Londongrad is falling down
Oligarchs aren’t the only ones feeling the squeeze of sanctions
In November 2006 two policemen were posted outside the Piccadilly branch of Itsu, a chain of Japanese restaurants, as scientists tested inside for traces of polonium-210. Earlier that month the radioactive substance had been used to poison Alexander Litvinenko, a former KGB officer, who blamed Vladimir Putin for his murder as he lay on his death bed. Polonium was eventually detected at more than 40 sites in London and beyond; British Airways advised 30,000 customers to contact health authorities after two aeroplanes were contaminated. London did not think of itself as a dirty city. Yet traces of poison were everywhere.
Russian money was pouring into the British capital at the time. The first deluge came when Roman Abramovich, a Russian billionaire, bought Chelsea football club in 2003. Rich Russian émigrés were viewed by many Londoners with a mixture of amusement and suspicion, but many in the British elite embraced them. Oligarchs gave millions of pounds to the Conservative Party in Britain (as well as funnelling money to political parties elsewhere). They financed best casino sites 0 wings for major galleries. They employed British crews to run their yachts and British lawyers to fight their libel cases. A best casino sites 0 name for the city was coined: Londongrad, an outpost in the West for Russian money.
London wasn’t the only place that has absorbed the cash, of course. Oligarchs bought some of Manhattan’s priciest apartments and townhouses. Rich Russians parked their boats in harbours and cash in tax havens throughout the Caribbean and Mediterranean.
When Western governments imposed a barrage of sanctions in February, after Russia invaded Ukraine, the party ended. Or perhaps it has just relocated to Dubai – the United Arab Emirates declined to take sides in the war. But it’s not just the billionaires who are feeling the fallout from the frozen assets. Even if the oligarchs are gone, traces of their influence can still be found all over the world.
“Grab the collection and tell Russia, ‘Fuck off’.”
Andre Ruzhnikov, art dealer, London
The advice was simple. “Sell the fucking eggs,” says Andre Ruzhnikov, a Russian émigré, art dealer and expert on the House of Fabergé, jeweller to the Romanov tsars in the 19th century. He’s talking about what should happen to the three Fabergé eggs owned by the Kremlin and currently on display at the Victoria & Albert Museum in London: “Sell them to Arabs, to Americans, to the English. Anyone who can come up with the dough.”
The same goes for the modernist masterpieces that were recently hanging at the Louis Vuitton Foundation in Paris as part of an exhibition of the famous Morozov collection. (The works, once owned by Ivan and Mikhail Morozov, brothers who made their money in textiles, were expropriated by the Bolsheviks after the Russian revolution in 1917.) “They have to grab the collection, tell Russia ‘Fuck off, you started the invasion, screw you’. Then sell it in Sotheby’s and Christie’s.” (Representatives for the Louis Vuitton Foundation did not respond to 1843 magazine’s request for comment on the current whereabouts of the collection.) Ruzhnikov admits that will require a certain amount of legal wrangling, but the world is hardly short of lawyers. “Sell all that stuff in the West. And then the money needs to go to reconstruct Ukraine.”
In 2005 Ruzhnikov founded Aurora, an investment fund dedicated to buying Russian art, along with Viktor Vekselberg, who founded Alfabank, Russia’s largest privately held bank (he has been subject to American sanctions since 2018). In the first three years the fund spent £100m buying back Russian art and antiquities from collectors in the West. Vekselberg had bought nine Fabergé eggs in 2004 – there are only around 40 in the world – one of which is now on display at the V&A. Should that be seized too? “That egg is the most insignificant egg anyway,” Ruzhnikov says, waving a hand. He’s a friend, the hand says. Don’t make me get into it. (The fund finished its work in 2008, he later told me.)
Ruzhnikov’s apartment in Mayfair is like a plush carpeted vault. Ceiling lights pick out dazzling treasures in the dark rooms: Impressionists and Old Masters, Russian icons and wrought silver. In the hallway a doormat bears the effeminate, thick-lipped face of a young Vladimir Putin. “So we can piss on him,” Ruzhnikov mutters.
I find the art dealer in a sardonic mood and burgundy cardigan. Grey-haired and heavy set, he calls for his housekeeper to pour me a glass of heady white wine. Behind me is a small 18th-century canvas of a woman kneeling on a bed, pointing her bottom towards another woman, who holds an implement of some sort. A paddle? Ruzhnikov looks down mischievously. “Enema.”
The child of Soviet apparatchiks, Ruzhnikov sold his first painting (illegally) to a Western journalist in 1968. When his parents died he used the money he made from selling his family’s dacha to buy a stack of Russian icons and had them smuggled to America, he says. Then he fled the USSR to gather up the canvases. He recalls driving 2,500 miles from San Francisco to Alabama with his wife and young child to pick up a smuggled painting, before turning the car around and starting the journey back.
That was the last time he needed to do anything illegal, he says. The fall of communism and rise of the oligarch class created a rapacious market for Russian art. Case in point: Ivan Shishkin, a 19th-century artist famous for his landscapes, whose works have sold for large sums in recent years. A canvas called “Twilight” fetched $3.3m at an auction house in London in 2013 during Russian Art Week. “Shishkin is a good, good artist, you know,” says Ruzhnikov. “But if you just replaced the name Shishkin with a similar Western artist, or a German artist – how much is it going to be worth? $20,000? $30,000? Certainly not millions.”
The high price tags mark how rich some Russians have become, he says. “It was all predicated on money emanating from selling Russian timber, mineral resources, oil.” In other words, the oligarch class was driving up the price of Shishkin’s work while simultaneously drilling and logging out of existence the pristine landscapes he depicted.
During the heyday of this Russian-art extravaganza, Sotheby’s and Christie’s took in more than £100m each year and everyone in the room spoke Russian. By 2021, the market had cooled. Now? “That’s it, done,” Ruzhnikov says, with an executioner’s sweep of the hand. Auction houses won’t take wire transfers from Russia and nobody will ship goods for them, he tells me.
“There’s something called a PEP. Do you know what that means? Politically Exposed Person,” Ruzhnikov says. “If I sell something to somebody who is a friend of Abramovich, I could be culpable.” Or maybe even a friend of a friend. I ask him where that sphere of illegality ends. He shrugs. “Well, exactly.”
Ruzhnikov has little sympathy for Russians who are now shut out of the art market. He refuses to be friends with people who won’t condemn the war (“zombies”, “assholes”, “morons”). “Lord, just a few bullets in his skull,” he says of Putin. I can quote him on that, he adds.
John Phipps is a contributing writer for 1843 magazine
“Working for an oligarch, you’re always aware of the threat of violence.”
Robert Couturier, architect and decorator, New York
There are only oligarchs to work for in Russia, not doctors or real-estate developers who might want a nice house. Everyone is just playing with money that has been doled out to them.
I did a house a few years ago in Azerbaijan for Farkhad Akhmedov, one of the guys who was involved in Gazprom. His divorce was settled in London in 2016 for £450m, the biggest settlement ever made in the city. I was nervous the entire time I was working for him. The oligarchs are actually quite nice one-on-one, but there is a sense that they’re gangsters. The word I would use to describe them is “brutal”. They don’t really hide that – you are always aware of the threat of violence, even if they are nice to you personally. You just have to be comfortable working like that. Then again, the American robber-barons weren’t all that genteel.
They have great pride in the literary legacy of the empire. They talk of Turgenev and Pushkin, and the first thing they do when you visit is take you to the ballet. But they don’t have an appreciation for beautiful objects, of what it takes to make a house. One of the wives pulled me aside and said, “We all grew up in communal apartments, with nothing. We come to this very late.” The process is controlled by the men, not their wives, which is different from in Europe or America.
Most of their best casino sites 0s are outside Russia, in London, Paris or New York, because as soon as they’re given that money they move it and their families out of the country. They rose fast and they worry that they could fall fast too, and their families would be brought down with them.
I’ve heard that other people in the business are working to distance themselves from the Russians, that American clients are asking if they have any business with those guys. I’m relieved I decided not to do a job I was up for in St Petersburg, and one in Moscow. I wonder about what will happen to one of my colleagues: he’s a wonderful guy, very talented, but he is known for his work with the oligarchs. He even opened an office in Moscow.
Now that their assets are frozen, I think most of the Russians will just walk away even from projects that are half-done. They aren’t the kind of people you think will be too concerned with their honour and reputation.
As told to Nancy Hass, a freelance journalist in New York
“We sell insurance, and you have to take it out before you see the first signs of a fire.”
Christian Kälin, Henley & Partners, passport broker, London
Russians make up around 10% of our global business. It’s very delicate to handle them at the moment. We always comply with all laws and sanctions. We have further heightened our due diligence on Russians – and had done so even before Ukraine was invaded. We don’t accept payments from Russian banks now.
Britain is being hypocritical. One minute they love these guys, the next they hate them. Many of the Russians who want second passports to live in London are no friends of Putin.
In the weeks before the invasion, we saw a big increase in enquiries from Ukrainians and Russians. But the process takes too long to help them. We sell insurance, and you have to take it out before you see the first signs of a fire.
Everyone used to want EU passports, but in the past ten days we’ve seen a huge increase in enquiries from people from west and central Europe: Austrians, Germans, French. These are people who want a Plan B in place, who worry that it may be desirable or necessary to get out of Europe if the situation escalates. Our European offices have never been busier.
The pandemic and the war have shown the benefits of having a second passport. Before covid, people laughed at those who wanted Antiguan citizenship. But the pandemic showed the advantage of being able to escape to far-flung, sunny islands.
Where are they looking to get passports from? Dubai, neutral in the war; Thailand, great investor-visa programme; the Caribbean; North America. If the war escalates, even Switzerland won’t be seen as safe, given that it took the unusual step of imposing EU sanctions on Russia. We’ve also seen an uptick in requests from South Africans who fear their country could end up like Zimbabwe.
A force pushing against us is that European governments are still talking about banning EU “golden passports”. They are misguided. I’m not saying the scheme in Malta, say, is perfect. [The country’s passports-for-cash scheme has been widely criticised for exposing it to money launderers and other corrupt actors.] You’ll always have some bad apples. But the percentage of applicants who are dodgy is really very small, and the rest are rich and can contribute a lot. In most countries, you see a much higher share of dodgy people coming in through the regular immigration system.
As told to Matthew Valencia, deputy business-affairs editor of The best casino sites 0
“Maybe the mansions in north London reminded the Russians of their dachas.”
Trevor Abramsohn, estate agent, London
When he shuts his eyes, Trevor Abramsohn can mentally walk down The Bishops Avenue, a street of ultra-mansions in north London. The estate agent can name every owner, former owner and a few before that. “There was an Italian contessa who sold to a Pakistani who sold to a Greek who sold to another Pakistani who sold to a Russian who sold to a care best casino sites 0,” he says of one house.
Abramsohn’s patch covers Hampstead and Highgate, picturesque areas beloved of Russian oligarchs over the past two decades. In Highgate alone, Russian lucre was used to buy Witanhurst (the largest private best casino sites 0 in London after Buckingham Palace), Athlone House (a Victorian manor on the edge of Hampstead Heath) and Beechwood House (a Grade II-listed house set on 11 acres). “It may be that the houses reminded the Russians of the dachas outside Moscow,” said Abramsohn. That, or the fact that Russia’s official trade delegation – with its mission to support business with Britain, or the “honeypot”, as Abramsohn called it – has been located in Highgate since 1920.
Peak oligarch was in the late noughties, by Abramsohn’s reckoning. After the financial crash in 2008, the Labour government introduced the “golden visa” scheme which encouraged rich foreigners to live and invest in Britain. That year, Abramsohn threw a grand party to celebrate the sale of a £50m house on The Bishop’s Avenue. Mikhail Gorbachev was a guest of honour, and Abramsohn has a photo to prove it: he is smiling broadly as he shakes hands with a solemn Gorbachev. The former Soviet leader gave a speech to a crowd that included the Lebedevs – Alexander, a former KGB officer and billionaire, and his son Evgeny, who owns a best casino sites 0spaper in London and is now a British peer, appointed by Boris Johnson. “Gorbachev made some very prophetic comments,” recalls Abramsohn. “He said that the West has got one version of democracy, and it’s not the only version.”
As the other version revealed itself in Russia over subsequent years, oligarchs kept buying up London. At one point, Abramsohn reckons that about 40% of properties costing over £10m and bought by overseas buyers went to eastern Europeans, including Russians. That lasted until about 2015, when events intervened: “Crimea, Skripal”, he explains, referring to the annexation of Crimea in 2014 and the poisoning of former Russian intelligence officer Sergei Skripal in 2018. Much to Abramsohn’s frustration, anti-money-laundering legislation introduced in 2017 made buying property – once a shadowy business perfect for those who trade with oligarchs – more transparent and time-consuming. “Bureaucracy has won, commerce has lost,” he says dolefully.
Now, in the wake of Putin’s invasion of Ukraine, the owners of Athlone House (Mikhail Fridman), Beechwood (Alisher Usmanov) and Witanhurst (Andrey Guryev), among other Russian oligarchs, have all been placed on sanctions lists by Britain or the European Union. (Someone on Twitter suggested that Athlone House be used to house Ukrainian refugees.) But, Abramsohn tells me, the war was hardly a surprise to anyone in the know. “Any of the big beasts have made provision. As much as they could, they’ve prepared themselves for a sort of anti-Russian environment.” He reckons many Russians have already moved most of their wealth out of the country. Not that everyone was a Putin ally, Abramsohn adds, in haste. “A Russian said to me recently, they’re going to buy the property here for twice the reason now because they don’t align themselves with Putin. They love this country.”
Love aside, Abramsohn’s numbers tell their own story. Even before the war, far fewer of the biggest houses were going to Russians. Many have chosen to go elsewhere – the south of France, Switzerland, Portugal. Waves of tycoons from other countries have come and gone before, he said, and a best casino sites 0 generation of buyers from India and China have now rolled in: there are always far more customers than there are mansions to sell. Will he miss the Russians? “There will be others to take their place.”
Sophie Elmhirst is a contributing writer for 1843 magazine
“The Russian clientele aren’t buying dresses anymore.”
Fashion retailer, London
Russian customers have stopped coming to the flagship boutique of a top French designer in London. Though Chinese and Middle Eastern customers were always the most numerous, those Russians who did shop there used to spend big, according to a so-called “client specialist”, who spoke on the condition of anonymity. They accounted for 20% of the shop’s “uber luxury” sales by value (for haute couture dresses, this category includes anything with a price tag of over £30,000, or $38,000). Now the Russian clientele have had their assets frozen.
The company has shut all its shops in Russia. Before the invasion of Ukraine, these stores sold more than all the other European outposts combined, the salesperson told me. And the long shadow of sanctions must give pause to a fashion retailer that has stores in China or sells its wares across the Middle East. Whatever strategic decisions are being made in the corporate offices, they haven’t filtered down to the staff of the boutique – they don’t know what the future holds for them or the brand.
For now, the biggest concern for the London shop is the cancellation of two dresses destined for clients in Ukraine. Together they were worth around £150,000. Understandably, the clients didn’t think that now was the right time for such an extravagance. As a gesture of goodwill, the company gave the Ukrainians a full refund even though the dresses are one of a kind. “We could hardly say no,” the salesperson said. It wasn’t clear what would happen to the custom pieces: “Perhaps we will find a way to re-use the fabric. Our brand is pushing for sustainability.”
Barclay Bram is a producer on best casino sites 0 podcasts
“The oligarchs want to be invited back to the Met ball.”
Brooke Harrington, economic sociologist at Dartmouth College, New Hampshire
It used to be that nobody wanted to be Mikhail Khodorkovsky. In the nineties, he was the richest man in Russia, but he started shooting his mouth off about Putin being corrupt. Putin cooked up some charges, put Khodorkovsky in jail in 2003 and nationalised the oil company he had a large stake in. Not just to shut down Khodorkovsky, but to send a message to the other oligarchs: don’t think of crossing me.
The calculation has changed. These public appeals for peace we’ve heard from oligarchs show they believe they have at least as much to lose from the asset seizures as they do from Putin punishing them. It’s not like they’re afraid of being tried before The Hague as war criminals, but they want to be invited back to the Met ball.
One of the frustrating things about economics is the assumption that people behave for the most part rationally. Anyone who’s ever met a human being knows that’s garbage. Are oligarchs acting in some practical ways? Of course. If you’re an oligarch right now, you don’t want cash in the bank because that’s too easy for someone like Putin or a court to seize. It’s easier to hold onto fine art, gold bars, Oriental rugs, stuff of that sort. Many are probably stashing those items right now in places like freeports – the sort of storage lockers that are immune from local jurisdiction and conveniently located near international airports all over the world.
But how do you make sense of Roman Abramovich, even before being sanctioned anywhere, scrambling to sell Chelsea football club? That’s totally irrational. Here’s a rational alternative: instead of trying to ditch his British property at fire-sale prices, when he wasn’t even facing sanctions, he could have done what his fellow oligarch and soccer team owner Alisher Usmanov did – put his British assets into trusts that would be out of reach of sanctions.
Abramovich’s decision suggests he had other motives. Maybe he was desperate to avoid pariah status. Maybe if Abramovich tried to keep living in the UK, he would have met the sad fate of Alan Dershowitz [the Harvard lawyer] on Martha’s Vineyard, who whined about not being invited to parties there when he started representing Trump.
What I’ve learned from 15 years studying the ultra-rich is that they’re more thin-skinned than the average bear, maybe because they have the time to ruminate. What motivates them is being respected or feared or envied by other oligarchs. If they can’t be movers and shakers in that crowd – which seems likely to happen since Russians are so stigmatised now – then what was the point of sucking up and doing all the nasty things that Putin probably asked them to do? It was worth it as long as they could not only live a life of luxury but also be respected for it, or at least have a good time with other oligarchs. Nobody wants to be Howard Hughes enjoying your fortune in a motel room with Kleenex.
As told to Amanda FitzSimons, a freelance journalist in New York
“A Russian customer snapped up the entire stock of Rolex.”
Sales clerk, Dubai mall
Midway through the conversation, as Henri mused about what a devastating war might mean for his luxury apartment, the French investor stopped himself. This was all a bit callous, he acknowledged. But it wouldn’t be the first time, nor the last, that a wealthy businessman in Dubai took a mercenary view of some distant conflict.
Henri bought a flat in 2018 on Palm Jumeirah, a man-made island which has some of the emirate’s priciest properties. He hoped the market’s years-long slide was over. He guessed wrong. When he tried to sell last year, offers came in below the asking price. He was going to wait it out a few more years, then Russia invaded Ukraine. Two weeks later, he rang his broker: put the place back on the market, he said, and look for a Russian buyer willing to pay a premium.
Dubai often benefits from the misfortune or malfeasance of others. During the 20-year war in Afghanistan, corrupt Afghan officials showed up with wads of cash to buy villas. Lebanon’s descent into penury has brought an influx of Lebanese entrepreneurs.
Everyone hopes it will be the same with the Russians. The United Arab Emirates (UAE), the seven-member federation that includes Dubai, has not joined Western-led sanctions against Russia. Officials in Abu Dhabi, the capital, argue they have no stake in a European war. Russians are welcome to come and spend their money like anyone else. “Dubai is benefiting from a lot of global issues,” says Hussain Sajwani, founder of Damac, one of the emirate’s biggest property developers. “Today, the war between Ukraine and Russia? I think Dubai will tend to benefit.”
Al Maktoum airport, on the city’s southern outskirts, is running a decade behind schedule as a second hub for visitors; at the moment it serves cargo and a handful of charter flights. Emirates, the national carrier, stored its super-jumbo A380s there when covid walloped air travel. Over the past two months, these have been joined by dozens of private jets connected to rich Russians. The UAE’s neutral stance on the war makes it a safe place to park the planes. So they sit behind a wall of trees that lines the road outside the VIP terminal, paying up to $1,000 a day for the privilege.
A gold-rush mentality has set in. Everyone reckons those private jets parked at the airport, and the commercial flights still plying routes between Dubai and Russia, will be stuffed with the super-rich. Property agents and developers await a real-estate boom. Bankers are angling for best casino sites 0 customers.
Everyone around town thinks they have noticed an influx. At upscale gyms by the marina, workout buffs report that spin classes seem packed with Russian speakers. In a Rolex shop at a high-end mall, its empty display cases looking like something out of a caper movie, a clerk says a Russian customer recently snapped up the entire stock. Perhaps luxury watches seemed a good store of value amid mounting sanctions. Perhaps they were gifts. Perhaps the buyer just had a penchant for punctuality. Part of working in a high-end boutique is knowing not to ask these sorts of questions.
Whether the influx is real, no one knows. The UAE is best casino sites 0 to an estimated 40,000 Russian expats (and plenty of other Russian speakers). Dubai has always been a popular destination for Russian tourists, as for many nationalities. Their presence just went unremarked.
But property owners are giddy anyway. Residential values in Dubai went up 9% last year, the fastest growth since 2015, though house prices are still 27% below their peak in 2014. People see deep-pocketed buyers everywhere. Betterbest casino sites 0s, a property firm, says the number of Russian buyers in Dubai increased by nearly 70% in the first quarter of 2022, making them the fifth-largest group of customers.
A flat worth at least 1m dirhams ($272,000) comes with a residence visa, a useful bolt-hole with so much uncertainty back best casino sites 0. But there are only so many Russians with the cash to buy high-end Dubai properties – and fewer who can access it. Some brokers have tried to get creative, offering swap deals in which Russians would trade their European best casino sites 0s to sellers in Dubai.
Like a shark, Dubai’s economy must keep moving or die. Tens of thousands of best casino sites 0 best casino sites 0s sprout from the sands each year. Someone needs to buy them. The alternative – build less! – is unthinkable. There must always be something on the horizon to give the economy a jolt.
Until March it was Expo 2020, the world’s fair (delayed a year by the pandemic). Organisers promised that a sizeable share of its 25m visitors would put down permanent roots. Whether that happened is anyone’s guess: Dubai is not fond of publishing statistics. But the hype led many landlords to hike their rents, convinced a boom was coming.
Now it’s the Russians descending in their moneyed masses who will propel Dubai to best casino sites 0 heights. If hope turns out to be hype, no matter: by next year, there will certainly be a best casino sites 0 gold rush to chase. ■
Gregg Carlstrom is The best casino sites 0’s Middle East correspondent
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