In February, I found myself sitting across from Oliver Bullough at a club in London. It was the mere hours before Russia’s invasion of Ukraine, though we didn’t know it at the time. I was in London researching trans-Atlantic relations, the Russia challenge, and Moscow’s political warfare campaign for my day job. Given Bullough’s deep research and prolific writing on Russia and kleptocracy, he was near the top of my list of people with whom to speak (to say nothing of my excitement about his forthcoming book “Butler to the World” (a signed copy of which he kindly provided me).
While the conversation was excellent, it was a decidedly dour affair. Russia was mobilizing nearly 200,000 troops on Ukraine’s borders and the United Kingdom seemed decidedly uninterested in doing anything to stop the flow of Russian ill-gotten gains into the country. It seemed as though nothing would change.
And then Russia invaded Ukraine.
Suddenly, nearly everything was on the table, with Prime Minister Boris Johnson standing in the House of Commons decrying Moscow’s war of aggression and ministers promising—at least rhetorically—action on many of the items on Bullough’s wish list.
The capital of the United Kingdom has long been labeled the “London Laundromat” or “Londonograd” for its willingness to accept Russian money of dubious origins, but it wasn’t just Russian money that flowed into the capital. It was money from Gulf sheiks, African dictators and warlords, drug dealers and arms merchants, and even nominally above-board businesses seeking to minimize their tax exposure. In Bullough’s words, London had become the titular “Butler to the World.”
In Bullough’s enthralling book he charts just how London sought to find its place in a post-Suez Crisis world and in so doing opened the doors to dodgy money. Great Britain rolled out the red carpet and offered its services to facilitate the flow of money into the country. The Treasury, the City of London, 10 Downing Street, and nearly everyone in between became complicit in the creation of a system that created regulatory loopholes ripe for exploitation and and twisted the spirit of the law (without breaking it)—all at the expense of the British people and the countries the money came from.
By legal hook or semi-legal crook, in came the money. In Gibraltar, gambling companies set up shop to evade UK taxes and manipulated the system to ensure that their services were found nearly everywhere in the country. It’s hard to watch a Premier League football match and not see some advertisement for gambling services. In Scotland, a little used legal structure—ostensibly used for tenancy management—became a vehicle to hide the true ownership and origin of suspect money. The British Virgin Islands crafted itself as a destination with its friendly business environment which allowed for the easy creation of shell companies— an element central to both the territory’s wealth, but also the obfuscation of illicit finance.
The money isn’t used to just buy flashy cars and expensive properties. As Bullough shows, it buys access and influence, and allows those with the deepest pockets to rub elbows with the country’s elite. When it is a billionaire, that’s concerning, but when it’s someone connected with Russian president, Vladimir Putin—as was the case with Dmitri Firtash—that becomes exceedingly concerning.
Even the systems created to monitor illicit money became little more than CYA (cover your, ahem, rear) activities. Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) requirements were box-checking exercises to ensure you were not liable. The proliferation of oversight bodies requires the submission of these forms, but no organization has the tools to wade through these reports. On paper the United Kingdom’s system is one of the best according to the Financial Action Task Force, an organization set up to standardize AML/CFT activities across the globe—in practice it is a different story.
As Bullough masterfully shows, these developments were not unintentional or done on the sly, but a willing and complicit effort by members of the “system.” Warnings were ignored and potential issues overlooked all in the name of making Great Britain a destination for international finance and investment as well as those with more dubious backgrounds.
Those intended to protect UK citizens are woefully outgunned. The National Crime Agency, nominally the equivalent of the American FBI, lost nearly a third of its budget in damages when it went tried to use a legal mechanism that was supposed to help pursue kleptocrats. Even an alternative, uniquely British legal mechanism—private prosecutions—is rapidly proving justice can be bought by the highest bidder. Great Britain’s storied traditional of wigged barristers and impeccable justice is being twisted by those with the deepest pockets.
What Bulllough describes is the consequences of a country trying to find its way in the world after stepping down from the apex of global power—creating a financial system that welcomes the good, the bad, and everyone in between. Rather than the sun never setting on the British Empire, the sun never sets of Britain’s illicit financial fecundity. Will this get worse post-Brexit? One has to imagine so. While the Golden Visa scheme, whereby wealthy individuals could by their way into the country, has ended, it remains an open question whether the post-Ukraine rhetoric will actually be matched with action.
Great Britain’s butler status goes beyond those profiled by Bullough to the broader ecosystem of those who benefit from the largess of oligarchs and kleptocrats. It is the high street retailers, the public affairs managers, the lawyers, property developers, and art retailers. There is so much skin in this game that one wonders whether it will be possible to address it at all.
As Bullough describes, the very same tools and techniques that Russian oligarchs use are used by friendly Gulf allies and Chinese oligarchs. Going after Russian money would be low-hanging fruit, but when the CEO of a corporation threatens to move to a lower-tax jurisdiction, how will the occupant of 10 Downing Street respond?
Readers would be forgiven for coming away from Bullough’s book depressed and disheartened. While he offers sensible policy suggestions, the scale of the challenge facing Britain seems insurmountable—the obstacles too significant and the interests too entrenched. What hope can reformers have when the weight of the City of London and Britain’s overseas territories are against them?
Yet, after reading “Butler to the World,” I find that I’m not entirely dispirited. I’m hopeful because people like Bullough are campaigning for reform in new and innovative ways. Bullough’s Kleptocracy Tours are entertaining and informative, but more importantly it’s part of a broader campaign by dedicated people like him to raise the public’s awareness of kleptocrats and their effects society—both at home and abroad.
Are Bullough and campaigners like him enough to turn the tide? Alone they are not, but their tireless campaigning and advocacy will align, at some point, with the right politicians, the right public mood, and the right opportunity to affect real and necessary change. Sometimes it takes is a war, but change is possible.
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London Plays Butler to the World’s Kleptocrats
Photo by Ugur Akdemir via Unsplash.
June 11, 2022
Bullough’s “Butler to the World” tells the story of how the UK became a hub for legal and illicit finance. In his latest review, DC’s Joshua Huminski asks if the Russian invasion of Ukraine may change the system or if the system is too entrenched.
I
In February, I found myself sitting across from Oliver Bullough at a club in London. It was the mere hours before Russia’s invasion of Ukraine, though we didn’t know it at the time. I was in London researching trans-Atlantic relations, the Russia challenge, and Moscow’s political warfare campaign for my day job. Given Bullough’s deep research and prolific writing on Russia and kleptocracy, he was near the top of my list of people with whom to speak (to say nothing of my excitement about his forthcoming book “Butler to the World” (a signed copy of which he kindly provided me).
While the conversation was excellent, it was a decidedly dour affair. Russia was mobilizing nearly 200,000 troops on Ukraine’s borders and the United Kingdom seemed decidedly uninterested in doing anything to stop the flow of Russian ill-gotten gains into the country. It seemed as though nothing would change.
And then Russia invaded Ukraine.
Suddenly, nearly everything was on the table, with Prime Minister Boris Johnson standing in the House of Commons decrying Moscow’s war of aggression and ministers promising—at least rhetorically—action on many of the items on Bullough’s wish list.
The capital of the United Kingdom has long been labeled the “London Laundromat” or “Londonograd” for its willingness to accept Russian money of dubious origins, but it wasn’t just Russian money that flowed into the capital. It was money from Gulf sheiks, African dictators and warlords, drug dealers and arms merchants, and even nominally above-board businesses seeking to minimize their tax exposure. In Bullough’s words, London had become the titular “Butler to the World.”
In Bullough’s enthralling book he charts just how London sought to find its place in a post-Suez Crisis world and in so doing opened the doors to dodgy money. Great Britain rolled out the red carpet and offered its services to facilitate the flow of money into the country. The Treasury, the City of London, 10 Downing Street, and nearly everyone in between became complicit in the creation of a system that created regulatory loopholes ripe for exploitation and and twisted the spirit of the law (without breaking it)—all at the expense of the British people and the countries the money came from.
By legal hook or semi-legal crook, in came the money. In Gibraltar, gambling companies set up shop to evade UK taxes and manipulated the system to ensure that their services were found nearly everywhere in the country. It’s hard to watch a Premier League football match and not see some advertisement for gambling services. In Scotland, a little used legal structure—ostensibly used for tenancy management—became a vehicle to hide the true ownership and origin of suspect money. The British Virgin Islands crafted itself as a destination with its friendly business environment which allowed for the easy creation of shell companies— an element central to both the territory’s wealth, but also the obfuscation of illicit finance.
The money isn’t used to just buy flashy cars and expensive properties. As Bullough shows, it buys access and influence, and allows those with the deepest pockets to rub elbows with the country’s elite. When it is a billionaire, that’s concerning, but when it’s someone connected with Russian president, Vladimir Putin—as was the case with Dmitri Firtash—that becomes exceedingly concerning.
Even the systems created to monitor illicit money became little more than CYA (cover your, ahem, rear) activities. Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) requirements were box-checking exercises to ensure you were not liable. The proliferation of oversight bodies requires the submission of these forms, but no organization has the tools to wade through these reports. On paper the United Kingdom’s system is one of the best according to the Financial Action Task Force, an organization set up to standardize AML/CFT activities across the globe—in practice it is a different story.
As Bullough masterfully shows, these developments were not unintentional or done on the sly, but a willing and complicit effort by members of the “system.” Warnings were ignored and potential issues overlooked all in the name of making Great Britain a destination for international finance and investment as well as those with more dubious backgrounds.
Those intended to protect UK citizens are woefully outgunned. The National Crime Agency, nominally the equivalent of the American FBI, lost nearly a third of its budget in damages when it went tried to use a legal mechanism that was supposed to help pursue kleptocrats. Even an alternative, uniquely British legal mechanism—private prosecutions—is rapidly proving justice can be bought by the highest bidder. Great Britain’s storied traditional of wigged barristers and impeccable justice is being twisted by those with the deepest pockets.
What Bulllough describes is the consequences of a country trying to find its way in the world after stepping down from the apex of global power—creating a financial system that welcomes the good, the bad, and everyone in between. Rather than the sun never setting on the British Empire, the sun never sets of Britain’s illicit financial fecundity. Will this get worse post-Brexit? One has to imagine so. While the Golden Visa scheme, whereby wealthy individuals could by their way into the country, has ended, it remains an open question whether the post-Ukraine rhetoric will actually be matched with action.
Great Britain’s butler status goes beyond those profiled by Bullough to the broader ecosystem of those who benefit from the largess of oligarchs and kleptocrats. It is the high street retailers, the public affairs managers, the lawyers, property developers, and art retailers. There is so much skin in this game that one wonders whether it will be possible to address it at all.
As Bullough describes, the very same tools and techniques that Russian oligarchs use are used by friendly Gulf allies and Chinese oligarchs. Going after Russian money would be low-hanging fruit, but when the CEO of a corporation threatens to move to a lower-tax jurisdiction, how will the occupant of 10 Downing Street respond?
Readers would be forgiven for coming away from Bullough’s book depressed and disheartened. While he offers sensible policy suggestions, the scale of the challenge facing Britain seems insurmountable—the obstacles too significant and the interests too entrenched. What hope can reformers have when the weight of the City of London and Britain’s overseas territories are against them?
Yet, after reading “Butler to the World,” I find that I’m not entirely dispirited. I’m hopeful because people like Bullough are campaigning for reform in new and innovative ways. Bullough’s Kleptocracy Tours are entertaining and informative, but more importantly it’s part of a broader campaign by dedicated people like him to raise the public’s awareness of kleptocrats and their effects society—both at home and abroad.
Are Bullough and campaigners like him enough to turn the tide? Alone they are not, but their tireless campaigning and advocacy will align, at some point, with the right politicians, the right public mood, and the right opportunity to affect real and necessary change. Sometimes it takes is a war, but change is possible.
