LONDON — One of Britain’s Conservative Party’s biggest donors is suspected of secretly funneling hundreds of thousands of dollars to the party from a Russian account, according to a bank alert submitted to Britain’s national law enforcement agency.
The donation, $630,225, was made in February 2018 in the name of Ehud Sheleg, a wealthy London art dealer who was recently treasurer of the Conservative Party. The money was part of a fundraising campaign that helped propel Prime Minister Boris Johnson and his party to a landslide victory in the 2019 general election.
But documents filed with authorities last year and reviewed by The New York Times say the money originated from a Russian account of Sheleg’s father-in-law, Sergei Kopytov, who was once a top politician in the previous pro-government. Kremlin. from Ukraine Now owns real estate and hotel businesses in Crimea and Russia.
“We can trace a clear line from this donation to its ultimate source,” Barclays bank wrote in a January 2021 alert to the National Crime Agency. The bank, which held some of the accounts used in the transaction, flagged the donation as suspected money laundering and a potentially illegal campaign donation.
A lawyer for Sheleg acknowledged that he and his wife received millions of dollars from their father-in-law in the weeks leading up to the donation. But they said that was “entirely separate” from the campaign contribution.
“There is absolutely no basis to suggest that Mr. Kopytov’s gift to his daughter was intended to make, or for the purpose of making, a political donation to the Conservative Party,” the lawyer, Thomas Rudkin, wrote in response to questions. from TheTimes. .
It is illegal for political parties to accept donations of more than £500 from foreign nationals who are not registered to vote in Britain. Mr. Kopytov is not listed on the national voter registry, records show. It is not clear why the Barclays alert came three years after the donation, or whether authorities had investigated it.
It’s no secret that Russia’s wealthy industrialists have contributed a lot to the Conservative Party over the years. Johnson once played a tennis match with the wife of a former Russian minister in exchange for a $270,000 donation. But those donors were British citizens, while documents produced in Sheleg’s case say the money came from a foreign source.
For decades, Russian wealth has poured into the London economy, enriching the lawyers, accountants and real estate brokers who polished the details. British leaders looked the other way, even as the Kremlin sowed disinformation, meddled in elections and tried to co-opt politicians.
Now, as President Vladimir V. Putin of Russia lays siege to Ukraine, Johnson and his administration promise to change course and get tough on Russian money. The donation and Mr. Sheleg’s subsequent rise in the party shows how difficult it will be.
Banks in Britain are required to alert law enforcement officials about suspected criminal behaviour. They do this through the National Crime Agency, which receives more than half a million suspicious activity reports each year. Most come from financial institutions, but law firms, real estate agents and casinos also contribute.
Alerts may include reports of suspected terrorist financing, romance scams, or benefits fraud. Former officials say they receive so many alerts that some are never read, a fact that will hamper the government’s crackdown on money from the Russian oligarchy.
There is no indication that the Conservative Party or Mr. Johnson knew about the source of the donation as described in the alert. But under English law, political parties are responsible for making sure their donations come from legal sources.
Mr. Sheleg’s attorneys said the party did not request additional information or documentation when making the donation.
A spokesman for the Conservative Party said it accepts money only from authorized donors and that all donations “fully comply with the law”. He did not say whether the party ever investigated the donation or planned to keep the money.
Mr. Kopytov, whom the alert identified as the ultimate source of the donation, is the father of Mr. Sheleg’s wife, Liliia Sheleg. He served in the pro-Kremlin Ukrainian government of Crimea until Russia annexed the area in 2014. Since then, he has largely disappeared from public view.
Corporate files show that he owns two hotels in Crimea. However, the source and extent of Mr. Kopytov’s wealth at the time of the donation is unclear. Company records from that period show business connections only to nonprofits, small or dormant businesses, with their most valuable shares worth less than $300.
Kopytov, in a statement provided by Sheleg’s lawyer, said he was a Ukrainian citizen and had not donated to any British political party.
“I have no interest in British politics at all,” he said. “Any donation made by my son-in-law to a British political party has nothing to do with me or the money I gave my daughter.”
The alert said that $2.5 million was transferred from Kopytov’s bank account in Russia in January 2018. That money was transmitted across Europe between empty bank accounts belonging to Sheleg and his wife.
The money then landed in an offshore account linked to Mr. Sheleg’s family trust.
Five weeks later, it bounced off the couple’s joint account in Britain, records show. The next day, $630,225 was transferred to the Conservative Party’s bank account. Transactions were made in dollars, records show. The party recorded it as a donation of £450,000.
“It can be stated with considerable certainty that Kopytov was the true source of the donation,” the alert says.
Mr. Sheleg’s lawyer said that is not the case. He said the $2.5 million was a gift, stemming from the sale of a property, that was transferred to the family trust to pay off a loan. Sheleg then borrowed money from that trust to donate to the Conservative Party, he said.
However, bank investigators were suspicious because all of the Shelegs’ personal bank accounts used in the transactions had a zero balance before Kopytov’s money arrived, according to the report. Everything went back to zero when the money left. This “would make it very difficult to argue that the donation came in any way from the personal wealth of Ehud or Liilia Sheleg,” the alert read, with misspellings of Ms. Sheleg’s given name.
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When asked about the zero balances, Sheleg’s attorney said account balances fluctuate. The important thing, he said, is that Mr. Sheleg did not depend on money from his mother-in-law to make the donation.
Rapid transfers in and out of multiple bank accounts, particularly between different countries and offshore jurisdictions, are sometimes signs of what anti-money laundering officials call “layering.” The process is intended to hide the origin of the funds, and officials have urged banks to be vigilant for such transfers, which may help explain why the donation was flagged.
Suspicious activity reports are confidential by law. A Barclays spokeswoman and a spokeswoman for the National Crime Agency declined to discuss the matter. The criminal agency often forwards these reports to other agencies for investigation. A spokeswoman for the Election Commission, the main agency that investigates campaign finance, said she was not aware of any allegations against Sheleg.
Mr. Sheleg made several more donations in the following months, including one of £750,000, making him the party’s biggest donor that year. Documents reviewed by The Times say nothing about those later donations.
Warnings about Sheleg’s financial background and Russian connections surfaced shortly after the donation and did nothing to slow Sheleg’s political rise, or prevent the party from accepting millions more from him.
Months after the donation, the British investigative and political magazine Private Eye reported that Mr. Sheleg had received the Russian ambassador in London at the height of the fallout from the annexation of Crimea. Around that time, Sheleg became associated with a businessman in Cyprus accused of connections to Russian organized crime groups, the magazine reported. The photos showed Mr. Sheleg and his business partner meeting the president of the Russian republic of Tatarstan.
Sheleg’s lawyers said he had met with the businessman accused of connections to Russian organized crime groups. only “three or four” times and it was not her partner. Mr. Sheleg met with the president of Tatarstan only for “business purposes”, the lawyers said.
When those revelations were published, Mr. Sheleg was no longer just a donor. In the fall of 2018, he became treasurer of the Conservative Party, a position responsible for raising funds and ensuring the party follows campaign finance rules.
The warnings came at the height of concerns about Russian influence in Britain. Kremlin agents had just been accused of poisoning a former Russian spy, Sergei V. Skripal, on British soil, prompting angry calls for more sanctions against Russia.
However, when a British opposition lawmaker called for an investigation into Sheleg’s donations and his “worrying connections” with Russia, the chairman of the Conservative Party at the time said that Sheleg should not need to reveal the source of his wealth and raised the question. defamation threat.
And when Mr Johnson became prime minister in July 2019, he immediately appointed Mr Sheleg as the party’s sole treasurer. Mr. Sheleg conceived and helped create a secret advisory board, later revealed by the London Times, made up of ultra-rich Conservative donors. He was knighted soon after.
During his time as treasurer, the party received an increase in Russia-linked donations. Mr Sheleg also generously donated himself: a total of £3.8 million from 2017 to 2020.
In September 2021, seven months after Barclays alerted law enforcement officials about the donation, Mr. Sheleg quietly stepped down as party treasurer. There is no indication that his departure is linked to any investigation of him, the donation or the origin of his wealth.
Law enforcement officials have never contacted Mr. Sheleg regarding his donation, his lawyers said.