Skip to main content

The oligarch invasion

SOLOMON HUGHES ponders the curious case of pro-Putin Russian oligarchs rubbing shoulders with Tory grandees and throwing a rouble or two into their party’s coffers

IT’S a Russian invasion. The Great Bear’s bully boys are breaking into new territories. 

I’m not talking about Ukraine. I’m talking about Vladimir Putin’s pals’ assault on the citadels of the Tory Party. 

They didn’t need tanks to break into the Conservatives’ summer party. They just needed money.

The Tory Party auctions off access to David Cameron through “donor clubs” and fundraising dinners. 

And Russian oligarchs have got lots of cash. When Russia privatised her industries in the 1990s, ordinary Russians were given share certificates. 

Thanks to economic “shock treatment,” Russian people were getting poorer, so they sold their shares for food and heating bills. 

Anyone with a bit of cash and some government connections could scoop them up. So the oligarchs got rich. Now they are using that cash to buy access to the Tory Party.

The Bureau for Investigative Journalism recently exposed who went to the £12,000-a-table 2013 Tory Summer Ball. Many of the cash-for-access guests were Russian oligarchs.

Some of these oligarchs fell out with Putin after enriching themselves and are on the run from Russian authorities. Andrey Borodin was at the Tory ball. Russian authorities want him arrested for “aggravated swindling” over a £114 million fraud on the Bank of Russia — charges he denies. 

Alexander Temerko was also at the ball. This billionaire successfully resisted an attempt by the Russian government  to extradite him for fraud on charges he says are politically motivated.

What seemed more surprising was the presence of pro-Putin Russians at the Tory ball. 

Putin’s judo partner and PR front man Vasily Shestakov was at the Tory Party’s party. 

At the 2014 Summer Ball, Lubov Chernukhin donated £160,000 to the Tories. She paid the money in return for a tennis match with Cameron and Boris Johnson sold in a fundraising auction. 

Her husband Vladimir Chernukhin was Putin’s deputy finance minister in the 2000s. He is now a British-based investor.

The point is that the Tories, like their friends in the City, love Russian money. 

They don’t care if it is pro-Putin cash or anti-Putin cash. It’s just cash. 

Which is why, when Cameron and co make noises about sanctions on Russia over Ukraine, they are just noises.

They don’t mind wasting other people’s blood in Libya or Iraq or Afghanistan in pursuit of their foreign policies. But they hate wasting their money or their City friends’ money.

You don’t need to go to the Tory ball to see this. 

Putin-friendly businessmen are among Cameron’s biggest and most reliable donors.

Ian Taylor, boss of giant oil trading firm Vitol, has given the Tories over £600,000 since 2006. 

Last year Taylor gave them £134,000, which buys him private meetings with Cameron.

Last year Vitol went into partnership with another trading firm called Glencore to give a $10 billion loan to Russian state-owned energy firm Rosneft. 

Vitol has put up around $3bn of the Rosneft loan and, according to the FT, is currently trying to lend Rosneft another $2bn. 

Rosneft is an arm of Putin’s state, run by his close ally Igor Scechin. 

Vitol’s loan, which will be repaid in oil, is designed to help Putin expand Russian state power in the energy sector. 

Vitol’s Russian interests go beyond Rosneft. Last November Russia’s government-owned gas firm Gazprom announced it was working with Vitol to develop underground gas storage and gas-fired power stations in Europe. 

While the British government is talking about reducing reliance on Russian gas because of the Ukraine crisis, Taylor’s Vitol is going into business with Gazprom to increase it. 

Vitol says Taylor’s donations are his personal business, but Taylor personally announced both the Rosneft and Gazprom deals. 

Taylor was also among those at Gazprom’s London offices for its annual champagne reception in March. 

Links between the Tories and Vitol became even stronger when former Tory Energy Minister Charles Hendry MP  became a £60k-a-year Vitol consultant this February.

Moscow-born billionaire Alexander Knaster has given the Tories £400,000 since 2010. 

Knaster runs London finance firm Pamplona Capital Management, which specialises in helping rich Russians invest in the West — a trade susceptible to serious sanctions. 

Knaster is close to Mikhail Fridman, a Russian oligarch prospering under Putin.  

Knaster was chief executive of Fridman’s Alfa Bank in Russia before he came to London. Alfa Bank now, in turn, invests around £1bn in Knaster’s London investment firm, Pamplona Capital. 

Knaster is involved in Russian energy deals — German energy firm RWE is selling its oil business to Fridman and other oligarchs. 

Knaster was chief negotiator on the deal and is reportedly financially backing the buyout. This kind of trade could well be hurt by firm sanctions. 

Knaster showed that London is more open to Russian business than New York by giving up his US citizenship to become a British citizen in 2010 — a step which also allowed him to donate to the Tories.

Taylor and Knaster are involved in big, Putin-friendly deals, but less obvious Russian cash runs right through London’s hedge funds, investment companies and luxury developers — who are precisely the kind of people funding the Conservatives. 

When the Ukraine crisis first kicked off, Cameron’s security adviser Hugh Powell was photographed on the steps of No 10 with a “secret” paper saying that the “UK should not support for now, trade sanctions … or close London’s financial centre to Russians.” 

This was describing the interests, not just of the City, but also the interests of some Conservative funders.


We're a reader-owned co-operative, which means you can become part of the paper too by buying shares in the People’s Press Printing Society.

Become a supporter

Fighting fund

You've Raised:£ 17,083
We need:£ 917
4 Days remaining
Donate today