70 The Economist March 12th 2022
Culture
ThebusinessofcorruptionA brief history of Londongrad
E
ven afterthe annexation of Crimea in
2014, the leak of the Panama Papers in
2016 and the poisoning of Sergei Skripal
two years later, London remained a haven
for “Moscow gold”. Britain has been hospi
table to Russian money, much of it tainted,
since the Soviet Union collapsed. What,
wondered anticorruption campaigners
and concerned mps, would it take for their
country to get tough on the oligarchs and
Kremlin cronies whose acquisition of
mansions and football clubs had earned
the capital the nickname Londongrad?
Just possibly, the answer is a big war in
Europe. After Russia’s latest invasion of
Ukraine, Boris Johnson’s government has
piled sanctions on the Russian companies,
banks and tycoons it sees as supporters of
Vladimir Putin. After years of delay, a new
economiccrime bill that will, for instance,
make foreign owners of British property
reveal their identities, is being rushed into
law. Even now, though, questions linger
about the cleanup’s thoroughness.
One of the bestinformed sceptics is
Oliver Bullough. His new book is an urgent
account of Britain’s history of welcomingcorruptcapital. Bytheend,readers will
sneer at the claim of successive British
governments that, as Mr Johnson has put
it, no country “could conceivably be doing
more to root out corrupt Russian money”.
The gulf between rhetoric and reality has
been chasmic.
Mr Bullough’s thesis is that London be
came a favoured destination for dodgy
dough not by chance but by design. For ov
er half a century, Britain’s business model
has been to act as the butler of his title to
oligarchs, gangsters and kleptocrats look
ing for a safe place to park their often ill
gotten gains and enjoy the high life.
Like the versatile and creative Jeeves of
the P.G. Wodehouse stories, the British
have developed an impressive range of apt
skills. The National Crime Agency reckons
Britain has a £100bnayear moneylaun
dering problem; London’s luxuryproperty
market serves as storage for much of thisloot. Should anyone ask awkward ques
tions, reassuringly expensive lawyers and
publicrelations firms have been only too
happy to shoo them away, aided by plaint
ifffriendly libel and privacy laws. Foreign
billionaires with chequered pasts have
worked hard and spent big to penetrate the
British establishment. It has embraced
many of them, even doling out the odd
knighthood or peerage.
To understand all this, argues Mr Bul
lough, you have to go back to 1956, and the
Suez fiasco. It worsened a sterling crisis
that led to the development of “euromar
kets”, unregulated finance in dollars and
other currencies outside their home coun
tries. In turn those led to the blossoming of
what has been called “Britain’s second em
pire”: a network of secretive offshore fi
nancial centres hosted by British overseas
territories, such as the British Virgin Is
lands (bvi) and Cayman Islands, which by
the 1980s were feeding big sums into the
City. The British seemed to understand
better than anyone that if you wanted to at
tract footloose capital, you had to treat its
owners well—which meant being discreet.
Mr Bullough’s previous book, “Money
land”, gave an eyeopening and entertain
ing tour of the world’s hubs for taxdodgers
and moneyrinsers. Focusing on Britain in
his followup is a statement in itself. Most
of his chapters are devoted to a particular
butlering characteristic. One covers the
bvi’s rise from a backwater largely reliant
on sales of postage stamps to a masspro
ducer of shell companies for Russian andBritain has welcomed dirty money for too long. That might be about to change→Alsointhissection
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74 Johnson: Why learn grammar?Butler to the World. By Oliver Bullough.
St Martin’s Press; 288 pages; $28.99.
Profile Books; £20