Of Prep School and Oligarchs

“With Putin’s attack on the international rule of law today, challenging western nations to stop him, Edward Luce of the Financial Times identified the larger picture: ‘Cannot be stated strongly enough,” he wrote. “If the west—chiefly America, but also Britain—doesn't burn its financial ties to Russia's oligarchy then Putin will prevail. This means taking on Wall Street, the City, law firms, realtors, the prep schools and western laundering outfits.’ (from Heather Cox Richardson, Letters from an American, February 21, 2022)
 
Heather Cox Richardson is a history professor right up the hill at Boston College. For the past few years, she has written daily “letters,” providing historical context for and summarizing, explaining, analyzing, and opining on the events of the day in our growing national history. She is astute, knowledgeable, level-headed, and very readable. But her February 21 letter caught me up at the very end when she concluded with the quote above from Edward Luce, a United Kingdom (UK) journalist based in the United States (US) who writes for the Financial Times. It was the inclusion of prep schools—independent schools in the US—with “Wall Street, the City (London’s financial district), law firms, realtors…and western laundering outfits” that took me aback. That is quite a group to be mixed in with—and one that, surprisingly, doesn’t include the usual suspects, such as multi-national corporations, oil and gas companies, or big pharma; nor did it include international organizations or cartels. It didn’t even mention colleges and universities. Just “prep schools.” So, do we actually have a direct role in taking on Putin and thwarting his ambitions?
 
This question sent me on an investigation during which, fairly early on, I discovered that Luce’s statement is not about us here in the US but about prep schools in the UK and Europe and about western Europe’s relations with Russian oligarchs since the end of the Cold War, most notably during the past decade or so. A Forbes magazine article published as far back as 1999 established the original contention: “The gangsters and corrupt officials who have made huge fortunes from Russia's disintegration flocked to place their kids in the right boarding schools. When the Russians arrived at Le Rosey (Institut Le Rosey, a boarding school in Switzerland) in the mid-1990s, they began to reenact their parents' lifestyle, ganging together, fighting, getting drunk, and generally terrorizing the other students.” (from “Where you learn to be a billionaire.” No author. July 5, 1999. )
 
This statement, however, strikes me as a bit askew and hyperbolic.
 
Zooming forward in time, a more recently published (2014) Newsweek article presented the uptick in prep school enrollments in Western Europe of children of the Russian elite as a bit less sensational and a bit more practical in nature. In her article, “Educating Their Children Abroad is the Russian Elite's Guilty Secret,” writer Elizabeth Braw asserts that “…ever since dismantling Communism two decades ago, Russian leaders have been sending their children to the West for better educational and career opportunities.” (from “Educating Their Children Abroad Is the Russian Elite's Guilty Secret.” Elizabeth Braw, 7/30/14.)
 
Subsequently, Ilya Khrennikov and Irina Reznik weighed in on the multi-decade trend in their 2018 article “Russian Billionaires are Building Megaschools.” They assert that there’s been a recent change among Russia’s wealthy elite, but recognizes the long-standing movement as well: “Since Russia annexed Crimea from Ukraine a month after the Sochi Olympics, more than 30 billionaires and senior executives with investments abroad have founded or helped fund projects to nurture students at home. The outlays coincide with a halving in the number of new Russian enrollments at boarding schools in Britain, long the educational destination of choice for the country’s elite…” (from “Russian Billionaires Are Building Megaschools to Rival Eton and Exeter.” Ilya Khrennikov and Irina Reznik. Feb 11, 2018.)
 
On February 19, 2022, The Times (of London) put out an article with a very provocative headline about the kind of money flowing into Britain’s preps schools: “Dirty cash pays fees at top private schools.” The article opens with a direct salvo aimed at specific schools and adds some eyebrow-raising claims as well: “Oligarchs convicted of embezzling hundreds of millions of pounds are sending their children to Britain’s private schools…Parents convicted or under investigation for financial crimes from Russia…have enrolled their children at Harrow School, Brighton College, Queen’s College, London, and Wycombe Abbey in Buckinghamshire. The revelations have prompted concern from Transparency International…It said schools were not just providing education but ‘conveying legitimacy’. The National Crime Agency has warned schools that they are at high risk of accepting laundered cash.” (from “Dirty cash pays fees at top private schools.” Ben Ellery and George Greenwood. February 19, 2022.)
 
With these and other sources in hand, I now have a good idea of the prep schools implicated in the quote, but I still wonder if these schools really have a role in the imposition of sanctions on the Russian state for the purpose of stopping its current threat to Ukraine--its neighbor, a member of the United Nations, and an independent state recognized by 192 out of 193 states in the world today? Well…yes. Maybe? And, of course, it’s apparently all about the Benjamins, or in this case, the Queen Elizabeths (England, formerly) or Lord Ilays (Scotland).
 
Apparently, the money going to the schools is “clean” but formerly had been quite “dirty”; it was laundered and then used for tuition, room and board (and maybe a bit of prestige as well). According to Corporate Finance institute, money laundering is “…a process that criminals use in an attempt to hide the illegal source of their income. By passing money through complex transfers and transactions, or through a series of businesses, the money is “cleaned” of its illegitimate origin and made to appear as legitimate business profits” (from https://corporatefinanceinstitute.com/resources/knowledge/finance/money-laundering/) – then used for education expenses. Voila!
 
The United Nations provides the dirt on dirty money from Russia in a 2001 report titled, “Russian Capitalism and Money Laundering.” It notes that dirty money comes from several sources, including “bribes, smuggling, illegal entrepreneurship, illegal banking, illegal use of trademarks, tax evasion, evasion of customs payments, violation of rules for handing over precious metals, failure to return monetary means in foreign currency from abroad, obstruction of legal entrepreneurial activity, intentional and fictitious bankruptcy and many others.” (from Global Programme against Money Laundering: Russian Capitalism and Money Laundering. United Nations. New York, 2001.) That, indeed, is a lot of illegitimate activity. (I hope the students are getting some good courses in ethics at their prep schools as well.)
 
I have certainly kept going further down this rabbit hole, but I’m getting claustrophobic and feel compelled to see if I can make it back to the surface. I’ll try this door…
 
Let me end this piece with this clear statement: While there are Russian oligarchs and kleptocrats who willfully use nefarious methods to acquire vast fortunes to use for their own self-interest, there are also a vast number of Russian citizens and immigrants around the world, including here in the US, who seek to make an honest living and who value education and pursue it for their children knowing that it is a means to achieve both a better individual life and a better communal life. Here at home, we can keep providing an excellent education that includes continuous explorations of our Core Values. Let’s keep an eye on our nation and our world and work to make it a safe, healthy, just place for us to live and thrive in. This is the place in the world for prep schools and all the other schools that educate our children.
 
It was my impulse to follow this “rabbit” because I am a life-long prep school educator, an instructor of International Relations, and a citizen of the world with an eye on pragmatism but a heart for diplomacy and equity. Russia is twice as large as the next country in the world and encompasses 11% of the world’s landmass. It has natural resources and an educated population. It does not have a democratic political system. What could it be if it had one?