Short of funds.

Photographer: MARTIN BUREAU/AFP/Getty Images

Le Pen Shouldn't Count On Putin's Money

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website
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The 11 million ($11.5 million) euro in loans the French National Front took from a Russian bank is to date the most solid bit of proof that Russia is backing nationalist populist political forces in Europe with more than just talk on Kremlin propaganda channels and invitations for meetings in Moscow. The Russian government, however, appears to want its money back -- and that drives home a hard reality for National Front leader Marine Le Pen: The Kremlin loves the Western nationalists, but it's a tougher kind of love than Western Communists got from the Soviet Union.

The two loans came in 2014 from the First Czech Russian Bank (FCRB), a small private lender in Moscow. The deal was reportedly brokered by Russian legislator Alexander Babakov, a businessman whose interests in Ukraine suffered after the country's "Revolution of Dignity" that year. They saved Le Pen's party, which is in perpetual dire straits. In 2013, the last year for which official data are available, the party spent 10 million euros ($10.5 million), of which only 2.8 million euros came from private donations. Even with 5.5 million in government support, the National Front spent 650,000 euros more than it raised. That year, a loan from the microparty Cotelec run by Le Pen's father, Jean-Marie Le Pen, helped keep the National Front afloat. But 2014 was a European Parliament election year, and without the Russian funding, Le Pen's political force couldn't have won a plurality, which set up the party leader as a major contender for the presidency.

Given the National Front's perennial financial difficulties, it's hard to say whether FCRB owner Roman Popov hoped to get the money back. But by the time Le Pen got her loans, the bank was spinning out of control. Last September, when a Moscow court declared the bank insolvent, its negative capital reached 26.5 billion rubles ($444 million). The bank is now being unwound by the government Deposit Insurance Agency, which faces 26 billion rubles' worth of demands from depositors and various other creditors. By the end of December, the agency had filed 14 lawsuits to claim back 3.4 billion rubles in loans. It also challenged 10 deals made by the bank's former management -- including, reportedly, the sale of the National Front debt to a third party. 

This doesn't immediately affect Le Pen's party, which says it's been paying interest diligently, at 6 percent annually. The loans are due in 2019. The Russian government agency's apparent determination to take control of the debt, however, suggests that it wants to be repaid eventually: Winding up banks is something Russia does by the book.

Le Pen needs a lot of money again this year. This week, she said she required another 6 million euros to fund her presidential campaign, despite getting a fresh 6 million euro loan from Cotelec (so much for her highly publicized split with her father). Le Pen complained she couldn't get any traction with French banks, so she asked European, British, American, and, sure, Russian banks. "I'll accept the first one that tells me yes," the party leader said.

Perhaps it was to sweeten her appeal to Russian banks that Le Pen reiterated this week that she didn't consider Russia's 2014 annexation of Crimea from Ukraine illegal. She recognizes the referendum held in the peninsula after non-uniformed Russian troops took control of it. That earned her more airtime on Russian television but no loan offers so far, perhaps because Francois Fillon, the center-right candidate more likely than Le Pen to win the presidential election this year, is also an opponent of European sanctions imposed on Russia since the Crimea annexation. Russia likes the nationalist parties to stir up trouble in Western countries, but President Vladimir Putin is a realist, and the benefits of keeping Fillon friendly -- something helping his rival would likely not achieve -- are far greater than those of funding Le Pen.

That's an important lesson for all European nationalists -- including the Austrian Freedom Party, whose leaders recently traveled to Moscow to sign a cooperation agreement with Putin's United Russia party, and the Dutch nationalists led by Geert Wilders, who also has been welcomed in the Russian capital. They can count on the Russian propaganda machine, which has proven marginally effective with some ultra-conservative U.S. voters. Putin will also pat them on the back if they allow it, and perhaps -- as many in the U.S. believe -- help them dig up compromising information about their rivals. But he needs a certain distance from them -- not just for his customary deniability, but so that their popularity appears genuine and their electoral successes cannot be delegitimized. 

Back when there were Communist parties throughout the world, the Soviet Union didn't worry about hiding its support. Western intelligence service knew these parties were getting funding from Moscow. They were comrades, though; European nationalists, and even Donald Trump, are situational allies who are not really expected to do Russia's bidding -- just to stir up trouble for anti-Russian centrist establishments.

This means they have to do their own fundraising, the way Donald Trump did in the U.S., attracting more money from small donors than Hillary Clinton did. In Europe, campaigns are far less costly than in the U.S. In France, for example, television advertising is banned. A run for the French presidency shouldn't cost more than 25 million euros. But even that kind of money is hard to raise in a country where people expect the government to finance political parties. In France, 50 parties get public funding, divided according to their electoral performance and the number of legislators that declare allegiance to them. 

In this culture, Le Pen has voter support -- but her supporters don't put their money where their mouth is, or at least not enough of their money. European populists need to learn from Trump's success; they need elements of American fundraising culture, not Russian funding, which isn't likely to flow freely.

(Corrects ruble conversion in third paragraph to millions from billions.)

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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Leonid Bershidsky at

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Therese Raphael at