Welcome to the Cheat Sheet, a clickable, shareable, bite-sized FAQ on the news of the moment. Today, who is the New Zealand billionaire at the centre of a bubbling Brexit scandal?
There aren’t many billionaires who have called New Zealand home.
Of course there’s Graeme Hart (dubbed by Forbes New Zealand’s perennial richest person) with an estimated wealth of about $10 billion, and we’re now claiming early Facebook investor, co-founder of PayPal and death-denier Peter Thiel as a Kiwi too, with about $2.5b to his name.
Then there are the two billionaire Kiwi brothers, Richard and Christopher Chandler. According to legend, they converted (and grew dramatically) the family’s relatively modest wealth made from selling a chain of New Zealand department stores into significant investments in Russia, Japan, Brazil (they took a punt on state-owned telecoms operator Telebras) and the Czech Republic.
It’s the Chandlers’ Russian links that have seen the notoriously secretive Christopher Chandler thrust into the unfolding Brexit debacle. The duo, through their old investment vehicle Sovereign Global Investment, were early foreign investors in Russian gas giant Gazprom – widely understood to be controlled by Russia’s political elite (current Russian Prime Minister Dmitry Medvedev was appointed chairman in 2000, for example) and considered a political pawn of Russian President Vladimir Putin.
But the brothers’ investment in Gazprom predates Putin’s rise to power – just – and the duo have claimed (in the few media interviews they’ve done) that their investment strategy is to put money into distressed or under-performing (often state-controlled) companies in emerging markets, pressure management into improved corporate governance, then sell out once that strategy bears fruit.
So what’s this got to do with Brexit?
After the Chandler brothers split their Sovereign fortune, Christopher set up a new fund, Legatum Capital, in 2006 in Dubai which spawned a think thank, the Legatum Institute Foundation. It’s the institute that has inserted itself into the Brexit campaign, after its researchers lobbied (effectively, it’s claimed) for a “hard Brexit” – giving up access to the European Union’s single market, when (and maybe if) Britain leaves the EU.
Brexit is, unsurprisingly, turning toxic as competing interests jostle to control what an out-of-the-EU Britain would look like. Legatum wanted to influence the action.
OK…. So where does the spying allegation come in?
Christopher Chandler’s Russian-made fortune has been attracting significant negative publicity since last year. The Mail on Sunday trumpeted in November 2017 that it had uncovered a “Russian link to Boris Johnson and Michael Gove’s successful plot to persuade Theresa May to take a tougher stance on Brexit”. It claimed Legatum’s economics director, Shanker Singham, had met Boris Johnson and Michael Gove, and had co-ordinated a letter written by them to Theresa May demanding a hard Brexit.
That negativity has now manifested as a claim made by British MP Bob Seely (under parliamentary privilege so it can’t result in legal action) that Christopher Chandler came to the attention of both Monaco’s security department and French intelligence in the 1990s for having links with Russian intelligence.
Yikes. What were these “links”?
The Guardian reported that Seely claims he and four other MPs had seen documents from Monaco’s security department. These “brief, terse, factual files” related to “national security and money laundering” and included information supplied by the DST intelligence agency, France’s equivalent of MI5.
Further, he claims that “according to the French intelligence services, as recorded by their colleagues in Monaco … Mr Chandler is described as having been ‘an object of interest’ to the DST since 2002 on suspicion of working for Russian intelligence services”, and the “Monaco intelligence division had marked Chandler’s file with an S, to indicate “counter-espionage”.
But the Chandlers were involved in Russian investments together?
Seely claims the files dated from 2005 and covered a period from the mid-1990s, and concerned “Christopher Chandler and his brother”.
What does Mr Chandler say about all this?
The now Maltese citizen with an EU passport says it’s bullshit, basically. He’s never even met Putin! You can read his latest response, titled “The truth is in the national interest” on Legatum’s website. But it comes down to this, Christopher Chandler says: “I am not and never have been associated with the Russian state in any capacity. There is no evidence to support claims to the contrary.”
“As I stated before, I have never had anything to do with Russian – or any other country’s – intelligence services. If the Monaco authorities investigated this question at some point, they must have concluded the same, as they obviously never pursued the matter with me. Instead, I remained a resident in good standing in Monaco for the duration of my two decades there and for many years after I moved away.”
Do we believe him?
Of course we do. We don’t have parliamentary privilege.
Legally dodgy jokes aside, the proof, as they say, is in the pudding. The “evidence” so far, as Christopher Chandler notes is, “unspecified allegations of wrongdoing… based on a discredited report from 16 years ago. These accusers have refused to release the full report to me for scrutiny. Calling for a response, while hiding the document at issue is patently dishonest. Moreover, impugning my reputation while hiding behind Parliamentary privilege shows the lack of confidence which they have in their claims.”
“Since its founding, my business has been voluntarily audited and reviewed by the world’s top firms and counterparties, and we have never had an adverse finding of any sort. In short, we have enjoyed an unbroken reputation for integrity, for over thirty years. Were this not true, those promoting the current fabrications would have delighted in exposing any shortcomings. They have found none. We have no skeletons in our closet.”
AND, the new Maltese citizen says he has never even taken a public stance on Brexit! “Many in the media and these MPs suggest otherwise, but I challenge them to point to one example of any statement by me one way or the other on Brexit. They can not. Regardless of this truth, they seek to make me an emblem of Brexit and then as with all others they perceive as enemies, discredit me in their quest to reverse the decision of the British electorate.”
And he’s right; using parliamentary privilege to make such damaging claims is pretty weak-sauce when you know you’d get destroyed and probably reduced to pauper status if you even whispered it outside of Parliament’s hallowed halls. It also shows the road to Brexit (or not) is going to be painful, personal, and vicious.
And look, we may not like private individuals making a literal fortune off the privatisation of state assets, but making a killing from the privatisation of state assets is practically the New Zealand way. Faye Richwhite or Brierley’s anyone?
The Spinoff’s business section is enabled by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.
The Spinoff Weekly compiles the best stories of the week – an essential guide to modern life in New Zealand, emailed out on Monday evenings.