“Londongrad” is the nickname, not entirely affectionate, that wealthy Russians have bestowed upon Britain’s capital. The term doesn’t just designate a physical place, though many Russians do indeed live here. Londongrad is more properly a state of mind — encompassing not only the nonresident owners of large houses in Kensington, but also the British institutions, banks, law firms, accountants, private schools, art galleries, and even the Conservative Party fundraisers that have gone out of their way to accommodate them.
Londongrad can be a place of bizarre contrasts. A few years ago, I found myself standing on the sideline of a school’s rugby pitch, watching small boys tackle one another in the mud. All around me were the green fields of England; cows were grazing in the middle distance. Huddled on the sidelines, a group of men — presumably parents of some of the small boys — were arguing loudly, in Russian, about large sums of money. Equally weird was a walk with friends in rural Hampshire, past the gates of a vast estate. Although registered to a company called Skymist Holdings, the house was in fact owned by Elena Baturina, a Russian business executive who became enormously rich while her husband, Yuri Luzhkov, was the mayor of Moscow. The locals knew the owner’s identity because they had seen Luzhkov at the pub.
These incongruities were produced by a tacit deal: For two decades, the British establishment has agreed not to think too hard about where the Russians got their money — how cash was stolen from the state, recycled in the West, then used to help bring Vladimir Putin and his ex-KGB colleagues to power. In return, the Russians spent a lot of that money in Britain, to the benefit of the British.
The relationship has, at times, been extraordinarily complicit. There was the 2006 London flotation of Rosneft, the oil company created from the stolen assets of another oil company, whose owner had been arrested and sent to prison in Siberia. The prospectus did actually warn potential purchasers of the risks: “Crime and corruption could create a difficult business climate in Russia.” But the sale went forward, reaped rewards for those who arranged it and established a principle: Stolen goods can become legal, as long as the London financial establishment approves. [Continue reading…]
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