What if the oligarchs strike back?

Oliver Bullough


There is growing concern about war fatigue, that Westerners will lose interest in the grinding Russian invasion of Ukraine, and just let Vladimir Putin take whatever he wants. Clearly, you wouldn’t be subscribing to this newsletter if you were the kind of person who isn’t passionately concerned about the horror being inflicted on the Ukrainians, but there is a second front here that is also prone to fatigue and which isn’t getting enough attention: what about the oligarchs?

In the immediate shock of Putin’s invasion, Western countries sanctioned hundreds of oligarchs, officials and hangers-on, but that particular campaign appears to have stalled. A couple of months ago there was a lot of discussion of “moving from freezing to seizing”, but if any progress has been made in that battle, I’ve not heard of it. And this time we don’t have anyone but ourselves to blame. It isn’t the lack of weapons deliveries that is holding us back, but our own lack of urgency.

  • “The G7 must stop dragging their feet and step up. The same gaps that allowed kleptocrats to amass and hide their vast illicit wealth are now preventing even the most willing authorities from finding it. They need to match their ambitious rhetoric of holding Russian elites accountable with real, hard work to fix the broken systems. These countries must invest sufficient resources and empower authorities with mandates to trace and confiscate the assets that are directly linked to crimes. This cannot be a short-term effort: governments must make these task forces permanent to help route out all dirty money beyond the current crisis. It’s time for kleptocrats to pay the price,” said Maira Martini, corrupt money flows expert at Transparency International, in a report published last month.

The report is worth reading in full, not least because it makes clear the urgency of moving from the splashy headline-grabbing raids on yachts to the steady, careful, methodical work to investigate the origin of the funds used to buy those yachts. The policy proposals won’t be a surprise to many of you. They are divided neatly into three areas.

  • Nowhere to Hide, which means transparency of company and property ownership, so we can see what kleptocrats own.
  • No One to Help, which means that professionals are stopped from helping kleptocrats.
  • No Impunity, which means that law enforcement agencies prosecute kleptocrats and the people who help them.

Sanctions should have been the beginning of our action against the kleptocrats, but I am beginning to worry that they might be the end.

“As mere tools to freeze assets, administrative sanctions are insufficient to achieve justice when designated individuals could be also linked to illegal activities. Rather, the ill-gotten assets of kleptocrats need to be seized and confiscated with the ultimate goal of repatriation to the people they have been stolen from,” as the TI report puts it.

EU efforts to sanctions oligarchs have in the past been stymied by, well, let’s call them patchy enforcement efforts in some member states, and also by the union’s failure to maintain restrictions on assets in the face of concerted legal challenges. But we haven’t seen anything yet. A quick look at the cases pending before the European courts reveal a torrent of legal challenges that will make everything that’s come before look positively comedic. The challenges are identified only by the family name of the plaintiff, and I may have misidentified some in my enthusiasm, but here are some that jumped out at me as potentially oligarch-adjacent: Aven, Abramovich. Fridman, Konov, Berezkin, Zubitskiy, Pumpyanskiy, Moshkovich, Mazepin, Pumpyanskaya (I’m guessing this is a female relative of Dmitry Pumpyansky), Melnichenko, Khan, Timchenko, Mordashov, Ponomarenko, Usmanov, Narzieva, Ismailova, Prigozhina.

These challenges are crashing into the final death throes of the last lot of sanctions that came out of a Ukraine crisis, with Viktor Yanukovich and Viktor Pshonka, formerly president and general prosecutor in Kyiv, still challenging their own designations from back in 2014. (The vast majority of their co-designees managed to wiggle their way off the list years ago.) There’s also a challenge from someone called Shatrov, which is the same name as a Belarussian sanctioned after the crackdown in Minsk last year, so the crises are really piling up.

What is the cumulative wealth of all of these people? It’s certainly in the tens of billions, perhaps higher, and they will be spending a lot of money on lawyers. Does the European Union’s valiant Legal Service have the firepower to withstand this? Time will tell, but I’m not going to pretend I’m not worried.

Alarmingly, even in the United States, which is very much the gold standard when it comes to the enforcement of the rules around financial crime (even if many of those actual rules are rather less than perfect), officials are begging Congress for more money to help them do their job.

“We are asking Congress to properly fund the IRS and provide it the resources needed to enforce our nation’s tax laws, especially against those who use tax shelters, loopholes, and accounting tricks to starve our country of the fiscal resources needed to pay for our domestic and national security priorities. The IRS’s technology is decades out of date, written in a programming language no longer taught, and incredibly expensive to maintain. The Master File that undergirds the tax system dates back to the 1960s, when there was no internet, no cell phones, and no spreadsheets or automatic payments. That IRS technology is so far behind the curve is simply staggering,” said Deputy Secretary of the Treasury Wally Adeyemo earlier this month.

You may remember that last week I explained my developing fascination with the phenomenon of “legalization by under-enforcement,” how governments have deliberately cut funding for law enforcement agencies so they can look tough without actually being tough, and asked if anyone had suggestions for what we might call it. There were loads of replies, many of which were hilarious: Enforcement Theatre; the public patronage of risk; Deregulation-induced moral hazard; Financial Don’t Ask, Don’t Tell; Spare the rod, spoil the shareholders; corporate welfare; red tape to green light; golden parashite; Dereliction Deregulation; The Three Monkeys Method; Enforcement Collapse; Decriminalization by Neglect; The Pull-Out Method.

I’m not sure any of us have quite got there yet. We need a term that combines “hollowing out” with “performative”, plus a bit of “hypocrisy” and a dash of “special interests”. We’ll get there in the end. What was amazing, however, was to get emails from all over the West – or from all over EU, the U.S., Canada, Australia, and the U.K. anyway – all reporting that they’d encountered the same phenomenon, which has clearly spread widely.

Back in the 1970s, some scientists became excited by the Hundred Monkeys theory, whereby widely dispersed population of primates supposedly all suddenly acquired a skill once a critical mass of the population had learned it. Some kind of telepathy seemed to be the only explanation. The theory has long been debunked as a load of old hippy nonsense, but perhaps it shouldn’t have been? Cynical politicians worldwide have as if by magic simultaneously all learned the electoral appeal of passing tough laws (“give us your votes if you hate greedy baddies!”), then doing nothing to enforce them (“give us money if you’re a greedy baddy!”).

Perhaps we could call it the Hundredth Three Monkeys theory? Or perhaps there’s some wickedly clever political strategist out there who has actually been responsible for spreading the idea round the world? If you hear anything, let me know! And please keep trying to think up a name for the phenomenon. When I’ve gathered a few more examples, I’ll arrange a public vote, with the winner receiving a signed copy of my book (there will be no cash alternative, sorry).

Before I get off the subject of ex-Soviet oligarchs, I got an email last week from a British parliamentarian who was agonizing over whether to accept an all-expenses-paid fact-finding trip to Ukraine arranged by a leading Ukrainian oligarch. Were Ukrainian oligarchs still bad, the parliamentarian asked, and should they go along? To which my answer was: YES, THEY BLOODY WELL ARE, and NO, THEY BLOODY WELL SHOULDN’T! Ukraine’s homegrown oligarchs have spent the last 30 years doing their best to stymie the country’s democratic transformation and will continue to do so just as soon as they can, so don’t buy the patriotic shtick.

Casey Michel wrote a good piece on this last month.

“Should their campaign succeed, it raises the risk of the West repeating many of the mistakes it made decades ago, when it first began helping oligarchs run rampant across the region. It’s a mistake the West, and Ukraine, can ill afford to make again: While Ukraine will remain on a firmly pro-Western trajectory after this war, it’s clear that Western media—and Western think tanks and law firms and politicians alike—need to finally realize that there is no such thing as a pro-Western oligarch,” he wrote.


One of the chapters I’m proudest of in my new book is the one on how Gibraltar was transformed from a naval base into a world-leading center for offshore gambling. On that note, it is notable that it has been gray listed by the Financial Action Task Force, the world’s anti-money laundering watchdog.

“Gibraltar needs to take a number of steps including focusing on gatekeepers to the financial system, including gambling operators and lawyers,” FATF chair Marcus Pleyer said. “At the moment, supervisors are not applying sufficient fines for anti-money laundering failings… This is important as the gambling sector in Gibraltar is large and is aimed at foreign jurisdictions.”

Offshore gambling has driven economic growth in Gibraltar, so it will be interesting if it now goes abruptly into reverse.


I’m intrigued by this lengthy report from the Bank for International Settlements (I’m also intrigued by the BIS, but that can wait for another time), looking into the future of the monetary system. We should perhaps be a bit suspicious that the Central Banks’ Central Bank is so unquestioningly supportive of the central role played by central banks, but there’s still plenty to take away from it. It argues that the collapse of the TerraUSD stablecoin reveals an inherent fragility at the heart of crypto, which can’t be fixed without deep-rooted and far-reaching reforms (which look unlikely).

“Activity in this parallel system is, instead, sustained by the influx of speculative coin holders,” the report notes, which is – unless I’m reading it wrong – just the BIS accusing crypto of being a huge Ponzi scheme. Anyway, it then goes on to lay out an extremely thoughtful vision of how central banks could create a better future system, which is worth delving into, in my opinion.