Russia’s richest woman, who moved to London after her husband was dismissed as mayor of Moscow amid corruption allegations, has been forced to resign as a trustee of a major London charity as a result of a Finance Uncovered investigation into a six-figure donation.
Billionaire Elena Baturina, 56, stepped down on Tuesday as a trustee of the Mayor’s Fund for London, a charity which raises money for social mobility and child education programmes.
Sadiq Khan is the charity’s patron, and in 2016 – shortly after he became mayor – his Greater London Authority (GLA) accepted a £138,000 cash grant from Baturina’s Swiss-registered Be Open foundation.
Khan’s office told Finance Uncovered she had been met at City Hall by his predecessor, Boris Johnson.
Her donation was made from Be Open to the Mayor’s Fund for London and then ploughed into a City Hall primary school project. She was made a charity trustee in 2017.
A year before she donated the money, a member of her foundation’s board had been charged in Spain with tax crimes and money laundering that were not connected to Be Open or Baturina, but a background check by the charity failed to spot this.
Khan’s office said concerns were raised about Baturina’s involvement, but despite this the mayor appeared in public with her to launch the programme, even taking a “selfie” with her.
Baturina, 56, is married in Yuri Luzhkov, the former mayor of Moscow who was sacked in 2010 by the then Russian president Dmitry Medvedev over corruption allegations.
She became Russia’s only female billionaire as her plastics company Inteko received a series of Moscow municipal contracts while her husband was mayor.
She strongly denies that she profited from her husband’s position, and insists she won the contracts fairly and that the Moscow business was only a small part of her company’s success story.
Luzhkov (pictured) was never charged in connection with the allegations in Russia and has described them as politically motivated and “total rubbish”.
After Luzhkov fell from favour in the Kremlin, the couple moved to London with their two daughters and Baturina set up her “BE OPEN” foundation in the Swiss canton of Zug, known for strict laws for financial secrecy.
Finance Uncovered discovered that in April 2015 a member of her foundation’s board, Spanish lawyer and Russia specialist Domingo Plazas Ruiz, was charged by prosecutors in Madrid with tax crimes and money laundering over his over his role in concealing the payment of almost one million euros in illegal commissions on an advertising contract with Spanish Bankia. The commissions were for Spain’s former deputy prime minister Rodrigo Rato, who was given a four-and-half year prison term in 2017 for embezzlement.
Meanwhile, in May this year the Spanish Prosecutor’s Office requested that Plazas Ruiz should receive a three year custodial sentence, if he is found guilty, for his role in giving the payments to Rato the “appearance of legality.” It is not clear when any trial might take place, or how he is pleading.
It was these details which prompted the Mayor’s Fund for London to remove Baturina as a trustee.
“The situation of the Be Open director was new information to us and we have acted upon this,” a charity spokeswoman said on Wednesday. “She has stepped down by mutual agreement and from immediate effect.”
A week earlier, and after being told of the Ruiz controversy, the charity had said: “Elena Baturina was introduced to the Mayor’s Fund for London, an independent charity, in 2014. This led to her foundation, Be Open, funding some of the Fund’s work to support young Londoners from low-income backgrounds.
“At that point, checks were undertaken in line with our normal procedures, both formally and informally, and in line with the charity’s ethical fundraising policy. This included (for example) tax status and the track record, nature and credibility of the Be Open Foundation, including the nature of other charitable activities it had supported. The commitment of the Be Open Foundation to supporting young Londoners then led to Elena Baturina becoming a trustee in 2017.”
A spokesman for the Mayor’s Office said: “Elena Baturina had met the former Mayor previously at City Hall.”
He confirmed that the GLA had relied on due diligence conducted by the Mayor’s Fund on Baturina, and since then there have been policy changes at both organisations.
“The new Chief Executive of the Fund is carrying out a strategic review of the charity and appointment process, has helped introduce a new ethical fundraising policy for the charity and agreed a new Memorandum of Understanding with the GLA.”
“The GLA has reviewed its approach to philanthropy and partnerships, and in April 2019 created the role of Giving Manager, which includes work on due diligence.”
Baturina, a keen golfer, skier and equestrian, owns Beaurepaire Park, a moated country mansion and 250-acre estate in rural Hampshire, where she makes gourmet goats cheese and sold it for a time at a “pop up” deli run by her daughter Olga Luzhkova on East London’s trendy Broadway Market.
Her spokesman said: “Inteko supplied plastic goods to thousands of privately owned and public enterprises in Moscow and Russia. It was a leading plastics manufacturer with multiple competitive advantages.
He said: “Domingo Plazas Ruiz is a member of the [Be Open] foundation’s board. We understand that although he is involved in an investigation in Spain which is unconnected with his role as a Member of the Board, as of today, he has not been convicted of any crime.
“Ms Baturina has been engaged in charitable and socially beneficial activities for more than 25 years, supporting a large number of individuals and organisations around the world,” he added.
*Editing by Ted Jeory
*A version of this article was published in The Times on September 26 2019