In a year dominated by a US presidential election between a kleptocrat and a democrat, a book about world-class thieves laundering trillions ought be the perfect bedtime reading for anyone curious about the unprecedented amounts of money that have been looted and hidden over the last 20 years.
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Tom Burgis, a reporter for the Financial Times, is certainly an impressive investigator. He works hard to explain how myriad financial institutions, from the Bank of New York to Merrill Lynch and HSBC, have tried to deceive regulators and wash the ill-gotten gains of countless dictators.
The oligarchs of Putin’s Russia are big players in these pages. So are Nursultan Nazarbayev of Kazakhstan, Robert Mugabe of Zimbabwe, Joseph Kabila of the Democratic Republic of the Congo, British bankers turned regulators, a trio of Central Asian billionaires, and no fewer than 30 other major characters, all listed at the beginning.
This results in so many competing storylines that it becomes almost impossible to keep track. We bounce back and forth, from the Russian and Italian gangsters of Brooklyn to the oil fields of the former Soviet Union, from the platinum mines of Zimbabwe to the copper and cobalt of the Congo.
Burgis draws useful parallels between Putin’s kleptocracy and Hitler’s Germany
There are long sections about the wholesale theft of natural resources in post-Soviet Russia and the birth of the oligarchs, all of whom were forced to become Putin’s partners – or face imprisonment or death. For example, the purchase of a three-quarter stake in Yukos, for $350m, made Mikhail Khodorkovsky the richest man in Russia. Five years later, the vast oil company with 100,000 employees was worth $12bn. Khodorkovsky was arrested, jailed and eventually sent into exile.
Burgis draws useful parallels between Putin’s kleptocracy and Hitler’s Germany, each home to both a “normative state” that generally respects its own laws and a “prerogative state” that violates most of them.
According to the German-Jewish lawyer who was the author of the theory in the 1930s, “Nazi Germany was not a straightforward totalitarian system. It retained some vestiges of the rule of law, chiefly in matters of business, so that the capitalist economy had the basic rules it needed to keep going. But the prerogative state – Hitler’s political machinery – enjoyed … ‘jurisdiction over jurisdiction.”
Trump helped to construct a new ‘global alliance of kleptocrats’. Their whole goal is the privatization of power
Putin has used his jurisdiction over everything to vanquish almost all of his enemies. And since Donald Trump has been collaborating with Russians in one way or another for almost 40 years, our kleptocrat-in-chief does finally make an appearance in Kleptopia, on page 250. After we’ve read a lot about Felix Sater, a second-generation Russian mobster connected to several schemes including the Trump Soho in lower Manhattan, Trump is identified as the “crucial ingredient” in Sater’s “magic potion for transforming dirty money”.
Once the ratings of The Apprentice had washed away the public memory of multiple bankruptcies and “reinvented” his name as “a success”, Trump’s role in real estate deals became simply to “rent out his name”.
“The projects could go bust,” Burgis writes, and “they usually did – but that wasn’t a problem.” The money had completed “its metamorphoses from plunder to clean capital”.
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Then there was the notorious sale of Trump’s Palm Beach mansion, to Russian oligarch Dmitry Rybolovlev for $95m, more than twice what Trump paid a few years before. According to Michael Cohen, Trump’s former fixer, Trump thought the real buyer was Putin – a story which hasn’t gotten nearly as much attention as it should.
With his election as president, as Burgis puts it, Trump helped to construct a new “global alliance of kleptocrats”. Their whole goal is the privatization of power, and they control “the three great poles” – the US, China and Russia.
In our new world of alternate facts, corruption is “no longer a sign of a failing state, but of a state succeeding in its new purpose”. The new kleptocrats have subverted their nations’ institutions, “to seize for themselves that which rightfully belonged to the commonwealth”.
This is a ghastly and very important story. But the secret to great storytelling is knowing what to leave out. If Burgis had found a more focused way to tell this one, he would have written a much more powerful book.