Putin faces sanctions, but his wealth remains an enigma

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Putin faces sanctions, but his wealth remains an enigma

When Western governments on Friday announced their intention to confiscate the assets of Russian President Vladimir V. Putin as punishment for attacking Ukraine, there was no indication they knew of the significant holdings that could be held from them. may be connected.

In fact, little is known about what Mr Putin has and where it might be. Despite years of speculation and rumours, the extent of his wealth remains vaguely opaque, even as billions of dollars have flown through the accounts of his close friends and luxuries belonging to family members. Is.

Officially, Mr. Putin earns around $140,000 a year and owns a small apartment, according to his public financial disclosures.

But this would not account for the “Putin’s Palace”, a sprawling estate on the Black Sea estimated to cost more than $1 billion, with a Byzantine ownership history that does not include the Russian president but is linked to his government in various ways. . Nor would the disclosure be attributable to “Putin’s Yacht,” a $100 million luxury vessel linked to it in speculative news reports. (Yacht, gracefully, had left Germany for Russia a few weeks before the invasion of Ukraine.)

There is also a $4.1 million apartment in Monaco that was bought by a woman through an offshore company said to be Mr Putin’s boyfriend. And in the south of France there is an expensive villa belonging to his ex-wife.

The problem for the United States and its allies is that none of these assets can be Directly connected with the President of Russia.

So far, western governments He has focused his sanctions on people suspected of serving as Mr Putin’s representative, hoping it will increase the pressure on him. And most of the new punishments, such as those after the Russian annexation of Crimea in 2014, continue to be aimed at oligarchs close to Putin. These include Kirill Shamalov, his former son-in-law and a major shareholder in a Russian petrochemical firm; Boris Rotenberg, a construction businessman; and Gennady Timchenko, an investor known as the sixth richest person in Russia.

The sanctions will make it impossible for people targeted to access assets or conduct financial transactions in the United States, Britain and the European Union, where penalties were announced last week. They will essentially freeze money and assets in a location that can be traced to those on the list, selling cash and securities, or even real estate, out of reach.

But Russia’s elite, which has been subject to Western sanctions for much of the past decade, has long favored a complex maze of corporate ownership to avoid scrutiny. Often, their wheeling and dealings are only publicly revealed with the leak of files from offshore law firms or secret banks that cater to those wanting to hide their wealth.

Paul Massaro, a senior adviser to the US Helsinki Commission, which is advising members of Congress on Russia’s sanctions, said it was not always clear to US officials which assets would be affected.

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“This means that the restrictions we put on these people are largely glorified press releases, because without knowing what these assets are, we can’t freeze them,” he said.

Still, even though the United States has only a limited picture of Mr Putin’s assets, the sanctions are “to freeze what we can, to freeze what we know, and to tell people For that these people are not welcome in our system,” are meaningful. Mr Massaro said.

A European diplomat stressed the symbolic value of the effort, describing it as a “politically significant sign”.

By joining the US Treasury Department’s “Specially Designated Citizens” list, Mr Putin joins a small but notorious subgroup of heads of state, including Nicolas Maduro of Venezuela, Kim Jong-un of North Korea and Syria’s Bashar al-Assad included. Russian Foreign Minister Sergei V. Lavrov was also under sanctions.

“We stand united with our international allies and partners to ensure that Russia pays a serious economic and diplomatic price for its further invasion of Ukraine,” Treasury Secretary Janet L. Yellen said in a statement on Friday.

Estimates of Mr Putin’s covert value can vary widely. One of the most sensational claims was that of Bill Brower, an American-born financier who was banned in Russia in 2005 after clashes with oligarchs. He testified before Congress in 2017 that he believed Mr Putin’s wealth could total $200 billion, an extraordinary amount that would have made him the richest man in the world at the time.

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Anders Aslund, assistant professor at Georgetown University and author of the 2019 book “Russia’s Crony Capitalism,” has estimated the Russian president’s wealth at around $125 billion. Much of it, he argued, may be hidden in a web of offshore hideouts held by Mr. Putin’s aides, friends and relatives.

On rare occasions, people close to Mr Putin’s inner circle have spoken publicly about his wealth. In 2010, Sergei Kolesnikov, who said he was a business associate of Putin’s aide, wrote an open letter to then-President of Russia, Dmitry Medvedev, stating that Mr. Putin was building a huge estate on the Black Sea coast. was what was to come. Known as Putin’s palace. Mr Kolesnikov wrote in his letter, the cost of which was more than $1 billion collected through “corruption, bribery and theft”, which he sent after leaving Russia.

Jailed opposition leader Alexei A. According to a report and documentary released last year by Navalny and his colleagues, the massive project consists of a movie theater, a hookah lounge and a pole-dancing stage. Several oligarchs close to Mr Putin have attended several times, including Mr Shamalov’s father. Last year, billionaire Arkady Rotenberg, a childhood friend of the Russian president, stepped in to claim he owned the property and is developing it into a hotel and apartment.

The Kremlin insists that Mr Putin is a man of simple taste, regularly distributes his images in the Siberian jungle, and denies that he has any palace.

“Putin has no need for luxuries,” state television host Dmitry Kiselyov said on his show earlier last year after a video check at Mr. Navalny’s estate.

The leaks of financial information also hinted at Mr Putin’s proximity to wealth, even though he himself does not appear in the data. The Panama Papers, a set of files from an offshore law firm that was uncovered in 2016, revealed the secret assets of several people close to him, including a cellist and longtime friend Sergei Roldugin, who died in a year Used to take more than $8 million. Documents submitted to a Swiss bank. (He previously told The New York Times, “I don’t have millions.”)

Last year, a new leak of files from companies specializing in offshore tax shelters called the Pandora Papers revealed that Mr. Putin’s lover had acquired the apartment in Monaco. It was one of the many assets he had accumulated that were estimated to be worth $100 million.

But ultimately, said Nate Sibley, a researcher with the Hudson Institute’s Kleptocracy Initiative, Mr. Putin doesn’t need to own a huge fortune because he is an autocrat who “controls everything.”

“When people say he deserves this and such, what does it mean?” He asked. “Are they really saying he’s going to cash in and retire to St. Tropez?”

Anton Troyanovsky contributed reporting.

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