The Byline Intelligence Team explores how Russian roubles are not the only currency cleaned at London’s laundromat

Vladimir Putin’s invasion of Ukraine earlier this year sparked a long overdue moral outrage over the dirty money that floods into Britain. For decades, the UK has rolled out the red carpet for oligarchs, but welcoming Russian kleptocrats with open-arms has now become rather unfashionable. So frowned upon in fact, that even Boris Johnson – who has partied with Putin’s cronies and accepted their generous political donations – was forced to publicly declare: “We must go after the oligarchs”. 

Policies have also been promised: Downing Street is considering allowing the UK homes and hotels of sanctioned Russian oligarchs to be used to house Ukrainian refugees, and a beneficial register showing the true ownership of all UK property, even those held through complex offshore structures, has been promised.

For the most part, this newly-invigorated critique has been focused on Russian oligarchs, but the capital’s well-deserved titles of ‘Londongrad’ and ‘Moscow-on-Thames’ only paint part of the picture: the dirty money capital of the world has not built its reputation on roubles alone.

Kleptocrats – members of a powerful elite who derive their wealth from appropriated public resources – are not a purely Russian export: funds from ex-Soviet states, the Middle East and Africa are also washed at London’s laundromat. And, like their Russian counterparts, these oligarchs flock to the ever-obliging UK.

“Britain is like a butler,” Oliver Bullough writes in his new book, Butler to the World. “If someone’s rich, whether they’re Chinese or Russian or whatever, and they need something done, or something hidden, or something bought, then Britain sorts that out for them.”

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The white stucco houses in Belgravia’s Eaton Square – nicknamed ‘Red Square’ after its numerous Russian residents – may attract Kremlin-linked oligarchs, but more than £5 billion worth of UK property has been bought with questionable funds from other kleptocracies since 2016. 

“Abuse of the property market often works like this,” explains Labour MP Dame Margaret Hodge, chair of the Anti-Corruption and Responsible Tax All-Party Parliamentary Group. “You set up an anonymous shell company in a secret offshore jurisdiction such as the British Virgin Islands. You transfer your money (which may have been stolen from your fellow countrymen and women) into that shell company.”

Writing in the Guardian, she continues: “The company then buys a property in the UK. You then have a luxury home in the UK. Or you sell the company to a UK citizen who pays you with legitimate money. You have then successfully laundered your money into a trusted jurisdiction.”


A Country For Sale

Due to the opaque nature of these financial arrangements, it is difficult to track the cash – or to prove wrongdoing on the part of particular individuals.

We do know, however, that the UK – and in particular its property market – has provided a safe haven for foreign figures with troublesome pasts.

Nigeria’s former oil minister has been marred with numerous corruption scandals and, while in office, was unable to account for £15 billion of disappearing oil money – although she denies any wrongdoing. Despite her less than squeaky clean background, she was able to buy five luxury properties in the UK, including a nine-bedroom £5.8 million London mansion. Three out of five of the properties were frozen in 2017 at the request of Nigerian authorities. 

One of these mansions is a stone’s throw from 7 Winnington Close – a once grand, now derelict building, previously owned by Colonel Gaddafi’s son. The former Libyan dictator secretly amassed a £1 billion property empire in the UK.

Headed by Azerbaijani President Iham Aliyev, who has governed the country for almost two decades under authoritarian rule, his family and close associates also own more than £500 million worth of UK property.

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Philanthropy is likewise used to enhance the standing of oligarchs. Qatar’s former Prime Minister was recently found to have donated €3 million – €1 million of which was allegedly stuffed into Fortnum & Mason carrier bags – to the Prince’s Foundation; Prince Charles’s charity. Meanwhile, the former Kuwaiti Prime Minister donated £2.5 million to Durham University. He later stepped down following corruption charges.

This reputation can also be laundered down the generations. According to Transparency International’s Robert Barrington, an elite British education “launders the family’s reputation and gives the next generation an entry card into the global elite.”

In Putin’s People, Catherine Belton claims that Putin wanted to buy Chelsea Football Club, via Roman Abramovich, to “increase his influence and raise Russia’s profile, not only with the elite but with ordinary British people” – a claim that Abramovich denies.

However, regardless of the the intentions of Putin or Abramovich, when Chelsea fans supportively chanted “Roman Abramovich” following the Ukrainian invasion, it certainly seemed that the Russian leader had scored a PR victory.

Perhaps the House of Saud has took page out of Putin’s playbook when it recently became the majority shareholder of Newcastle United via its sovereign wealth fund, the Public Investment Fund (PIF). By buying into British society’s greatest love, football, the kleptocratic Saudi dynasty may be hoping to gain acceptance and even influence in British society.

The Saudi Crown Prince and chair of the PIF, Mohammed bin Salman, authorised the killing and dismemberment of Washington Post journalist Jamal Khashoggi, according to US intelligence agencies.

Yet, this process of reputation laundering is being actively encouraged by Boris Johnson’s Government.

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A Byline Intelligence Team investigation unearthed official Department for International Trade documents revealing the Government’s desire to encourage Saudi firms to invest in its flagship ‘levelling up’ agenda. Qatar, meanwhile, has already pledged its support – with the hereditary monarchy committing £10 billion in investment to the UK over the next five years.

The Saudi regime is responsible for a catalogue of human rights abuses, including war crimes in Yemen and a crackdown on Government dissidents, while Qatar is accused of widespread workers’ rights abuses. More than 6,500 migrant workers have died in the country since it won the right to host the football World Cup 10 years ago.

Despite Johnson’s promises that engagement with the Gulf states will encourage a commitment to human rights, the Government has dropped “human rights” and the “rule of law” from its list of objectives in negotiating a trade deal with the six-nation bloc.

Huge investments from companies owned by kleptocratic states are a form of diplomatic reputation laundering – a mechanism for these countries to avoid international condemnation for their authoritarian abuses. The day after the death of Sheikh Khalifa bin Zayed Al Nahyan, the hereditary President of the UAE and ruler of Abu Dhabi, Boris Johnson announced that he would be flying to the country to “pay his respects” and “reinforce the close bond between the United Kingdom and United Arab Emirates”.

Investments from Saudi Arabia, Qatar and the UAE – archetypal oligarchies, where power and wealth is concentrated in the hands of a few ruling families and their associates – should ring alarm bells. We have to question what these countries seek in return for their investment, and whether their money is a form of economic and diplomatic kompromat.

Britain is still a butler to the world – even if its services are increasingly closed to Putin’s mobsters.

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