How Russia’s elite bought Biarritz The French are cracking down on dirty money

Some years ago, The Hollywood Reporter, covering the Cannes film festival, happened to ask a local estate agent how many ultra-rich Russians there were on the French Riviera. He estimated 20,000 of them. “They bring their funny money from Russia through Cypress into the Riviera. They’ve kept the market moving for 10 years. So they can be a little thuggish — who cares?” In a detail one would blush to make up, the secretive Kremlin billionaire Suleiman Kerimov (the subject of a long-running tax evasion and money laundering investigation by the French authorities) is believed to own the sumptuous villa on the Cap d’Antibes used in the Michael Caine movie Dirty Rotten Scoundrels.

The Med may be the place for Putin’s friends, but the family and the real intimates head to Biarritz for their holidays. France’s glittering south-west coast has been irresistible to rich Russians since the middle of the 19th century. (It was once dubbed the “queen of resorts and the resort of kings.”) Flunkies of the imperial court came both for the climate and for the coddling offered by the beach-side Hôtel du Palais, originally built in the 1850s for the French Empress Eugénie. And it was in Biarritz that the then-head of the Federal Security Service received an urgent phone call from Boris Yeltsin, in the Summer 1999, asking him to become prime minister.

Around the same time Putin accepted the rule of all the existing Russias, and those to be regained, the Kremlin appointed an honorary vice consul in Biarritz, a town of less than 30,000 people. Nearby Bordeaux, France’s seventh largest city, received no diplomatic outpost. “It was because Putin’s circle has an affection for this place,” admitted the man selected for the job, otherwise known as biographer Alexandre de Miller de La Cerda. The “To Do” list of the Kremlin’s man in Biarritz has included hosting debutante balls in the casino for the children of the Russian elite — an opportunity for Putin’s courtiers to feel like the heirs to the czarist aristocracy. Indeed, a sojourn in Biarritz is an attempt to confer class and legitimacy on Russian’s nouveau riche.

As one might expect, the Putins are tight-lipped about their property holdings in Biarritz, though various news agencies have identified at least three, beginning with the villa located at 9, rue de la Frégate (the street once home to Igor Stravinsky), in the town centre, bought in 1996 for around $400,000. The title deed is in the name of one of Putin’s daughters. According to Time magazine, in 2012 another Putin daughter bought a property in the town with her husband, Kirill Shamalov, an oil-executive reputed to be worth $1.25 billion. (He is also one of the founders of Bank Rossiya, which the US Treasury Department identified in 2014 as the “personal bank” for Putin and his close associates.) The seller of the property was oil trader Gennady Timchenko, one of Putin’s oldest friends.

What’s wrong with buying a few holiday homes? Well, as a civil servant of the Russian state, Putin was barred in 1996 from taking money out of the country. He was also officially only earning circa $1,000 a month. Currently, the self-described “galley slave” ascetically proclaims no individual wealth at all, beyond a small plot of land, a modest pension pot, three Russian cars, a couple of homely apartments, and a Skif M1 trailer tent. Lyudmila Putin’s financial records, filed during her marriage to Putin, show only relatively miniscule sums. She supposedly earned just 121,000 rubles ($3,800) during the whole of 2012. The following year, Villa Suzanna was purchased in her name and that of her new husband, the head of a non-profit with no known money. The villa had been on the market for around £5 million.

“Luxury property is a preferred means of laundering money stemming from corruption or embezzlement of public funds”, Sara Brimbeuf of Transparency International France told France 24 News. When Time magazine asked Father Panteleimon, the priest at the Russian Orthodox Church in Biarritz, about the Kremlin elites who visited his parish, he replied: “what they do here just doesn’t look good.” Nor does it look good to French finance minister Bruno Le Maire, who has created a “task force” of customs officers, tax officers and ministry officials to draw up a list of oligarch-controlled assets in France and begin seizing them.

Fabien Roussel, the French Communist Party’s personable candidate in the upcoming election for the Élysée, tweeted a suggestion: storm the oligarch’s summer palaces and use them “to welcome refugees from Ukraine”. He got 2,500 likes; he normally gets a hundred. At the capitalist end of the French spectrum, luxury brands Hermès, Chanel and LMVH — all beloved of Russian oligarchs — have announced suspension of activity in Russia itself.

And the EU, of which France currently holds the presidency (and, a cynic would aver, always holds the political reins), has sanctioned 400 times more Russian entities than Downing Street. Le Maire claims that the total amount of Russian assets frozen amount to “almost 1,000 billion dollars”.

“No oligarch will slip through our net”, promises Le Maire, adding that oligarchs’ “partners, their children, their property holding companies” would be affected, “such that they won’t be able to hide behind financial constructs”. Like owning villas.

While Macron’s parlaying with Putin sometimes smacks of appeasement, his fellow Frenchmen are taking a harder line. It’s less Bienvenu à Biarritz, more “Fuck Poutine” — as another local daubing proclaims.