How Putin’s Oligarchs Bought London
Roman Abramovich was thirty-four – baby-faced, vigorous, already one of Russia’s wealthiest oligarchs – when he did something seemingly inexplicable. It was 2000. Abramovich, an orphan and school dropout turned Kremlin insider, had amassed a gigantic fortune by taking over companies that had once been owned by the Soviet state. He owned almost half of the oil company Sibneft and a large part of the world’s second largest aluminum producer. A man with cosmopolitan tastes, he favors Chinese cuisine and holidays in the South of France. But now, he announced, he would move to the remote region of Chukotka, a desolate arctic hellscape, where he would run for governor.
Chukotka, which lies about thirty thousand kilometers from Moscow, is comically inhospitable. The winds are strong enough to knock an adult dog off its feet. When Abramovich arrived, the human population was meager and struggling with poverty and alcoholism. After being elected governor – he won ninety-two percent of the vote, his closest challenger being a local man who herded reindeer – he was faced with the baying of his new voters: “When will we have fuel ? When will we have meat? There was no Chinese food in Chukotka.
“People here don’t live, they just exist,” Abramovich marveled. Shy by nature, he was not a natural politician. He poured a lot of his own money into the area, but didn’t seem to derive any pleasure from his new job. Nor could he explain, to anyone’s satisfaction, what he was doing there. When a journalist from the wall street journal traveled to Chukotka to ask the question, Abramovich claimed he was “fed up” with making money. the Newspaper speculated he was working an angle – did he have a lead on an untapped natural resource beneath the tundra? Abramovich acknowledged that his own friends “can’t understand” why he made the move. They “can’t even guess,” he said.
Three years after winning his governorship, Abramovich rose from wealthy obscurity to tabloid notoriety when he bought London’s Chelsea Football Club. In 2009, he moved into a fifteen-bedroom mansion behind Kensington Palace, for which he reportedly paid ninety million pounds. His mega-yacht Eclipse featured two helipads and its own missile defense system, and he began throwing New Year’s Eve parties with guests like Leonardo DiCaprio and Paul McCartney. It was far from Chukotka. Indeed, this unlikely interlude seemed largely forgotten, until the publication of “Putin’s People: How the KGB Took Back Russia and Then Took on the West” (2020), a landmark work of investigative journalism by the correspondent longtime in Russia Catherine Belton. His thesis is that after becoming president of Russia in 2000, Vladimir Putin ran the state and its economy like a gift from the mafia – and that he did so through the careful control of businessmen. ostensibly independent like Roman Abramovich.
When Abramovich went to Chukotka, Belton tells us, he did so “on Putin’s orders.” The first generation of post-Soviet capitalists had amassed vast private fortunes, and Putin set out to bring the oligarchs under state control. He had influence over government officials, so he forced Abramovich to become one. “Putin told me that if Abramovich breaks the law as governor, he can put him in jail immediately,” an associate of Abramovich told Belton. A “feudal system” was beginning to emerge, Belton argues, in which the owners of Russia’s largest companies would be forced to “operate as salaried managers, working on behalf of the state”. Their garish displays of personal wealth were a diversion; these oligarchs were just capos, who responded to the gift. It wasn’t even their wealth, really: it was Putin’s. They were “just watchmen”, Belton writes, and “kept their things by the grace of the Kremlin”.
Belton even makes the case – based on what she was told by former Putin ally Sergei Pugachev and two unnamed sources – that Abramovich’s purchase of Chelsea Football Club was done on Putin’s orders. . “Putin’s Kremlin calculated with precision that the way to acceptance into British society was through the country’s greatest love, its national sport,” she wrote. Pugachev informed him that the aim was to build “a beachhead for Russian influence in the UK”. He adds: “Putin told me personally about his plan to acquire Chelsea football club in order to increase his influence and raise Russia’s profile not only among the elite but also among ordinary Britons. .”
The stark implication of ‘Putin’s People’ is not only that the President of Russia may be a silent partner in one of England’s most legendary sporting franchises, but also that England itself has been a silent, lavishly paid partner in Putin’s kleptocratic designs – which, in the past two decades, Russian oligarchs have infiltrated England’s political, economic and legal systems. “We have to go after the oligarchs,” Prime Minister Boris Johnson said after invading Ukraine, doing his best to ring Churchill. But, as the international community strives to isolate Putin and his cronies, the question is whether England has been too compromised by Russian money to do so.
In recent years, Oliver Bullough, a former Russian correspondent, has led “kleptocracy tours” through London, explaining how dirty money from abroad has transformed the city. Bullough shows up with a busload of thugs past elegant mansions and steel-and-glass apartment towers in Knightsbridge and Belgravia, and points to the multimillion-pound residences of the sleazy expats who find refuge there. His book “Butler to the World: How Britain Became the Servant of Oliarchs, Tax Dodgers, Kleptocras, and Criminals”, just published in the UK, argues that England actively solicited such corrupting influences, letting “some of the worst people out there” know he was open for business.
Citing Dean Acheson’s famous 1962 observation that Britain had ‘lost an empire but not yet found a role’, Bullough suggests that it has found a role, as a service provider no questions asked. to the twisted elite, offering access to capital markets, prime real estate, shopping at Harrods and illustrious private schools, as well as accountants for tax tips, lawyers for legal wrangles and “reputation managers” for awkward stories. It starts with visas; any foreigner with sufficient funds can buy one, by investing two million pounds in the UK (ten million can buy you permanent residence.)
London property is always an option for such investments. After King Constantine II was overthrown in a military coup in Greece in 1967, he moved into a mansion overlooking Hampstead Heath; Since then, plutocrats around the world have sought refuge in the leafy neighborhoods of the city. After the collapse of the Soviet Union, Russian buyers flocked to the London property market. A real estate agent described his Russian clients “happily dropping bags of cash on the desk.” According to new figures from Transparency International, Russians accused of corruption or having links to the Kremlin bought at least 1.5 billion pounds worth of goods in Britain. The real number is undoubtedly higher, but it’s virtually impossible to determine, as so many of these transactions are obscured by layers of secrecy. The Economist described London as “a salvage bucket for dubious Russian wealth”.
Bullough has made an extensive study of this process. In a previous book, “Moneyland: Why thieves and crooks now rule the world and how to take it back” (2018), he explained that for wealthy upstarts in the UK, a glamorous new home is the first step to a well-established way for the laundering of reputations. Next step: Hire a PR agency. “The PR agency connects them with eligible MPs,” says Bullough, “who are willing to put their name to the billionaire’s charitable foundation. The foundation then launches into a trendy event space in London – a gallery is ideal. Ultimately, the smart billionaire “will put his name to an institution, or become so closely associated with an institution that he might as well be. Major gifts to universities are popular. Clubs soccer too.
What’s most apt about the Bullough butler analogy is the property’s gray flannel appearance, which can lend an aura of respectability to even the most disreputable of fortune. The mercenary filth of Britain’s role might be “difficult to comprehend”, suggests Bullough, “because it is so at odds with Britain’s public image”. Yet Belton and Bullough are joined in their disheartening diagnosis by Tom Burgis, the author of the excellent book “Kleptopia: How Dirty Money Is Conquering the World” (2020). And by the UK’s National Crime Agency, which found that “several hundred billion pounds of international criminal money” is laundered each year by UK banks and subsidiaries. And by Parliament’s own Intelligence Committee, which has described London as a “laundry” for illicit Russian money. And by the House of Commons Foreign Affairs Committee, which said in 2018 that the ease with which the Russian president and his allies hide their wealth in London has helped Putin pursue his agenda in Moscow.