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Journalist says Britain has become a safe deposit box for oligarchs' ill-gotten gains

TERRY GROSS, HOST:

This is FRESH AIR. I'm Terry Gross. Russia can afford its war in Ukraine because Britain helped raise the cash, writes my guest Oliver Bullough. He's referring to how Russian oligarchs linked to Putin launder their money, keep it hidden in shell companies and stash it in luxury yachts and mansions in Britain. There are so many Russian-owned mansions in London it's been nicknamed Londongrad. Bullough says the Russian state would have nothing like the wealth it has now without Britain's help. England, the U.S. and several other Western countries have sanctioned some oligarchs, but Bullough says they're not changing the financial systems that enable oligarchs and criminals to protect their ill-gotten gains.

Bullough has spent years investigating how kleptocrats hide and protect their money. His second book on the subject will be published in the U.S. in June. It's called "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything." Among the things he's known for is giving kleptocracy tours in London, pointing out the mansions and apartments owned by oligarchs. Bullough is a British journalist and spent the early part of his career reporting from Russia and covering the war in Chechnya.

Oliver Bullough, welcome back to FRESH AIR.

OLIVER BULLOUGH: Thank you for inviting me back. It's an absolute pleasure.

GROSS: Can you explain how the money that Russian oligarchs have stashed in England is helping Russia pay for the war, is helping Putin pay for the war?

BULLOUGH: Well, this is a, on the face of it, complicated question in that they make it complicated. You know, the money is hidden by multiple layers of shell companies in multiple jurisdictions. But it all comes down to a pretty basic calculation, which is people don't steal things unless they can keep them. And the basic expedient used by Russian oligarchs to secure their ill-gotten gains - and these are people who have made huge fortunes by essentially stealing chunks of the state in Russia - their sort of main tactic is to get that money outside Russia and to put it somewhere where they think it's safe. And the main place that they've chosen - not the only place, but the main place they've chosen - to keep it safe is the U.K. They put their money in the form of high-end property in West London or in the countryside around London. They buy soccer clubs. They buy fine art. They buy superyachts. They buy financial instruments - all of these things.

And so, essentially, what Britain has been and what Britain has become for them is a giant safety deposit box that allows them to know that whatever happens in Russia, you know, whatever the government there does, whatever the response of the people to the government's mismanagement, their money is safe. That's been the calculation. And therefore, they've kept stealing it far past the kind of limits when people would, in any normal country, have had to stop. They've been able to keep stealing it because they've been able to keep it safe.

GROSS: So here's what I don't understand. If the Russian oligarchs have taken their ill-gotten money and stashed it in England to keep it out of sight and to keep it out of reach, how is that money helping to fund Putin's war in Ukraine?

BULLOUGH: It's not so much that that money, per se, is funding Putin's war in Ukraine; it is the system that they have built, essentially, in order to steal that money so that the system that they have built, this kleptocratic system, is totally controlled by - you know, by Putin, by a very small number of his friends. And the reason it can be controlled by this very small number of his friends is they have essentially created an extremely efficient looting machine to enrich an incredibly small number of people. So it isn't so much that they are calling on their bank accounts in London to buy tanks or weapons or missiles; it's that this entire system, enabled by British lawyers, British accountants, over many years has been created, which is under the direct control of Putin and his very close friends.

So it isn't, you know, as if they are dipping into a safety deposit box just to buy the missiles they need right now; it's more that over the last two, three decades, London has essentially allowed them to create an incredibly tightly controlled dictatorial kleptocratic system, which is able to wage war in this way without any kind of attempt to prepare the ground among the public or to justify it democratically to a Parliament or whatever because, you know, when you have so much control over the purse strings, as Putin and his friends have in the system which London has helped them to build, then they are able to essentially operate completely independently of any of the checks and balances which you would normally get even in a normal dictatorship.

GROSS: Well, what are the possible penalties if an oligarch criticizes Putin in public and speaks out against the war? Like, what might the penalties be? Can Putin, like, confiscate the business and turn it into a state-run business?

BULLOUGH: Well, we saw this with Oleg Tinkov, who is an interesting sort of serial entrepreneur who's done various things. He had a beer company. When I lived in Russia, his Tinkov beer was some of the best Russian beer, certainly in my opinion. And he also had a very successful bank. He criticized the war for a couple of weeks, three or two weeks ago now. And his - was essentially very quickly forced to sell his bank at what he called, you know, a knockdown price, severely undervaluing it to a Kremlin-aligned - a still Kremlin-aligned oligarch. And that was a pretty clear demonstration of the consequences of speaking out. More generally - and going back a bit further in time, back to sort of 2003, in the very early years of Putin's time in office - and sort of more dramatic in a way because Oleg Tinkov, a wealthy man is not particularly - is very definitely not in the top rank of Russian oligarchs or even in the middle rank.

Mikhail Khodorkovsky who then was Russia's richest man, spoke out against what Putin was doing and essentially tried to interfere in politics in the way that Putin had warned the oligarchs not to, and he was jailed. His business, Yukos, his oil company, was expropriated and, essentially, you know, taken by the state oil company and made a state asset. So, you know, it is pretty clear. I think both examples will have been - you know, anyone who's forgotten the example of Khodorkovsky will be reminded by the example of what happened to Tinkov and his bank, that standing up to Putin is unwise if you wish to keep your access to the Russian market and want to keep being able to freely operate as a business person.

GROSS: So we've been talking about Russian oligarchs. What about Putin himself? Does he have money stashed in England in secret accounts or real estate or whatever?

BULLOUGH: This is a really interesting question. I have a good friend called Bradley Hope, who is a journalist who - and I talk about this with him quite often because it's very interesting 'cause it cuts to the heart of, in a way, what wealth is. I personally don't think Putin does have wealth offshore because, you know, having a deposit account, in a way, suggests you're saving money for a rainy day, right? You know, you're putting it aside. I don't think Putin does that because if Russia is your current account, you don't need a deposit account. I think it's, in fact, a slightly broader understanding of wealth. However, we can say that he probably does have a lot of wealth. He doesn't have any in his own name. Well, I very much doubt he has much in his own name because he has long been able to call on the wealth of the oligarchs whenever he wants it.

So essentially, any money the oligarchs have offshore, he can request it and receive it. If he wants something, he asks for it, and he gets it. You know, he wanted - when he wanted to host the soccer World Cup, he persuaded the oligarchs to build him the stadiums. When he wanted a palace on the coast of the Black Sea near Gelendzhik, the oligarchs stepped up and built him his palace. When he wanted a superyacht, they stepped up and bought him his superyacht. So I don't think Putin has somewhere - I don't think there are bank accounts to be found, you know, in his name if the authorities just look hard enough. I think, more broadly, what we have is a situation a little bit like the Tudor Court of Henry VIII, whereby he personally probably didn't have very much wealth, but he was able to essentially use any of the money that belonged to any of his courtiers as his own at any time that he wanted it. So it's a far - you know, almost a feudal system whereby the barons own their wealth at his pleasure, and he therefore gets to call on it whenever he wants.

That, I think, is something that was shown fascinatingly by the Panama Papers, this leak of secret legal documents from the law firm Mossack Fonseca, which revealed a lot of the offshore secrets of the elite from around the world, is how Putin's friend, the cellist Roldugin, had this, you know, vast offshore wealth, far more than you could conceivably justify with what he earned playing his cello. And it seems likely that he and many of other - Putin's other friends have essentially been able to become wealthy during Putin's time in office. And so some of his oldest friends have become astonishingly wealthy, multi-multibillionaires now, essentially on the basis that he is able to call on that wealth whenever he wants it.

GROSS: So you're talking about Putin calling on the wealth of the oligarchs to use as he pleases when he wants it. I mean, do you think he's been doing that with the war?

BULLOUGH: Yes. I think, at the moment, it seems absolutely certain that he has been calling on them in all sorts of ways. I mean, the sanctions being put - that have been placed on Russia have been far, far more severe than I think the Russian authorities anticipated, particularly the sanctions on the Russian central bank. And that has left, obviously, the government scrambling around for funds and mechanisms to access the international markets. So the oligarchs' business connections, particularly with countries that are sort of skilled sanction busters, such as Iran, will definitely have been, you know, tapped by the Kremlin in the last couple of months. And we will see far more of that going forward. I mean, obviously, it is difficult for them to provide him straightforward with money because so many of their assets have been frozen as well.

You know, just to - I think probably a lot of Russians expected the Western sanctions to be broadly similar to the ones that came in after the 2014 annexation of Crimea, which were pretty tough by the standards of sanctions against a major country like Russia. But the sanctions that have been imposed in the last two months have been, you know, far, far more severe from a Russian perspective. So, you know, I suspect he would like to be able to access the oligarchs' money. But an awful lot of that money is as frozen as the Russian central bank's is. So, in a way, more what he will be accessing will be their connections around the world in order to find ways to circumvent the sanctions, to move money via jurisdictions like the United Arab Emirates, for example, which, you know, is a wealth center that isn't a Western dominated one. You know, I suspect we'll be seeing much more of that. Certainly in the next few months, we'll be hearing a lot of allegations about that kind of behavior.

GROSS: Well, let me reintroduce you here. If you're just joining us, my guest is British journalist Oliver Bullough. And his new book, which will be published in the U.S. in June, is called "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything." We'll be right back. This is FRESH AIR.

(SOUNDBITE OF DAN AUERBACH SONG, "HEARTBROKEN, IN DISREPAIR")

GROSS: This is FRESH AIR. And if you're just joining us, my guest is British journalist Oliver Bullough. And for years, he's been investigating how oligarchs and other kleptocrats hide and launder their money in Britain. His new book on the subject, which will be published in the U.S. in June, is called "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything."

Let's talk money. Give us a sense of how much Russian oligarch money is hidden in assets in England and in mansions and yachts and shell companies, other assets.

BULLOUGH: Once again, you've asked an extremely complicated question, in fact, one that I'm not sure that there is an answer to. Part of the problem is that money that is Russian, how long does it remain Russian? If the oligarch who owns it buys himself a passport from a jurisdiction like Cyprus or Malta or Saint Kitts and Nevis, is he still Russian? If the money has been invested in a superyacht and then sold and then reinvested and then sold again, is it still Russian?

You know, you do end up with these increasingly complicated calculations of trying to work out what exactly is Russian wealth? But, you know, in the broadest scheme of things, it's reckoned that about $1 trillion has left Russia. Russia is in a unique position among major economies in the sheer volume of its national wealth, which is owned outside of Russia - probably half, maybe slightly more than half of Russian national wealth - until the recent events, which may have upended this calculation. Until the recent events, around half, slightly more, was owned outside of Russia. And, you know, the equivalent figure for the U.S. would be, you know, in the single figures of a percentage.

So it is, you know, a vastly different situation. And that is because, you know, the oligarchs who have these huge fortunes in this very unequal economy, they like to spend it on the usual bling that rich people like to spend money on, you know, superyachts, mansions, fine art, all that kind of thing. And, you know, you can buy those things far better outside of Russia than you can in Russia. It's not to say they aren't available in Russia, but they're far more available outside. So because Britain has been one of the places that's been most willing to accept this money and most unwilling to investigate its origins - its law enforcement and regulatory system is incredibly weak and sort of demoralized - a significant proportion of this money is here.

Now, as you said, it's very hard to give a precise figure on how much money there is because it's hidden behind shell companies and trusts and all the other paraphernalia of the offshore world. But if $1 trillion has left Russia in, you know, the last 20 or 30 years, then I would anticipate that a significant proportion of that - perhaps half, perhaps not quite as much as half - will be here somewhere.

GROSS: Alexei Navalny, the opposition leader in Russia, released a list of 35 men and women who are Putin's enablers. Now, Putin had Navalny poisoned twice. And when Navalny survived, Putin put him in prison, where he is today. So he kind of secretly released this list from prison. Has that list been helpful to you as a, you know, investigative journalist?

BULLOUGH: There are quite a lot of these lists going around. And the system is what I am most concerned about, rather than the individuals. You know, I think it's possible to condemn the individuals, but if we wish to really change the ability of kleptocrats in Russia and elsewhere to steal whatever they like and to use that stolen wealth to threaten democracy and the rule of law in the West, then we really need to change the system here to prevent enablers being able to do that, you know. And the calculation is a straightforward one. The, you know, oligarchs are very good at certain things. They're good at stealing money. They're good at, you know, the political connections in the Kremlin. They're good at, you know, encouraging invasion of sovereign countries and so on. But they're not very good at integrating their wealth into the international financial system or managing complicated networks of shell companies or bringing legal proceedings against journalists that try and expose them. They need help for all of those things.

If we can change the calculations of people who might be tempted to help them, then we can cut them off from the system. And this isn't going to stop them stealing because, you know, these are thieves, and thieves will keep stealing, but it will stop them stealing so much because they won't be able to hide the money they steal. And they won't be able to build this kleptocratic network. So that's why I'm so keen and so focused on attempting to change the system that creates and allows enablers to appear rather than just sort of, you know, whack-a-mole-ing (ph) individual enablers. It's important to name and shame, obviously, but I think it's more important to try and prevent more emerging in the future.

GROSS: Before we get to the larger system that enables the kleptocrats to stash their money in other countries, with an emphasis on England, let's talk a little bit about the sanctions against the oligarchs. The U.S. has created sanctions. Britain has created sanctions. From your perspective, which sanctions have actually been most effective?

BULLOUGH: I mean, obviously, the - from a perspective of committing (ph) individual oligarchs, just freezing their wealth has been dramatic and effective, has clearly driven a lot of oligarchs out of Britain and other Western countries, Britain in particular. But they haven't been effective with regard to turning the oligarchs against Putin, which I think is what we were all hoping they would do. Or, you know, possibly thinking that they might conceivably do, though maybe hope would be too strong in that regard. So that's important. But I'm not sure we've really thought about what's going to happen next. You know, we've been thinking about freezing, but we haven't really been thinking about seizing. So what happens next? If this - will this money be confiscated and used, you know, to help rebuild Ukraine? That's a question which needs to be thought of. So you know, it's been - it's clearly significant that their wealth has been frozen, but it hasn't had the effect that perhaps we were hoping for. And, you know, I don't think there's been nearly enough work being put into thinking about what happens next to this, you know, frozen wealth.

Of greater significance, I think, and I'm very heartened to see this, is the embargos, the boycotts of Russian oil. The U.S. and the U.K. have already gone ahead and done this. Not being sort of major consumers of Russian oil, that wasn't a huge hardship for either country. But the EU is today talking about within six months ending imports of crude oil from Russia and within - and by the end of the year, ending imports of oil products. That is a real game changer. You know, without that revenue stream - people talk a lot about gas, but, you know, oil is a bigger revenue stream for the Kremlin - that could really undermine the entire sort of financial basis of the Kremlin system. Most of his, of Putin's oligarchs, or many of Putin's oligarchs, rely on oil for their wealth. The Russian budget relies heavily on taxes on oil for its wealth. So that could be a really big deal.

GROSS: Let me reintroduce you here. If you're just joining us, my guest is journalist Oliver Bullough, and he spent years investigating how kleptocrats hide and protect their money in England. And his second book on the subject will be published in the U.S. in June. It's called "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything." We'll be right back after a short break. I'm Terry Gross, and this is FRESH AIR.

(SOUNDBITE OF ERIK FRIEDLANDER'S "OSCALYPSO")

GROSS: This is FRESH AIR. I'm Terry Gross. We're talking about how Russian oligarchs have parked a lot of their money in Britain over the years and how that's helped Putin, including helping Putin launch the war in Ukraine. My guest is Oliver Bullough, and he's spent years investigating how kleptocrats hide and protect their money. His second book on the subject will be published in the U.S. in June. It's called "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything." He's a contributor to the British paper The Guardian.

So let's talk a little bit about the system that enables oligarchs to hide and launder money in England. And you trace this back to 1956. When Britain lost control of the Suez Canal - a very important trade route - they lost control to Egypt, which took over the canal. Why was that so disruptive to Britain that it created parts of, like, a new financial system?

BULLOUGH: Yeah, it's a really important moment. I mean, the Suez crisis is, you know, one of the most important moments in modern British history, a real nadir of British influence, you know, one of the final sort of death throes of the British Empire as a sort of significant geopolitical force. The British economy was heavily indebted at the time because of the legacy of the Second World War, a huge overhang of debt, which meant that the pound was incredibly vulnerable. And so in a sort of couple of weeks when Britain attempted to sort of stand its ground before it sort of ignominiously surrendered, it froze the use of pounds by British financial institutions to finance trade in order to try and make sure that the pound could be used only for absolutely essential purposes, you know.

And the British Empire was dying, but it was still a thing. And the city of London, which had been the financial engine of the British Empire, was still there. It was still staggering along in a very diminished way. And these financial institutions, which were still using pounds to finance trade around the world, were suddenly left thrashing around for something else to do. And they seized on this tiny little idea which had been created the year before by a deal between a British bank and a Soviet bank, in which they - the British bank allowed the Soviet Union to keep its dollars in London in order to avoid potential U.S. restrictions.

And so instead of banking with pounds, the British banks - in desperation - started banking with dollars and using dollars to finance trade and made this extraordinary discovery completely by accident. It wasn't intentional at all. But they realized that if they weren't using pounds, then no British regulations applied to them. But because they weren't in the U.S., no U.S. regulations applied to them, either. That essentially opened a hole in the global financial architecture and allowed their clients, the owners of these dollars, to move their money back-and-forth anywhere they liked, totally regulation and scrutiny free. So business got really profitable if you owned capital. And essentially, what London did was opened a side passage which allowed people with wealth to bypass this entire onerous system that had been created to favor ordinary people and not the wealthy and to move their money and make as much money from it as they liked.

GROSS: I know you think that reforming the financial system in England that allows oligarchs to stash money there is, in the long run, more important than singling out individual oligarchs and freezing their money. So let's talk about that system. What are some of the basic ingredients of the system that allows kleptocrats to safely store and launder money?

BULLOUGH: Well, you know, we hide wealth behind shell companies to disguise the ownership. We protect wealth. We protect it from scrutiny by, you know, suing people who would look into it or suing journalists who would look into it. And we invest it for people with, you know, a world-leading financial services industry. But, you know, essentially, you know, we - all the skills that we learned running the world's biggest empire for so many years, we've repurposed to essentially allow other people to run their own empires. You know, we provide almost empire solutions services, you might say.

GROSS: Well - and you also write, like, a whole industry that surrounds helping the kleptocrats who store their money in England, helping them do it. And you alluded to this - the lawyers who defend them, the banks that help them. What else?

BULLOUGH: One subject I've been writing about recently, which is sort of at the forefront of my mind as a result, is lawyers who use data protection rules to sue journalists and private investigators who might investigate oligarch's businesses. Now, this seems really, really niche, but actually it's quite important because under European law, if you are, you know, using someone else's data - you're a tech company or whatever - then you have to, you know, abide by certain regulations. And what these entrepreneurial lawyers have realized is that data isn't just ones and zeros being held by Facebook about you. It applies to any information. So if you are a journalist and you store information about an oligarch, then that information has to be open and accurate and all the other things that, you know, are the rules that apply to Facebook if it stores your ones and zeroes. And so this has been a new front essentially being opened against anyone trying to investigate oligarchs in that oligarchs' lawyers can now demand to see your files, to see all the information you have about them. And this is quite terrifying if you are investigating. So, I mean, that's just an example of how a well-meaning law, like a data protection law designed to protect ordinary people against the giant tech companies, has essentially been repurposed in the hands of the oligarchs' lawyers to defend oligarchs' wealth rather than to do the opposite.

GROSS: Well, it can be very perilous to be an investigative journalist in England investigating the oligarchs because the oligarchs can sue. And the libel laws in England are different than the ones in the U.S. and they tend to favor the oligarchs over the journalists. Can you explain how the law tends to favor the oligarchs?

BULLOUGH: Yeah. We don't have a sort of First Amendment right of free speech here. So, yeah, essentially, if you write about someone - anyone but normally someone who can afford a lawyer - they have the right to sue you for having defamed them, for having lowered their reputation in the eyes of society. And if they do that, essentially, it - the law assumes you're guilty. You have to actually prove that you're not. And there are various ways of doing that but all of them are very expensive. So, you know, London has become a major center for oligarchs to sue journalists who write about them, both for defamation and, as I said, on data protection grounds.

I have a couple of good friends here - Catherine Belton and Tom Burgis - both of whom have been sued in terrifying cases in the last three years by Russian oligarchs in Catherine Belton's case, and oligarchs from Kazakhstan in the case of Tom Burgis, and have been left potentially facing up to being on the hook for hundreds of thousands or millions of dollars' worth of costs. And so, you know, in Catherine Belton's case, she was forced to settle cases against a number of different oligarchs just because, you know, the costs that she could have faced and her publisher could have faced could have been so colossal had they lost. So they really couldn't take that risk. It's a little bit like gambling against someone who's got a gigantic hill of chips in front of them when all you've got is two or three chips. Even though your hand might be extraordinarily good, you're probably going to lose anyway just because you can't afford to keep playing against them, you know, for any length of time.

And that's a little bit what it feels like as a journalist, you know, facing up against oligarchs because they're just going to keep suing you. Even if they might lose, they're just going to keep suing you because for them, the costs are peanuts. But for a journalist, you're talking about existential sums of money. So it - this is the real problem is that the courts here have become playthings of people who can afford to bring these vexatious lawsuits all the time. And there isn't like you have, this sort of, essentially, assumption that, you know, journalists are acting in good faith and have the right to freedom of speech. We don't have those laws here. So it becomes a really scary place to operate.

GROSS: How much of a chilling effect has the fear of lawsuits had on your reporting?

BULLOUGH: Yeah, it does. I mean, I notice it when I'm talking, to be honest. I'm constantly trying to think, you know, 20 seconds ahead of what I'm saying to make sure that I'm not about to say anything which would be unwise. I know that what I say is being listened to. And that is an alarming thought. There are a lot of people who, I think, would prefer me to shut up. So it does have a chilling effect. I'd like to say it didn't. I'd like to say that I was incredibly brave and prepared to pick every fight going.

But at the end of the day, there's only so many hours, you know, available to work in. And I would rather research articles that can be published rather than, you know, bravely throw all of my resources at something for months, which ends up on the cutting room floor somewhere. So yes, there are lots of oligarchs that I wouldn't even consider writing about. I tend to try and find ones that I can write about but tell sort of the same stories as I would about the big ones. It's been - yeah, it's a pain, to be honest with you. And, you know, I've had to learn the hard way that you need to pick your battles.

GROSS: When did you start to feel that the oligarchs were paying close attention to what you said and that you had to be really careful?

BULLOUGH: I mean, there's been a couple of times when I've been hacked by - clearly in response to particular things I've said or written. There's been some pretty alarming communications that I've received in terms of, you know, having meetings and so on, which has been pretty dark. And also, I have, you know, friends who are well-connected who occasionally warn me off and tell me that, you know, people are aware of what I'm doing and that I should stop. So you know, it could be worse. I mean, you know, obviously, friends who I have who work in Russia or Ukraine or Azerbaijan have far worse time than I do. My friend Vitaly (ph) in Ukraine had his house burned down. And that was before the war. He's now got a gun in his hands. You know, I have a friend in Azerbaijan who's been jailed for, you know, reporting on what politicians there have done. So you know, let's put it in perspective. I'm in the U.K. And the sun shining. It's not that bad.

GROSS: Well, let me reintroduce you here. If you're just joining us, my guest is British journalist Oliver Bullough. And his new book, which will be published in the U.S. in June, is called "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything." We'll be right back. This is FRESH AIR.

(SOUNDBITE OF VIJAY IYER'S "BLACK AND TAN FANTASY")

GROSS: This is FRESH AIR. And if you're just joining us, my guest is British journalist Oliver Bullough. And for years, he's been investigating how oligarchs and other kleptocrats hide and launder their money in Britain. His new book on the subject, which will be published in the U.S. in June, is called "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything."

For an oligarch to sue a journalist, I think they have to prove that the journalist tarnished the oligarch's reputation. So I think the way you explain it is that the oligarchs often start donating large amounts of money to charities and, you know, good works and stuff to build a reputation that they can then say was tarnished by the journalist.

BULLOUGH: Yeah. This is a whole separate industry here in the U.K., a sort of reputation-management industry whereby - and there is, you know, a fairly well-trodden path that many oligarchs have trodden when they give money to charitable institutions, to art galleries, to universities and so on, essentially gaining a reputation as a philanthropist. And once you have a reputation here, then you have a reputation that can be harmed, you know? In a defamation case, you have to be able to show the journalist has harmed your reputation. If you don't have a reputation, it's very difficult to show that. But if you do have a reputation as a philanthropist, thanks to your generous donations to a university or art gallery or whatever, then it becomes very difficult for journalists to write about you. I mean, this was - and this really affects the decisions that we as journalists make.

You know, when Roman Abramovich, the oligarch who owns - still owns, I think, time of I'm talking, Chelsea Football Club, one of the wealthiest and most high-profile Russian oligarchs - when he was sanctioned by the British government, a number of editors got in touch with me and asked me to write about him. And I had to admit that I'd never done any research into him at all just because it had never occurred to me I'd ever be able to get anything published. Yeah. I'm a freelance journalist. I'm not going to just do, you know, research into someone for an article which I can never, you know, make any money out of, obviously. And that is a problem that affects sort of every calculation we make. If you can't get an article published, then you're never going to start the process of researching it, which means that there have been people with reputations for being extremely litigious who have been able to avoid any kind of scrutiny from journalists.

And it isn't just journalists who are affected by some of these cases. The data protection cases are not just against journalists, but also against the whole private investigation industry. If they can be sued too, then, you know, the kind of people who advise banks on who to take on as their clients also are going to be very risk averse about the reports that they write. You know, there is an entire industry here to shield oligarchs from investigation and scrutiny. And there is very little - certainly that I've heard from politicians - suggesting they're planning to do anything about it.

GROSS: So the people who help support the oligarchs in protecting the oligarchs' reputation and protecting their money, do those people like the lawyers, like the PR people, do they make a lot of money off of the oligarchs? And because those British people who make money off the oligarchs are powerful, and this is a very profitable business, does that help bolster the system and prevent it from being reformed?

BULLOUGH: Yeah. That's an entire class of very well networked and, you know, well wealthy enablers, particularly in London, I mean, elsewhere as well, but mainly in London who, you know, who use their connections in politics to make sure that nothing really gets done. There's always a reason not to do something, right? You could always call for another consultation. And, you know, every year that goes past, that's more business in these people's pockets. The kind of lawyers who might once have worked for ordinary people now work for oligarchs. And so you end up with a situation whereby there's a whole service class of people. It's not just about what they own, it's who they employ. It's a whole service class of people who no longer sort of have the interests of, you know, Britain or democracy particularly in mind. They just have their own personal interests and the interests of their oligarch employers.

GROSS: I think the City of London has independent banking rules from the rest of Britain. Is that right?

BULLOUGH: Sort of. The British - City of London is a really fascinating place. I'm thinking of writing my next book about it. But it has its own kind of autonomy while also not really having its own autonomy. So the reason when we talk about the City of London is just because that's always been the financial center of Britain. So it has a kind of institutional sort of memory while out - without really being constitutionally separate anymore. It's more of a kind of culture than it is of politics.

But it's very noticeable how, you know, the City of London is the Roman capital of Britain, right? I mean, it's been there for 2,000 years. And yet it remains the sort of the business heart of the country with, you know, with this incredible concentration of banks and financial services. So it is an absolutely fascinating place with the old street plan. And even if you go underground in the Guildhall, there's even an amphitheater down there that's been there ever since the Romans were around.

GROSS: So how does that - how has that contributed to making London an attractive place for oligarchs?

BULLOUGH: Well, the City of London's role that it's been playing since the 1950s, as I was talking about before, is essentially as a sort of - it's a bit like Wall Street, but with less regulations. That's its post-empire role in the world. So, you know, if you had business to do but, you know, you worried that the feds might come after you on Wall Street, you could just bring it to the City of London and do it here instead. And that's been, you know, a pretty profitable way to rebuild post empire for the city of essentially enabling dodgy business.

You know, for a lot of Americans too, you know, you may notice that whenever there's a big financial crisis, the dodgiest (ph) practices done, you know, in 2007-'08 exposed - the dodgiest practices of American companies tended to be done by subsidiaries in London. That seems to be the way - when Deutsche Bank laundered money out of Russia, that money ended up in London. You know, when Danske Bank, the biggest-ever money laundering scandal, moved money out of Russia, the shell companies were registered here in the U.K. So essentially, you know, Britain's role is the dodgy cousin of America. You know, if, like, as I say, if there's any business too dodgy for the U.S., then it happens here.

GROSS: You're very critical of the regulatory system in England and basically say that there isn't a body that's responsible for investigating crime within the banking system.

BULLOUGH: Yeah. I mean, we have sort of regulatory and police agencies, but they're sort of hilariously underfunded. My favorite example is the fact that one of the many anti-money laundering regulators here is the faculty office of the Archbishop of Canterbury, which is responsible for regulating one of the branches of the legal profession and has been since the 16th century. Yeah, this is quite clearly not a system that has been designed to actually do anything. It's just, you know, what we happen to have. And no one really expects it to crack down on anything. I mean, the Archbishop of Canterbury has many advantages, but he's not, you know, very good at fighting money laundering, you know.

And so essentially, you know, we have the appearance of a regulated system. We have the appearance of, you know, police organizations that look like the FBI because they've got three-letter acronyms like the SFO or the NCA. But in reality, behind the facade, they're very few people, hugely outmuscled by the oligarchs. Yeah, one of the most remarkable quotes that came out of a British Parliament report into Russian interference here in the U.K. a couple of years ago was when the head of the National Crime Agency, which nominally is Britain's FBI, was asked why she didn't go after the oligarchs. She replied, because she was concerned about the impact on her budget. You know, you wouldn't get the head of the FBI saying that.

GROSS: Well, let me reintroduce you here. If you're just joining us, my guest is journalist Oliver Bullough. He's the author of the new book "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything." It will be published in the U.S. in June. We'll be right back. This is FRESH AIR.

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GROSS: This is FRESH AIR. Let's get back to my interview with journalist Oliver Bullough, who's a contributor to the British paper The Guardian. He's been investigating for years how Russian oligarchs hide and launder their money in Britain, and lately, he's been writing about how that's helping fund Russia's war in Ukraine. His second book about how kleptocrats hide their money is going to be published in June in the U.S. It's called "Butler To The World: How Britain Helps The World's Worst People Launder Money, Commit Crimes, And Get Away With Anything."

As we've said, you think that there not only needs to be sanctions against the oligarchs, that the British financial system needs to be reformed so that it's no longer easy for oligarchs and other kleptocrats to hide or launder money there. Has Russia's war on Ukraine led to any reforms or proposals of reforms?

BULLOUGH: There has been a bit of action, actually. Last month, there was the - an economic crime act. It's a pretty scanty measure, actually. But it did - the idea, anyway, is that it imposes transparency on property that's owned via offshore shell companies. So you can't - as an oligarch, you can't own a house anymore and have it - you know, say it belongs to ABC PLC of, you know, the British Virgin Islands or Liberia, when instead of saying that you own it in your own name. So that's really good. You know, I don't know how well it will work in practice, but the idea is good. But really, what we need is just much more potent law enforcement agencies who can really go after oligarchs with the kind of resources to prosecute them that they have able to deploy to defend themselves. And I don't see any sign yet that the government is prepared to do that. And without that, all the laws in the world are kind of a bit meaningless.

GROSS: So, you know, you've said it's not enough to sanction the oligarchs, that Britain has to reform the system that enables the oligarchs to hide or launder their money in Britain. And this week, Britain seemed to take a step forward on that, announcing that British accounting, management consulting and PR firms will be banned from doing business in Russia with Russian firms. Would you describe what this is, what this new ban is?

BULLOUGH: This is a step forward. It's positive. The stated justification for this measure was that these firms helping Russians to structure their businesses are helping fund the Russian war machine. So the fact they won't be doing that anymore is good. However, I was sad not to see lawyers included on that list. You know, obviously, PR consultants are important, but they're not that important when it comes to really structuring a hidden business empire. Lawyers are the ones we need to really prevent doing business with the Russians. Without Western legal services, these businesses would have real trouble operating in the Western economy at all. That has to be the next target, really.

GROSS: I'm still - like, I'm not sure how this would work. In other words, so are these firms banned from doing business in Russia? Or what about if you're a Russian oligarch who occasionally is in Britain and you want some help from a PR firm - how does that work? Are they banned from that?

BULLOUGH: You ask a good question. I mean, I've read the statement and looked at it. Sadly, over the last couple of months, Britain has been quite good at announcing gimmicky measures against the Russians. Technically, what they've done is ban business exports, so services exports to Russia, so Russian businesses can no longer use these services from the U.K. Does that mean a Russian in the U.K. could use them? I think we'll have to wait and find out. But still, it's a step forward. It would have been unimaginable two months ago. You know, and it does show that perhaps the British government is finally getting a little bit serious about ending its support for the kleptocracy, for ending its provision of services to the Russian kleptocracy. But like I say, it's a baby step, and maybe it won't amount to much, but it's better than nothing.

GROSS: Well, Oliver Bullough, I want to thank you so much for talking with us.

BULLOUGH: Thank you very much for having me on. It's been my pleasure.

GROSS: Oliver Bullough is the author of the new book "Butler To The World."

If you'd like to catch up on FRESH AIR interviews you missed - like this week's interviews with actor Alexander Skarsgard, who stars in the new film "The Northman," or New York Times reporters Jonathan Martin and Alexander Burns, who got the leaked audiotapes revealing what House Minority Leader Kevin McCarthy had to say in private after January 6 - check out our podcast. You'll find lots of FRESH AIR interviews. Oh, and I want to remind you to check out the new FRESH AIR newsletter. The link to sign up is on our website at freshair.npr.org.

FRESH AIR's executive producer is Danny Miller. Our technical director and engineer is Audrey Bentham, with help today from Diana Martinez. Our interviews and reviews are produced and edited by Amy Salit, Phyllis Myers, Roberta Shorrock, Sam Briger, Lauren Krenzel, Heidi Saman, Therese Madden, Ann Marie Baldonado, Seth Kelley and Joel Wolfram. Our digital media producer is Molly Seavy-Nesper. Thea Chaloner directed today's show. I'm Terry Gross.

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