[S02 E05] New
In this episode of Cities After…, Prof. Robles-Durán discusses how the western oligarchy has been intrinsically interconnected with its Russian counterpart through massive urbanization projects around the world. Oligarch Business Districts have been developed in major cities at the command of dark money in the search for legal loopholes, fiscal gymnastics, and money laundering. By looking closely at two of these development districts, New York’s Hudson Yards and Russia's Moscow International Business District, Robles-Durán reveals how they render the invisible web of dark money visible and enable an immense service industry of lawyers, accountants, architects, creatives and financiers dedicated to supplying the wants and needs of the global neoliberal oligarchy.
Transcript has been edited for clarity
In this episode, I discuss how the Western oligarchy has been intrinsically interconnected with its Russian counterpart through massive urbanization projects around the world creating complete oligarch business districts at the command of dark money in their search for legal loopholes, fiscal gymnastics and money laundering that has enabled an immense service industry of lawyers, accountants, architects, creatives and financiers, dedicated to supplying the wants and needs of the global neoliberal oligarchy. The first weeks of March have been somehow of a bonanza for luxury real estate agents in New York City. Dozens of properties valued from 5 to 50 million dollars have been whisper-listed flooding the ultra-luxury market of Manhattan. These are properties that were released directly to brokers who already have a long list of other billionaires who might want to expand their investments and buy them. You will never see these properties in public listings as the owners simply desire to stay under the radar and the less public attention they receive for them, obviously, the better. So, what prompted the sudden surge of whisper-listings?
Well, in this specific case it was fear. The fear of losing assets due to the economic sanctions that the US government was preparing against anyone closely tied to the Russian president Vladimir Putin. So, if you were a Russian oligarch in early March, or late February, you would be trying to sell fast your assets. Not surprisingly, the majority of these flash sales have been geographically concentrated in one small area of Manhattan nicknamed, The Billionaires Row, which for those of you that cannot recall it is an array of eight, for the moment, super tall skyscrapers located in the southern end of Central Park. Those of you that can picture the Manhattan skyline might not recollect seeing these buildings since all of them are fairly new phenomenon in the city for sure. The first building called 157, developed by EXTEL Development Company and designed by the famed French architect Christian de Portzamparc, was completed just in 2014. The second one, 432 Park Avenue, developed by CIM group, and designed by Rafael Viñoly, recipient of the prestigious American Institute of Architects Medal of Honor, was completed in 2015. The other skyscrapers of the complex were just completed in the last three years, with two of them designed by Robert M Stern, which is a powerful and influential architect, who until 2016, was the Dean of the Yale School of Architecture.
It has taken thousands of innocent lives and a major war threatening the international stability of capitalist markets to finally begin to talk about oligarchs and the many legislations that were enacted to protect their laundered investments. As it stands, the current loopholes in legislation allow oligarchs to transfer their ill-acquired wealth to any friends or family without retribution, thus adding to the secretive investment patterns allowed by the creation of anonymous limited liability corporations, and the endless options that currently exist for offshoring ownership, whether in Panama. Lichtenstein, and the like. And despite talks about new legislation that would enforce every LLC, or limited liability corporation, to disclose the owners of the New York apartments to the New York Department of State, and despite the attempts to create a proper ownership database, all of these proposals look doomed to failure. And this is because all the other oligarchs that are not Russian also use these loopholes, and at the moment are not being sanctioned or perhaps will never be sanctioned.
So, Russian oligarch bashing is now a common sport, which is great and all, but what about the other oligarchs? What about all the actors that continue to serve them like politicians, fancy architects, real estate developers, and the like? By Wikipedia’s definition an oligarchy is a form of power structure in which the power rests in a small number of people. Aristotle pioneered the use of the term as meaning the rule by the rich. And these were just concerned with one thing - the protection of their own power. Clearly our times are closer to that than they have ever been.
In this podcast, I want to argue that nowhere is the power of oligarchy more material, is more graspable than in cities. Especially in those cities that like New York City, London, Paris, Zurich, Toronto, Singapore, which have been happily welcoming the multi-million dollar investments of dark money for decades. Your dark money is always welcomed as long as your president doesn't illegally invade another country. Of course, unless you're also from Israel or from Saudi Arabia or an American or a European. In the late 1980s, the urban world began to experience a new kind of growth propelled by the gradual world dominance of neoliberal policy. As I explained in the last season's episode on the urbanization of shock therapy, this recent period of capitalism, neoliberalism, is about the privatization of everything that was publicly owned. And it's commonly characterized in cities by the sudden proliferation of development of public-private partnerships, including, of course, with them the creation of luxury towers and international business districts, those urban areas that we recognize with a high concentration of new skyscrapers, logos of international companies on them, etc. Great early examples of these business districts were Canary Wharf in London, or Battery Park City in Manhattan, La Défense in Paris, and Singapore at large. Recent examples abound right from Puerto Madero in Buenos Aires, Santa Fe in Mexico City, Eco-Atlantic in Lagos, South Axis in Amsterdam, Hudson Yards in New York City and the Moscow International Business Center in Moscow. These new urban developments served a number of important functions to the global oligarchy.
First, it was tax evasion, of course, as many of these areas legislated with a plethora of fiscal benefits to foreign and local investors. Second, safely contained wealth parking lots. I mean these properties were considered, and are still considered good depositories of the wealth that you are creating. The more money the oligarchs plunder the more obviously they need to figure out where to put it. And these districts have become a favorite place for that. Thirdly, they are discussed as laundered assets to inflate investment portfolios to make more money in the fast-paced world of global finance.
To illustrate a bit better the ambition of these districts to oligarchs, let me focus on the stark similarities of two emblematic developments. The largest private urban development in the history of the United States, called Hudson Yards, which is in New York City, and the largest private urban development in the history of Russia - the Moscow International Business District ,or MIBD, which was previously known just as Moscow City. The Moscow International Business District is close to a 20 billion dollar collection of 15 ultra-luxury, smart skyscrapers located on 60 hectares of land which situated more or less four kilometers or two and a half miles from the Red Square. This project was first conceived in 1992. I mean, coming from the sort of a revolution of turning capitalist, neoliberal Russia turning neoliberal after the fall of the Berlin Wall, the Iron Curtain, and so on. And the idea of developing a finance center, a capitalist finance center in Moscow. However, most of the buildings were not finished until the 2010s which is perhaps the most prolific period of the recent Russian oligarchy. During that period the majority of the large state-controlled Russian companies had moved offices to these buildings. To mention a few: Transneft, the largest oil pipeline company in the world, currently operates from the helicoidal-shaped 55-floor skyscraper designed by a British architect, which name is Tony Kettle, in collaboration with a prestigious university professor of arts, Karen Forbes. Rosselkhozbank, the state-owned Russian Agriculture Bank, also moved its address to the IQ-quarter which is another skyscraper designed by the American architecture and planning firm from Seattle, NBBJ. The government of Moscow bought 55,000 square meters in another building designed by the Chicago-based American architecture firm Skidmore, Owens and Merrell.
The list of oligarch control companies that share offices in this real estate complex is all-encompassing. Needless to say, a large number of American and European companies, as well as financial institutions that were profiting from the oligarch boom, also happily opened offices there as well. All of these offices are surrounded by a hyper-securitized ring of luxury shops, luxury restaurants, luxury hotels, luxury apartment dwellings, luxury conference spaces and luxury leisure amenities, which make it indeed a gated paradise conceived in the image of the oligarch's wants and needs.
On the other hand, Hudson Yards, in New York City, is the American version of this kind of oligarch paradise. It is a 22 billion dollar collection of 16 ultra-luxury smart skyscrapers on the west side of Manhattan built for absorbing surplus of corporate America and its oligarchs, as well as to attract foreign oligarch money aka foreign direct investment through the EB5 Investment Program which is a federal program that offers permanent residence or a green card that in exchange for half a million dollars of investment in a new commercial enterprise in areas that are called targeted employment areas, which are urban areas with an unemployment rate are higher than 15 percent. So, obviously this part of Manhattan did not qualify as a targeted employment area, but somehow the developers, Stephen Ross and Michael Turner, together with their politically influential teams, managed to gerrymander the area to qualify as this, as a targeted employment area.
So, in this space as of today, many of America’s largest companies have relocated headquarters in Hudson Yards. Boston Consulting Group, Google Sidewalk Labs, BCG, The Coach Group, occupy a 54 floor skyscraper designed by the American firm Kohn Penderson Fox. Time Warner, Facebook and Wells Fargo Securities are occupying a 103 story skyscraper also designed by Kohn Penderson Fox. Other corporations such as Black Rock, Equinox, SAP, Intercept Pharmaceuticals, HBO, CNN and Third Point Financial Services, are tenants of this paradisic development, surrounded also, as in Moscow, by a hyper-securitized utopian ring of luxury shops, luxury restaurants, luxury hotels, luxury apartments, luxury conference spaces and luxury leisure amenities. You know, one major contradiction of oligarch urban districts such as Hudson Yards and the Moscow International Business District is that through their reform, or their forms of urbanization, they render visible the invisible complex array of international legal loopholes of tax evasion schemes, of corrupt dealings, and of the financial web of dark money that sustains capital flows and investments across the globe. Suddenly, in their static architectural form, all the oligarchs of the world, and those that have enabled their economy, become next-door neighbors. Not only that but they willingly display their extravagances to all citizens from whom they have plundered or exploited. The banks that finance these developments around the world are the same ones: Deutsche Bank, Barclays, Allianz, Credit Suisse, you know them. You also know the companies that aid the corporations with tax evasion and international law: KPMG, Ernst & Young, PricewaterhouseCoopers, Deloitte, McKinsey, etc.
I have also mentioned the name of architects that enjoy global fame and respect for being the architects of the oligarchs. You might not have heard of them before but now you do and these designers are a main reason why all these oligarch urban districts look alike from Moscow to New York to Astana. It has become the same urbanization model.
One does not need to look further than your local oligarch urban district to know who is involved. Who are they? They are the absolute magnifying lens to the origins of the contemporary capitalist crisis. Everything from environmental degradation to the Russian-Ukraine war can be traced inside the money that goes to these developments.
So, okay, to further elaborate what I mean please let me entertain you with a series of fast connections that I was able to make by looking just below the surface into the development of the Moscow International Business District. I am aware, though, that these connections might sound like a conspiracy theory of sorts, but I assure you that that is not my goal nor my style. So, here we go. The founding developer of the Moscow International Business District is a person of the name of Pavel Fuchs, who is a Ukrainian oligarch that had extremely close ties to Vladimir Putin. Fuchs was an advisor to the chairman and later a vice-president of the foreign economic corporation of Prominvestbank which is one of Ukraine’s largest commercial banks that until 2016 was fully owned by the Kremlin and that has been at the heart of many scandals of helping to steal Ukrainian assets into the hands of Russian oligarchs. After Fuchs’ role as a vice-president, he moved to Moscow to become a real estate developer. As I’ve just mentioned, the main founder of this business district that I was talking about. Amongst his many real estate deals he began to negotiate with no other than Donald Trump and the negotiation was for the construction of the Trump Tower in Moscow. And where else was that tower going to be located but at the Moscow International Business District. After this deal went sour, Fuchs returned to Ukraine where according to the Washington Times his task was to use the money of the Russian criminal circles to buy out promising Ukrainian gas and oil fields, energy companies and other tactical assets for his Russian friends. Quoting the International Policy Digest, “Fuchs is clearly suspected of shady bidding and buying up distressed assets in Ukraine as a proxy for the fugitive Moscow-based former politicians.” Later, in 2017, while Trump was president, he hired Rudy Giuliani’s law firm to help improve the city of Kharkov’s international image. During all his business dealings Fuchs has operated closely with many corporations that Americans put proudly in pedestals. This includes the so-called Big Four accounting firms, more prominently with Ernst & Young. Fuchs also operated with many of the West’s major banks, many of the most prolific American real estate developers, prominent law firms and, of course, architects that hold prestigious professorships in Ivy League universities.
This links us back to Hudson Yards and the billionaires’ row in New York City where the dark money of the Russian oligarchy blends completely with the other oligarchs of the world. And this blending renders a dystopian hellscape of skyscrapers financed by clean Western capital, brokered by respected elites and designed by award-winning architects, serviced by governments and organizations with a clear purpose of supporting global oligarchy.
The current forms of investigating, denouncing and sanctioning Russian oligarchs are helping antagonize an image of bad and good oligarchs. In this context, the Russian oligarchs are clearly the bad guys, but the reality is that these bad guys have often partnered, invested, lent, assisted and fused their dark money to enable the surplus accumulation of the good oligarchs of the West.
Oligarchy is not a Russian problem. It is a very serious global problem that needs to be addressed. In the same way the West is beginning to sanction the Russians, we need a mass uprising against the dark forces that enable it. Neoliberalism led to oligarchy and oligarchy has historically brought the worst kinds of authoritarianism. All these dark forces are materialized in front of us through its forms of urbanization.
I encourage all of you to scratch the surface of your local oligarch urban district and begin to reveal the many dark connections that need to end and need to end now. We must equally be able to hold the oligarchs of the West accountable together with all the people and all the organizations that service them. This was another episode of “Cities After.” Thank you for listening and don't forget to subscribe.
Transcript by Alyssa Bonilla
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