WASHINGTON — The Russian military attack on Ukraine is continuing, and several Western countries have taken steps to punish its wealthiest citizens, the oligarchs that made billions doing business with President Vladimir Putin.
A small group of people, including government officials, media CEOs and business moguls have seen their power and wealth increase in Putin’s Russia. Now, they face scrutiny from governments around the globe and are facing sanctions.
It is difficult to track the wealth of Russia’s ruling classes. It is linked to major institutions, businesses, and bits of land scattered around the globe. It is obvious that it will be difficult to unravel.
It is not possible to get a complete accounting of Russia’s foreign investments. However, forensic accounting and analysis can provide some insight.
According to the Atlantic Council, there are $1 trillion worth of Russian “dark cash” hiding in different countries and businesses around the world. The National Bureau of Economic Research estimates 60 percent of Russia’s wealth is outside of Russia’s borders.
These figures are only estimates as exact numbers are difficult to find. Russia’s oligarchs invest their money in many ways, and the sums are staggering. However, if you look back at the past few decades, there are many examples that demonstrate just how widespread this money is. These include tech, tourism, and sports.
Roman Abramovich, a Russian billionaire, purchased Chelsea Football Club’s English Premier League team in 2003 for $90 million. The team now has a value of billions. The UK government has frozen Abramovich’s assets this week, putting the team in limbo. Russian Alexei Mordashov, the largest shareholder of German tourism giant TUI with a stake in the company worth approximately $1.4 billion, was the biggest European shareholder.
The investments are also in the United States. Russia’s Oleg deripaska promised $200 million to build an aluminum plant at Kentucky in 2019. The investment was then suspended in 2021. In 2016, Mikhail Fridman had invested $200 million into Uber, the most valuable private startup in the world. In 2019, he sold his shares.
These are only a few of the most prominent investments that have been made in public view. There are many other investments, some of which are more subtle and harder to track.
Beyond business, the oligarchs also own real estate around the globe. If you are a billionaire and travel a lot, why not travel in style. The properties that the oligarchs have are not just pieds-aterres, they are also investments.
Forbes published last week a list of 62 properties owned by 13 Russian oligarchs valued at approximately $2.5 billion.
According to the magazine, Abramovich owns properties in Aspen, Colorado, France, and St. Barts in St. Barts, in the Caribbean. The U.K. is worth approximately $620 million. Andrey Melnichenko owns properties in New York, France and Italy. He also has property in Switzerland, Monaco, Switzerland, and the U.K., which is worth approximately $400 million. Alisher Usmanov owns properties worth $250 million in the U.K. and Germany.
In fact, Russian real property investments are so spread out that it is almost impossible to find them all. Many U.S. cities possess at least one property. You can find stories online about oligarchs who own property in Miami, Los Angeles, Cleveland, Washington, D.C.
Russian oligarchs have established connections to some of the most powerful and well-respected institutions in America with all their money. The Anti Corruption Data Collective created a database listing oligarchs along with their gifts to elite national organizations in a report on “reputation laundering”.
According to the ACDC database, at least $900,000.000 has been donated by Russian oligarchs to Massachusetts Institute of Technology. New York University has raised more than $4million. Brandeis has raked in more than $10 million.
The Kennedy Center in Washington has received over $5 million from Russia’s billionaires. According to the database, at least $1million has been collected by Mayo Clinic.
David Szakonyi (one of the founders of ACDC), says that this doesn’t even show the extent of the oligarchs impact. Numerous cases are where the group is aware that there are gifts or donations but cannot determine how much.
This is true for many investments made by Russian oligarchs. These billionaires are not a new phenomenon. It has become harder to track their wealth as it grows. You might be walking down the street of a major city and see a property, a business or institution they own or have endowed.
Although there might be strong feelings of retribution for billionaires who have received benefits from Vladimir Putin’s Moscow regime, it is unlikely that they will be fulfilled.