Just-resigned British Prime Minister Boris Johnson made a show of his trip to Ukraine recently, showing support for the war torn country while lambasting Russia.
But Johnson’s Conservative Party has been like a pig at a trough when it comes to taking Russian oligarch money and allowing those same oligarchs to essentially run up real estate prices in the most fashionable London zip codes with dirty money linked to the Kremlin.
Writer Willem Marx has an article in the current edition of Vanity Fair that details how everyone knows that London, and much of the Conservative party, has been drunk on oligarch money while everyone looked the other way, from David Cameron, to Theresa May, and on through Johnson.
Proving Russian ownership of a London home is not always easy, never mind taking the legally binding action to seize such assets. The advocacy group Transparency International U.K. recently published an analysis of open-source data—including property ownership and court records, leaked information and journalists’ investigations—that shows around $2 billion worth of U.K. property has been purchased by Russians who either have links to the Kremlin or are accused of corruption. The majority of the properties are in just three central London neighborhoods, including the Royal Borough of Kensington and Chelsea. “When people talk about it as being one of the world’s major money-laundering hubs, I think that’s quite right,” says Duncan Hames, who heads policy and programs for the U.K. arm of the organization. “This whole anonymous-ownership problem would have fundamentally undermined the sanctions which the foreign secretary is particularly proud of.” Various data leaks in recent years have been crucial for NGOs seeking to shine a light. And while admittedly British businesses that serviced Russian wealth—banks, accountants, lawyers, and real estate agents—seemed for a long time to have jettisoned their scruples, without better public information it will be difficult for such London service firms to avoid inadvertently falling afoul of sanctions in future. And that may in turn rely on those that understand such bad behavior best—other outraged Russians.
Like Roman Borisovich, a blond, barrel-chested Columbia University grad who’s worked as a senior trader at Merrill Lynch and an investment banker at Deutsche Bank. Raised in Moscow by Russian and Ukrainian parents, he returned to the Russian capital to help run a struggling Soviet-era insurance behemoth and became an early supporter of Alexey Navalny’s Anti-Corruption Foundation. Around the time Borisovich’s wife was held for an extended period at a Moscow airport while returning from a European vacation in 2012, Navalny cautioned him that he might face Kremlin accusations of spying for Western governments. The banker moved his family right back to London, where they subsequently lived for several years.
On their hunt for a new apartment there, a “young punk” of a real estate broker provoked his ire during a tour of a penthouse duplex next to Dormition Cathedral, seat of the U.K.’s Russian Orthodox diocese. “He was trying to endear himself by saying that his firm deals with Russians all the time,” Borisovich recalls of the broker, who told him they had recently sold a $32 million property to one of Russia’s regional governors. “That’s when I looked at him: ‘Would you be saying the same if this was a Mexican drug dealer? Would you be telling people with the same sort of pride that you’ve done it?’ ” The broker went quiet as Borisovich railed about how local officials in Russia were not paid nearly enough—at least not by honest means—to buy an apartment in Knightsbridge, where the most recent data puts average real estate transactions around $4 million. Since that encounter he has lobbied for transparency. Corruption, Borisovich says, is “the cement, and this is the concrete of the foundation” of Russia’s current government. “There is nothing else that holds it together.”
It has the power to metastasize. “The less probity or propriety we have in our system, the more open we are to manipulation and exploitation by ruthless or authoritarian regimes like the one we see in the Kremlin,” says Kinnock, who spent several years living in Russia during the mid-2000s. New rules he and others are advocating for would follow a U.S.-style registry of foreign agents and empower independent forensic accountants to perform due diligence on all party donors. “We can actually then start to clean up our politics, and to protect the integrity of our democracy.”
Conservative party leaders even arranged for some of the oligarchs to be given Lordships.
(And, for good measure, you can throw in the always oily neo-liberal Labor Party Prime Minister Tony Blair.)
The article details how Great Britain is starting — just starting, mind you — to close the giant loopholes that have made London the world’s capital of international dirty money.
This includes shuttering the so-called “golden visa” program, begun by psychopath Margaret Thatcher. The Vanity Fair article first addresses that exceedingly crooked program this way:
Many members of the Russian emigratsiya community in Britain are simply well-to-do people who chose to leave after the Cold War ended. London was convenient for its time zone, language, and private schools. But in 1994, Margaret Thatcher’s Conservative successor, John Major, introduced a new immigration category for individuals who brought 1 million pounds into the country, investing at least 750,000 pounds of it in bonds, or stocks or loans tied to actively trading U.K. businesses. The rest they could use to buy property, for example, or deposit in banks. These “golden visas”—as they became known—encouraged the wealthiest demographic, Russian and otherwise, to go shopping. And because almost all of today’s great Russian fortunes are derived directly or indirectly from former or current state enterprises or assets, “that did pose a potential security risk,” says Dominic Grieve, the U.K.’s former attorney general. “It meant that there were people who are now integrated into the United Kingdom—some of them have taken dual nationality—who in fact have, because of their economic interests, ties to Russia, which can be exploited by the Russian state.”
They knew their pay-to-play visa program would be abused, but they did it anyway. Because that is how the small “c” conservative mind works. If you’re poor and need refuge from wars your country likely had a hand in starting, you can right well fuck off, can’t you? But if you’re rich, no matter how dirty your hands are politically and financially, you are welcomed with open arms and wallets.
For another great read on this same subject, you might also read this article from The Economist. (Alas, this one is behind a paywall, whereas the Vanity Fair article is likely free if you’ve read no Vanity Fair articles on their web site recently.)