How Putin’s Oligarchs Bought London

https://www.newyorker.com/magazine/2022/03/28/how-putins-oligarchs-bought-london

by null_object • 4 years ago

450 303 4 years ago

jka3• 4 years ago

Here's hoping for more transparency and analytical rigour with regards to the volume and cost of prime real estate ownership within London (and other cities worldwide)

smcl• 4 years ago

I hope so too, but I think this is very wishful thinking. If Oligarch owned properties somehow get returned to the market, they'll just get snapped up by a different collection of semi-anonymous billionaires.

jka3• 4 years ago

Agreed; it's not really a free market, in that sense. They share information among themselves and have common interests that they try to develop over time. It's all very shady.

colechristensen• 4 years ago

But fewer of them. Shrinking demand is good.

GekkePrutser3• 4 years ago

Yeah it's not suddenly going to make hosting more affordable sadly. It would be great if investors would be banned from the housing market though. Houses should be bought to live in, not as investments. It used to be like that but due to this practice it's almost impossible for our generation to buy a house now :(

eps2• 4 years ago

Putin personally told me of his plan to acquire the Chelsea Football Club in order to increase his influence and raise Russia’s profile, not only with the elite but with ordinary British people.

This does not correlate at all with the polonium and Novichok cases.

gerdesj3• 4 years ago

Anyone arriving at an airport in the UK with a Russian accent will be asked the height of Salisbury cathedral. An answer correct to 0.5m will lead to instant arrest.

I live quite close to Salisbury and have no idea apart from "bloody tall", how high the spire thrusts skywards. Apart from anything else we'd generally measure it in feet.

I'd better spell it out: One of the gentlemen accused of poisoning a Russian ex-pat in Salisbury (Hants. UK) claimed that he was a tourist and came to see the cathedral in Salisbury. He quoted the height of it to quite a degree of accuracy as proof of his touristic intentions. He really did not smear novichok on Mr Skripal's door.

boomboomsubban2• 4 years ago

While I agree that the "tourist" excuse was likely bullshit, I suspect someone that recently visited a tourist site would know more about it than someone who lived near it all their life. They just learned about it, how often do you think about it?

And if they had been visiting the spire, which they probably weren't, it's likely they would have gotten information about it in their native language which would use meters.

pfisherman• 4 years ago

Salisbury cathedral houses the Magna Carta, and that is why tourists go there. Literally nobody cares about the height of its spire.

The “tallest church” explanation is kind of like of someone saying they buy playboy magazine for the articles. It’s transparently false to the point of absurdity.

ogogmad2• 4 years ago

He quoted the height of it to quite a degree of accuracy as proof of his touristic intentions

Doesn't really prove anything. Could just be a really strange individual who memorises statistics. To 3 significant figures doe.

GekkePrutser3• 4 years ago

Lol this is typically something locals don't know yeah. I've also been reluctant to even visit tourist hotspots in the places I've lived. Never felt like waiting an hour in a queue with busloads of Chinese snapping photos and listening to a tour guide with a flag to make sure her herd doesn't lose their way :P Friends visiting me in Amsterdam would be appealed I never saw the Anne Frank House.

It's just not really a fun thing to do in your own town. And to be fair most tourist attractions are hugely overrated.

pklausler• 4 years ago

It's 123m and that's an easy number to remember. (404ft).

https://en.wikipedia.org/wiki/List_of_tallest_church_buildin...

chayleaf• 4 years ago

I'm Russian, travelled to UK once, didn't get asked that. Sorry if that was a joke and I ruined it...

unfocussed_mike8• 4 years ago

Why not? Putin has a profile with ordinary Russian people, too -- and yet he has someone murdered, defenestrated, poisoned, discredited, ruined, or jailed without reason literally every single day.

Why would he think he should act differently abroad? Remember: he's a psychopath.

Edit: a flagged comment replying to this called this hysterical hyperbole because I used the words "literally" and "psychopath".

In the latter case I understand this to be the assessment of more or less every foreign intelligence service on earth. The flagged comment suggested "sociopath" is better; I do not see evidence of Putin's ability to feel remorse or of his conscience generally. Also, psychopaths are not unusual; up to 3% of the human population could be psychopaths, and the point was not to stress his personal violence, but his remorseless consistency.

In the former case: OK, let's go with "very nearly literally" -- there may be some days where Putin's regime, if not Putin quite directly, does not have someone at least jailed, threatened or ruined for opposing him, but I'm going to go out on a limb and say there are very few days like this. He runs a regime that threatens every single citizen who opposes him, and he could stop it if he chose. He chooses not to.

hondo77• 4 years ago

The flagged comment suggested "sociopath" is better...

FWIW, enter "sociopath" in Wikipedia and you are redirected to the "Psychopathy" page.

pvg4• 4 years ago

Don't write replies to flagged or bad comments.

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

pydry• 4 years ago

The rest sounded plausible but this bit doesn't. I think it's just Abramovich's hobby. He's clearly really into it and I don't think Putin gives a damn.

eps2• 4 years ago

Woke up to my original comment ^ being in gray... what the heck.

It's just an observation of something that doesn't add up.

If one makes an explicit effort to get into Britons' good graces, why would then they do something as exceptionally damaging as those two assasinations? This makes no sense, and the article doesn't address it.

Eddy_Viscosity2• 4 years ago

https://news.ycombinator.com/item?id=30721216

pvg4• 4 years ago

These links only make sense if the submission has had some discussion

codedokode• 4 years ago

Russian oligarchs have donated millions of pounds to the Conservative Party

I don't understand how this is possible. Is it legal in Britain for foreigners to finance political parties?

outside1234• 4 years ago

This would be legal in the United States as well. They would just first form a corporation and then donate it from there.

This is why the "Citizens United" decision was so horrible and should be reversed.

EGreg• 4 years ago

Money in politics is a symptom of a larger problem:

https://www.youtube.com/watch?v=gv5mI6ClPGc

Capitalism and Free Speech

nickff3• 4 years ago

The Citizens United decision doesn't allow corporations to donate unlimited or anonymized funds to campaigns. Citizens United wanted to release and promote an independent, short, anti-Hillary Clinton documentary film, and the decision was that this was protected free speech.

dragonwriter• 4 years ago

They would just first form a corporation and then donate it from there.

Corporations can't donate money to campaigns, either. (They can spend money on them, or donate funds to non-campaign groups that spend money independently of campaigns, but not donate to politicians.)

usrusr• 4 years ago

Assuming they'd care (unlikely): how hard could it be to introduce a middleman?

GekkePrutser3• 4 years ago

I think it's just as questionable a practice for both nationals and foreigners to be honest. When it involves large amounts of course. Not talking about the 50-odd bucks membership most parties charge yearly.

But donating millions like it's commonplace in the US I find pretty questionable. And it leads to corruption like the "pay to play" lists.

hattmall3• 4 years ago

"Questionable" is being extremely lenient, it is corruption on the face, nothing less. $100,000 speaking fees, millions in donations to foundations are the same thing, it's not even hidden. It's just double speak.

unfocussed_mike8• 4 years ago

Naturalised citizens in the USA can donate too, can't they?

The point is these guys have visas, residency etc., they aren't a criminal class, in the UK.

It's funny how until the Ukraine crisis, every time I mentioned how serious a problem this was, people told me I was exaggerating. Even in the first week of the war, that happened here on HN.

The London Laundromat is a significant corrosive influence.

nonrandomstring3• 4 years ago

they aren't a criminal class, in the UK.

Well, they _are_ a criminal class here. It's just they've been getting away with it for some time because they're under the protection of another criminal class - our leaders. With any luck the ramifications of this Russia/Ukraine business will cause the unravelling of much more than that little squirt Putin.

nereye• 4 years ago

FWIW, not just naturalized citizens, if you expand the 'Foreign Nationals' entry under 'Who can't contribute' in [0] it expands to:

An individual who is not a citizen of the United States or a national of the United States and has not been lawfully admitted to the U.S. for permanent residence, as defined in 8 U.S.C. § 1101(a)(20); or ...

Suggesting that you can also donate if you have permanent resident status (aka 'green card holder'), regardless of citizenship.

[0] https://www.fec.gov/help-candidates-and-committees/candidate...

jandrese• 4 years ago

Even if they were barred from contributing directly to political candidates or parties they would just funnel the money into 527 organizations.

tyjen2• 4 years ago

Yep and this is also a problem due to "birth tourism." Particularly, when you consider it's mostly rich Chinese and Russians who are capitalizing on it to obtain US citizenship for their children.

Doesn't take a genius to see the potential long-term negative implications this creates. It's clearly not going to liberalize China or Chinese diaspora temporarily living abroad at large, let's not make that catastrophic error again. It was just a couple days ago that a Chinese student in the US stabbed a Tiananmen activist Chinese defector to death, in public. Thanks Henry Kissinger.

It's kind of time to take this stuff seriously before it catches us by surprise more than it already has.

stevenwoo• 4 years ago

I thought part of the problem is the jurisdiction for the investigating lies with parts of the government and Parliament that are under control of the party in power - there are investigations of Russian influence that has been withheld from the public for more than four years https://www.bbc.com/news/uk-politics-51417880

skeeter2020• 4 years ago

amassed a giant fortune by taking control of businesses that once belonged to the Soviet state.

The Soviet Union was so vast and disorganized, both accidentally and intentionally, that for decades after it collapsed they showed a trade surplus based on selling the resources hoarded to meet future central planning goals. You had a huge trade surplus, but the money just seemed to disappear. Officially there was nothing to spend it on, but individuals bringing back anything cheap and in-demand within their personal allowance ($2000 I think?) created an enormous grey/black market with no regulation, taxation or statistics. Many of these oligarchs were cogs in the middle of this machine and ideally suited to essentially become "fixers" on both sides of the market.

agumonkey2• 4 years ago

Do you know any trusted sources about the structure of the soviet union and its collapse ?

_jal• 4 years ago

_Secondhand Time_ is good, although a Russian friend who lived through it has quibbles with parts of it.

For coverage of the formation of the "new Russia", _Nothing is True and Everything is Possible_ is good.

rodgerd• 4 years ago

This article https://www.ft.com/content/503fb110-f91e-4bed-b6dc-0d09582dd... touches on it, mostly with a focus on the transition from Yeltsin's robber-barons to Putin's inner circle of billionaire nationalists.

i_like_waiting• 4 years ago

I am realistically wondering now, what changes does this bring. If London won't be interesting anymore for oligarchs, what will happen with prices of accomodation in center? If Switzerland is not a neutral country anymore, where will the money go?

There should be prisoners dilemma and therefore some country should emerge to fill this "market need"

AeroNotix• 4 years ago

The geographic or political consolidation of tyranny is not a bad thing.

The sooner we get to a point where tyranny overtly seeks tyranny, for all to see, the better.

nostromo• 4 years ago

China.

ImprovedSilence• 4 years ago

Dubai

csee• 4 years ago

Nothing will substitute that well because these are prestige luxury goods. Xi wants to send his daughter to Harvard, not to a university in Moscow. Abramovich wants to sail in Europe, not China.

It was the case in the Soviet Union too that even though the West was the enemy, the status symbols were still all Western. In a weird way the elites aspired and lusted over the produce of Western consumerism.

hpkuarg• 4 years ago

I doubt it. Anyone with any money or power in China already has a foot out the door, in almost all cases in a country with strong property rights and rule of law. Russian oligarchs won't find anything in China that they don't already have at home.

reincarnate0x142• 4 years ago

Highly doubtful. The last decade or so of CCP direction has been to control and punish the huge outflow of capital by rich Chinese into various western asset pools (like US and Canadian real estate) that are outside the party's reach. See also the recent controls on various cryptocurrencies. A lot of this got washed through Hong Kong and Taiwan and Singapore.

Nobody outside is going to want to secure their wealth there. If kleptocratic Russians wanted that sort of arrangement, they could just keep it in Russia.

miohtama3• 4 years ago

Dubai is currently the go-to destination of shady money. It’s the next Monaco/Swizerland. The local rulers have de facto control over government, jurisdictional and businesses. Any money is welcome as long as the right parties get their share - the rule of the law does not apply as long as you hire the right lawyer and advisors. It’s still the US ally in Middle East and so far, Dubai/UAE has had a blind eye on their lax money-laundering practice.

Here is a good article from The Economist on the situation. I apologise for the low quality of photo of the page.

https://twitter.com/moo9000/status/1504425086073413639

selectodude• 4 years ago

For those who don't want to try to read a picture of a magazine embedded in a tweet:

https://www.economist.com/middle-east-and-africa/2022/02/26/...

_dain_2• 4 years ago

The local rulers have de facto control over government, jurisdictional and businesses.

isn't that a tautology?

mullingitover• 4 years ago

The local rulers have de facto control over government, jurisdictional and businesses
...the rule of the law does not apply...

All of these should be red flags - even if you yourself are shady, you want strong property rights and rule of law, not whatever the local despot feels like doing that day.

webkike• 4 years ago

I really don’t understand the appeal of Dubai unless the only thing you care about is living in a resort

mywacaday• 4 years ago

Cyprus is also a big location for Russian money.

fmajid4• 4 years ago

Long before Dubai registered on the map, their speciality was gold smuggling towards India. It's also no coincidence their entire economy is run by British expats, the native citizens are an indolent rentier class that just skims off the top.

danans2• 4 years ago

Their yachts are apparently escaping to the Maldives [1], so that's an option, as long as it's not underwater. But then again, they have yachts.

1. https://www.bloomberg.com/news/articles/2022-03-02/russian-o...

thelittleone3• 4 years ago

I love the Maldives but if they become a haven to escape sanctions, it could be taken in a few hours, confiscate the yachts, then return Maldives to their government.

monocasa• 4 years ago

The US ironically enough.

https://www.nbcnews.com/business/real-estate/russian-money-f...

HWR_143• 4 years ago

When those assets get seized and auctioned off, it might reduce some pressure in the housing market.

_dain_2• 4 years ago

If London won't be interesting anymore for oligarchs, what will happen with prices of accomodation in center

i might be able to afford a house there

chernevik3• 4 years ago

Most people would far rather live in London than Dubai.

crate_barre2• 4 years ago

What is life at those wealth numbers? Anywhere you go would be the same lifestyle. Granted you’d need to be a lot more underground in Dubai but I’m sure they can figure out how to get coke and high end escorts and hang out on boat off the gulf coast. Ditch all all the alcohol in the ocean and head back like a good Muslim, no questions asked.

kilroy1232• 4 years ago

I've lived in Dubai for a few months. I'm writing this right now from central London.

I agree.

intricatedetail• 4 years ago

If money can't be explained it should be seized. The properties should be nationalised and then sold on auctions. Money should be used to rebuild Ukraine and legal assistance to get war criminals tried.

forum_ghost• 4 years ago

Guilty, until proven innocent.

Excellent starting point, I wonder what other rights should we dispense with.

tonyedgecombe2• 4 years ago

The UK does have unexplained wealth orders. The haven't been used much though, at least so far.

mistermann• 4 years ago

Canada is on it (and has been for a couple decades now).

https://www.nationalobserver.com/2022/03/18/news/canada-prim...

mrtksn• 4 years ago

Do you know what I'm hoping for? I'm hoping for more natural, for more "organic" communities.

Walking around the residential areas of Chelsea or Knightsbridge I found it to be some of the most boring places in London. Beautiful houses and no one on the streets, pedestrian hostile roads, generally boring perfection.

I think optimising the city for the wealthy when these wealthy are not invested in the community kills the spirit of the city. London doesn't have particularly beautiful nature or weather, so if you make it about perfect streets and expensive buildings you can build something much better somewhere else. What London actually offers that is extremely valuable is a great culture and institutions and all these rich people who occupy a place in London without being in London are undermining it.

London has much more to offer than hiding the elites money, just as the Switzerland. These are advanced communities that has a lot of more going on for them beside accommodating the rich people of the world. The accumulated wealth in these places is not like the wealth in Silicon Valley, it is stale.

IMHO the dilution of the artificial wealth saturation will result in talented people having their impact amplified.

heavenlyblue3• 4 years ago

Yeah I agree absolutely. I find it quite amusing when people say “move out of London” and completely miss the whole of what West End has to offer at least.

matthowe2• 4 years ago

I doubt much will change in London over the long term.

Johnson and his government are doing with the Ukraine/Russia issue what they have done on virtually every other topic: talk loudly and carry a very small stick. They have made some grand statements about punishing these oligarchs, while moving at a glacial pace, so as to allow these oligarchs to liquidate as much as possible and flee.

I think, once the war in Ukraine is over (please God that's soon), the next Tory government (it's always the Tories!) will simply revert to type, take money from the Russian oligarchs who still want access for their kids to schools such as Eton, Harrow, etc. and allow the laundering to continue.

As long as the Murdoch press continues to misinform the British public on these issues, Johnson and his Tory ilk will have enough air cover to continue allowing these oligarchs to finance their party (political), their parties (social), and further corrupt the entire political system (see "Lord Lebedev").

nullifidian• 4 years ago

their kids to schools such as Eton, Harrow

How is it bad? If the Russian elite would be at least partly be indoctrinated in the western values it could only do good.

Spooky233• 4 years ago

The US attracts plenty of shady money. Places like Delaware, South Dakota, Nevada, Wyoming create all sorts of opportunities for hijinks.

Gollapalli• 4 years ago

I doubt property values would really change unless we started talking about getting Chinese money out of London, because it's just a way bigger thing from all that I've seen.

tim333• 4 years ago

In London there'd probably a bit of a drop in prices at the super lux end but life would go on as normal. The tax laundering stuff is a small percentage of the market except maybe in the £10m+ properties.

nickdothutton• 4 years ago

Property in (certain parts of) london is just an asset class.

unfocussed_mike8• 4 years ago

In the UK in general.

e.g. there are funds that allow you to own fractional shares of rental properties spread across the entire country -- REITs.

https://en.wikipedia.org/wiki/Real_estate_investment_trust#U...

Commercial properties, obviously, but also residential properties.

NaturalPhallacy• 4 years ago

I'd love a similar article on how America's oligarchs are buying America.

For some weird reason they get called "elites" if they're American, but oligarchs if only if they're Russian, even though they're the same class of wildly disproportionately powerful people.

yaacov• 4 years ago

the richest people in america got that way by creating enormous amounts of value and then capturing lots of it for themselves.

the richest people in russia got that way by plundering the country of its natural resources and the remnants of the soviet-era industry.

those are not the same.

pm902• 4 years ago

Most of the richest people in the US got their wealth through inheritance.

ReaLNero• 4 years ago

creating enormous amounts of value

To be honest, the poster child for American businesses are Intuit, Equifax, that company that manufactures EpiPens, or the company that manufactures insulin etc. They all essentially exist by rent-seeking without creating value, enforced through lobbying or regulatory capture.

Painting American companies and Russian companies in such stark contrast is overly simplistic. And pretending American elites are any more altruistic than Russian elites would be insanity.

micromacrofoot2• 4 years ago

the US’ top billionaires have often profited a lot from government funding, whether it’s subsidies, tax breaks, regulatory capture, etc… the “rich because they created equivalent value” is old school American Dream flavor propaganda

wavefunction2• 4 years ago

A number of the most wealthiest (Top 15?) people in America inherited their wealth. The rest, well they seem to have exploited various aspects of the country and people.

danans2• 4 years ago

the richest people in america got that way by creating enormous amounts of ? value and then capturing lots of it for themselves.
the richest people in russia got that way by plundering the country of its natural resources and the remnants of the soviet-era industry. those are not the same.

Importantly, the wealth of the richest in the oligarchy is maintained (or destroyed like in the case of Mikhail Khodorkovsky) by the use of force by the authoritarian. The power of the authoritarian is in turn backstopped financially by the oligarchs.

The wealth of the richest in the US is maintained by the economic system and its associated laws (however flawed). There is a conceivable path to make the system fairer in the US via elections, but not in Russia.

reincarnate0x142• 4 years ago

the richest people in america got that way by creating enormous amounts of value and then capturing lots of it for themselves.

This may have been the case through the 1960s but post 1970s American is very much back on the crypto-aristocrat track with people inheriting vast wealth or being given jobs as money managers or financiers due to family influence and then rent-seeking the hell out of anything that smells like money.

gotaquestion• 4 years ago

How do we know who the richest people in the US are? Forbes' list is based largely on first-order research of federal filings, like stock ownership, compensation, and extrapolation from data that is made public. But with so many ways of channeling wealth, it seems likely the very wealthiest could easily remain anonymous. I don't recall who said this, but the president of a hedge fund was being interviewed by Forbes and told them, paraphrased, "You have no idea how much money I have, and you never will." I could be wrong about how the Forbes list is computed, but it seems to be more guesswork than rooted in reality, since the Paradise and Pandora papers uncovered more wealth than has been reported. (Again, I'm not 100% certain I'm mixing up internet disinfo.)

radec• 4 years ago

The richest people in America got that way by exploiting labor.

ogogmad2• 4 years ago

I think the term started life in Russian (just before my time) before being translated directly into English. It's got little to do with Oligarchy in Plato's sense, but it originated as a reference to it. Incidentally, the term Aristocracy is also used in a corrupted sense, but not in the context of Russia.

mikeyouse2• 4 years ago

I don't think anyone disputes the power of American billionaires - especially with their incessant meddling in politics and their proximity to regulators - but the Russians earned their scorn by looting the state to earn their billions. Sweetheart deals to "privatize" public assets with no accountability - random people like Putin's chef/cater being given billion-dollar companies and multi-billion dollar state contracts. Their spouses and children amassing huge net worths with multiple houses, yachts, and airplanes while their official public salaries are a few hundred thousand per year.

It really is a wide difference in degree.

space_rock• 4 years ago

Because in Russia the KGB associated people took political and economic power. Hence ruled by few as is the definition. I'm assuming you believe Mark Zuckerberg has a iron grip on your country and will have you killed if you cross him?

jka3• 4 years ago

How many people will the metaverse be ruled by?

ElevenLathe• 4 years ago

In Russia, KGB spooks became oligarchs. In the US (~50 years earlier), oligarchs created the CIA to do their dirty tricks for them. It's a distinction without a difference.

venachescu• 4 years ago

Sure, you can see a lot of shallow similarities between these two groups but it would miss a pretty important structural difference.

Oligarchs don't have power outside the authoritarian apparatus of the state. Oligarchs exist entirely at the pleasure of the leader and have no true autonomy. If an Oligarch tries to 'branch out', they end up in jail or dead.

adamrezich• 4 years ago

our oligarchs are more subtle in how they deal with things. the last time citizens tried to call out our oligarchs in a significant, grassroots way, they invented & deployed modern identity politics so we'd stop #occupying and start in-fighting—we still have yet to recover.

nerfhammer• 4 years ago

it's a distinct system in which they have to give a substantial share of their take to the supreme leader, and that leader sort of dictates the lines of their territory and doesn't allow them to engage in politics, and all of this exists completely outside the legal system

throwaway1110232• 4 years ago

nothing like lobbyists donating large sums of money to political candidates on behalf of the elite, hey! it's legal!.

pjmorris• 4 years ago

Try 'The Quiet Coup', Simon Johnson [0].

[0] https://www.theatlantic.com/magazine/archive/2009/05/the-qui...

alexklark• 4 years ago

Piggies got fat enough, they can be finally eaten.

chernevik3• 4 years ago

https://archive.is/m7yx0

commandlinefan• 4 years ago

donated millions of pounds to the Conservative Party

And somehow none to the liberal party? This kind of bias throws the rest of the article into suspicion.

anonymous_sorry• 4 years ago

The Conservative Party have been in power in the UK since 2010. It wouldn't be surprising if those aiming to buy influence focussed their donations on them.

In general it feels like you're trying to extrapolate American politics onto British politics. For example, "liberal" in the UK (and I think most of the world) doesn't mean what it has come to mean in the USA. And the Conservative party at the moment tends to raise more of its money from large donations from wealthy individuals than the main opposition party in the UK [0].

[0] https://commonslibrary.parliament.uk/general-election-2019-w...

TillE• 4 years ago

If foreign billionaires are giving money to the Liberals, it's probably in an attempt to sabotage Labour, for the benefit of the Tories.

jmyeet• 4 years ago

My sincere hope is that the Ukraine war might actually lead to changes such that people (both foreigners and domestic) won't be able to hide or park money in real estate. I'm not hopeful that this will happen but I can but hope.

In the UK in particular the government is beholden to the bankers in the City of London and they want no such crackdown.

It's already the case where when you buy real estate in the UK with an LLC (which should be illegal IMHO) you need to declare who the beneficial owner is with the company registered with Companies House. This is routinely not done and there is absolutely no enforcement. That would be a start but it doesn't go near far enough.

Another example: all US citizens and permanent residents have to declare all their foreign assets to the government every year, typically twice: once to the IRS, another time to the Treasury Department. These forms are known as Form 8939 and FBAR respectively.

Guess what you don't have to declare? Real estate holdings. Why is there a carve-out for real estate? It's disgusting.

We have a housing crisis in the West. It's a complex problem but there are a number of factors:

1. NIMBYism stopping building of denser living;

2. Tax advantages and policies that make it more profitable to build ultra-luxury housing; and

3. The ease to which the wealthy can park their money in such real estate, which creates a lot of demand.

I would like to see this all go much farther. If you own real estate in a given jurisdiction you should be a resident for tax purposes in that jurisdiction. That should allow the government to tax your worldwide income. Want the anonymity of ownership through an LLC? Without a clear beneficial owner established then just punitively tax such property. Anonymity is a privilege you should pay through the nose for.

I'd accept a carve-out for owning "working" property, which is to say an apartment building where the units are rented out. But individual residential property? Get the hell out.

And any property where no beneficial owner can be established (and thus taxed) should just be seized. We seem totally fine with seizing the assets of poor people (ie civil forfeiture). Let's apply that to wealthy tax evaders, oligarchs and despots instead.

hkt• 4 years ago

And any property where no beneficial owner can be established (and thus taxed) should just be seized.

Amen. Social contract dodgers are wrecking the west. We can't afford to let crazy rich people run things, it isn't efficient or right.

rainworld• 4 years ago

Once again posting these old docs for the benefit of anyone wanting to understand where these oligarchs come from and what their relationship is to Putin:

The Rise and Fall of the Russian Oligarchs (ARTE 2006)

https://youtu.be/oLNKqbwec0s

Russian Godfathers (BBC 2005)

https://youtu.be/ZLPxyDlQfBc

Also highly recommended: Paul Klebnikov's Godfather of the Kremlin: Boris Berezovsky and the Looting of Russia. Berezovsky, for a while London's best-known oligarchic resident, this article doesn't even bother to mention. Berezovsky, who likely had Klebnikov murdered in 2004 for exposing him.

rahimnathwani• 4 years ago

This book about Berezovsky is also good:

https://www.amazon.com/Once-Upon-Time-Russia-Oligarchs_A/dp/...

dntrkv• 4 years ago

I'm about a third of the way through "All The Kremlin's Men", and it's been really good so far. Some really interesting stories from Putin's early days.

Yajirobe• 4 years ago

A short video on this topic: https://www.youtube.com/watch?v=CQ9RQrcv3T8

walterbell3• 4 years ago

U.S. investigation of Zelensky's Oligarch, Sept 2020, https://www.icij.org/investigations/fincen-files/with-deutsc...

Kolomoisky siphoned billions of dollars from PrivatBank, Ukraine’s largest financial institution, which he co-owned, in an audacious laundering scheme, cleaning the money through a web of companies around the world, U.S. federal prosecutors allege ... transferring more than $750 million to Kolomoisky’s business interests in the United States ... secretly amassed a real estate empire, buying at least 22 properties, including a skyscraper in Cleveland with vaulted ceilings that featured one of the largest bank lobbies in the world, a shuttered Motorola facility rising from the farm fields of northern Illinois and the former headquarters of Mary Kay Cosmetics in Dallas

... The flow of Kolomoisky dollars into the U.S. finally ended in December 2016 when Ukraine regulators nationalized PrivatBank on suspicions of widespread fraud. The losses to the institution prompted criminal investigations by the Anti-Corruption Bureau of Ukraine. Last February, agents from the U.S. Justice Department jetted to Kyiv to talk with law enforcement agents about the ongoing case in the U.S.

... Though the federal government has set up targeting orders in places like Miami and and New York to screen property purchases for laundering, the orders do not extend all over the country and do not apply to commercial transactions ... The Justice Department finally pushed to seize some of the real estate in August, but much of the damage was done, with buildings devalued, factories shuttered, and steel workers without jobs.

https://www.buzzfeednews.com/article/mikesallah/ukraine-bill...

At one time, Kolomoisky and his associates were the largest commercial landlords in Cleveland, owning 2.8 million square feet. One of the properties that has drawn the FBI's attention is the Warren Steel plant in Ohio ... Valeria Gontareva, former chair of the National Bank of Ukraine, the nation's chief regulator, said the level of fraud on the institution was larger than any crime ever perpetrated on a Ukrainian bank.

U.S. DoJ filings, Aug 2020, https://www.justice.gov/opa/pr/justice-department-seeks-forf...

https://euromaidanpress.com/2021/10/06/what-the-pandora-pape...

Kvartal 95 was bought by 1+1 TV channel owned by Ihor Kolomoiskyi which gave the company good terms of cooperation and higher prices. Kolomoiskyi started to support Zelenskyy and Kvartal as comedians and now keeps backing them as politicians ... The Pandora Papers disclosed that since 2012, an offshore company affiliated to Kolomoiskyi’s 1+1 group at least once paid more than $1 billion to Zelenskyy’s offshore firm SVT from the British Virgin Islands, for the popular TV show “Make a Comedian Laugh” created by Kvartal 95. And Maltext owns half of SVT ... Zelenskyy’s and Kolomoiskyi’s companies made a transaction worth $40 million in 2012. Under the documents, this was “contribution to capital,” or investment, paid by the oligarch to the now-president.

Documentary (enable subtitles): https://www.youtube.com/watch?v=Pp0WWZbNGq4

bgorman• 4 years ago

Didn’t Joe Biden pressure the Ukrainian government to fire the prosecutor who was looking into these corruption allegations?

myko• 4 years ago

He pressured them to fire a corrupt prosecutor, with the backing of basically the entire west.

He did the opposite.

https://www.usatoday.com/story/news/factcheck/2020/10/21/fac...

"Despite a recently concluded investigation by Senate Republicans that found no wrongdoing by the Bidens, claims to the contrary have continued to circulate on social media."

claudiulodro• 4 years ago

Yes, but it was because the prosecutor wasn't looking into the corruption allegations:

It's true that Joe Biden leveraged $1 billion in aid to persuade Ukraine to oust its top prosecutor, Viktor Shokin, in March 2016. But it wasn't because Shokin was investigating Burisma. It was because Shokin wasn't pursuing corruption among the country's politicians.
https://www.usatoday.com/story/news/factcheck/2020/10/21/fac...

edbaskerville• 4 years ago

No. Biden pressured the firing of a prosecutor that was NOT looking into corruption allegations, since terms of U.S. aid included reducing corruption.

You may remember this as a right-wing line about him corruptly helping his son. It was the opposite.

whyenot• 4 years ago

U.S. investigation of Zelensky's Oligarch

I'm a little confused because neither what you quoted, nor the article you linked to mention Zelensky.

scyzoryk_xyz• 4 years ago

Kolomoisky was a known financier and supporter of Zelensky, especially with the use of his media conglomerate 1+1 media, which was instrumental in Zelensky’s victory.

That being said, after winning the election, Zelensky supposedly successfully silenced Kolomoisky after Kolomoisky made attempts to speak out and started issuing recommendations on how the country should be run. This was something Zelensky did not like, as he saw it undermining his authority. Supposedly the two have maintained a relationship behind closed doors.

Aeolun• 4 years ago

If all this happened between ‘11 and ‘16, how can it possibly be Zelensky’s Oligarch? He was a comedian at the time I think?

eth0up• 4 years ago

It might help to add Serhiy Shefir to the context too. You'll find plenty mention of Zelensky in the sources below.

https://www.theguardian.com/news/2021/oct/03/revealed-anti-o...

https://www.occrp.org/en/the-pandora-papers/pandora-papers-r...

bigbluedots• 4 years ago

Whataboutism?

walterbell3• 4 years ago

U.S. regulators have been working for years to close real-estate loopholes used by oligarchs and money launderers. There are lessons here for multiple jurisdictions.

pipeline_peak• 4 years ago

https://web.archive.org/web/20220318230703/https://www.newyo...

madrox• 4 years ago

The older I get, the more jaded I become at the illusion of democracy in society. Lobbies don't even need to bribe politicians to change their minds. They simply donate money to candidates whose thinking already aligns with their interests. As long as a politician's success is correlated to their ability to raise money, this will continue to happen for good and for ill.

jacquesm• 4 years ago

London is the worst by far but there is a lot of Russian money floating around in other countries as well and lots of it was gained through illicit means and whitewashed in all manner of ways, including gifts to politicians and start-up investments.

ardit33• 4 years ago

Yep... NYC as well. I remember when I was looking to buy a place back in 2014. I saw one I liked in Brooklyn, and asked the agent to see it.

He said that there were already two all cash offers, and one was over price. I said: who buys them all cash? He said: Russians, for their kids.

Large cities, like NYC, SF, London, Paris, and Vancouver are seen as good places to park money in real estate, as they are international hubs.

zepearl• 4 years ago

Super-heavy and long article, at least for me (italian mothertongue). Still, quite interesting.

Personal random excerpts (not pointing to anything specific, they just popped up when I read the article):

- these oligarchs were mere capos, who answered to the don

- England itself has been a silent and handsomely compensated partner in Putin’s kleptocratic designs

- “We must go after the oligarchs,” Prime Minister Boris Johnson declared after the invasion of Ukraine, doing his best to sound Churchillian. But, as the international community labors to isolate Putin and his cronies, the question is whether England has been too compromised by Russian money to do so.

- At a fund-raising auction at the Tory summer ball in 2014, a woman named Lubov Chernukhin—who was then married to Vladimir Chernukhin, one of Putin’s former deputy finance ministers—paid a hundred and sixty thousand pounds for the top prize: a tennis match with Johnson and David Cameron, who was Prime Minister at the time. Johnson defended the match, decrying “a miasma of suspicion” toward “all rich Russians in London.” A Russian magnate told Catherine Belton, “In London, money rules everyone. Anyone and anything can be bought.” The Russians came to London, the source said, “to corrupt the U.K. political elite.”

- Libel tourism is another chronic English problem that everyone bemoans but nobody does anything about. This has meant terrific business for the oligarchs’ morally flexible attorneys; according to the British trade publication The Lawyer, some law firms charge a “Russian premium” for their services, of up to fifteen hundred pounds an hour.

Disclosure: I work for a swiss bank (therefore a potentially indirect antagonist to the London Exchange/Marketplace - but I'm just an IT-guy :P ).

During the past years I kept reading in the news and saw on TV some docs about russian interests in London (they never mentioned anything about other cities/regions, it was always all about "London", I don't know why), therefore none of these news should be surprising, but apparently they still are?

Additionally I'm totally/absolutely surprised by UK's government's attitude change:

not just a sudden 360-degrees change from "welcome investors" to "don't you dare to talk to us" but even a "what you owned here is history" (maybe I'm mis-interpreting but I understood that that's the general direction of where things are going there - maybe I'm wrong??).

Cheers

B1FF_PSUVM2• 4 years ago

a sudden 360-degrees change

That's amusing: you're end up in the same position, but appearing to have changed?

ayngg3• 4 years ago

I don't think this is limited to Russian oligarchs, I thought that because of its trust and crown dependencies system, London is a popular place for people to hide this kind of stuff. Russian oligarchs and other unsavory individuals like corrupt leaders in Africa, the Middle East and the developing world all dump their ill gotten gains into the opaque system away from prying eyes. The stuff you can actually see, like mansions in Knightsbridge are probably just the tiniest tip of the iceberg, everything else is held in such opaque ways that nobody even knows who it actually belongs to. It is so blatant that you couldn't really call it a dirty secret.

eevilspock3• 4 years ago

Oh everything and everyone is for sale. I mean look, most of us have sold our souls so that we can get free web search and free email, and cheap delivery of goods to our doorstep at the touch of button on our iPhones. We prefer to look the other way if not outright deny the huge social costs of an ad-supported web, of the costs to the planet of our one-click to our doorstep shopping convenience in terms of plastic, paper and energy use, and how much of these conveniences rest on the exploitation of people who have no choice but to work for as little as possible, a tiny fraction of what we get paid.

AYBABTME• 4 years ago

I don't think the average person has much choice in term of whether they use ad-based products or not. Where do you go to pay for a search engine? Even paid newspapers and paid cable TV is serving us ads.

matthowe2• 4 years ago

Agreed that it isn't limited to Russians, but I do think there is a scale difference when it comes to the ultra-wealthy from Russia.

For example, when I was home in London a few years ago we had dinner at a fancy Chinese restaurant in Mayfair. My wife and I were chatting with the Maître D' for a bit, and he told us that they scheduled their host staff such that at least one person was present at all times who could converse fluently in Russian, in order to cater to their big spenders.

I know this is only an anecdote but I do think it is uniquely specific to Russian oligarchs. Aside from Harrods, which have specific staff to converse with the wealthy from China, the ME, etc. I didn't encounter a similar form of catering/pandering to the wealthy Chinese, Middle Easterners, etc. elsewhere.

Stevvo• 4 years ago

The difference is more in style than scale. Middle-eastern royalty own more property in London but they buy unassumingly buy large developments with many tenants, whereas the oligarchs tend the buy more vanity mansions.

rr808• 4 years ago

Its not even about hiding. If you were a FANG developer with a few million and you are from Russia/Venezuela/Syria/Zimbabwe/Argentina what would you do with your assets? London property is a solid investment.

tonyedgecombe2• 4 years ago

It's not proving so solid for Russians anymore.

bestouff• 4 years ago

Even since brexit ? I'm not so sure.

GFischer• 4 years ago

If you're from Venezuela or Argentina you buy real estate in Uruguay.

Check Punta del Este.

908B64B197• 4 years ago

like corrupt leaders in Africa, the Middle East and the developing world all dump their ill gotten gains into the opaque system away from prying eyes.

Not just limited to London. Vancouver is a prime example of that thanks to an out of control immigration policy coupled with almost no enforcement for financial crimes [0].

Anyone with money who can't pass the stricter bar for US immigration and investment tries to hide it there.

[0] https://en.wikipedia.org/wiki/Snow_washing

BeetleB2• 4 years ago

Anyone with money who can't pass the stricter bar for US immigration and investment tries to hide it there.

I believe a few years ago Canada eliminated the immigration category that lets you move there just based on wealth.

rosndo4• 4 years ago

London is also popular because it is the best city in the world to live in if you have a lot of money. London has been very important for a very very long time.

This may even play a bigger part than any regulatory environment, especially in a world where English is the lingua franca.

ethbr0• 4 years ago

London has been very important for a very very long time.

This seems like a critical component. In the US or Canada, there is no "old money" in the European-magnitude sense.

In the UK, on the other hand, there are a lot of structures that seem to straddle oligarchy and democracy (see: accuser burden of proof libel laws mentioned in article). There are not just different options for ultra wealthy, but experienced options, staffed by people who have been doing this for decades, at firms who have been doing this for centuries.

Opaque South Dakota trusts look quaint against that depth of historically-earned competency.

rurban• 4 years ago

the usual polls show Vienna being the best big city to live in, and for smaller cities there's always the Riviera or Marbella ahead.

maerF0x0• 4 years ago

It was kind of a hear-say thing that was presumed about the Vancouver, British Columbia (and surrounding area) Real estate market too

https://www.cbc.ca/news/business/russian-money-canada-1.4102...

newyankee2• 4 years ago

There was a case where a guy committed a multi million $ fraud in some Indian state and safely ran after to BC. The BC police did not cooperate in investigation or so I heard. Rich countries are happy to accept shady money as long as it is not done loudly and impacts lie in some third world country far away without strong legal capabilities.

volkadav• 4 years ago

now newyorker.com should cover how the kleptocrats bought NYC too, but that'd make a lot of powerful people in NYC uncomfortable.

kevin_thibedeau2• 4 years ago

The media did a wonderful job burying the story about how Hudson Yards was set up to sell visas to foreign "investors" building luxury apartments for themselves in a southwest extension of Harlem to promote "economic development".

alecco• 4 years ago

Unsurprisingly, they blame conservatives. But the city has been a stronghold of Labour for a very long time. BoJo’s tenure was after this happened.

Mind Gell-Mann Amnesia. Remember last time this outlet covered a subject you know about.

pmyteh• 4 years ago

The authority of English local government is highly constrained, and very little of what makes London attractive to kleptocrats was put in place by city hall (either under Johnson or his Labour predecessor or successor).

Most of the Russian money in politics is flowing through the Conservative party. They're currently in power, traditionally more wealth friendly, and rely on big-money individual and corporate donors to a greater degree than Labour (who have union funding and also many more members to pay subs). That said, the last Labour government (up to 2010) was also beguiled by rich people, and there are definitely a few Labour backbenchers who have been bought off.

stelliosk• 4 years ago

Jonathan Pie: How Putin Weaponized London’s Greed | NYT Opinion

https://youtu.be/YAblAQENQhE

wolverine876• 4 years ago

The Russian oligarchs and Putin had friends in conservative parties in many countries in the West (and maybe elsewhere?), including the US and UK. How are those parties escaping a reckoning?

In the US, many people blame the liberal party for things regarding Ukraine that didn't even happen, but what the conservative party has openly done is somehow overlooked. It's not the first issue on which we've seen this phenomenon (economics, etc.), but it's an excellent example.

jeffreyrogers• 4 years ago

London is known as "The Laundry" in Russia. No one in power has cared for two decades and only care now because it serves their interests to. Maybe they will crack down on it, maybe it will get swept under the rug again if the Russian invasion of Ukraine dies down as an important news story, either way, the root issue of why this was allowed in the first place won't be addressed and it will continue to occur with nationals of other countries.

magpi3• 4 years ago

That no one in power has cared is less remarkable that the fact that democracy's supposed watchdogs (i.e. the media) don't care, until now that is. At least this is definitely the first I have heard of it.

EDIT: After fully reading the article, I realized that the author of the article deals with this issue: U.K.'s libel laws make it dangerous for media watchdogs to call out oligarchs explicitly.

kasey_junk• 4 years ago

https://www.cnbc.com/amp/2018/05/21/london-is-a-laundromat-f...

throwaway2903• 4 years ago

I'm Russian and spent a fair amount of time there, but I was not aware of London being known as the laundry/laundromat until media coverage this month. Maybe I'm out of touch, but more likely the term is known not so much in Russia but among Russian oligarchs (which intersects with "in Russia" probably less than you might think).

rendall• 4 years ago

How's it going in Russia, as an aside?

tdiff• 4 years ago

It was never considered a "secret" in Russia. London was always the "default" destination for Russian wealth as well as for children of wealthy people.

gumby• 4 years ago

in England, a person bringing a libel suit does not have to prove that an assertion is untrue, so long as there’s evidence of “serious harm”; instead, the author must prove that it is true. This is a fiendishly burdensome standard

This standard has been proposed for US libel law, though so far the efforts have not made progress.

B1FF_PSUVM2• 4 years ago

All I can think of is that in Dubai (and similar places) the real-estate dealers must be exceedingly pleased.

And the outcome may not be that bad overall, perhaps lower prices in London and more activity in places that want it will work out better for everybody.

formvoltron• 4 years ago

Apple should create a special update for all iOS devices that are Russian language. This update can include feeds of real news and images and videos from the Ukraine.

This could have a seriously important effect on the war by opening Russian's eyes to what is going on.

fmajid4• 4 years ago

The Russians did not come to London to corrupt the political elite. The elite was already corrupt, they just came to avail themselves of this corruption.

smt88• 4 years ago

The elite was already corrupt, they just came to avail themselves of this corruption.

The wealthy of all civilizations at all times in history have been corrupt. There is nothing interesting about that.

What is interesting about this situation is that London is incidentally a good place for Russian money. No one is trying to argue that London would be a magical, affordable Utopia without them.

It's just interesting that the conditions in London were most suitable for so many of these people exfiltrating money from their home country.

fmajid4• 4 years ago

The difference between London and, say Paris, Amsterdam or Berlin is that the UK hasn't had a democratic revolution since Cromwell or land reform. Its entire political, legal and economic structure is organized to protect the interests of the aristocracy starting with the Queen, including such things as draconian libel laws whose intent is illustrated by the jailing of Oscar Wilde for daring to importune a Marquess. The hereditary aristocracies of every other European country have been successfully defanged. No wonder why Russian oligarchs felt so congenial (except for the old money turning its nose down at them).

SquibblesRedux• 4 years ago

Does anyone know of an infographic that bluntly shows where the Russian oligarch wealth comes from originally and how it is aggregated and concentrated?

staticautomatic• 4 years ago

It comes from the privatization of government-run businesses during the fall of the Soviet Union.

HWR_143• 4 years ago

Specifically, resource extraction businesses, like mining metals or drilling oil and natural gas. There may be some exceptions, but it seems to be the vast majority of them.

dukeofdoom• 4 years ago

I don't understand taking other people property is legal if they legally acquired the property in the first place. I specifically don't get how you can take Roman Abramovich, Chelsea Football Club or his yachts away without proving in court him acquiring these things broke the law. And if you do start retrospectively punishing people, why not go after someone like Bill Gates who is just an American Oligarch just doesn't get called that, but rather a billionaire. He too used all kinds of shady connections to aquaria his wealth.

I get the instinctive hatred for extremely rich people and their wealth. But the one thing I've come to realize as I myself become richer, every new thing I buy atomically means I get less time to enjoy my previous possessions. We all just have 24 hours in a day. So practically all those possession of the ultra rich are often just paper deeds. There is on sum, a much greater benefit of something like a Mega Yacht to all the people that work there, worked to build it, work to maintain in, crew it, dock it in ports, and so on. He himself only probably get to use it on rare occasions.

To me it seems like theft to do it. Perhaps why I'm personally opposed to it, is that a few a years back I read about a government trying to take over the teachers pensions fund in Ontario. The teachers were paying out to a private firm to invest their pensions, and the firm did so well, it was worth billions of dollars.

The government running a large deficit at that time, seeing that huge sum (worth 227 Billions now) started getting wet dreams how they could take it over. They backdown.

But just seeing this kind of thing is off putting. It's just thievery.

lenkite• 4 years ago

"But, by making it perilous to publish allegations, however well documented, that haven’t yet resulted in a criminal conviction, the legal system can grant well-financed malefactors a free pass from scrutiny."

Wow. Kudos to London for having this. Publishing allegations without proof is something that should be punished. Throwing out unsubstantiated allegations without paying for it destroys all faith in the media.

Spooky233• 4 years ago

Lol. Yes the British press is well respected for truth telling.

woodruffw2• 4 years ago

"Unsubstantiated allegations" and "hasn't yet resulted in a criminal conviction" are substantially different things. Investigative journalism plays an important role in our (American) society and justice system, and I think we're much better off for it.

To make it concrete: it seems perfectly reasonable for a journalist to publish a first-person story about an event, potentially a crime, that they witnessed. The fact that Britain's legal system threatens journalists who would do that isn't great.

archhn• 4 years ago

"Putin's Oligarchs" ... as if a man from a working class family rose to power without the consent of Russia's oligarchy. Why does western media always obsessively focus on the front man?

sigsergv• 4 years ago

In russian satire London is often depicted as a laundry/safe haven for stupid and ignorant oligarchs from esUSSR. It's more a status symbol that something really useful.

How Putin’s Oligarchs Bought London

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