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November 22, 2008updated 28 Jan 2016 7:01pm

How to act like an oligarch

By William Cash

The rich operate according to a different set of rules – and if you don’t like the rules, you simply change them.

Putin is no better than Chavez when it comes to tampering with the Russian constitution to try and stay in power indefinitely. That both of them should be up to the same game comes as no surprise.

After coming back recently from Moscow, I have begun to realise the extent of George Osborne’s mistake in cavorting with a Putin oligarch like Deripaska on his ill-fated holiday to Corfu last year. He just didn’t understand how the rich are not only ‘different’ from him but also operate according to a different set of rules. And the overriding rule is that if you don’t like the rules that exist, you simply change them to suit.

Putin is, of course, the man who pulls all the power strings and is now re-writing the Russian law book or constitution to suit. The Russian constitution is being amended in to allow him to be installed as president again and also for the presidential term of office in Russia to be extended to six years, so that ‘Russia can be made great again’.

You cannot survive as an oligarch in Russia unless you have Putin’s support; you need to be part of his circle and you need to understand that simply trying to stay out of trouble and mind your own business is a sure fire way to simply have whatever assets you may have worked to build up simply confiscated.

This happened to a non-Russian acquaintance of mine who built up an old disused steel plant in Russia only to one day find it had been nationalised. The case is going to be settled in the English courts.

What was Osborne thinking when he tried to make a few political cheap shots to the BBC’s Andrew Marr at Peter Mandelson’s expense (‘dripping poison’) after accepting his old friend Nat Rothschild’s hospitality in Corfu? Personally, I think Osborne was, at worst, simply naive; but because he has lived in a pampered and cosseted political universe for so long – far removed from the realities of actually dealing with the likes of Deripaska – he is probably unaware of how oligarchs do business and spit out fresh-faced politicians for breakfast.

In my view, I find it incredible that senior politicians of any stripe or creed, or indeed senior UK business figures for that matter, want to suck up to these Russians in the first place. They shouldn’t have anything to do with them.

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To want to hang out on their boats in the hope of a £50,000 donation is no better than simply being a lavatory attendant at the Connaught, hoping to be left a few coins for having had the pleasure of running the tap water and handing a rich guest a starched towel. In Osborne’s case, he was hoping to make a few crumbs for his party. Such toadying and grovelling from the Shadow Chancellor and son of a baronet is simply demeaning for both him and the Tories.

I prefer the example of the former head of one of the world’s largest private banks who told me over breakfast that he had a policy when he was in charge of simply not opening bank accounts for Russians, whoever they were.

This came after the experience of receiving a phone call one morning from a Russian client who had an account and who wanted to borrow £15 million at very short notice. When my friend said ‘no’, the Russian called him up at home and started threatening him saying that if he didn’t loan him the money, he should watch out for his wife and children.

Another example of how the Russians do business that has been doing the gossip rounds in hedge fund circles in London is the visit that a Russian client (along with his security goons) made to the private home of the founding partner of one of London’s largest hedge funds that has stopped clients redeeming funds for now. The Russian wasn’t interested in any words like ‘lock-up’, or any idea that he might be consoled by the fact that his management fees would be reduced or that it might be better if he spoke to the office on Monday morning.

The Russian just said ‘I want my money back now – or else.’ Whether a cheque was written I don’t know but most filthy rich Russians are, with some fine exceptions such as my friend Leon Max, the Russian fashion mogul who bought Easton Neston off the Hesketh family, a ‘rotten crowd’, as the narrator Nick Carraway concludes about the bad set that Gatsby used to surround himself with.

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