A Review of Butler to the World by Oliver Bullough

The fight against money laundering needs an enemy and Putin sells.

If you have stepped foot in a bookshop recently you may have noticed that within the non-fiction display or history section the books with their covers turned outwards and most aggressively marketed to customers often relate to the war in Ukraine or the study of Vladimir Putin. The photo below is taken from a Barnes and Noble outlet in the United States but Ukraine-mania, kleptocratic studies and Putinology is very much in vogue in the UK. Almost a genre its own right, these books, including Catherine Belton's 'Putin's People' seek to spread greater awareness of the shady activities which have taken place in post-Soviet Russia and ask the question as to why a select group of people have got so rich so quickly. In line with such thinking, kleptocrats conquered Russia and now they are taking over Ukraine, whilst they stash their money in the UK.

Oliver Bullough's 'Butler to the World' was published in March 2022, just weeks after the Russian invasion of Ukraine. Indeed, Robert Verkaik's review of the book published in The Guardian called it a "timely expose of how the UK helps oligarchs, gangsters and money launderers spend and store their wealth". In his review Verkaik suggested optimistically that the war in Ukraine might represent a turning point as to when the UK finally gets its act together to stop acting as a nation of butlers safeguarding dirty money belonging to "the worst people on Earth". Having began his career as a journalist in post-Soviet Kyrgyzstan, Bullough has now built up a profile as somewhat of an activist against money laundering. Butler to the World follows Moneyland (2018) which in a similar vein, set out the nefarious world of kleptocracy to a largely new audience. Reviewing Moneyland in the London Review of Books, Vadim Nikitin remarked on Bullough's moralistic approach to the topic, suggesting that he made it sound as if theft and corruption was something that happened in far flung places by uniquely evil people. By contrast, Butler to the World is less heavy on the whiff of righteousness and the cringeworthy references to Harry Potter. It also redirects the issue of kleptocracy closer to home, asking vital questions as to why the UK has become such a willing enabler.

With an estimated £88 billion laundered through the UK on a yearly basis, the fight against money laundering is a tireless and often fruitless endeavour. As Bullough points out, the UK regulatory environment is weak, lacking public funds to properly investigate complex cases and suffers from a confusing system whereby over twenty bodies have regulatory powers. Furthermore, other than in the banking sectors where Suspicious Activity Reports are over-reported, key enablers such as lawyers are reluctant to share information. Combined with a historic lack of political will, the result is the continuation of a well-developed system whereby those with ill-gotten gains are able to keep money in the UK, often held in high-value assets which they have acquired, safe from the scrutiny of authorities and backed up by a team of butlers (ie. the bankers, lawyers and any other professionals who may have facilitated the safeguarding of their money).

Bullough charts the rise of the country's butlering profession back to the Suez crisis in 1956 which precipitated the fall of the British Empire. This in turn led to the creation of several nascent states, many of which, such as in the case of a small Caribbean island, had little natural resources and thus revenue streams to speak of. In the case of a new African nation, local elites who had become rich during the time of the British Empire were concerned about whether they would be able to hold their wealth in a country with a new and potentially unstable banking system where the post-independence political environment had a tendency to promise the redistribution of a nation's wealth. Such scenarios, combined with the 'Eurodollar' phenomenon which saw large amounts of money pumped through the City of London, created a new frictionless system in which money, in search of a safe home, could move around more freely.

By the 1970s, many so-called tax havens sprung up, whereby a wealthy individual could set up a shell company in the British Virgin Islands for a small fee, in exchange for fiscal efficiency, secrecy and legal rights. In return, the islands had a national revenue stream and a new service industry. More and more 'hot money' began to circulate through the global financial arteries, much of this via illicit activities such as the drug trade but also via legitimate activities since rich businesspeople had cottoned on the fact that financial secrecy and lower tax bills were also on offer to them. The fall of the Soviet Union in 1989 and the new opportunities for wealth creation that came with it brought in the next wave of kleptocrats, many of whom were keen to make use of fiscal loopholes and the playground of London. Not only does Bullough suggest that financial butlering might even be part of the British national psyche, using the fictional example of PG Wodehouse's Jeeves who acts as a servant to the aristocratic Bertie Wooster, he outlines how it is also made possible as the result of constitutional quirks and corporate loopholes. For example, the existence of Scottish Limited Partnerships, originally used to protect agrarian landlords, had been taken advantage of by money launderers in Moldova since the structures allowed them to register companies under nominee arrangements, through which they were able to launder public money via shell companies in the Seychelles.

But the book would not be complete without a chapter on Post-Soviet kleptocracy, where the author is able to take aim at Putin and his so-called cronies. It is for this inclusion that the book may also be found upon the shelves amongst the now popular pages of Putinology and Ukraine-mania in a bookshop near you. Chapter 7 is dedicated to the rise of a Ukrainian businessman named Dymtro Firtash who essentially acted as a middleman for Gazprom. He was not only close to the pre-2014 Russia-friendly government in Ukraine but had also become a major donor to Cambridge University and owner of a multi-million pound property in Belgravia. Whilst the questions of how Firtash was able to amass such wealth in the first place are a part of the book's key themes, the accusation that Firtash’s success was helped by being 'close to Putin' is not the black-and-white assertion of money laundering that Bullough puts it as. Indeed, such a phrase is an oft-used sleight of hand used by Western Putinologists to suggest that Putin has abetted the majority of the corruption since the break-up of the Soviet Union. The reality is more complex since the Russian President has pledged and to some extent has managed to clamp down on the oligarchs’ excessive wealth and political influence. By suggesting that Firtash was able to successfully lobby against the UK Foreign Office's plans to sanction Russia over its annexation of Crimea in 2014, Bullough likely overestimates Firtash’s actual political clout at the time in the UK. Not only this, but by mixing the potential corruption of an oligarch with sensitive political activities, it becomes harder to find an objective, regulatory solution to money-laundering since competing state interests are at play.

Perhaps the most powerful message of the book is the way that it shows how British history has had a boomerang effect, as the unravelling of Empire and the lax corporate and fiscal system that has remained in the UK has now come back to bite the country, making us all poorer overall at the expense of a small group of elites. In short, the global money men and oligarchs are a British creation and Bullough is right to wonder where all the fuss about this has been previously. Public awareness of money laundering is relatively recent and the global regulatory environment, spearheaded by the Financial Action Task Force only took off towards the end of the Cold War. In Bullough's introduction to the book he cites a series of speeches by Lord Agnew who lambasted the UK's unwillingness to tackle money laundering before resigning at the beginning of 2022. Weeks later, following the Russian invasion of Ukraine, the rhetoric and response from parliament was subsequently dialled up, with a Labour MP holding up a copy of Bullough’s book whilst arguing that the government needed to do more to crack down on kleptocratic wealth. Bullough noted himself that he believed the moment was there to be seized and still writing in his introduction to the book, enthusiastically welcomed the numerous sanctions which had now been placed on wealthy UK-based Russian nationals such as Roman Abramovic. Although Bullough admits that not all kleptocrats are Russian oligarchs, there is a risk that public interest in the matter is linked too closely to the war in Ukraine and that the solutions to global corruption become politicised in such a way.

If indeed the diagnosis of the problem is one of legal and fiscal loopholes, combined with an underfunding of the the relevant authorities, then the solution should not be lawfare via sanctions (a political tool by nature) imposed on a select few Russian nationals. Bar some unsuccessful reforms such as the introduction of Unexplained Wealth Orders, the sanctions approach and anti-Russia hysteria is the route the UK government has taken most strongly to date. Throughout the book Bullough praises the equivalent US efforts in fighting kleptocracy, highlighting how organisations such as the FBI not only have greater powers but greater budgets to tackle dirty money. A similar book, also belonging to the new literary genre of kleptocratic studies and Putinology is Casey Michel's 'American Kleptocracy'. As its title suggests, America too has allowed large amounts of dirty money onto its shores, however Michel is more positive about the US authority's fight against it than Bullough is of the UK's. The landmark moment in the US regulatory environment was the adoption of the Patriot Act which followed 9/11 and the so called war on terror. The danger with such an approach is that it aligns the fight against money laundering closely to national security interests, meaning the fightback becomes politicised, often at the expense of necessary fiscal and constitutional reform. In jumping on the anti-Russia bandwagon, Bullough undoes some of the excellent diagnoses he makes in the book. Too often, the book’s tone is indicative of a ‘culture-wars’ approach to anti-money laundering, where a corrupt ex-Soviet villain is central in building a certain narrative and win people over to ‘fight the good fight’.

Instead of getting excited about sanctions, we should not lose sight of the fact that we in the UK have enabled kleptocracy as a result of our own fiscal and constitutional inadequacies. Maybe we should put some of our lawyers that profit handsomely from butlering for kleptocrats to better public use by tightening the relevant loopholes that facilitates money laundering. The problem didn't start with Putin and its remedies should be constitutional reform and better regulatory funding rather than political manifestations and anti-Russian lawfare.