LONDON — One of Britain’s largest donors to the Conservative Party is suspected of having secretly funneled hundreds of thousands of dollars into the party from a Russian account, according to a banking warning filed with Britain’s national law enforcement agency.
The $630,225 donation was made in February 2018 in the name of Ehud Sheleg, a wealthy London art dealer who was most recently the treasurer of the Conservative Party. The money was part of a fundraiser that helped 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 DailyExpertNews say the money came from a Russian account owned by Mr Sheleg’s father-in-law, Sergei Kopytov, who was once a high-ranking politician in the previous pro -Kremlin government of Ukraine. He now owns real estate and hotel businesses in Crimea and Russia.
“We are able to withdraw a clear line from this donation to its ultimate source,” Barclays Bank wrote in a January 2021 warning to the National Crime Agency. The bank, which retained some of the accounts used in the transaction, flagged the donation as both suspected money laundering and a potentially illegal campaign donation.
A lawyer for Mr. Sheleg admitted that he and his wife had received millions of dollars from his father-in-law in the weeks before the donation. But they said that was “completely unrelated” to the campaign contribution.
“There is absolutely no basis to suggest that Mr Kopytov’s gift to his daughter was intended or for the purpose of making a political donation to the Conservative Party,” the lawyer, Thomas Rudkin, wrote in response to questions from The Times. †
It is illegal for political parties to accept donations of more than £500 from foreign citizens who are not registered to vote in Britain. Mr Kopytov is not listed on the national electoral register, data shows. It’s not clear why the Barclays alarm arrived three years after the donation, or whether authorities had investigated it.
It’s no secret that wealthy Russian industrialists have given much to the Conservative Party over the years. Mr Johnson once played a game of tennis with the wife of a Russian former minister in exchange for a $270,000 donation. But those donors were British citizens, while documents filed in Mr Sheleg’s case say the money came from a foreign source.
For decades, Russian wealth has flowed into London’s economy, enriching the lawyers, accountants and real estate agents who smoothed out the details. British leaders looked the other way as the Kremlin sowed disinformation, meddled in elections and tried to co-opt politicians.
With Russia’s President Vladimir V. Putin besieging Ukraine, Mr. Johnson and his government vow to change course and be tough on Russian money. The endowment, and Mr. Sheleg’s subsequent rise in the party, shows how difficult that will be.
Banks in Britain are obliged to warn law enforcement officers about suspicious criminal behaviour. They do this through the National Crime Agency, which receives more than half a million reports of suspicious activity every year. Most come from financial institutions, but law firms, brokers and casinos also contribute.
Alerts may include reports of suspected terrorist financing, romance scams, or benefit fraud. Former officials say they receive so many warnings that some are never read – a fact that will be an obstacle to the government’s crackdown on Russian oligarch money.
There is no indication that the Conservative Party or Mr Johnson were aware of the source of the donation, as set out in the warning. But under English law, political parties are responsible for ensuring that their donations come from legal sources.
Attorneys for Mr. Sheleg said the party made no request for additional information or documentation when he made the donation.
A Conservative Party spokesman said it only accepts money from authorized donors and that all donations are “fully compliant with the law”. He would not say whether the party ever investigated the donation or intended to keep the money.
Mr Kopytov, who was identified in the alert as the ultimate source of the donation, is the father of Mr Sheleg’s wife, Liliia Sheleg. He served in the pro-Kremlin government of Crimea in Ukraine until Russia annexed the area in 2014. Since then, it has largely disappeared from the public domain.
Company files show that he owns two hotels in Crimea. However, the source and extent of Mr Kopytov’s wealth at the time of the endowment is unclear. Company records from that period only show business connections to nonprofits, small or inactive businesses, with its most valuable stock worth less than $300.
Mr Kopytov said in a statement from Mr Sheleg’s lawyer that 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. “All of my son-in-law’s donations to a British political party have nothing to do with me or the money I donated to my daughter.”
The warning stated that $2.5 million had been transferred from Mr. Kopytov in Russia. That money haggled across Europe between empty bank accounts of Mr. Sheleg and his wife.
The money then ended up in a foreign account linked to Mr. Sheleg’s family trust.
Five weeks later, it returned to the couple’s joint account in Britain, the data says. The next day, $630,225 was transferred to the Conservative Party bank account. The transactions were made in dollars, the data shows. The party registered it as a donation of £450,000.
“It can be stated with great certainty that Kopytov was the true source of the donation,” the warning reads.
Mr. Sheleg’s lawyer said that is not the case. He said the $2.5 million was a gift, from a property sale, which was turned over to the family trust to repay a loan. mr. Sheleg then borrowed money from that trust to donate to the Conservative Party, he said.
Bank investigators were suspicious, however, as all of the Shelegs’ personal bank accounts used in the transactions had zero balances before Mr. Kopytov’s money arrived, the report said. Everything went back to zero when the money was gone. This “would make it very difficult to claim that the donation somehow came from Ehud or Liilia Sheleg’s personal wealth,” the warning read, misspelling Ms Sheleg’s first name.
War between Russia and Ukraine: important developments
Asked about the zero balances, Mr. Sheleg’s lawyer said that the account balances fluctuate. What’s important, he said, was that Mr. Sheleg didn’t rely on his father-in-law’s money to make the donation.
Rapid transfers to and from multiple bank accounts, especially between different countries and offshore jurisdictions, are sometimes signs of what anti-money laundering officials call “layering.” The process aims to hide the source of the funds, and officials have urged banks to be wary of such transfers, which may help explain why the donation was flagged.
Reports of suspicious activity are confidential by law. A spokeswoman for Barclays and a spokesperson for the National Crime Agency declined to discuss the matter. The crime organization often refers these reports to other agencies for investigation. A spokeswoman for the Electoral Commission, the leading agency for investigating campaign finance, said it was not aware of any allegations against Mr Sheleg.
Mr Sheleg made a number of further donations over the following months, including one of £750,000, making him the party’s largest donor that year. The documents reviewed by The Times say nothing about those later donations.
Warnings about Mr Sheleg’s financial background and connections to Russia surfaced shortly after the donation and did nothing to slow Mr Sheleg’s political rise – or stop the party from accepting millions more from him.
Months after the donation, the British political and investigative 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, Mr Sheleg became partners with a businessman in Cyprus accused of having connections with organized Russian crime groups, the magazine reported. Photos show Mr Sheleg and his business partner meeting the President of the Russian Republic of Tatarstan.
Lawyers for Mr Sheleg said he had only met the businessman accused of having connections with Russian organized crime groups “three or four” times and was not his partner. Mr Sheleg only met the president of Tatarstan for “business purposes,” the lawyers said.
By the time those revelations were published, Mr. Sheleg was no longer just a donor. In late 2018, he became treasurer of the Conservative Party, a position responsible for fundraising and ensuring that the party follows campaign finance rules.
The warnings came at the height of concern over Russian influence in Britain. Kremlin agents had just been accused of poisoning a former Russian spy, Sergei V. Skripal, on British soil, fueling angry calls for more sanctions against Russia.
But when a British opposition lawmaker called for an investigation into Mr Sheleg’s donations and his “disturbing connections” to Russia, the then Conservative Party chairman said Mr Sheleg should not reveal the source of his wealth and threaten libel.
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 set up a secret advisory council, later revealed by the Times of London, made up of ultra-wealthy conservative donors. Shortly afterwards he was knighted.
During his time as treasurer, the party received a wave of Russia-related donations. Mr Sheleg himself has also generously donated: a total of £3.8m from 2017 to 2020.
In September 2021, seven months after Barclays notified law enforcement officers of the donation, Mr Sheleg quietly left his role as party treasurer. There is no indication that his departure is related to any investigation into him, the endowment or the source of his wealth.
Law enforcement officers have never contacted Mr Sheleg about his donation, his lawyers said.
