WASHINGTON — On paper, the U.S. decision to freeze Russian President Vladimir Putin’s personal assets looks like an empty gesture.
Although he is widely considered one of the richest men in the world, Putin owns only a couple of old cars, a small apartment and whatever savings the 69-year-old former KGB agent has squirreled away from a salary of around $140,000, official documents say.
Nobody believes the official documents. Most experts say Putin’s vast assets are secretly held by a circle of cronies — the so-called oligarchs and their families.
Forbes, the magazine known for ranking the world’s billionaires, says it has been trying to answer that question for 20 years. One of its editors was gunned down in Moscow while he was looking into Russia’s early oligarchs.
The Russian president’s worth is believed to run well into the billions of dollars.
William Browder, a onetime investor in Russia who was instrumental in U.S. Congress’ passage of the Magnitsky Act, which sanctions foreign individuals who commit human rights abuses, estimates Putin’s wealth at more than $200 billion. That would put him on par with Tesla’s Elon Musk as the richest person on Earth.
He based his estimate on a deal he said Putin struck with the oligarchs in 2004. It was a Mafia-like offer they could not refuse: Half of all they earned would belong to Putin. “He doesn’t have any money in his own name,†Browder said from London.
A lot of it is stashed in overseas accounts, investments and properties. An estimated $800 billion is held by wealthy Russians offshore, according to a 2017 study published by the National Bureau of Economic Research.
That includes significant real estate, mostly in Europe. Oliver Bullough, a British money-laundering expert formerly based in Russia, is about to relaunch “kleptocracy tours†around London showing luxury properties owned by Russian oligarchs. Transparency International has estimated that nearly $2 billion of British real estate has been bought by Russians with Kremlin ties or links to corruption, much of it in London, Russia’s “laundromat†— or “Londongrad,†as some call it.
“They often use their children or close associates as cutouts to hide their wealth,†he said.
Then there are palaces, super-yachts and private jets. In one case that made Kremlinologists chuckle, a few weeks before Putin’s invasion of Ukraine, the 265-foot luxury yacht Graceful was seen abruptly leaving Germany for Russia. Analysts believe the vessel belongs to Putin, and he was putting it in a safer berth.
Closer to home, the team of Alexei Navalny, a Russian opposition leader whom Putin’s government has jailed, produced a lengthy report (in Russian) detailing a complex web of transfers and people that went into “Putin’s palace,†a massive estate in the south of Russia, overlooking the Black Sea, estimated to be worth $1.3 billion. Russian billionaire Arkady Rotenberg, who has close links to Putin, has said the property belongs to him.
After Putin’s illegal annexation of Crimea in 2014, the U.S. and the European Union imposed a series of restrictive measures against Russian individuals and entities.
But Putin and his band of rich friends have spent years dispersing and hiding assets, aided by a cottage industry of lawyers, accountants and banks that have served the oligarchs in exploiting the West’s laissez-faire approach to disclosure requirements, as well as loopholes and schemes, to mask their ownership.
“We have a coalition not of the willing but of the woeful: Putin’s henchmen teaming up with amoral lawyers,†British Parliament member Bob Seely told the House of Commons this week, naming several U.K. lawyers.
MaÃra Martini, an expert on money laundering at Transparency International in Berlin, says investigating illicit Russian money will require unprecedented international cooperation, because funds are often cloaked through shell companies in one country and banks in another, then spent on assets such as luxury property in a third.
“Putin’s wealth is hidden really well,†Martini said. “There are layers and layers between his assets. It requires a whole understanding of who has been serving as proxies for people close to the regime.â€
The U.S., European Union and United Kingdom are working with an expanding sanctions list of elites with ties to the Russian president. Those lists represent the prime targets as government investigators begin trying to peel the onion of secrecy.
On Monday, Switzerland broke from its tradition of neutrality by joining to freeze the assets of Putin, Russia’s prime minister and foreign minister and scores of individuals targeted last week by the EU.
For those on the list, the sanctions would block access to assets and financial transactions in the U.S., EU and Britain, essentially freezing accounts holding cash and securities.
The U.S. is preparing to add more Russian oligarchs and related parties to its list. On Wednesday, Atty. Gen. Merrick Garland announced Task Force KleptoCapture, an interagency effort to enforce the sanctions and other economic measures against targeted Russian individuals and entities.
“We will leave no stone unturned in our efforts to investigate, arrest and prosecute those whose criminal acts enable the Russian government to continue this unjust war,†Garland said.
It’s not going to be quick and easy, and in some cases it might be impossible, to find proof of Putin’s holdings until he is no longer in power.
“There’s a political will to go after this systemically, but it takes time. You’ve got to mean it, and it won’t happen overnight,†said Daniel Fried, a former U.S. ambassador to Poland who is a fellow at the Atlantic Council in Washington.
Jamison Firestone, an American lawyer who once practiced in Russia and has been doing work for Navalny’s group, says the response from the West is much vaster in its scope and intensity than ever before.
“We weren’t sanctioning family members before; we weren’t pulling their visas,†he said. “And what we’ve seen so far is just the beginning. I cannot imagine — as Kyiv comes under aerial bombardment, that as things get worse and we look at those images on TV — I cannot imagine that we’re not going to keep rolling these out. I think we’re really at the tip of the iceberg here.â€
The goal is not to make Putin a pauper; it’s to disrupt the lives of his inner circle enough that they might exert pressure on him to moderate his conduct.
It’s unclear whether the oligarchs, even under financial pressure, would dare ask Putin to pull out of Ukraine, let alone try to remove him from power. He has built many networks based on personal favors and kompromat, or damaging information, that give him control over people, said Olga Khvostunova, director of the Institute of Modern Russia in New York.
Still, some say the oligarchs who struck a Faustian bargain with Putin have grown accustomed to a lavish lifestyle, one they may not want to give up.
“This isn’t just about money,†Firestone said. “This is about a way of life.
“We’re no longer looking for whether you’ve done something wrong. What we’re basically saying is: Everything you have is derived by supporting this one dictator. You now have to make a choice. You can’t enjoy our system while continuing to support this regime.â€
Said Fried, the former ambassador: “If Putin drives the country into economic chaos and isolation, which he seems to be doing, and the war grows more unpopular, suddenly Putin’s position is unassailable until it’s vulnerable. ... I’m not saying it’s going to happen tomorrow. But I also remember [former Romanian President Nicolae] Ceausescu. He went from being a dictator to being a dead guy in about a week.â€
On Feb. 24, the day Putin launched the invasion of Ukraine, the Russian news agency Tass reported that he summoned 37 of the country’s business representatives to St. Catherine Hall in the Kremlin. It was a virtual who’s who of Russian industry, including a few billionaires who have since been hit with sanctions from the West.
Putin told them why he had decided to attack and apparently braced them for likely sanctions. According to published accounts, he left the hall without giving any of the business leaders an opportunity to comment.
The sanctions against Putin himself are largely symbolic — but the symbolism is powerful.
“The wealth of Putin, we’re supposed to understand it as a tribute. It’s not just that he’s one more billionaire who hides his money,†Yale historian Timothy Snyder said Wednesday. “No, it’s a tribute. It’s an aspect of his power. â€
Daniel Treisman, a UCLA professor who specializes in Russian politics and economics, noted, “It’s not that he has assets outside the country that are vulnerable to seizure that he’s worried about losing. I doubt that he was ever really going to use all those billions of dollars. It certainly won’t lead him to cut back the luxuriousness of his lifestyle.â€
At the same time, Treisman said, “it will certainly be taken as a personal attack, and he’s quite thin-skinned about those things.â€
“I think we have to be worried about his emotional and psychological state,†he said. “He’s clearly extremely emotional about these issues. And any leader, when backed into a corner, may make decisions that previously seemed unlikely.â€
Lee reported from Washington and Pierson from Singapore.
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