Trump’s presidency has now entered its most dangerous phase. With little left to lose after an earth-shaking midterm wipeout, he is released from political restraint. He has accepted the result with apparent grace, dismissing the fact that the elections were a referendum on his presidency with the assertion that he was not on the ballot — an amusing claim, since he spent the campaign saying the opposite. The mood in the party is somber. The Florida governor Ron de Santis, mooted as a presidential candidate, has described the results as “close to an extinction-level event for Republicans”. No doubt rightly, given its impact on prices at the pump, the vice-president JD Vance — also looking to his future — has averred “the reason we lost is the war”. They and many others are pointing the finger at Trump, but he may not care. 

In control of the House and Senate, the triumphant Democrats can launch as many legal challenges as they like. They can block legislation, launch investigations into his crimes and impeach him, but he retains the presidential veto, and the supreme master of the attention economy will not be out of the limelight for long. An adventure in Cuba would be a welcome distraction, and he may yet trigger a greater cataclysm in the Gulf. Trump’s second administration is the experimental refutation of liberal legalism. Post-Trump America is not a constitutional republic but an illiberal democracy, the triumph of politics and executive power over law and procedure.

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John Gray: liberal civilisation is finished

By John Gray

Those who believe Trump shares a mindset with the world’s leading tyrants are mistaken. Neither the Russian nor the Chinese leader displays his all-consuming narcissism. Putin is an archetypal creature of the Soviet system, a cold-eyed killer schooled in the art of survival. Xi is a suspicious autocrat possessed by the insecurity of his position. Putin’s aggression combines self-preservation — his own survival inseparable from that of his regime — with a neo-tsarist vision of a mystical “Russian realm” targeted for destruction by the West. Xi’s “Chinese dream” is the project of making China into the global hegemon and an unapologetic affirmation of Chinese civilization.  

Embodying nothing except his own emptiness and venality, Trump is the ideal dupe for these flinty tyrants. Possibly he fears Putin as the possessor of kompromat of some sort — there must be many possibilities — and he has certainly done business with the regime. But if Trump is behaving like a Russian asset, it is not because he was recruited as a Manchurian candidate in Moscow 40 years ago. Putin never expected Trump to become president (any more than Trump did himself) and seems to view him with bemused contempt. Trump sees the Russian dictator through the lens of his ideal self-image as strongman and admires him as a model of how to use state power to accumulate personal wealth. 

Those who speak of the Putinisation of America can point to undeniable parallels. Putin is a master of vranyo, the Bolshevik practice of telling lies that both speaker and audience know perfectly well are falsehoods — as when he denied that the “little green men” invading Crimea in 2014 were Russian troops. The goal is not persuasion but domination: by imposing a narrative that is transparently false, the very idea of a domain of facts independent of power is undermined. With his incoherent boasting — claiming to have “completely and totally obliterated” Iran’s nuclear capability, then justifying a resumption of the war to destroy it — Trump also asserts power over facts. The difference is that Putin knows he is lying, whereas in Trump’s moment-by-moment solipsism, truth has no meaning.

For his critics, Trump is the kingpin of a Putin-style kleptocracy. It is true that his second administration has seen the presidency monetized to an unprecedented degree. Diplomacy has become a rent-seeking family business. Insider trading has been normalized. In August of this year, the Trump Media and Technology Group (TMTG) launched a premier data feed allowing Wall Street banks and high-frequency trading firms access to his market-moving Truth Social posts milliseconds before they become available to the public, with subscribers paying a hundred thousand dollars a month for the service. 

By the time they leave office, Trump, his family and acolytes will have amassed immense riches. Likewise, Putin’s extraction of capital from Russia’s economy has, by some estimates, made him richer than Elon Musk. Yet wealth and government interact differently in Putin’s Russia and Trump’s America. Under Trump, the US is ruled by a variant of capitalism in which the state is used as a means of corporate enrichment at the expense of America’s strategic interests. In Russia’s version of state capitalism, corporate influence is curbed when it threatens the state itself. The same is true in China.

When Russia’s richest oligarch, Mikhail Khodorkovsky, became involved in opposition politics and negotiations to sell part of his oil company, Yukos, to American firms, he was arrested at gunpoint on his private jet, sentenced to 10 years in a Siberian penal colony and Yukos bankrupted. When the CEO of the Alibaba Group, Jack Ma, criticized China’s financial regulators, he was taken out of circulation and his business empire dismantled. In contrast, the Trump administration authorized the export of high-end computer chips of Jensen Huang’s Nvidia for export to China. During Xi’s visit to Washington, Trump bent the knee in more than one sense. He reportedly pitched the Chinese leader regarding purchases of American military technology, violating decades-long commitments to Taiwan and other allies. He prioritized corporate gain over national security and America’s standing in the world.

Trump’s “transactional” diplomacy consists of the exchange of American power for promises of private gain. The settlement of the Ukraine war being brokered by Trump’s special envoys, his son in law, Jared Kushner, and the real estate investor Steve Witfkoff, follows this playbook. A multibillion-dollar deal to acquire the international holdings of Lukoil, Russia’s largest remaining private oil company, has apparently been discussed, along with reopening the Nord Stream pipeline, blown up in September 2022. Elon Musk’s Space X — on Trump’s instructions, according to Musk — imposed speed limits on Starshield, which allowed Ukraine to intercept Russian drone and missile attacks. Sanctions have been paused, and Trump has called more than once for Zelensky’s removal. 

Trump’s aim is full-scale economic détente with Russia, which he believes will realize large profits for him and his coterie. Very likely he and they will benefit, but there is something spectral about the fabulous wealth envisioned in these sordid machinations. Why should Putin respect the terms of any deal? The “energy ceasefire” Trump believed he had agreed with him was flouted within hours. Much of Trump’s chicanery is based on fantasies — the reverse of realpolitik. If Ukraine is being sold out, it may be for next to nothing. 

Lured by dreams of financial gain, Trump has torn up whatever remained of an American-led “rules-based” order. This is more than the much-discussed passing of a unipolar order. American power is imploding, with the post-Cold-War leviathan now a floundering, flailing behemoth. Rather than an “unreliable friend”, the US seems closer to the enemies of the countries that depended on it for their security. Yet there can be no assurance that America’s new strategic partners will keep their end of the deal. When they met in St Petersburg in October, Witkoff praised Putin as a “humanitarian” for releasing an American prisoner captured in eastern Ukraine in April 2022. Such a toadying eulogy may be understandable. For the US, Yalta 2.0 may yield little more than the prisoner’s release. The presumed exchange is that Russia ends its support for Iran while the US forces Ukraine to surrender; but America has no way of ensuring Russia’s compliance, let alone that of China or Iran.

The Iran debacle itself began with a whim that set in motion a fateful escalation. The illusory prospect of another Venezuela-style coup, semi-magical in its flawless operational execution, was irresistible. What Trump described in March as “a little excursion” has been a forced march to strategic defeat. The result of decapitating the Iranian leadership has been to install a military dictatorship more repressive than the decaying theocracy it replaced. The Islamic Revolutionary Guard Corps has become a permanent threat to the Strait of Hormuz. The pre-war status quo, in which it was an open international waterway, is irrecoverable. 

This was not unforeseen. Similar bombing campaigns have been war-gamed many times, with similar results. As Barbara Tuchman showed in The March of Folly: From Troy to Vietnam (1984), history is not so much a catalog of error as a succession of follies whose consequences can be known in advance. 

However the war develops, America has forfeited its position in the Middle East. Over the past months, its bases in the Gulf and Iraq have been disabled and its armories depleted. Tens of billions of dollars have been expended using costly missiles against cheaper and more quickly replaceable drones. Iran’s partner in the “Axis of Resistance”, the Houthis have turned another vital waterway, the Bab el-Mandeb Strait, into a high-risk corridor, while launching a deadly wave of strikes on Saudi airports and refineries.The Gulf monarchies are constructs of European colonialism propped up by American security guarantees that have proved effectively worthless. It cannot be long before regime change comes to the Kingdom, weakened by festering rivalries within the House of Saud since Mohammed bin Salman’s Ritz Carlton coup in November 2017. How could the debt-laden US withstand the collapse of the petrodollar, which channeled Saudi oil revenues into an AI-led stock market bubble already showing signs of bursting? 

Another “short, intensive” bombing campaign against Iranian nuclear and energy facilities, which seemed to be prefigured in the “limited” American strikes on Qeshm Island in the Strait of Hormuz early this week, would only postpone a further American retreat. Trump’s curtailing aid to Israel has been seen as reducing the likelihood of a resumption of the war. But Benjamin Netanyahu and Trump may still think they can “finish the job”.  

Iran’s economy is being slowly strangled by the American naval embargo that is blocking its seaborne oil exports. Yet the regime retains the capacity to devastate the Gulf’s energy production, causing acute shortages of diesel — the fuel on which the global economy runs — and irreplaceable agricultural chemicals. Undersea cables and data centers could also be attacked. The true Iranian nuclear option is disabling water and desalination plants. Weaponizing its geography, with its mountainous streams, inland rivers and lakes, Iran could wreak an enormous civilian catastrophe in the desert kingdoms of its Gulf enemies. 

At a global level, a species of total war is already underway. In the delirium of the Western mind, Gaza has been singled out as a unique catastrophe, but the reach of the battlefield into civilian life is practically universal. In Ukraine, Putin’s relentless bombardment destroys schools and scientific academies and cuts off electricity and water, aiming to render Kyiv uninhabitable and drive out millions of desperate refugees. Across Europe, Russia is orchestrating assassination, arson and cyber-strikes, together with drone strikes that could easily spiral into mass casualty events.  

The Baltic and Nordic states have fortified their defenses, but most European countries seem paralyzed. Poland — the most militarily prepared — is in the throes of constitutional crisis. Emmanuel Macron’s technocratic centrism has reached its endgame. Teetering on the edge of default, the Fifth Republic is rehearsing the upheaval that will come when Marine Le Pen enters the Élysée Palace — as must now be likely — and Jean-Luc Mélenchon mobilizes an insurrection against her. “Cost-of living” rioting and looting has spread to Belgium, Spain, Portugal, Italy, Greece, Germany, Switzerland and Albania, among other countries. It is hard to envision the French banlieues and AfD strongholds in former East Germany accepting the cost of deploying European troops indefinitely in Ukraine. Nor is it clear that Europe could afford to forgo the billions of euros’ worth of oil and gas it buys from Russia (which help Putin fund the war). A European solution is a mirage, and for all the heroic resourcefulness of its struggle, Ukraine cannot go it alone. Unless Zelensky’s supporters in Washington can somehow tie Trump’s hands, the logic of the situation is a brutal partition.

In America, Trump’s rise was a by-product of the neo-liberal cult of globalization. It was not simply an increase in inequality that stoked “populist” revolt. Whole sections of society were denied any productive role. Capital was exported and manufacturing offshored, labor imported and communities abandoned. With their workless families, drug habits and short lives, the human detritus of American industry could be safely left to molder on their reservations. Yet post-industrial decline has now affected much of the middle class. Occupations and career structures have melted into air. Neoliberal economics was the enterprise of re-engineering capitalism without a bourgeoisie, and the hollowing out of middle-class life has continued under Trump’s corporate kleptocracy. There was bound to be a countermovement from the Left. New York mayor Zohran Mandami’s “democratic socialism” is not a movement of organized labor. Like Jeremy Corbyn’s and Zack Polanski’s movements, it is a bourgeois populism, varnishing the status anxieties of heavily-indebted graduates and downwardly-mobile professionals with high-rent progressive causes. Incubated in campus seminaries of anti-Western orthodoxy, Mamdani’s leftism is set to be a deciding force in Democratic politics. 

A sea change is underway in the Republicans as well. As he limbers up for a presidential campaign in 2028, JD Vance is cultivating the same nativist constituency that is the audience of Tucker Carlson — aside from Trump, America’s most accomplished demagogue. A devil’s brew of anti-Semitism, historical revisionism and conspiracy theory is shaping up as the ruling ideology of the MAGA Right. As in Europe, the old center ground no longer exists. 

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Where is Trump’s heir?

By B. Duncan Moench

The midterm clean sweep was a repudiation of Trump more than an endorsement of the Democrats. The winners included Dr Abdul El-Sayed (Michigan, US Senate) and Dr Abdul Hamawy (New Jersey, US House), Egyptian-born Muslims closely aligned with the progressive wing of the Democrats who campaigned strongly against the war. Foreign policy positions that used to be bipartisan are being questioned and rejected in both parties. Europeans who are still invested in the notion that the Trump era is an unfortunate anomaly would be wise to think again. Nothing is further from reality than a reversion to Nikki Haley-style interventionism. It is not fantastical to see the US becoming the first advanced post-Western state and joining Russia in a China-led Eurasian bloc. 

That does not mean such a concert of powers would be stable. If a trilateral summit between Xi, Putin and Trump is held at the Asia Pacific Economic Cooperation (APEC) conference in Shenzhen scheduled for later this month, their exchanges may well come to nothing. In some ways this looks less like February 1945 and more like the run-up to August 1914. Now as then, great powers are engaged in wars for control of natural resources against a background of tangled and shifting alliances. With multiple players and no one in charge, miscalculation by any of them could bring disaster on all. 

Another future is possible, however. Rather than drifting towards another Great War, we may be entering an era of peace. A curious kind of peace, to be sure, accompanied by unending bloodshed. Proxy wars and urban terrorism will rage unabated. War and peace will, in effect, be one and the same. The West will cease to exist as a geopolitical or civilizational bloc. But joining forces with its adversaries will fuel another stock market boom, and what neo-Marxian theorists fondly call “late capitalism” will enjoy a new lease of life. Having used the neoliberal interlude to build a mercantilist juggernaut, China will re-establish globalization in a dirigiste form that entrenches its economic primacy, with Russia exploited as a vassal state. A certain equilibrium will prevail, underpinned by the shared interests of transnational ruling classes.

Then again, none of this may come to pass. The future may not be advancing authoritarianism but accelerating disintegration. If Taiwan is not easily absorbed, Xi’s autocracy may be overthrown, and China could revert to disunity of a kind recurrent in its history. Putin might be toppled by war-weary oligarchs, only to be replaced by a more extreme anti-Western despot ruling a nuclear-armed Muscovy surrounded by breakaway fiefdoms. The United States may fragment, with enclaves of anarchic high-tech vitality booming alongside wastelands of poverty and desolation, presided over by an enfeebled federal government.

But of one thing we can be certain. Donald Trump has brought Western hegemony to a close. A world-historical figure as much as Napoleon or Mao, the founder of MAGA has ushered in a post-American age.

The 3.5 million pages released last week by the Department of Justice confirm that these are, in fact, the same story. Treating Russiagate as a case of isolated foreign interference or the Epstein revelations as a story of individual depravity are limiting and, strange as it sounds, comforting frames because they give each side a convenient villain.

The real story is more systemic. It rests on the emergence, from the ashes of the Soviet Union, of a transnational kleptocratic class that has grown to encompass Western elites too — many of whom are only too happy to collude with the Russians, the Saudis, the Israelis, whoever, in undermining democratic institutions. The Epstein Files need to be reframed: this is a story about modern geopolitics.

It should not be surprising that Russian names are all over the Epstein Files. Russia was the laboratory that birthed the modern transnational kleptocratic class. The collapse of the Soviet Union in 1991 created new oligarchs, as Soviet state assets were liquidated and former intelligence officers became freelance. But it also created a global template that opportunistic would-be Western oligarchs could follow in their turn.

The men who emerged from post-Soviet lawlessness — bespredel is the Russian term — built their fortunes by moving money across jurisdictions, leveraging kompromat, and treating governments as service providers instead of sovereigns. In this they were enabled by willing partners in the West, who provided the shell companies, the anonymous limited liability corporations, and the real estate loopholes. As Casey Michel has documented in American Kleptocracy, the US was not a victim of this corruption. Rather, it built the frameworks that enabled it.

Jeffrey Epstein appeared to understand this intuitively. He brokered connections across the worlds of Israeli intelligence, Gulf royals, European politicians, and the Russian state. One of his most frequent contacts was Sergey Belyakov, an FSB officer. Epstein helped Belyakov to locate tax havens and to evade sanctions; he also assisted in laundering the reputations of Russian intelligence officers, introducing them as legitimate businessmen to high-profile Americans to help them operate in the US without raising suspicion.

Russia’s former ambassador to the UN, Vitaly Churkin, was another recurring contact. He went to Epstein for advice on handling Trump. “Churkin was great,” Epstein wrote in June 2018. “He understood Trump after our conversations. It is not complex.” This was sent weeks before the Trump-Putin Helsinki summit, where Trump sided with Russia, contradicting US intelligence. Epstein also pushed to meet Russia’s foreign minister Sergey Lavrov, telling his frequent intermediary, former Norwegian prime minister Thorbjørn Jagland: “I think you might suggest to Putin that Lavrov can get insight on talking to me.”

Epstein also promoted de-dollarization schemes like BRIC currencies and crypto, via his ties with US commerce secretary Howard Lutnick. There were the inevitable honey-traps, too — he introduced Russian women to targets like Prince Andrew and Bill Gates.

There’s even a Silicon Valley dimension. One of his associates was Masha Drokova, a former commissar of the pro-Putin youth movement Nashi who later reinvented herself as a Bay Area venture capitalist. The files show she represented Epstein as a client and embedded Russian capital in the American tech sector through the same networks. An email from 2015 finds Epstein pitching Peter Thiel, chairman of the Palantir, in order to set up a meeting in Palo Alto with his “very good friend” Belyakov, who was organizing an “innovation conference in Moscow”. Epstein had previously facilitated meetings between Thiel and Churkin. The connection between Palantir’s surveillance capabilities and Moscow’s interests was framed as just another networking opportunity among friends.

The British dimension is equally revealing. Lord Mandelson, the “Prince of Darkness” who was a key architect of New Labour, appears throughout the files as a willing conduit between Whitehall and Epstein’s network. While serving as Business Secretary during the 2008 financial crisis, Mandelson forwarded internal government communications to Epstein — including advance notice of the €500 billion bailout and discussions about selling off UK government assets.

This behavior tracks with Mandelson’s broader cultivation of Russian kleptocracy. He vacationed on the yacht of aluminum tycoon Oleg Deripaska, whose company benefited from tariff cuts that Mandelson oversaw while serving as EU Trade Commissioner. Mandelson’s firm later leveraged these ties to lobby the Kremlin directly, with Mandelson even writing to Putin to intervene in a dispute involving a Russian defense conglomerate on whose board he sat. Mandelson also offered to secure a Russian visa for Epstein using his backchannel to Deripaska. In November 2010 — when Epstein was already a convicted pedophile — he emailed Mandelson asking for a workaround to get a last-minute Russian visa. Mandelson replied the next day, confirming that he had an associate “helping on visas” to expedite the paperwork.

As we’ve known for a while, a lot of the Russiagate revelations turned out to be completely true — despite being labeled cringe lib paranoia. Trump’s campaign manager Paul Manafort really was colluding with the Russian agent Konstantin Kilimnik. I’ve had an interest in this subject for some time, arguing in 2017 that the collusion was a byproduct of long-standing financial schemes. The protagonist was not Putin but the money itself.

At a certain point it began to feel like shouting into the void. People were so fixated on the overhyped effects of Russian troll farms that they forgot that the source of the problem, as usual, is not anonymous shitposters but the people in charge. As David Klion argued years ago, the Steele dossier spy-thriller framing of Russiagate was a distraction; the Left should have treated the scandal as a means to critique global capitalism — rather than a pretext to leap to the defense of the FBI. We can have a debate over how much Russia influenced the 2016 election, but this is a bit of a red herring; in any case, the shady links were there years before Trump developed political aspirations.

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Jeffrey Epstein's corrupt overclass

By Mary Harrington

I suspect one of the reasons Epstein was able to coast for so long is that many sensible people — especially educated liberals — found the idea of viewing the world through a conspiratorial lens vaguely distasteful and rube-coded. The liberal epistemic style has a strong allergy to connecting the dots, partly as a reasonable response to growing paranoid thinking on the Right — but also as a class marker. Baroque patterns of elite coordination became associated with Glenn Beck’s chalkboard. As Thiel wrote to Curtis Yarvin in 2014, “one of our hidden advantages is that these people” — he meant the progressive Left —  “wouldn’t believe a conspiracy if it hit them over the head…Linkages make them sound crazy, and they kinda know it.”

Epstein’s case seems almost designed to exploit this blind spot. The actual facts sound like QAnon fever dreams, which made the serious people instinctively skeptical, because believing it pattern-matched to believing nonsense. The deeper issue is that educated liberals tend to have high trust in institutions and credentialed expertise. The idea that prosecutors, academics, and journalists might all fail simultaneously due to social pressure, career incentives, or willful blindness cuts against the assumption that these systems basically work.

But if liberals were guilty of an anti-conspiratorial reflex, the Right bears responsibility too, for flooding the discourse with QAnon fever dreams, anti-vaccine hysteria, and stolen election fantasies. When everything is portrayed as a conspiracy, the term loses its sting. The tools that might have exposed Epstein’s network earlier — investigative journalism, institutional accountability, the rule of law — are precisely the liberal inheritance that the post-liberal Right treats with such contempt.

Connect the dots and the files do highlight connections that span decades and resurface in unexpected places. In a 2019 email Epstein flagged a “coincidence”: the Russian billionaire Dmitry Rybolovlev bought Trump’s Palm Beach mansion for more than twice what Trump paid for it four years earlier. Rybolovlev never occupied the property before demolishing it. He was the same man who sold a Leonardo da Vinci painting to Saudi Arabia’s Crown Prince Mohammed bin Salman for $450 million — a price that Epstein claimed was absurdly inflated. As Epstein noted, Rybolovlev “knows all”.

Last year, Rybolovlev appeared as part of Russia’s delegation in the Ukraine peace talks held in Riyadh, sitting across from Trump’s team. Just to be clear: the same man apparently involved in laundering money through a Trump real estate deal is now helping to negotiate the end of Europe’s largest war. One of the most spiritually exhausting elements of all this is that it’s impossible to discuss such things without sounding like a conspiratorial lunatic. But here we are.

As for Trump himself, Epstein described him in the emails as “the dog that hasn’t barked” — someone who knew all but stayed silent. Lutnick appears throughout as an obsequious dinner companion and fundraiser contact. William Barr, who repeatedly appears in the files, unilaterally cleared Trump of Russiagate charges in 2019. He was also Attorney General when Epstein died in federal custody. His father had given Epstein his first job at the Dalton School decades earlier.

But it wasn’t just Trump cronies. Kathryn Ruemmler, counsel to the White House under Barack Obama, wrote that she “adored” Epstein. Bill Gates met with Epstein repeatedly after his conviction for pedophilia. Bill Clinton flew on his plane. Noam Chomsky offered him advice. Larry Summers took his money.

The Russian collusion story was never about shadowy foreign forces assaulting an innocent democracy. This lets the US off the hook too easily. It was about a sphere of elite impunity. American consultants, Russian oligarchs, Saudi princes, European politicians, Israeli intelligence figures and British ex-spies all swim in the same waters.

Abstracted from the lurid details, Epstein and Russiagate are two manifestations of the same phenomenon. Epstein was a node in that global infrastructure and Russiagate was one operation that ran through it. You don’t need an elaborate conspiracy if you have lots of power and similar concerns.

Russia wants to weaken Western institutions and will pay for it. The borderless elite profit from weak institutions and enjoy getting paid. Their interests converge. At a certain altitude, the lines on the map disappear.

***

A version of this article first appeared on Hegemon.

Former Afghan President Ashraf Ghani reportedly fled to Dubai after the Taliban takeover of his country in a chopper loaded with hard currency. He joined former Pakistani military ruler Pervez Musharraf, who moved there to avoid charges following the assassination of Benazir Bhutto, and Thailand’s Thaksin Shinawatra, who went into self-imposed exile after he was overthrown in a military coup in 2006.

Yet these men are small fry compared to the global criminal elite who have also moved to the air-conditioned oasis. Irish mobsters the Kinahans left their Spanish hideout for Dubai in 2016, the same year as powerful South African kleptocrats the Gupta brothers. They join Somali pirates and Al Qaeda members in enjoying the Emirate’s bespoke money laundering services. Most recently, the city has been flooded with the villains of the hour: wealthy Russians caught up in sanctions and a tanking economy in need of a safe haven following the invasion of Ukraine.

Dubai, no stranger to patronage networks and opaque systems of governance, is deliberately attracting this money. The state is strongly pushing crypto, and crypto kings have descended on the city — which is beginning to be known as “The Wall Street of crypto”. Today, the Russian elite who have flooded Dubai are largely bringing their money in digital form, rather than in the bank notes of bygone eras.

But there’s no greater appeal for money launderers than bricks and mortar. Dubai offers investor visas for those willing to spend upwards of £1 million on property. With the recent influx of Russian money, property sales increased 45% in April (compared to 2021) and 51% in May. While the sanctions against Russia’s elite have been so biting that Roman Abramovich and his stolen billions are no longer even welcome in London, the original home of blood-soaked wealth, he has been spotted strolling Dubai’s marinas, even docking his superyacht in its harbour. He is not the only Russian kleptocrat said to be shopping for a luxury apartment there.

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The man who lost Afghanistan

By Will Lloyd

For a city that touts its very low crime rate — abuse of blue-collar migrant workers doesn’t count, of course — Dubai now has a dance card that would make Interpol blush. That is, if the agency hadn’t elected Emirati Major General Ahmed Nasser al-Raisi as its president last year. But the city gets away with it, by operating a very simple code for its “colourful” expat community: do your dirty work elsewhere. So long as your enemies aren’t murked on Dubai’s streets, and yachts loaded with cocaine aren’t arriving in the city’s ports, mobsters and tyrants are welcomed with open arms.

The Kinahans, for instance, run a transnational cocaine business and are suspected to be behind some 20 murders in Ireland and Europe. But in Dubai, they have enjoyed the best of what the city has to offer, laundering dirty money into hard assets. Having been deemed “low-risk” by UAE authorities, the Kinahans built a luxury property portfolio and a business front to maintain the ruse that they’re not cons. Ireland and the European Union were frustrated by attempts to catch their man because the UAE does not have an extradition treaty with either.

And yet, the welcome extended to them in Dubai may be cooling. In April, the Emirate agreed to give up the Kinahans and their vast business empire, with extradition to the West appearing likely. Recently, Dubai’s police actually arrested South Africa’s Gupta brothers after Interpol issued a red notice against them.

Why the sudden willingness to give up a few crooks?

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Britain is Putin's playground

By Oliver Bullough

Dubai might be a global tourist and finance destination, but the Emirate is subservient to its big brother Abu Dhabi, capital of the UAE. Not only does the latter have most of the oil — indeed, the seventh-largest proven oil reserves in the world — but it used the profits from that oil to come to Dubai’s rescue during the financial crisis of 2008-09, when the city’s over-leveraged property sector was teetering on the verge of collapse. “Dubai has had to give up control over the foreign affairs, and this includes responding to international sanctions and international police requests,” says Christopher M. Davidson, a British academic of the Gulf. “Abu Dhabi likes to play this role of a good international citizen.”

In the case of the Kinahans and Guptas, Dubai was happy to ignore pressure from the United Kingdom, the European Union and South Africa to hand them over. But when both families were sanctioned by the United States (the Guptas in 2019 for corruption, the Kinahans in 2021 for drug running and money laundering), they became a problem that could no longer be ignored.

As a tightly controlled laissez-faire economy, the UAE embodies all the contradictions of 21st-century hyper-globalisation. Emirati rulers buy their clothes in Paris, surveillance systems in Tel Aviv, and their arms in London, Washington and Moscow. They have a station on China’s Belt and Road initiative, send their troops to stamp out terrorism in India, and abstained from a UN vote condemning Russia’s invasion of Ukraine. With the exception of Iran, the Emirates are friends and business partners with everyone who matters.

However, the free flow of capital and people through its ports is still the American way of doing business, and America is still the umpire: the US dollar still functions as the world’s reserve currency. Being sanctioned by Washington can destroy an economy overnight, and what would Dubai be left with? A glittering airport and skyscrapers aren’t much use when no one will pass through, and the royal family’s legitimacy is built on an ever-growing economy.

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How Russia's elite bought Biarritz

By John Lewis-Stempel

That’s not to say Dubai has zero leverage. “As a major hydrocarbon producer, the United States, Britain, and the European Union see it as playing a vital role in stabilising international energy markets,” Christopher Davidson says. “In the same context, the US — and now France — have allowed Saudi Arabia’s crown prince Mohammed bin Salman to ‘come in from the cold’. In return, they are expecting full Saudi cooperation with regard to oil production.”

Just as Dubai knows its place in a geopolitical hierarchy, it is alert to the hierarchy of crooks it harbours. Clearly, the Kinahans and Guptas are small change compared to some of that Emirate’s other residents — worth sacrificing to appease the United States. But this of course begs the question: why is Dubai still considered the global safe haven for Russian money since crushing sanctions were put in place after the invasion of Ukraine?

For its part, the UAE has said that it wants to remain neutral and that it  does not want to “lump together” all Russians into one category. After all, the nation has the fifth-highest number of billionaires in the world — 117 per million people — and it’s not as if their home nation is agitating for their extradition. In the end, human rights and just wars are abstract concepts, but the language of business — and oil — is one that all sides can understand. Stability means cutting a deal where everyone feels like a winner, and it appears the West will put up with Dubai housing the Russians it will no longer do business with, in order to appease the Emirates’ diverse political and financial interests.

The United States can ask for plenty from the world’s key oil suppliers, but not everything. After Dubai skated through the Great Recession on the mantra that some companies are “too big to fail”, it’s now navigating a fraught geopolitical stage on the time-honoured idea that some people are simply too rich to jail.

The menace of Putin’s kleptocracy seeped into Britain long before he started stacking up armoured divisions on the Ukrainian border. Yet the money has kept flowing, Britain has kept fencing his cronies’ stolen wealth, and repeated promises to tackle the problem have achieved nothing.

This failure is a national embarrassment, and has fuelled a mess of conspiracy theories: that the Tories are bought and paid for; that the Kremlin has kompromat to keep ministers in line; that the City of London has a special hotline into the heart of parliament.

The real story, however, is far more alarming, but requires some telling, because you can’t understand London’s love affair with Russian money without understanding the story of how the City was reborn as both a financial centre and the engine of our national economy. They are, in fact, the same story.

Once you understand this, you can see why government after government has been so reluctant to drive the oligarchs’ money away. They’re like doctors watching a cancer grow bigger and bigger in a vital organ: operating will cripple their patient, so they leave it in place, even though — eventually — it will kill him. But this choice can’t be postponed much longer. If we want to save British democracy, we need to take a scalpel to a tumour that was seeded all the way back in 1955.

Back then, the Soviet Union had a problem. Its great rival the United States had ended World War Two as the undisputed centre of the world’s economy; if the USSR wanted to trade with the world, it needed dollars. The global financial system was less globalised in those days. In order to secure democratic control over wealth, governments imposed limits on money in ways that are hard to comprehend now. They restricted how much money you could move across borders, for instance, or what interest rates you could charge on loans you made.

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That meant that, if you had dollars, you kept them in the United States, where they were subject to the scrutiny of the Federal Reserve. But Soviet officials worried that, if Cold War tensions became more tense, and if their dollars were in New York, the US government might seize them, thus cutting Moscow off from international markets.

The City of London had a problem too, albeit a very different one. Britain was broke, with a huge hangover of debt left from funding its war effort. The capital flows that had sustained financiers’ incomes had shrivelled, and sterling had lost its role as the world’s leading currency. Banks were moribund, and ambitious young Brits preferred to work in academia, industry, or government.

The solution to the two powers’ problems came thanks to two banks: the Moscow Narodny (MNB), which was Soviet-owned but London-based, and the Midland, a scrappy challenger unable to attract the deposits it needed to compete with its more established rivals. MNB lent its dollars to the Midland, which used them to buy pounds, with which it could grow its UK business.

It may not sound like much, but these two banks had invented the most consequential financial invention of the second half of the twentieth century: the Eurodollar. By transacting with dollars outside of the United States, they kept the American currency’s upsides — its strength and convenience — while removing its downside: the heavy hand of the US government.

As sterling declined further, more London banks began to appreciate this new form of currency, which could move across borders unimpeded, could be traded easily, and was completely unregulated. They used pounds for domestic transactions, but kept different accounts for the Eurodollars, which they described with a word borrowed from maritime law to describe something outside the reach of government: offshore. Soon other banks noticed the innovation too, arriving from Japan, from continental Europe and from the United States to take advantage of the new discovery.

The Eurodollar could have appeared almost anywhere, and embryonic versions did appear in Canada, in Switzerland and elsewhere in Europe. But in those countries the governments recognised the threat that footloose currency posed to their sovereignty and snuffed it out. Memories of the Great Depression, and of the misery and war that followed it were still raw, and democratic politicians wanted to make sure they could always put people before wealth.

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In the City, however, the Bank of England loved the idea of setting money free, so it did. “It is par excellence an example of the kind of business which London ought to do both well and profitably,” a Bank official wrote in 1963. “If we were to stop the business here, it would move to other centres with a consequent loss of earnings for London.”

At that time, the market was worth around $5 billion. Within four years, it was worth $13 billion. By the end of the Sixties, it was worth $40 billion. That was when other countries started to surrender, to scrap their own efforts to stop their banks from leaving, and the market really took off. Now, it’s the biggest in the world: all dollars are offshore, so are pounds, euros, Swiss francs and — with a few exceptions — pretty much every other currency in the world.

This business model did not stop there. Our financial professionals looked for countries whose governments were imposing limits on wealth that its owners found onerous, and undercut them. In the Cayman Islands, Americans found a ready haven for all the money they didn’t want to pay taxes on, and this once-obscure turtle-fishing archipelago is now a world class financial centre. In the British Virgin Islands, tycoons from China and criminals from Latin America found cheap, opaque shell companies to hide their ownership of assets behind. And in Britain itself, generations of oligarchs — from the oil-rich countries of the Gulf, from the ex-colonies of Asia and Africa and, of course, from the post-communist countries of Eastern Europe — found a warm welcome.

What we offer them is a haven: not just a tax haven, but an everything haven. They can buy property here and they don’t need to tell anyone about it, because they can hide their ownership behind a shell company. They can manage their liquid wealth here too, either in a discreet bank or a boutique private office. They can send their children to one of our world-class schools, buy their art at one of our auction houses, and meet their friends at a ritzy restaurant while their wives and/or mistresses shop at Harrods (because, let’s be honest, these oligarchs are pretty much all men).

If a business rival complains about them, they can settle the dispute in our commercial court, thanks to our world-leading legal sector. And if they want to keep an eye on how their adopted country is run, they can dine with a minister for not much more than they’d spend on a holiday. They can buy anything in London and, thanks to the way politicians have starved our enforcement agencies, no one with the power to do anything about it will ever know if the wealth was honestly acquired.

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Politician after politician has stood up in parliament to insist there is no place for dodgy money in London. But then the lobbying starts. Every one of these sectors — finance, law, estate agencies, auction houses, education — starts arguing for exceptions and loopholes, and nothing gets done. In 2014, for example, after it was revealed that specific shell structures called Scottish limited partnerships had been used to launder money stolen from Moldova, politicians from the Scottish National Party campaigned for the law to be tightened. Not only did this not happen, but the Treasury actually deregulated the structures further, so as to protect the competitive advantage of the City.

This is a supercharged version of that same business model cooked up by Moscow Narodny and the Midland back in the Fifties. It is reliant on British regulations, enforcement and oversight being weaker than those of other countries, so wealth comes here, and we can earn fees from it. It is not just oligarchs that benefit from our offshore services, but corporations too: the City earns fees from any wealth, whether honestly or dishonestly acquired.

The risk is obvious. If it isn’t enough that Britain is depriving other countries of money they need, and driving down levels of tax and regulations everywhere by providing a haven for the wealthy, we are also acting like a giant Florida for an magnified version of Al Capone’s gangsters, and giving them a playground from which to threaten the world. We are privileging the interests of the few over the wishes of the many, whether those happy few are evil, naughty, or just publicity-averse.

This is not a revelation. Multiple parliamentary enquiries have revealed the seriousness of the problem in recent years, including the Intelligence and Security Committee’s (ISC) 2019 probe into Russian wealth in the UK. Truss should be commended for saying she will do something, but let’s wait until the laws are on the statute books before congratulating her. After all, Boris Johnson battled to prevent the ISC’s Russia Report being published at all — and that is not the action of a man looking to put democracy before money.

In December, the National Crime Agency froze a bank account linked to a scheme that laundered billions of pounds out of Azerbaijan, an ex-Soviet republic, having already made the UK property of an Azeri banker’s wife the target of its first ever Unexplained Wealth Order (UWO). That same month, a solicitor was fined £45,000 for trying to help the daughters of Azerbaijan’s president buy luxury property in London, and failing to do the appropriate checks on the origin of their wealth.

By the low standards of law enforcement in the UK, where allegations of laundering the proceeds of grand corruption tend to be greeted with something between a shrug and a grin, this is big. Rumours are rife that other wealthy Azeris are being considered for UWOs of their own, up to and including members of the ruling Aliyev family. If these three steps become the start of a journey into the heart of all Azeri-owned wealth in the UK, it could prove uncomfortable, and not just for lawyers and estate agents.

London and Baku have a close relationship thanks to BP, which opened an office in Azerbaijan within six months of its independence from the Soviet Union. The oil revenue has gradually allowed the Aliyev family – first Heydar, the former head of Azerbaijan’s KGB, and then, following his death in 2003, his son Ilham – to turn the country into a hereditary kleptocracy. Heydar is commemorated by a vast swooping museum in central Baku, designed by Zaha Hadid and set among magnificent fountains. This glorious building houses various bits of ephemera from his life – a train ticket, a school report from the KGB academy, various of his limousines – like the grave goods of a pharaoh.

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Under the rule of the Aliyevs, their friends and relations have become enormously wealthy, and used the global banking system to launder much of their money into the West (as revealed by the “Azerbaijani Laundromat” leak of financial documents). “Azerbaijan’s economy is largely dominated by monopolistic interests,” wrote the US embassy in a 2010 cable released by wikileaks. The cable was part of a series in which American diplomats explained to Washington which families were most powerful in Azerbaijan, and they provide a fascinating insight into a system where bribes, influence, and abuse of power control everything.

This particular cable dealt with the business activities of Emergencies Minister Kamaladdin Heydarov (of “the second most powerful commercial family in Azerbaijan”, according to the State Department officials). The kind of behaviour described in the cable was beginning to get Azerbaijan a bad reputation and it was to improve the country’s image that, in 2008, Heydarov’s two sons Nijat and Tale created a London-based lobby group: The European Azerbaijan Society (TEAS).

TEAS specialised in promoting Azerbaijan, and acted as secretary for the All-Party Parliamentary Group for the country. It flew MPs out to Baku, where it showed them around, and tried to persuade them that the country was a reliable source of energy, the wronged party in its long-running dispute with Armenia, and a generally lovely place for all its citizens.  “Such visits have great effectiveness, because to read about Azerbaijan is one thing, witnessing the development of the country is another thing,” Tale Heydarov boasted at a lobbying conference in Baku in March 2012.

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Jim Sheridan, then the Labour MP for Paisley, accepted a three-day £3,100 trip to Azerbaijan in March 2013, and came back full of praise. “We discovered that the trade unions there enjoyed better relationships and more employment rights than we do here in the UK. Azerbaijan is a young democracy and we are the oldest, yet we are still fighting for employment rights,” he told the House of Commons later that year. (The International Trade Union Confederation is less sanguine, saying that in Azerbaijan many labour rights exist only on paper.)

Over on the Government benches, Mark Field, Tory MP for Westminster and recipient of a five-day £3,500 trip in May 2011, told the Commons in the month after he got back that Azerbaijan “has made tremendous strides forward both politically and economically in recent years. That should be recognised and rewarded.” At the time he was on TEAS’ payroll, as a member of its advisory board.

I asked Heydarov about the source of TEAS’ funding, when I met him on the sidelines of a business forum that TEAS organised in Mayfair. He said the money came from members’ subscriptions, but refused to be drawn on their identities or the amount they contributed. These members have certainly been very generous, whoever they are. TEAS and other Azeri lobbying groups spent more than £70,000 on MPs alone. Most of it went on 23 trips to Azerbaijan, although Slough’s Labour MP Fiona McTaggart received £1,000 of hospitality in Britain, at the Royal Windsor Horse Show, and TEAS even got into publishing.

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When Liam Fox wrote a meditation on globalisation called Rising Tides it failed to trouble either the charts or the reviewers on either side of the Atlantic (sales figures show it has sold just over 3,000 copies in English worldwide), but TEAS bought the Azeri translation rights for an astonishing £11,400, paid in two instalments in 2014, and then flew him to Istanbul to promote it at the cost of another £3,579.94.

One book industry source described this as barely believable: “Azeri rights for something like Malala, or Michelle Obama, or Dan Brown might go for £11,000, but it would need to be a big name. This does not look like a wise investment”.

Of course, the nature of an investment depends on the return you are looking for. If TEAS was seeking friends, rather than profits, perhaps the investment was a wise one, particularly since Fox has risen to be the minister in charge of negotiating our post-Brexit trade deals.

“MPs have a history of accepting funding from Azerbaijan’s lobbyists and keeping quiet about gross and systemic human rights violations, including some now in senior governmental positions,” said Rebecca Vincent, a former US diplomat in Baku and now head of the UK Bureau of Reporters without Borders.

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She was particularly critical about the fact that so few British politicians had supported journalists who have revealed the extent of the wealth of Azerbaijan’s ruling family, and been harassed or jailed as a result. “As the source of the largest foreign direct investment in Azerbaijan, the UK has a responsibility to speak out. As long as our politicians turn a blind eye to this repression, courageous individuals like Mehman Huseynov and Khadija Ismayilova will continue to pay the price.”

This is not to say that TEAS was an organisation packed with ruthless and sinister geniuses, since it was at times almost hilariously incompetent. In 2010, it hired the 1980s two–hit-wonder Smiley Culture to produce propaganda music in the mistaken belief he could persuade Lady Gaga to do the singing, which he could not. This and other pratfalls notwithstanding, the budding scandal over Azeri money in London does raise questions over whether MPs should have been quite so willing to accept the organisation’s money.

Goran Lindblad, a Swedish ex-MEP who worked for TEAS in Brussels, told me his pay cheques came from a Marshall Islands company via Danske Bank’s branch in Tallinn, the same branch that is now at the centre of perhaps the biggest money laundering scandal of all time: the movement of €200 billion through non-resident accounts in 2007-15.

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We have become accustomed to hearing stories of kleptocratic cash pouring into UK property, which is what the NCA is (belatedly) beginning to investigate, but perhaps the scandal will turn out to be not how much dirty cash was spent in Knightsbridge, but how much ended up in Westminster. Because Azerbaijan is not the only country that has sought to buy friends in this way.

Ukrainian oligarch Dymtro Firtash ran a similar lobbying group, as did the Bahraini ruling family. Bashar al-Assad’s father-in-law ran the British Syrian Society, which took MPs to Damascus. Even the Russians tried to get into the game, with a group called the Conservative Friends of Russia, though Kremlin money eventually proved too hot even for our MPs to handle.

There are many urgent issues being ignored by politicians thanks to the Brexit gridlock, but perhaps this is the most important: who exactly has been paying their wages? In a democracy, voters have to know who their elected representatives are working for. Once trust in their integrity has been lost, it will be all but impossible to restore.