It is absolutely breathtaking the speed and
swiftness and strength of these sanctions against the
oligarchs.
This time around, the effort to track down their assets
is much greater.
We're joining with European allies to find and seize
their yachts, their luxury apartments, their private
jets. We're coming for your ill begotten gains.
I mean, it's an incredible move. We're chasing down
yachts in the ocean. You know, it's like a movie
being played out in front of us.
I think there's a whole bunch of places where more
sanctions need to be imposed.
It's not as if there's a document in a vault
somewhere that says the owner of asset X is Vladimir
Putin and he signed on the bottom line and shhh just
don't tell anyone.
It's complicated.
This is just something absolutely unprecedented in
the history of wealth, let alone oligarchs.
The oligarchs are critical to understanding Vladimir
Putin and today's Russia.
They were born out of the chaos of the fall of the
Soviet Union and its transition from communism to
capitalism.
And oligarchy is, in technical terms, rule of an
organization or a country by a small number, typically
of wealthy individuals.
And that term really stuck in Russia in the 1990s.
Effectively, the government took companies that had
previously been state companies, privatized them,
and then tried to finance those privatizations and
their ongoing businesses thereafter by finding
favored investors and creating deals in which the
government managed to turn over ownership to these
individuals for what was seen as an attractive price.
If you look at Roman Abramovich and his partner,
they bought an oil company in the mid 1990s called
Sibneft for about $200 million.
They later sold it back to the government for $12
billion.
This group of kind of 1990s oligarchs—Pyotr Aven and
Mikhail Fridman at Alfa Bank—they're much more
integrated with the West.
For example, Vladimir Potanin was on the board of
the Kennedy Center in Washington.
They were really the kings of Russia after the
elections in the mid 1990s when Boris Yeltsin was
reelected. And then when Yeltsin became ill in the
late 1990s, it was the oligarchs who chose Vladimir
Putin.
When Putin came to power in 2000, most people thought
that he would have difficulty taming the
oligarchs and the powerful regional governors in
Russia. This is somebody who did not have a big
public profile, who had never run for office, was
uncomfortable speaking before crowds.
Over time, Vladimir Putin said to them first, if any
of you meddle in politics, I will come after you.
And sure enough, those who criticized Putin or the
oligarchs who meddled in politics were mysteriously
found hanging in their bathrooms, strangled with a
dog leash, or in some cases, poisoned.
There's also a whole generation of oligarchs who
grew up in the Putin era, who control state assets and
who grew fantastically wealthy off of state
contracts or by running large state companies.
Obviously, Putin's background was in the
Russian intelligence, KGB and then FSB.
Those who were colleagues, peers or friends, or in some
cases literally childhood friends of Putin, ended up
forming the basis of the next circle of oligarchs.
They ended up benefiting from their relationships
with Putin.
The United States first started targeting the
oligarchs in 2014 when Russia invaded Crimea.
It didn't work for two main reasons.
Number one, the oligarchs had a very easy way of
avoiding sanctions. They'd simply transfer their assets
to their family members or friends.
The second reason it didn't work is that the United
States discovered that the oligarchs had no influence
on Putin. In fact, the power flowed completely in
one direction.
What the Justice Department did this time is to create a
special global task force to coordinate with countries
in Europe and around the world to find these assets,
to seize these assets.
And eventually, if they can prove a crime, they will
actually seize them and perhaps take ownership, sell
them for cash, which could be used to help Ukraine in
the future.
We've seen the seizing of the yachts and it'll take a
long time to dig through a lot of the dodgy real estate
purchases and the like, but there does seem some
commitment to make that happen.
There are many, many corporate intermediaries so
that the beneficial owner is extremely difficult to
determine. And one way that these task forces are
working is to try and break down the barriers of a lot
of the privacy requirements that are in place.
The governments of Europe and the US have already
seized over a half a dozen yachts worth well over
$1,000,000,000. They've taken frozen their houses,
their villas in Lake Como.
In the case of Abramovich, they've frozen his financial
investments in the US.
They're forcing him to sell Chelsea Football Club, which
is of course his prestigious football club
that he owns.
I want to be clear, I'm not defending any of the
oligarchs, but it is not entirely clear how the
decisions are being taken as to whose property is
being seized in what jurisdiction for what
alleged connection to the ongoing atrocities that are
taking place in Ukraine.
The goal this time around is, number one, to punish
these oligarchs who have become fantastically wealthy
from Vladimir Putin's autocracy and the
kleptocracy that is today's Russia.
But number two, it is also to prevent Vladimir Putin
from accessing that capital, from accessing
those funds that the oligarchs have provided him
for years.
To my mind, the sanctions are designed not so much
to get the oligarchs to turn on Putin.
That's a big ask.
But they do degrade the military capacity of Russia
and they make Russia much more difficult to govern.
In my opinion, the oligarchs are the trustees for
Vladimir Putin. They're the ones who hold his money.
And so far, we've only sanctioned 20 oligarchs.
There's about 118 of them.
We should at least be increasing that sanctions
list.
We have really strong property rights protections.
And so it's really hard to impose sanctions that denies
someone the benefits of assets that they own.
And that's by design.
We don't want governments to be able to, on a
political whim, come in and say, 'I don't think that you
agree with me on this policy and therefore I'm
going to take away your yacht, your mansion, your
company, your bank accounts or anything else.'
At the very least, this will at least reduce their
fortunes. We've seen many of these oligarchs lose up
to half of their fortunes since the invasion of
Ukraine. And this is just the beginning.