How do Russian oligarchs bypass international
tax laws? By using London of course! We’ll explain how London became the money laundering
capital of the world soon. But first we need to explain to you the events that led
up to this international tax loophole. It was the worst of times for some people when
Britain’s so-called glorious empire fizzled out, and territories were lost at a staggering
rate. But it was the best of times, too, because some of the people who benefited
the most from the empire had a trick up their very long and spacious sleeves.
This partly consisted of using some British Overseas Territories as tax havens, probably the
most famous being the beautiful Cayman Islands. With such places in its pocket, Britain became
the country of choice to launder your money. If you were a crook, a kleptocrat, a drug trafficker,
or just your run-of-the-mill fraudster, Britain, the home of Shakespeare and dodgy dental hygiene,
was your best buddy. The empire might have fallen, but the empire struck back when it became
the center of international money washing. Now we must ask who’s had the most money
to hide over the last few decades. Which country had the most gangsters and infinitely
crooked businessmen who needed the help of the so-called London Laundromat?
The answer is Russia. You see, when the Soviet Union collapsed
in the 1990s, and much of the Russian population was wondering where it might get
food for the next week, Russian businessmen and gangsters pretty much looted the entire
nation. How this happened is a long story, but if you want to know more about
it, we reckon the new Adam Curtis documentary “Russia 1985–1999: TraumaZone” is
as good as anything you’ll see on this topic. The documentary outlines how at the end of the
Soviet Union, there was utter chaos. Within this chaos, a few not-so-nice people pilfered
everything they could from the Russian economy. They used their wealth to buy up the industries,
took the cash out of Russia, and hid it or invested it for their own benefit- not for Russia.
These people became known as the oligarchs. As all this was happening, the Russian
people suffered enormously, which, to be frank, wasn’t exactly anything new for
Russians. Around this time, a new man came onto the political scene, a former KGB foreign
intelligence officer named Vladimir Putin, who was as corruptible as anyone in Russian
politics, even though he talked a good tale of making Russia great again. Hmm, MRGA
just doesn’t have the same ring to it… Putin was supposed to save the day after what
can only be called a generally bad time for Russians. At this point in his career, he was
praised in the US as a decent “professional” and “a man we can do business with.” In
1999, when life expectancy for Russian men had dropped below 60 and extreme poverty
was killing Russian families everywhere, many of Britain’s elites also had a good reason
to like Putin. That’s because Putin didn’t go after the oligarchs as any ethical leader would
have done. As a journalist said on this matter: “Putin offered the oligarchs a deal: bend
to my authority, stay out of my way, and you can keep your mansions, superyachts, private
jets, and multibillion-dollar corporations.” These oligarchs needed a place to hide their
money, to launder it, as they had not earned it through what you might call an honest day’s
work. They’d stolen it, basically. Britain was the ideal place for them to launder their cash.
Under the stern, very conservative British leader Margaret Thatcher, a friend to Ronald Reagan and
undoubtedly an “iron lady,” many of Britain’s industries had been closed or deregulated. Her
time in power heralded a new era of neoliberalism. She took a hands-off approach to
the economy, feeling that if you let monied people do what they want to
do, more money will come, and of course, it will trickle down on all those folks
who’d worked themselves to death in the now-closed British mills and mines. Did
it trickle? We’ll come back to that soon. Later, Britain became a country of blind
eyes. Dirty money flooded into the nation, and the British elites that benefited from it
had no reason to eradicate this flow of new cash, even if its owners were sketchy to the
extreme. The politicians that came many years after Thatcher also had no intention of
causing problems for Russian oligarchs. “Come in,” they said, “Make yourself at home.
Do you have money to hide? No problem. We’ll sort that out for you. Here's some tea.”
Anyone with enough cash was invited to set up shop in England. London became their home. It should
have been a scandal, but as seems to be protocol, those who suffered the most in the UK
were too busy screaming at non-Russian immigrants to notice the influx of dirty cash.
The oligarchs very quickly had their fingers in a lot of very British pies. We don’t mean apple
pies, either. We mean industries, including the media. A Russian oligarch once admitted as much,
telling a journalist named Catherine Belton: “In London, money rules everyone…Anyone
and anything can be bought.” The greatest trick the British elites ever played
was making people think they are all about manners and morality. The British elites can be as cunning
as people come, and as Russians were struggling en masse, those elites machinated about how to get
more of that dirty money. It goes without saying that many different people would take their cut
from this massive wad of illegal cash. We are talking about billions, not pocket change.
To make it much easier for oligarchs to stay in Britain and start doing business, the
“golden visa’ was introduced. This essentially allowed anyone with enough cash to buy British
citizenship. In 2008 when the scheme was launched, 60% of the visas were awarded to Chinese and
Russian nationals, whose money was partly what was later called “corrupt capital.”
These visas made it much easier to bring cash into Britain and avoid those pesky anti-money
laundering checks. The oligarchs bought mansions in Kensington and splashed out on incredibly
expensive yachts. They invested in Britain and had their cash hidden offshore. The oligarch
Roman Abramovich, who had links to Putin, even bought London-based football team Chelsea,
helping it to be good for the first time in years. He took care of an 80 million pound
($97 million) debt and spent a whopping 100 million ($122 million) on new players. Chelsea
quickly became on of the best teams in the world. “So what?” said some people
about this oligarch’s cash; it’s good for the economy, and what’s good
for the economy, a la trickle-down economics, is good for the people. That’s partly
why there was no scandal back then. As long as foreigners had over two million pounds,
about $2.4 million (2022), a red carpet was laid down for them. They often had much more than that,
though, much, much more. It wasn’t clean money, so British banks and firms had to clean
it. As you know, when you launder cash, you lose a fair bit of it. There was no shortage
of Brits willing to help out those oligarchs. One writer said the UK soon became “a safe
deposit box for oligarchs' ill-gotten gains.” From 2008 to 2022 when the golden visas were
instated, the Home Office issued 2,581 of them to Russian citizens. Thousands more
went to other nationalities, many of them thought to be held by people whose money was
dirty or, at the very least, contaminated. Years later, there was some criticism in the
press, but by that time, the money had already been laundered, and everyone had taken their
cut. One article about the golden visas said, “It offered ideal mechanisms by which illicit
finance could be recycled through what has been referred to as the London ‘laundromat’…Russian
influence in the UK is ‘the new normal.’” The oligarchs would buy the best lawyers you
could get in London. They made it possible for the oligarchs to buy properties and put someone
else’s name on them, any name; according to a report by the Financial Times, even “Donald Duck.”
They used British banks for their ill-gotten money, and they used shell companies to keep it
hidden. They created company offices in London, but if you visited those offices, you’d
find no staff there. They were just shells of companies. The money was coming from
somewhere else. This is still happening now. You’d think there would be a scandal, but the
Russian kleptocrats have bought politicians. They have friends in the House of Lords. On
their company committees sit British elites, ready at all times to do their dirty work.
Former Prime Minister Boris Johnson might have said in 2022 that something should be
done about this, but he was just another British elite who was trying to cover
his tracks after the Ukraine invasion. Make no mistake, the Russians infiltrated
everything: politics, media, law, and banking. It became a joke to some. They called
London “Londongrad.” Property agencies would meet for lunch in some of London’s swanky
restaurants, and an agent would have a smile as long as London Bridge. Those in attendance
knew what that meant. He’d just landed a Russian client. Now, that’s how you made money.
One of the oligarch’s sons is even a member of the House of Lords. His name is Evgeny
Lebedev, and his father is Alexander. Guess who put him forward for this position?
It was none other than the Old Etonian, the bumbling boss of extreme privilege, Mr. Boris
Johnson. The expression that comes to mind is, “You couldn’t make this up.” It gets better,
though, when you discover that Lebedev’s company owns a British newspaper, The Evening Standard.
It also has the highest stake in The Independent newspaper and owns media companies in Russia.
In 2018, Johnson, who was a journalist himself in the past, visited Alexander Lebedev’s villa
in Perugia, Italy. He was there at Lebedev’s 60th birthday party after he won the general election.
Former Prime Minister David Cameron, who we’ll talk about soon, was also there, as was George
Osborne, a newspaper editor who became Chancellor of the Exchequer and First Secretary of State
in the Cameron government. It’s enough to make people talk about conspiracy theories where elites
own everything and control the news narratives. Sure, all big media these days is owned by
billionaires or huge corporations, which is always problematic, but not all those billionaires
have roots in the KGB and the Russian oligarchy. Britain is a democracy, but nepotism is
commonplace. Even with the very lucrative contracts given during the pandemic, friends of
the government made plenty of hay as most British people struggled. Not to mention the parties held
by politicians as the rest of the country was in a serious lockdown. The elites in Britain are a law
unto themselves. They make the laws, and they damn well profit from them. As you’ll see, they join
this circle of power when they’re still young. An investigation discovered that something like
84,000 homes in London are owned anonymously. A whopping $6.7 billion has been spent on these
homes with what the investigation said was “suspicious wealth.” $1.4 billion can be traced
back to Russian oligarchs or close ties with the Kremlin. You may pick up the newspaper or go on
Facebook and think that the UK and Russia are not close friends, but if you take the time to look a
bit harder, there is a web that connects extreme Russian wealth with many British elites.
You’d think journalists would have talked about this more often, but the problem is
Britain’s strict libel laws. You can talk about the oligarchs, but you can’t
print the details. If you try that, you might find yourself losing everything you own
while the oligarch in question uses his power and influence to manipulate the so-called optics. The
oligarchs’ reported “substantial investments in media” helps to create the optics they want.
As the New Yorker wrote not long ago, Britain has become “a no-questions-asked service
provider to the crooked élite, offering access to capital markets, prime real estate, shopping
at Harrods, and illustrious private schools, along with accountants for tax tricks,
attorneys for legal squabbles, and ‘reputation managers’ for inconvenient backstories.”
If a journalist does go after one of the oligarchs, they could find himself in a legal
battle that their newspaper will have to pay for. There are cases in which people have criticised
the oligarchs, only for them to get a knock on the door by a less than friendly looking individual.
One of them told The Financial Times that a man with “gold teeth,” built like “a gorilla,” came
to his house to politely demand that he shut his mouth…if he liked his teeth…that kind of thing.
They don’t need the muscle, though. They donate to every entity with influence, including
political parties. The Conservative Party, the usual home of the elites but arguably now
not much different from labor, took three million pounds ($3.6 million) from the oligarchs.
The wife of Vladimir Chernukhin, Lubov, donated 2.2 million ($2.6 million). Her husband
served as deputy finance minister early in Vladimir Putin’s regime. Because his wife gave
the Conservatives that cash, she became a member of its “advisory board.” which meant she had
direct access to the Prime Minister. She was seen photographed once with a group of MPs, two
of whom have been Prime Ministers of the UK. One of the women was Lizz Truss, who wrote
“#girlpower” on her Instagram page. Truss wasn’t PM for very long, which might have had a lot to do
with her being a devout proponent of trickle-down economics and her mis-management of the fallout
that came after Boris Johnson stepped down. The oligarchs also donate to private schools,
museums, and a plethora of charities, spreading their money around powerful
institutions, just as many rich folks do. They look charitable, but charity might
sometimes be the opposite of what they do. That might worry our American viewers
when we tell them a recent Washington Post headline read, “Russian oligarchs
have donated millions to U.S. charities, museums and universities.” Over 15 years,
the donations amounted to about $400 million. They are not doing this because they have
bleeding hearts and always cry at Bambi. When they need help, they get it. That’s because
they’ve paid for it with their donations. And even if something like Britain’s serious fraud
office wants to get involved, its paltry budget of 50 million pounds ($60.7 million) a year
is hardly enough to go against an oligarch, who, in all likelihood, could be earning 50
million pounds a week. This is what makes them untouchable. This is why The Economist says London
is “a slop-bucket for dodgy Russian wealth,” and there’s nothing anyone can do about it.
One person who investigated the matter said there are certain stages for an oligarch
once he’s gotten his visa and property. First, he hires a PR firm. That firm then looks at all
the politicians and figures out who is “biddable,” meaning they can be bought so they’ll put their
name on the oligarch’s company board. After all, even if you’re a thief, you’re gonna
look good when you have a Sir Something or other in your glossy company brochure.
Step two is to send your kids to the most expensive schools in the UK. This offers
another opportunity to make friends with the right people. You then go to the horse races
or other prestigious events with these people. You help them out. You scratch their back, and they
reciprocate. You donate to their gallery or throw a few million at their foundation. The wealth
you hide then becomes part of someone else’s portfolio. Portfolios meld into other portfolios
and what you have is a great big nexus of power. Job done. You are now officially a
member of Britain’s elite. Even so, you must keep up appearances, which according to
one expert, means stealing, hiding, and spending on a continual basis. The British who make money
from this might just say the cash is better coming here than going elsewhere, and remember,
great wealth always trickles down to the masses. Some of you watching this might think this
is outlandish, but don’t forget that the ancestors of these posh Brits got rich
from selling opium that ruined Chinese lives. The elites often work in an economy of
misery. This is how one person explained it: “We were the oligarchs. Now, we don’t
steal money from other countries anymore. We just help the people who did the stealing.”
Sure, some people have raged against this machine, but they are small voices lost among the roar of
inexorable power. People with more power can drown out their voices. As the New Yorker wrote, “The
English political establishment, like everything else in London, appears to be for sale.”
In fact, some people say the Russians didn’t just create Londongrad so they could hide in
luxury. They could have chosen any number of countries to do that. They could have bought half
of Southeast Asia, Africa, or Eastern Europe with their dirty money, and dirty politicians and cops
there would have welcomed them in their arms. The Russians, some say, chose London because the
UK packs power on the world stage. In this sense, Putin, they say, is buying himself leverage in
Britain. The UK might not have an empire anymore, but it’s still a big player in the game
of global politics. Someone could try to prove that the oligarchs are pulling
strings for Putin in Britain, but by God, they’d face a hefty lawsuit if they did.
Speaking of Abramovich, one writer said, “He is Putin’s representative.” She said
as much in a book called Putin’s People, but then the publisher, HarperCollins,
had to take it out. Running scared, the publisher even made a donation to appease Mr.
Abramovich. This led the British columnist Nick Cohen to write, “Oligarchs can manipulate the
truth here as surely as Putin can in Russia.” Another book, Butler to the World, describes
how the UK has become a servant to the world’s mega-rich oligarchs and criminals. We
haven’t had time to read it yet, but here’s part of a review explaining the basis of it:
“The UK’s bankers, lawyers, and wealth managers have become so reliant on Russia’s dirty money
that, in the aftermath of the invasion of Ukraine, it is proving politically and economically
painful to cut the umbilical cords channeling cash from Moscow into the City.”
Even so, after the Ukraine invasion, some of the oligarchs had their assets seized.
They were no longer untouchable. Nonetheless, some critics have said the government has still
been “toothless” as the oligarchs still have a lot of influence in London. It’s worth
pointing out that during the first two and half years that Boris Johnson was in power, the
UK issued the grand total of zero “Unexplained Wealth Orders,” which might have looked into
where the oligarchs’ cash was coming from. Other people might tell you that the British are
now just robbing the people they promised to keep safe, so they are making hay on the hay they
already made. The same people might tell you that Russian wealth has benefited England, but
you could ask them who it has benefited exactly. Has it helped those who’ve suffered greatly
under British austerity, or has it just filled the bank accounts of the elites, London’s
lawyers, and the schools where ultra-rich kids go to learn Latin and daylight robbery?
If you’ve ever been to England, you’ll know much of the country is made up of dirty old towns
where former thriving industries have closed down, where pawn shops, betting shops, thrift shops,
drug addiction, violence, and frustration pervade the crumbling streets. Much of the urban
population in Britain live below the poverty line. Remember, we are talking about
a multi-trillion-dollar offshore industry that hides these oligarchs'
cash. That money is invisible. It’s can’t trickle down if it doesn’t exist.
Many struggling Brits, you could say, are not directing their anger at the right
people. It’s ironic that throughout history, some of the poorest folks have vented their
anger at anyone but these shady businessmen. We’ve used this movie quote before, but we’ll
invoke it again now as it’s so relevant: “The greatest trick the devil ever played was
convincing the world that he did not exist.” One of those little devils, Boris Johnson,
recently told the madding crowds that the “oligarchs in London” would soon find there was
“nowhere to hide.” He said he’d hunt them down if it were the last thing he ever did… He didn’t,
not really. His words were as empty as the shelves of Russian grocery stores in 1991. The hunting
trip looked more like PR than anything else. The oligarchs, for the most part, will be fine.
Some of them might have been sanctioned of late, but these robber barons of Mother Russia have
secret weapons. They are loaded with lawyers, have unlimited funds, and still have friends
in high places. Going after them is dangerous, and everyone knows it.
As a British MP recently said: “A free press should be intimidating kleptocrats
and criminals. Why have we got to the position in our society, a free society, where
we have kleptocrats and criminals and oligarchs intimidating a free media?”
They even know members of the royal family. They regularly break bread with
politicians. As pseudo-philanthropists, they donate their cash to worthy institutions but
make no mistake; the philanthropist will turn into a tyrant at the push of one of his buttons.
Let’s just remember here that the former British Prime Minster David Cameron happily took
donations from a Russian oligarch. Cameron was even set to play tennis with that former Russian
finance minister we mentioned earlier, who paid for the match at an auction. Cameron’s playing
partner was supposed to be the then-London mayor, Boris Johnson. Hmm, doesn’t it all sound
cozy? It’s not surprising when you hear that Cameron and Johnson were in the same elite
club together years before they ran the country. As boys, these elites go to the same schools
and talk about how they’ll be bossing Britain one day. They don’t have the first clue as to
how most people in the UK live. They really think they are a different class of human.
This superiority complex wasn’t left behind in the classroom, and many British leaders
still think this way. With this in mind, it’s no surprise the oligarchs chose
London as their destination. Indeed, London is their spiritual home, their Babylon, where they thrive like maggots on a wasteland
of British greed fueled by Russian corpses. Now you need to watch “The Most Powerful
Families Who Secretly Run The World?” Or, see how the rich stay rich in “How the
British Royals Actually Make Money.”
