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42 I Eastern Europe bne March 2020
Despite the best efforts of Putin’s foes, no evidence whatsoever has been produced that he holds or controls
any money outside his official income. Former fund manager and now the Kremlin’s nemesis Bill Browder told bne IntelliNews recently in Berlin: “Based on my estimates I believe Putin is worth $200bn.” That would make Putin the richest man in the world several times over. Yet Browder and his peers have been unable to provide a single shred of evidence to support these claims.
That is not to say that Putin won’t end up a very wealthy man when he eventually retires. As this publication has reported, he is surrounded by the stoligarchs –
a small circle of state-sponsored oligarchs who win the lion’s share of big state contracts to build things such as the Kerch Bridge or the Power of Siberia
in 1993 by former President Boris Yeltsin, much of the reconstruction of the building and environs was carried out by a firm called Mabetex.
The next year an Italian bank executive from Banca del Gottardo responsible for Eastern Europe produced photocopies of the Yeltsin family's credit cards, including the signatures of Yeltsin and his daughters, that drew on the Mabetex account at the bank. Swiss magistrates later raided the Mabetex headquarters in Lugano and confiscated the records and the cards themselves.
While it appears unlikely that Putin and Deripaska would set up a scheme as transparently easy to prove as this,
it is possible that a well-connected oligarch made cash available to Putin and his family.
Forbes list of bad guys
The evidence laid out in the USTD letter is almost all based on “reportedly”. Presumably there is substantial classified evidence behind this open source information. But on the face
of it this evidence proves nothing and cannot be used as justification for more sanctions.
This is not the first time that the US administration has based important sanctions decisions on spurious press reports. In the run-up to the April
2018 round of sanctions at the start of that year investors were afraid many
of Russia’s top businessmen would be named on a sanctions list released at the end of January the same year.
The USTD did release a list of 96 names of “oligarchs” that were potential targets; however, it quickly became clear that rather than being a well- researched list of businessmen who may be guilty of criminal behaviour and/or close ties to the Kremlin, the published list was simply a copy of the annual Forbes Russia rich list of the wealthiest businessmen.
Forbes went through the lists and confirmed that indeed the Treasury Department’s list was an exact replica
of the Russians on the 2017 billionaires list. In an emailed statement to Forbes, a Treasury spokesperson explained that the unclassified report was derived from open sources, including Forbes and others. To qualify for the USTD version of the Forbes list, all an oligarch had
to do was be worth more than $1bn.
In addition to some businessmen that
do qualify as an “oligarch” – someone that has both a lot of money and a lot
of political influence – the majority of men on the list are respectable Russian businessmen such as Arkady Volozh, the found of Yandex, Europe’s most valuable tech company, and Andrey Gurev, the CEO of Phosagro. Indeed, Gurev told bne IntelliNews there was a lot of confusion over his inclusion, as it was not clear if the list referred to himself or his father, a former Duma deputy, who has the same name.
“Based on my estimates I believe Putin is worth $200bn”
gas pipeline. These men have become multi-billionaires in the process and will almost certainly make sure Putin’s nest is well feathered if he demands it. But
as bne IntelliNews has written on other occasions, greed is not one of Putin’s vices; he is more focused on making Russia great again. Having said that, he has been spotted wearing very expensive watches and jogging pants on occasion. But again, all the leaders of the CIS are guilty of lining their pockets and those of their underlings; corruption is the system in emerging Europe.
The fifth item on the list makes a slightly more explicit claim of at least one occasion being “a cover to facilitate the transfer funds for the personal use of then Prime Minister Vladimir Putin.” This has never been reported and must be based on classified information, so it is impossible to judge unless the evidence is released.
However, there is a precedent for this sort of transaction. Following the bombing of the White House in Moscow
Kyrgyzstan: The last item on the list is frankly bizarre. It says simply that “In late 2004, Deripaska reportedly acted on verbal instructions from President Vladimir Putin in a high-level bilateral meeting between Russia and Kyrgyz representatives."
So Deripaska was at some diplomatic meeting and Putin told him to do something and he did it? There is no mention here of money or business. There is nothing illegal or suspicious about a big businessman being at a high- level diplomatic meeting. The CEOs of both Gazprom and Naftogaz were at the last Normandy Four summit in Paris on January 15, when Putin met Ukrainian President Volodymyr Zelenskiy for the first time. Nor is there anything strange about those businesspeople doing something their president asks them
to do at such a meeting.
But this accusation is taken as part of the basis of evidence to justify imposing fresh sanctions on Deripaska and his assets.
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