Let Londongrad be a lesson: Russian money is no way to run a country

Back in 2014, when Boris Johnson was Mayor of London, he was happy to welcome Russian oligarchs and other billionaires. His city, he boasted on the Freakanomics podcast, was “to the billionaire as the jungles of Sumatra are to the Orangutan… the presence of these exotic creatures, the billionaires, is good for the whole ecosystem.” 

And they came, swinging into the glass and steel jungle of the city, urban palaces and leafier estates in what used to be called the Stockbroker belt. 

In the seven years from 2008 when the Labour government introduced the Tier 1 visa scheme, 200 Russian plutocrats and their families invested upwards of a million pounds each in the UK to take advantage of this fast track to British Citizenship. 

Last week, Home Secretary Priti Patel shut down Tier 1. Her statement that this was “just the start of our renewed crackdown on fraud and illicit finance” casts an interesting light on how she reckons the investor visa system has been operating in practice and on the wearily repeated defence from ministers that the Conservative party has, legally, only accepted donations from people who are actual UK citizens. 

The horror of the violent invasion of independent, sovereign, Ukraine by Russian forces under the direct orders of President Vladimir Putin demands a radical rethinking of the peaceful invasion of the UK by Russian wealth — if the UK is serious about joining allies in the “massive package of economic sanctions designed in time to hobble the Russian economy”, promised by Prime Minister Johnson hours after the attack got underway on Thursday.

It wasn’t only the Mayor who celebrated the Russian cash splashing into London. For two seasons in the middle of the last decade, Londongrad, a situation comedy about the tribulations of Russians setting up home here was a hit on Russian State TV. 

The luxuriant lifestyles of “Moscow on Thames” were staples of British features journalism. Excess has been glorified in glossy magazines and newspapers, including The Evening Standard and the Independent papers, which were acquired by Evgeny Lebedev, son of Alexander Lebedev, a senior KGB officer turned banker and oligarch with investments in Russian assets including Sberbank and Gazprom. 

Moscow-born Evgeny was educated in British schools and became a dual British citizen in 2010. In 2020, Prime Minister Johnson elevated him to the House of Lords as “Baron Lebedev, of Hampton in the London Borough of Richmond upon Thames and of Siberia in the Russian Federation”.

I’ve done lively interviews with Father Lebedev by satellite from Moscow, where he is a gadfly oppositional figure perhaps best known for punching a rival panellist during a TV debate. 

He is a long-time ally of Mikhail Gorbachev, who is very much out of favour with Putin. I met Lebedev, the son, when he was accompanying Gorbachev for a TV interview ahead of a glitzy party to launch the “Raisa Gorbachev Cancer Foundation”. 

Like other hyper-rich Russians, the Lebedevs have been big donors to good causes at home and abroad. Evgeny is a shyer and more establishment figure than his father. A huge parade of celebrities ranging from Judi Dench and Amol Rojan to Rupert Murdoch and Boris Johnson have paid their respects at his parties. Former Chancellor George Osborne edited the Standard for him. 

Other oligarchic individuals invested in UK trophy assets such as the football clubs, Chelsea, Arsenal, Bournemouth and Everton. Since Boris Johnson became its leader, the Tory party has received nearly £2m in donations from Russian linked sources. 

All of this has been perfectly legal — indeed welcomed by many in the British Establishment. The Russian rich are served by local employees and entertainers. Politicians insist that they have brought investment and employment to this country.

Of course, the foreign money finding its way here is not only from Russia or the former Soviet Union. Londonistan is a nickname as well as Londongrad. 

Dodgy Russian cash accounts for just a fifth of the five billion pounds worth of UK property bought with questionable funds, according to Transparency International. 

Whatever its source, it has become the lifeblood for the UK financial system — feathering the nests of lawyers, accountants, estate agents, architects, club owners and private schools and universities. 

Light touch regulation and the rule of law protect the assets and privacy of the super-rich in Britain. If things go wrong, the British Courts are on hand to protect their reputations aggressively through our unreformed libel system. 

For years official reports and investigative journalists such as Misha Glenney and Edward Lucas have sounded alarms about Russian rot in our system.

Few in authority paid attention. Glenny’s non-fiction exposè McMafia was used to inspire a BBC drama series. It is to be hoped a more serious fate greets Oliver Bullough’s new book Butler to the World: How Britain became the servant of tycoons, tax dodgers, kleptocrats and criminals. 

The report from the UK’s top foreign policy thinktank, Chatham House, made little impact in spite of its dramatic title The UK’s Kleptocracy Problem: How servicing post-Soviet elites weakens the rule of law. 

Meanwhile, the Commons Foreign Affairs Committee produced Moscow’s Gold: Russian Corruption in the UK in 2018 after the Salisbury poisonings, followed by the Russia Report in 2020 from parliament’s Security and Intelligence Committee which questioned that “PR firms, political interests, academic and cultural interests were all willing beneficiaries of Russian Money”. 

Yet successive British governments have overseen weak or no effective application of a Beneficial Ownership Register or Unexplained Wealth Orders, which might at least reveal who is buying up what. 

The British sanctions targeted on individuals, which were introduced after the Litvinenko and Skripal attacks, scarcely affected the flows of money through the UK and thus did not seriously hurt the Putin regime and most of its hangers-on. 

MPs on both sides dismissed the first tranche of new sanctions announced by the Prime Minister ahead of the Ukraine invasion as no better than a slap on the wrist. 

It may be that the ratchet of international sanctions the UK is now joining will be more effective. But it was noticeable that Johnson’s “our worst fears have now come true” TV address did not mention the problems of Russian influence within this society. 

Instead, he advocated an “end the dependence on Russian oil and gas” which is a much more sensitive and intractable challenge for continental allies in the EU than for the UK. 

Russian Kompromat succeeds in two ways – directly, if successful, by buying influence in our society sympathetic to alien influences. If exposed or resisted it compromises us in any case by showing that we were susceptible and setting us arguing with each other. This all plays to the malign agenda to undermine western democracies shared by Putin and Xi of China.

There is also something to cherish about Londongrad and Londonistan. For decades this has been an open city, which helped it become The World City. 

The Russians here are not all oligarchs, and they are also among the foreign voices I hear every day as I pass construction sites. Alexander Litvinenko and the Skripals lived here because the UK offered a haven to dissidents just as it did in the past to Lenin, Kropotkin and Marx. 

We compromised ourselves in this generation because we got greedy and lazy and went for the cash at the expense of our old world-renowned principles of democracy, justice and fair play.

 As the Prime Minister noted, there will be a cost in supporting Ukraine, if we do it properly. In the long run, the costs should be greater for Kleptocratic Russia. There may well be a place for billionaires in London’s ecosystem. But then again, in the jungle, orangutans are, very sadly, an endangered species.