Follow the money: the rise and rise of the Russian oligarchy in Britain

Photo Credit: Alex Kich

It was a strange and unlikely setting for my first (and only) glimpse into the world of the Russian oligarchy – rural Sussex 20 years ago, watching my teenage daughter’s riding lesson with a local showjumper. In the background was a young boy on an elegant Arabian horse, waiting for his own lesson to start. The peaceful scene was suddenly interrupted by the arrival of an enormous black chauffeur-driven limousine with tinted windows, from which emerged a small man in a beautifully tailored coat, followed by two heavies – all three in dark glasses. I later found out that this was an immensely wealthy Russian whose son (the boy on the Arab) was boarding at a local preparatory school, and who would occasionally turn up to watch his son’s riding lessons.

Who was the Russian? I was never told his name, but very possibly he was one of the 35 oligarchs on the list that Layla Moran read out under parliamentary privilege to shame the UK government into introducing heavier sanctions after the invasion of Ukraine against UK-resident Russians with connections to the Putin regime. The invasion seems to have at last shattered the complacency of the media and the British public about the profound influence that Russian money and Putin-connected Russian oligarchs have built in this country over the years. Their tentacles reach far and wide, deep into the British establishment, the City of London and our political system. And the scent of corruption is hard to escape.

Deregulation and the birth of Russian soft power

The birth of Russian ‘soft power’ in the UK goes back many decades. As so often in history, several unrelated events seem to have come together to make the UK one of the most attractive destinations for Russian money and Russian oligarchs: Margaret Thatcher’s ‘Big Bang’ (the deregulation of the City of London), the 1991 dissolution of the Soviet Union and the resignation of Mikhail Gorbachev as president.

Deregulation of the City opened up London’s financial market to foreign banks and foreign ownership of brokers on the stock exchange, and money flooded in. In the dying days of the Soviet Union many of the KGB operatives and spymasters who had acquired expert knowledge of Western economic systems used that expertise to loot billions from the state treasury and stash it in accounts in Europe and the US.

A lightly regulated financial centre like the City of London proved to be an ideal money-laundering base, so much so that it quickly became known as the ‘Londongrad Laundromat’. Astonishingly, that label does not seem to have concerned many in the political establishment – perhaps because the lure of funds pouring into London property and UK companies was just too hard to resist, and so many in the capital benefited directly or indirectly from Russian money and investments.

The growth of Russian influence

Three themes seem to have dominated the subsequent growth of Russian influence in the UK:

  • the ‘hands-off’ approach of successive governments to regulation and oversight of financial dealings and companies,
  • naivety and wishful thinking (or worse) on the part of politicians and the media, and
  • the size of donations from Putin-connected oligarchs to political parties – almost entirely the Conservatives.

Immensely wealthy Russians have become knitted into the British establishment, throwing parties at which the great and the good are seen, sending their children to the same schools, donating to cultural organisations and buying football clubs and newspapers – becoming an integral part of British life.

Does this matter? 

The few courageous journalists who have continued over the years to comment on the increase of the oligarchs’ ‘soft power’ certainly think so. One of the foremost is Carole Cadwalladr, who has faced successive attempts to silence her and is currently awaiting the court’s decision on an intimidatory lawsuit brought against her by Arron Banks, founder of Leave.EU, owner of hypothetical diamond mines and friend of Russian ambassadors.

Information war

Cadwalladr believes that Putin has been waging an information war against Europe, the US and the UK for many years. “The first Great Information War began in 2014. The invasion of Ukraine is the latest front. And the idea it doesn’t already involve us is fiction, a lie,” she has written on Twitter.

Through the highly sophisticated use of social media, Cadwalladr argues, this ‘dezinformatsiya’ campaign has targeted key events in the UK, including the 2016 EU referendum and the 2017 and 2019 general elections. And once again the name of a Russian oligarch comes into the frame: Evgeny Lebedev, son of a former KGB officer, owner of the London Evening Standard and a long-term friend of Boris Johnson’s whom he strongly promoted in his paper as a successor to Theresa May.

In February 2016 Lebedev went to a private dinner at Johnson’s Islington home during which the then Foreign Secretary’s decision on whether to vote for or against Brexit was debated. Other guests were Michael Gove (then Secretary of State for Justice) and his wife Sarah Vine, columnist for the Daily Mail. Former Chancellor of the Exchequer Oliver Letwin joined the discussion from his phone.

In 2020 Johnson made Lebedev a life peer – against strong opposition from the House of Lords appointments commission. Inevitably questions were asked about what the peerage was a reward or payback for. And those questions do not stop at one individual oligarch.

Russian donations

Westminster appears to be awash with Russian money. The Conservative Party has received over £2m in the past decade, including £450,000 donated in just one year by Lubov Chernukhin, wife of a former Russian deputy finance minister, and £1.2m contributed by arms tycoon Alexander Temerko over a seven-year period. Based on information from the Electoral Commission the Labour Party has calculated that the Conservatives have received more than £1.93m from individuals with Russian connections since Johnson was elected in 2019. And that appears to be a conservative estimate (pun intended). A quarter of Johnson’s cabinet colleagues have benefited from Russian donations.

Even if we believe claims that these donations have in no way influenced policy or attracted favours, they are nevertheless deeply undermining of our democratic system, public trust in UK institutions and our credibility overseas. At a time when the Ukrainians are fighting for their lives and the independence of their country against the Russian invasion, that matters profoundly.

Why was the British government so slow to institute effective sanctions against Russia? Why are private jets belonging to Russian oligarchs apparently still flying out of UK airports, defying the latest ban? Why has there been no investigation into the 623 new ‘British’ companies controlled from Russia registered with Companies House in the last year? With so many questions remaining unanswered, it is only too tempting to fall back on that old saying, “If it looks like a duck, quacks like a duck and swims like a duck, then it probably is a duck.”

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