London is a city designed for the rich. Those that have visited the city know that prices are exorbitantly high; beware of going for a pint, you may soon find yourself looking apologetically at your bank account. While the ordinary citizen struggles to maintain a decent standard of living, the wealthiest members of our global society find in London a haven; one where they are able to live in utmost luxury whilst hiding the provenance of their wealth. As sanctions against Russian oligarchs are introduced in light of the re-invasion of Ukraine, it bears taking a look at the honeymoon Putin’s pals have enjoyed here in the UK.
Let us begin with the story of one such gentleman: Dmitry Firtash. Firtash is a Ukrainian oligarch who was long known as ‘Putin’s man in Ukraine’. After the collapse of the Soviet Union, Ukraine went from being an energy-rich state, thanks to access to the USSR’s natural resources, to one that was struggling to feed its power-hungry industries.
Two solutions presented themselves to Ukraine: either close these energy-hungry industries or re-align itself with Russian interests. Needless to say, these were both inconceivable options. There was a way around this impossible dilemma, however, thanks to Russia’s former role as the European Union’s primary supplier of gas. Ukraine became a middle-man as pipes flowed through the state, allowing the country to get its share of much-needed natural gas.
A corrupt elite saw an opportunity and began stealing gas from the pipelines to sell it abroad at a significantly higher price. A high level of cooperation took place between Russian and Ukrainian insiders as they teamed up to steal from pipelines at the border. Selling the gas to high-paying Europeans, they split the proceeds.
Dmitry Firtash was the owner of the intermediary company that kept money flows hidden, RosUkrEnergo (RUE), itself half-owned by Putin’s Gazprom.
At home, he was accused of trying to restore Russian influence in Ukraine. He had funded the political comeback of pro-Kremlin presidential candidate, Viktor Yanukovych, who was elected in 2010. Meanwhile, he was busy reselling the gas that Gazprom had sold him at an artificially low price, pocketing a healthy $3bn. On the back of this financial corruption, he decided to make the United Kingdom his second home.
Firtash bought a luxury property in London, adjacent to the old and deserted Brompton Road tube station. When he heard of an entrepreneur seeking to transform it into a museum, complete with a rooftop bar, he offered the state £53m. Quite a price to pay to stop millennials peeking into your garden as they sip overpriced cocktails.
Firtash hired a lobbying firm, Asquith & Granovski, to rid his name of its ties to corruption and become a ‘respected’ member of London’s social elite. This is testament to a wider phenomenon in London society: oligarchs come not just to launder their money but also their reputation. For Firtash, it was a successful strategy. By the end of 2013, he found himself visiting the Houses of Parliament, where he was welcomed by then Speaker of the House, John Bercow. Just months later the pro-Kremlin president he had helped elect to power in Kyiv would be ousted by the Maidan Revolution.
His influence did not stop at British politics: in 2010, a £4m donation by Firtash created the Ukrainian Studies course at the University of Cambridge. In March 2011, Firtash was welcomed into Cambridge’s prestigious Guild of Benefactors, a club for its most generous donors, by none other than the Duke of Edinburgh. What better influence is there than having a stake in one of the country’s most prestigious institutions?
Firtash is only one example of how Britain’s open-arms, blind-eye policy towards oligarchs has allowed Putin’s allies to invest immensely in the country while building an alarming level of influence in political and educational institutions. So why are these oligarchs, oftentimes directly connected to Putin’s regime, so attracted to London? The answer is straightforward enough: they have been able to hide and protect their money thanks to Britain’s favourable property rights system.
When an oligarch has purchased assets in the UK, the source of their wealth has been hard to trace or hold accountable. Moreover, law enforcement had little incentive to look into it. If proceedings began and the state lost against these oligarchs, they would have to pay for their eye-watering legal fees.
The Economic Crime (Transparency and Enforcement) Bill had been introduced in Parliament in 2016 but was left on the back burner for the better part of six years. Only now, with the launch of an atrocity-laden invasion, has the bill been passed into law. The Economic Crime (Transparency and Enforcement) Act sets up:
“a register of overseas entities and their beneficial owners and require overseas entities who own land to register in certain circumstances; to make provision about unexplained wealth orders; and to make provision about sanctions.”
It is very much a case of too little too late, not an uncommon feature of British politics. For years, London has profited from this dubious income, as has the Conservative Party, receiving £1.93m from donors who have made money from Russia or have links to Putin’s regime since Boris Johnson’s 2019 electoral victory.
When Johnson granted a peerage to Tony donor and Russian oligarch Evgeny Lebedev, whose wealth derives from his father who was once a KGB officer, MI6 warned the Prime Minister that Lebedev posed a security risk. Lebedev, who owns The Evening Standard alongside The Independent, has been a vocal supporter of Putin. He has framed his criticism of the invasion of Ukraine as the ‘tragedy’ of ‘Orthodox Slavs killing their brethren’, thus omitting the murder and mass exodus of Ukraine’s Muslim and Roma population, as well as other non-Orthodox Ukrainians.
The British honeymoon with pro-Kremlin cronies is not a surprising story, by any measure. Though it does highlight the disappointment felt throughout the West that more had not been done previously to question or block the influence of the pro-Kremlin oligarchy. Such measures would have allowed for a delegitimisation of Russian influence abroad. Time and time again, economic and political power trumps moral integrity, something the West claims to hold so dear.
All views expressed are the writer’s own.
Article Image Credit: Wikimedia Commons