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.”