UK should avoid become playground for Russia's rich
AN island state advertises itself as the destination of choice for the super-rich - mainly from Russia - to launder their money and reputations, while enjoying the high life and low taxes. Then it discovers all is not what it seems. It is not just Cyprus that might have cause to regret its business model. As the natural resources of the former Soviet Union were being plundered by a few ruthless and politically well-connected individuals, Britain set itself up in the early 1990s as a welcome home, or second home, for a new global elite. London is both playground and battleground for rich Russians. Occasionally, things go wrong. The murder of Alexander Litvinenko in the capital was one of the more brazen attacks. The discovery last Saturday of the corpse of Boris Berezovsky at his well-guarded Berkshire mansion has raised more suspicions. Was it the suicide, as was the initial suggestion, of a man who had lost much of his fortune taking on his enemies? Or was it something more sinister?
I only met Berezovsky once, over lunch several years ago, when he complained bitterly about his treatment at the hands of his erstwhile protege - Vladimir Putin. I did not bring out my hanky for a man who was kingmaker during the dissolute regime of Boris Yeltsin.
Once he had consolidated his power, Putin famously summoned the oligarchs, including those who had installed him in the Kremlin. That was then, this is now, they were told. The deal was: They could carry on their business dealings inside and outside Russia as long as: A) They did not meddle with politics. And B) They looked after the financial interests of the siloviki - the political/security establishment.
Some of them did not listen. Mikhail Khodorkovsky, who made public his political ambitions, languishes in prison; Vladimir Gusinsky, who started the once-fearless NTV television station, was forced to flee. Berezovsky legged it to England before they could get him and then mounted a one-man campaign of denunciation from his gilded cage.
Some of Russia's exiles are pro-Kremlin. Others are antiKremlin. Some were pro and have become anti. One or two who were anti have been persuaded to become pro. Some ended up in Israel or Cyprus. Most would rather spend time in Courchevel in the winter or the Cte d'Azur in the summer; but they would rather speak English. The US tends not to be a favoured destination, because the authorities have an annoying habit of asking intrusive questions.
This is competitive tendering, in terms of law and tax enforcement and Britain comes in lower than other American and European rivals. Apart from the weather, what is there not to like there? An industry has been created to cater to the oligarchs' every need. Former ministers represent them in the Lords; former spin doctors do their PR; lawyers queue up to represent them, using Britain's hideously indulgent defamation laws to slap suits at the first sign of trouble.
Financial advisers make sure the oligarchs pay as little as possible on their earnings, savings and even their council tax. Private boarding schools welcome their children and their chequebooks. A parallel economy of designer shops, private jets, speedboats and security guards exists for them and for the new rich of China, Brazil, the Middle East and elsewhere. The top end of the skewed housing market in London and the south-east exists only for them. Back in 2007, I wrote after a trip to Moscow, that several Russian friends and acquaintances (lawyers, journalists, architects) were "flabbergasted that the British authorities have been so indulgent towards the Russian corporate invasion". This was about six months after Litvinenko's murder and my friends had little time for the national outrage. I wrote: "If the price of making the City a haven for low-tax oligarchs and other assorted spivs is to turn London into a mobsters' paradise, then that is our lookout, they say."
The morality of Britain's assorted activities is for others to determine. Apart from the work of the hitmen (and they could hail from anywhere), the services rendered to the super rich are all legal. The issue is more the effect this has on our body politic. Britain's approach to Russia has long been contradictory. Over the last decade, while Britain opened the doors to the elite, diplomatic relations were, to borrow a popular Russian word, "slozhny" (complicated). The recriminations following the murder of Litvinenko sent them into permafrost.