Virendra Pandit
New Delhi: When investigative journalists Bob Woodward and Carl Bernstein penned their 1974 book All the President’s Men, on the Watergate Scandal, little did they know the timeless phrase would echo loudly in Russia of President Vladimir Putin whose dozen-odd blue-eyed boys will go down in history as “oligarchs” for their dubious role in the country.
The Scandal sunk the presidency of Richard Nixon, and the film on his men cited in the book was a hit. A post-Putin Russia may also produce a film on its infamous, and incredibly rich oligarchs. Many of them are under sanction from the West and its allies for enabling and indirectly financing Russia’s invasion of Ukraine on February 24.
The Russian oligarchs are billionaires with direct or indirect ties with President Putin, who is now under international sanctions for starting the war.
Among the oligarchs is the controversial Alisher Usmanov, one of the wealthiest men in the world. He spread vast holdings over many sectors of the global economy. Because of the sanctions, his bank accounts have been frozen and his visa restricted. More, he can no longer entertain and influence powers-that-be on Dilbar, his USD 600 million super-yacht.
Other Russian oligarchs under the West’s sanctions include Sergey Chemezov, Nikolay Tokarev, Boris Rotenberg, Yevgeny Prigozhin, Igor Shuvalov, Yevgeny Prigozhin, and Dmitry Peskov, and Mikhail Fridman, the media reported.
Usmanov allegedly used his Kremlin connections to enrich himself, and Tokarev, “a long-time Putin associate” served with the current President in the Soviet Union’s Committee for State Security (KGB) as a spy agent in Dresden, East Germany, in the 1980s. Tokarev also heads one of Russia’s leading companies, Transneft.
Unlike business tycoons elsewhere, Russian oligarchs milk their political connections with the government and make themselves rich and invincible through corruption and at the cost of the country. The White House said some of these oligarchs elevated their family members to high-ranking positions, while others head the country’s largest companies.
In an oligarchy, power gets concentrated in a small group of powerful and privileged people or oligarchs, who design a favorable financial-political ecosystem that includes intra-oligarchic power-sharing, targeted repression, and rewards for informants to prevent collective action among the majority population. They also cooperate with each other to sustain this ‘system’.
These oligarchs started surfacing with the collapse of the Soviet Union in the 1990s and strengthened their business, social, and political positions. They linked their profiting to heavy corruption.
Recently, US President Joe Biden observed: “… I say to the Russian oligarchs and corrupt leaders who have bilked billions of dollars off this violent regime, no more. The US Department of Justice is assembling a dedicated task force to go after the crimes of Russian oligarchs.”
French Finance Minister Bruno Le Maire announced the yacht owned by Putin’s oligarch Igor Sechin has been seized.
The West is identifying and freezing the assets of Putin’s business allies. They have banned oligarch Roman Abramovich from running Chelsea Football Club (FC).
These oligarchs own yachts, private jets, and mansions to football clubs across the world, particularly in the West.
The first group of oligarchs emerged out of the privatization of the Russian economy in the 1990s, particularly the all-cash sales of the largest state-owned enterprises after 1995. After Vladimir Putin became the President in 2000, he facilitated the second wave of oligarchs via state contracts. Private suppliers in many sectors, like infrastructure, defense, and healthcare, overcharged the government by manipulating the prices and bribing the state officials involved. Thus, Putin allegedly enriched a new legion of oligarchs who owed their enormous fortunes to him.
After Russia invaded Ukraine, the US, the European Union, the UK, Australia and others announced to scrutinize and ban the assets of these oligarchs.
The United Kingdom put several oligarchs, including billionaire and Chelsea FC owner Roman Abramovich and aluminum magnate Oleg Deripaska, on its sanctions list. Britain froze all of Abramovich’s assets in the country. A US lawmaker also urged the Biden administration to freeze Abramovich’s funds at Concord Management, a financial advisory company in New York.
Italy seized several yachts and villas owned by some of these sanctioned billionaires while the French seized an oligarch’s superyacht just before it was to set sail.
The US formed a Task Force, KleptoCapture. It targeted oligarchs such as Alisher Usmanov, Nikolay Tokarev, and Dmitry Peskov, the Kremlin spokesperson. President Biden said the move was part of the “severe economic sanctions” being levied in Moscow, which already had a “profound impact”. These oligarchs provided resources to support Putin’s Ukraine military campaign and must pay the price, he said.
President Putin is “looking at the impact on his own economy, on his rich and wealthy oligarch friends, and on the people of Russia,” White House Press Secretary Jen Psaki said.
Others the US sanctioned included Boris Rotenberg, Arkady Rotenberg, Sergei Chekmezov, Igor Shuvalov, and Yevgeniy Prigozhin. The White House also announced the State Department would implement visa restrictions on 19 Russian oligarchs and 47 of their relatives.
The US Treasury said Usmanov owned one of the world’s largest super-yachts, worth between USD 600 million and USD 735 million, and a private Airbus a340 jet, registered in the Isle of Man, worth between USD 350 million and USD 500 million.
But not all the allies of the West have imposed sanctions. The Russian oligarchs are still welcome in the United Arab Emirates, which has yet to condemn the Ukraine invasion or enforce sanctions. At least 38 business owners or officials linked to Putin own dozens of properties in Dubai, collectively valued at more than USD 314 million. Six of those owners are under sanctions by the US or the EU.