There comes a time when the origin of a vast fortune is forgotten. Sometimes it takes hundreds of years, like the fortunes made in the colonial era by trading sugar, rum and slaves, and sometimes it takes a surprisingly shorter period for the ill-gotten gains to be whitewashed and welcomed.
The pictures that emerged from a very exclusive party at the summit of Tepuy Kusari, a sacred flat-top mountain in the Canaima national park in Venezuela, might also serve as proof that after twenty years, old money and new money obtained by deals with the Venezuelan government have all merged into just money.
But those black-tie partygoers are not the only Venezuelans at the top of a peak. The latest leak from the Credit Suisse bank revealed that almost two of every ten accounts belong to a Venezuelan citizen or resident.
Casi dos de cada diez cuentas filtradas del banco Credit Suisse pertenecen a ciudadanos venezolanos o clientes que reportaron vivir en Venezuela.https://t.co/RddaQKxPOi
— Ewald Scharfenberg (@Ewalds6) February 20, 2022
A bank in Switzerland is only one of the many destinations of the unprecedented wealth drained from Venezuela during the last twenty years. Some of that dirty money can be seen in sweet spots in Caracas, my hometown.
It is hard to know with precision which of the gourmet restaurants and mini markets, bars, hotels, casinos, luxury car dealerships and mostly-empty office towers are owned by those with enough money to ‘invest’ in a country where the average salary in dollars can be counted with the fingers of one hand.
Due to the acute poverty among regular Venezuelans, these new businesses cater almost exclusively to their class.
“We know who they are and where their money comes from, but they are the people that I have to trade with if I want my business to succeed,” says a Venezuelan who owns a social media company and has asked to remain anonymous. Her reality is shared by many Venezuelans who work for a living.
Before moving to London some five years ago, I never really knew of the deep connections this city had with dirty money. Having spent years reporting on the demise of our democracy and the massive cases of corruption that emptied Venezuela’s coffers, I wasn’t expecting to find the British government so eager to bend the rules and willing to turn a blind eye to an influx of money coming from impoverished countries with a public record of crooked governments.
For instance, Russia.
London is the Place for Oligarchs
“There are no barriers to a rich man,” claims a Russian proverb quoted as an opening statement in the novel Londongrad: From Russia with cash, which details the dealings of the many Russian billionaires who landed in the UK since 2008 when the British government allowed them to gain residency rights in return for multimillion investments in the property market.
The book describes the moment when a group of oligarchs went into a restaurant and the waiter told them that the marble table was very valuable and they shouldn’t put briefcases on it. The waiter returned to find a big briefcase on the table. “It’s not a briefcase,” one oligarch replied, “it’s my wallet.”
This reminded me of the time when a bunch of boliburgueses gave a tip of 99,980 euros to a worker at a hotel in Paris back in 2010. This blatant display of wealth was the beginning of the investigation in Andorra of the so-called “Salazar group,” an elite made up of Venezuelans related to the former Minister of Energy Rafael Ramírez, also investigated by the looting of PDVSA, the national oil company.
Here in London, an undercover journalist posing as a Russian kleptocrat pretended to buy a luxury property in London. He confirmed to the real estate agent that the money came from corruption so his name cannot appear in the documents. The estate agent assured him that this was not a problem and suggested a trusted firm to assist with the sale. This young real estate agent would have earned a commission worth £350,000 if the deal were real.
That privileged elite is only a fraction of a community of some 70,000 Russians living in the UK. Among them is Roman Borisovich, a former banker turned anti-corruption campaigner who in 2016 organized the first sightseeing of properties owned by foreign kleptocrats in London.
There are lots of colorful buses giving guided tours in London and among them is the “Kleptocracy Tour,” with a route designed to showcase luxury mansions and to highlight the pervasive presence of money laundering practices in the city. The tour visits wealthy neighborhoods such as Marylebone, Hyde Park, South Kensington, Knightsbridge and Mayfair. There is no coincidence that the shops and restaurants in these areas are the likes of Harrods, Rolex, Bentley and Burberry.
Living in the UK, I have come to realize that Venezuelans are not the only ones resorting to jokes to deal with uncomfortable truths, such as the closeness of our governments with oligarchs. Just last week, a few Russian nationals and banks were subjected to sanctions as a response to Putin´s decision to invade Ukraine. A tweet from a satirical group, similar to our Chigüire Bipolar, made me feel right at home.
Boris Johnson hits three Russian billionaires with travel bans. Unclear now how they’ll get from Knightsbridge to Downing Street.
— Have I Got News For You (@haveigotnews) February 23, 2022
The role of the city of London in facilitating this blending scheme couldn’t be more conspicuous. The Tier 1 investor visa program—a.k.a. golden visas—, allowed people with at least £2 million in investment funds to apply for residency rights. The larger the investment, the quicker the application process went: £2 million took five years and £10 million shortened the wait to only two. Between June 2008 and April 2015 about 3,000 successful applicants got a foot in the UK, including 700 millionaires from Russia.
According to Transparency International UK (TI), at least £3.15bn entered the UK through the golden visa scheme. “97% of golden visa investors came to the UK during the blind faith period of checks by the visa authorities when the scheme was highly vulnerable to abuse by the corrupt,” refers TI. In other words, no one checked the origin of the money.
The anti-corruption organization estimates that 60% of all golden visas granted by the UK were awarded to Chinese and Russian nationals. “At a minimum, a total of £1.15bn of investment flows into the UK can be attributed to Chinese golden visa investors and £729m to Russian nationals,” says the report. However, there were no investigations led by UK law enforcement authorities focused on money laundering into the UK of the proceeds of corruption stolen from China or Russia.
The golden visa scheme was finally canceled in January 2022. Nevertheless, the harm had already been done to the reputation of the UK, portrayed as a safe haven for dirty money in investigations such as the Pandora Papers.
“There is now a wealth of evidence that corrupt individuals see UK property as an attractive asset as it offers stable prices and, in the case of luxury property, status. Using open-source data we have identified 421 properties, worth £5 billion, bought with suspicious wealth,” says a TI report entitled UK at your service, in which the organization describes how the proceeds from corruption are used to buy luxury goods such as cars, clothing, jewelry and jets, and to gain access to world-class education in the finest UK schools and universities.
But perhaps the most worrying kind of access conferred by this influx of dirty money is the one granted to the very top of the political class. The Sunday Times revealed the existence of a secret advisory board of wealthy donors who were regularly invited to private briefings with the prime minister and his top team. In total, the board members were said to have donated £22 million to the Conservative Party, in power since 2010.
— Adam Bienkov (@AdamBienkov) February 20, 2022
What’s next? Maybe a place under the sun
With all its luxury and glamour, England lacks a vital asset that is plentiful in Venezuela: sunshine. Both the Russians and the Venezuelan government have taken notice of this tropical advantage and have set up an incipient but promising tourism scheme from Moscow’s Sheremetyevo airport to Margarita Island, located off the northeastern coast of the country in the Caribbean Sea. At the moment, flights are scheduled every ten days and the tour operator offers a range of all-inclusive deals from about $1,800 per couple.
The propaganda machinery of the Venezuelan government is in full blow about this new enterprise, with the Minister for Tourism, Alí Padrón, announcing that 424 tourists from Russia have arrived in the country “to enjoy the benefits of Margarita Island.” The scheme is set to welcome some 65.000 tourists from Russia during its first year.
¡Excelente noticia para el #MotorTurismo! Continúan llegando turistas rusos a la isla de Margarita, se suman 424 visitantes que disfrutarán las bondades de la Perla del Caribe y de nuestra Nación.
— Alí Ernesto Padrón Paredes (@AliErnesto32) January 10, 2022
The ties of Venezuela with Russia are deep and longstanding, especially since the South American nation parted from democratic principles and its circle of alliances concentrated among a small group of countries that share a strong ideological affinity. Among such countries are Iran, Syria, Turkey, Russia, Belarus, and China. It is with their support that the Chavista regime has been able to circumvent the economic sanctions imposed by the United States and Europe in 2017.
Given how close the governments of Nicolás Maduro and Vladimir Putin are, and how closely oligarchs and enchufados resemble one another, it might be a matter of time before Margarita Island suffers the same invasion and ecological degradation endured in Los Roques, another Venezuelan paradisiac spot.
An investigation led by the Alianza Rebelde Investiga revealed just how “the new constructions in the archipelago violate the current legal framework and threaten to destroy the beauty of a pristine territory by building complexes of mass tourism that fulfill the wishes of the new economic and Chavista elite”.
Let’s face it: if such is the plan for Margarita Island, who would say no to a bunch of rich Russians?
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