International Policy Digest

Sebastian Derungs
World News /04 Jul 2019

An Oligarch’s Web: How a Network of Consultants in the West help Putin’s Favourite Businessman

Russian oligarch Oleg Deripaska is a man whose use of Western consultants and advisers has attracted the attention of media and political observers on both sides of the Atlantic. In London, concern has been raised about whether this network is working against the UK’s own national interests.

The role of this network is to spot, pre-empt and avoid pitfalls, problems, and crises that may scupper Deripaska’s operations. While this is normally acceptable commercial practice, Deripaska’s personal proximity to President Putin and his own admission that he does not separate himself from the Russian state have triggered the concerns of MPs and others who believe Russian foreign policy, of which oligarchs are a useful tool, should not be aided and abetted while it remains under US and EU sanctions.

Deripaska has faced two primary challenges in the last two years. Firstly, he listed his power and steel conglomerate, En+ Group, on the London Stock Exchange in November 2017, raising over $1.2 billion for the company while Russia was under US and EU sanctions. Secondly, after Deripaska himself and his companies were placed under US sanctions in April 2018, his advisers engineered a deal to ensure that sanctions on En+ Group were removed nine months later, thereby freeing up his commercial operations and allowing it to continue business.

In both instances, an army of lawyers, lobbyists and investigators were mobilised, likely at great expense, to fight on Deripaska’s behalf and to reach solutions that would otherwise have been impossible. Questions have been raised by lawmakers in both the US and UK, as well as by the intelligence services, about the actions of these consultants and whether they are acting in Russia’s interests, given how close Deripaska is perceived to be to the Kremlin by the US government.

Deripaska’s stable of regular advisers is well stocked and many are based in London. His long-term corporate legal adviser remains Paul Hauser, a London-based partner at Bryan Cave Leighton Paisner, while Rupert Boswall at RPC also provides litigation support and advice to the Russian oligarch in the UK. Rod Christie-Miller of Schillings is Deripaska’s ‘attack dog’ media lawyer who pounces on any article written about the billionaire, ensuring that journalists have a hard task ahead of them when writing about the Russian. Linklaters also provided corporate advice around the listing of En+ Group, for which they were roundly chastised by the UK’s Foreign Affairs Committee, who left others to judge whether “their work at ‘the forefront of financial, corporate and commercial developments in Russia’ has left them so entwined in the corruption of the Kremlin and its supporters that they are no longer able to meet the standards expected of a UK-regulated law firm.”

London is a hub for the private intelligence and investigations sector, a fact that has not gone unnoticed with Deripaska, who is intent on making use of the many former intelligence and security officials that operate in these firms. Orbis Intelligence, the firm led by Chris Steele, the former MI6 officer that wrote the now-infamous dossier into President Trump’s activities in Moscow, has worked for Deripaska through his lawyers for some years. Deripaska has also used GPW Ltd, another private intelligence company, and has also for a long time been a client of Diligence, a long-established investigations firm.

As well as these better-known firms, Deripaska has also reportedly made use of lower-profile security consultants in London, including USG Security. USG is run by Walter Soriano, an Israeli fixer who is understood to have worked with Deripaska on corporate intelligence matters, according to Politico. According to Israeli journalist Raviv Drucker, USG’s subcontractors have in the past carried out “sophisticated surveillance, information gathering and data acquisition by various technological means, such as eavesdropping, hacking, and so on” on their targets.

Perhaps most scandalous of all is the involvement of Lord Barker, a former minister under David Cameron who was appointed chairman of En+ Group by Deripaska in October 2017, shortly before its listing on the LSE. After providing a dash of respectability to the controversial listing, Barker then proceeded to work on a deal to remove En+ Group from sanctions with the help of two Washington DC companies, law firm Latham & Watkins and lobbying firm Mercury LLC. While claiming that he was acting on behalf of minority shareholders, the eventual result of Barker’s lobbying campaign was that Deripaska remained the company’s largest shareholder (despite his stake being reduced to slightly under 50%, with more owned by his ex-wife and his charity and with voting rights suspended) while the company escaped sanctions and continued to earn him funds, albeit that are temporarily held in trust. Barker has now even left the House of Lords in order to focus fully on his role at En+ Group, but not before being investigated in a ‘sleaze probe’ for lobbying on his company’s behalf (no action was taken).

And Deripaska’s links into the establishment don’t just stop with Barker. He’s employed London based PR company Hawthorn Advisers coincidentally owned by Theresa May’s close ally Ben Elliot to lobby and spin for him. This cozy relationship has raised eyebrows at the top echelons of the UK government. He previously employed the well-known PR outfit Finsbury run by the remain campaigner Roland Rudd but even Rudd found Deripaska too hot to handle and dropped him as a client when he was hit by US sanctions.

The major concern for British politicians and those seeking to rein Russia in on the international stage is that the inter-connectedness between oligarchs like Deripaska and the establishment in London is so entrenched that it is very difficult to untangle. As a result, expect to see the same consultants, investigators, and lawyers come out fighting to try to remove Deripaska personally from the sanctions list and reduce pressure on one of the Kremlin’s closest business allies – and at the same time, work contrary to their own national interest.