of inquiry - independently of each other and of other agencies in other countries.

In many ways, this does not make sense: the FBI have been investigating but press reports suggest that an investigation by Robert Morgantau's office (New York County DA) was proceeding in parallel. That neither knew about the other suggests that neither has yet come to terms with the idea of FinCEN as a central repository of information, with the hope that parallel, and indeed conflicting, investigations can be avoided. More, out of all the countries of the World, the only one to have a full time secondee to FinCEN is the British Government through its Washington Embassy - with full access to the FinCEN databanks. So, one must question how come a British police force failed to make their concerns effectively known? Surely feeding them into FinCEN would have been a worthwhile course of action. There is the follow-up question - how come, if the FBI and The NYDA's office were acting with the open exchange of information that the system is designed to permit, the British Police thought no one else was interested?

When the story first appeared in the UK press, it seemed to have interesting parallels with a previous attempt to pursue alleged laundering of Russian money. In that case, the Metropolitan Police's South East Regional Crime Squad raided the offices of a law firm on the borders of the City. They released information claiming investigation of a "City" law firm. But there was much reading to do between the lines: the firm was not actually in "The City", where it would have fallen under the jurisdiction of the City of London Police, which was in the throes of setting up a Financial Fraud Unit; the firm was an outpost of a large American law firm; the investigation revolved around a series of companies and bank accounts in Jersey; the money being followed allegedly came from Russia; the wife of one of the partners of the law firm was Russian. The police quietly withdrew from the investigation, paying, it was reported at the time, some £20,000 for the legal costs suffered as a result of their actions. In a classic blunder, the police had, somehow, failed to find anyone who would claim to have lost money or any evidence that the money they had tracked across continents was the result of any form of criminal conduct.

Today, the UK's regional crime squads have been rebranded under the banner of "National Crime Squad" - but this is, at present at least, window dressing. The reality is that the old South East Regional Crime Squad is the leading group in a loose coalition of the former regional crime squads. And the same names have appeared on the investigation team in the Bank of New York investigation as were involved in the previous enquiry.

There is pressure on the UK's police forces to mount a successful prosecution against large scale money launderers. But it strange to note that the choice of target is Russian money, given that it is established that the Russian authorities are historically less than co-operative when asked to provide any evidence to support an investigation. And the fact that there are persistent comments about the use of the City as a centre for laundering is not lost on anyone connected, on any side of the debate, with the processing of dirty money. But, again, the investigation centres not on a target in the City but someone whose offices are just outside the border.

Bank of New York has its UK offices in Canary Wharf, a massive private development in the regenerated Docklands area to the East of London's traditional banking heartland. Over the past ten years or so, many financial institutions have set up there, either on arrival in London or transferring out of the City's antiquated buildings which do not lend themselves to the installation of the technology that underpins modern commerce. The Financial Services Authority - destined to become the overall regulator for financial services in the UK - is busy setting itself up there. Even the UK's backbones into international telecoms are based only a few hundred metres outside Canary Wharf. But, most tellingly, a move to Canary Wharf or any other part of Docklands moves the institution out of the area of the City of London Police and into the jurisdiction of the South East Regional Crime Squad, as was. The City of London Police are a gentlemanly sort of police force, preferring consensus to compulsion. The National Crime Squad needs to make its mark, or else funding will be even more difficult to come by, and with Governments of all hues decrying organised crime, and money laundering in particular, there is a natural tendency to seek attention by acting on the current fashion of the paymasters.

But there is an interesting comparison in the USA. It is usual for financial crime in New York to be investigated by the New York County District Attorney's office and that office has some very high profile and accomplished people with considerable experience of cases of this type. Yet proceedings have been brought against three individuals not by that office but by the Federal District Attorney for Manhattan.

There remain three basic issues that do not make much sense: the leak of the story to the press when publicity was likely to be damaging to the investigation rather than to provide a means of progress, and why Russian money was again the target. Third is why charges have been brought in the USA and not in England where much of the alleged conduct is said to have taken place.

There is a case for saying that the answer to all three questions is actually a matter of economics. The Russian economy is supported if not completely shored up by foreign money, much of which comes in the forms of loans or aid from, amongst others, the International Monetary Fund (IMF). The original story claimed that some US$40milliard was diverted from IMF originated funds. The IMF has been quick to deny that this is so, but there is, of course, concern to make certain that support packages are used for the proper purposes. The story broke just as the IMF was considering the release of a further tranche of money under an existing agreement. The nett effect was to display to Russia that the international community could create considerable financial pressure if it wanted to. Suddenly, Russia was under no illusions - if support money was diverted for any corrupt reason, it would be found and the purse strings tightened, even at very short notice. Russia simply has no slack in its financial system and the risk of loss or delay of money expected to come from the IMF would cause considerable problems in Russia. Russia had an urgent need to prove that it would act in concert with the international community to seek out corruption and to act to prevent financial crime including money laundering. The authorities there have raided banks and started prosecutions against several people accused of a range of offences. And, according to the US prosecutors have co-operated in the investigation into money movements through the Bank of New York. Now, the IMF money seems to be secure.

When the full details of the case emerge, it will be clear that there were investigations into money movements at the Bank of New York for some time, but the investigations were stalled. The answer to the second question is simple: Russia is a soft target for investigating proceeds of crime because there is such a high proportion of dirty money in the system. When there are reports of as much as US$1milliard leaving Russia each month, it is an almost inescapable conclusion that there is a huge cash-generative parallel economy, much of which must be illegal in some way or other or there would be no need for subterfuge about it. Because of these assumptions, any large sum of money leaving Russia is bound to be a subject for speculation about its origins. So, any investigator knows that he can track Russian money across the globe and, provided he can find a "loser" willing to admit to some interest in the money, he will have a sympathetic hearing when he comes to try to interest a prosecutor.

Which brings us to the third question - why is the prosecution in the USA and not in London? Again, it is almost certainly a question of economics. British police forces are under-resourced. They have far too little money and far too few competent staff and far too little computing power to properly perform their duties. They are, for the most part, dedicated and motivated. But Britain's Labour government does not believe in adequately funding the police and, worse, demands that the police change direction at a whim, so that, for example, the police are told to adopt zero tolerance to speeding offences because they are cheap to prove, generate considerable revenue and are currently fashionable in the press. When it comes to investigating and prosecuting financial crime, the resources are simply not there. Commercial organisations reporting a fraud are told that they should package the complaint, so that it can be put to the Crown Prosecution Service (CPS) with minimum processing by the police. The reasons for this are that the CPS is notoriously unwilling to prosecute any offence where it can push the victim into a civil recovery action or where the prosecution will soak up manpower or other resources or where the case is complex. In part the reasons behind this are financial - there are constant rumours about the parlous state of the CPS and it is true that its staff are poorly paid and overworked. It is also true that it consistently fails to recruit the most able lawyers. Its staff are demotivated. From its inception in the mid 1980s, the CPS has been renowned for backing away from a fight. The police have to persuade the CPS to take on a case and, if it is tough or if it will be expensive, the CPS is reluctant to get involved. So, regardless of the best efforts of police forces across the UK, the reality is that financial crime will, largely, go unprosecuted. The only significant exception to this is where the Serious Fraud Office is concerned because the SFO has its own prosecution team and does not need to secure the services of the CPS.

The issues about funding prosecutions in the USA are much simpler - the integrity of the financial system is regarded as a paramount objective and the full weight of the enforcement system will be put behind such prosecutions to ensure that criminals know that New York (at least) should not be regarded as a safe haven. Tony Blair's government in the UK does not have the same concern and, whilst there are platitudes in press releases and parliamentary statements, there is no political will to give the UK an effective and properly funded national policy, for the investigation and prosecution of financial crime and, when it is discovered, the officers who have identified and investigated the problem sit on the sidelines as their efforts are rejected principally due to the likely cost of pursuing the case.

So, it is WMLR's supposition, and we put it no higher than that, that the National Crime Squad identified a problem, tried to deal with it and could not get the resources nor support from the CPS and ultimately decided that the only way of making sure the case was dealt with was to have it handled in New York. The only way of getting credit for their work (and so having some sympathy when negotiating for future budget) was to have their work identified in press reports and so a leak was arranged. The leak was conveniently close to the IMF/Russia negotiations and so there was additional pressure upon the Russians to come up with supporting information.

No doubt, when the dust settles, there will be explanations buried in the official reports. But for now, it just looks like another mess borne out of inadequate planning, presumptive execution and lack of proper funding.