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On paper, the United States' move to freeze Russian President Vladimir Putin's personal assets appears to be a hollow gesture.
Although commonly regarded as one of the world's wealthiest men, official Russian documents reveal that all he owns are a couple of old cars, a small apartment, and whatever savings the 69-year-old former KGB agent has amassed from a salary of roughly $140,000.
Nobody believes the official records are accurate. Most experts believe his immense fortune is hidden in the hands of a network of cronies – the so-called Russian oligarchs, their families, and relations.
So, how much is Putin's hidden money likely to be worth?
Forbes, the magazine famed for rating the world's billionaires, claims it has been trying to answer that question for 20 years, and that one of its editors was assassinated in Moscow while researching Russia's early oligarchs.
Despite the jealously guarded secrecy, the Russian president is worth billions of dollars.
According to William Browder, a former top Russian investor who was key in enacting the Magnitsky Act, which sanctions foreign persons who commit human rights violations, Putin's wealth is worth more than $200 billion. That would place him on level with Tesla's Elon Musk as the world's richest person.
Browder based his estimate on a contract he claims Putin negotiated with the oligarchs in 2004, a Mafia-style offer they couldn't refuse: half of anything they gained would be his.
"He has no money in his own name," Browder stated from London.
So, where is the money?
Much of it is buried in foreign accounts, investments, and real estate. According to a 2017 report published by the National Bureau of Economic Research, affluent Russians hold an estimated $800 billion abroad.
This contains substantial real estate, the lion's share of which is in Europe. Oliver Bullough, a British money-laundering expert who was previously based in Russia, is ready to relaunch "kleptocracy tours" of London that would showcase luxurious mansions owned by Russian oligarchs. According to Transparency International, approximately $2 billion in British real estate has been purchased by Russians with Kremlin ties or links to corruption, much of it in London, Russia's "laundromat" or "Londongrad," as some refer to it.
"They frequently utilize their children or close colleagues as cutouts to conceal their money," he explained.
There are also palaces, superyachts, and private jets. A few weeks before Putin's invasion of Ukraine, the 265-foot luxury yacht Graceful was seen unexpectedly leaving Germany for Russia, which made Kremlinologists laugh. Analysts believe the ship is Putin's and that he was relocating it to a safer dock.
Closer to home, Alexei Navalny's team, a Russian opposition leader imprisoned by Putin's government, produced a lengthy report (written in Russian) detailing a complex web of transfers and people that went into "Putin's palace," a massive estate in southern Russia overlooking the Black Sea estimated to be worth $1.3 billion. Arkady Rotenberg, a Russian oligarch with close ties to Putin, has claimed ownership of the property.
How long have Putin and his associates been planning sanctions?
Following Putin's illegal annexation of Crimea in 2014, the United States and the European Union levied a slew of sanctions on Russian persons and companies.
However, Putin and his group of wealthy friends have spent years dispersing and concealing the assets, aided by a cottage industry of lawyers, accountants, and banks who have assisted the oligarchs in exploiting the West's lax approach to disclosure requirements, as well as loopholes and schemes, to conceal their ownership.
"We have a coalition of the woeful: Putin's henchman teaming up with amoral attorneys," British Parliament member Bob Seely said last week, identifying many British lawyers.
According to Maira Martini, an anti-money-laundering expert at Transparency International in Berlin, investigating illicit Russian money will necessitate unprecedented international cooperation because funds are frequently cloaked through shell companies in one country, banks in another, and then spent on assets such as luxury real estate in a third.
"Putin's riches is very effectively hidden," Martini stated. "His assets are layered upon layered upon layered upon layered upon layered upon layered upon layered upon It necessitates a thorough grasp of who has been acting as proxies for regime supporters."
How are the United States and its allies going after the Russian oligarchs who back Putin?
The United States, the European Union, and the United Kingdom are collaborating on a growing sanctions list of Russian elites with ties to Russia's leadership. These are the primary targets for government investigators when they begin to peel the onion of secrecy.
On Monday, Switzerland deviated from its reputation of neutrality by joining the EU in freezing the assets of Putin, Russia's prime minister and foreign minister, as well as a number of other persons targeted by the EU last week.
Sanctions would restrict access to assets and financial transactions in the United States, the European Union, and the United Kingdom for persons on the list. They would virtually freeze their cash and securities holding accounts.
The United States is planning to add additional Russian oligarchs and linked parties to its list of sanctioned individuals. Attorney General Merrick B. Garland established Task Force KleptoCapture on Wednesday, an interagency operation to impose financial sanctions and other economic measures against specified Russian persons and businesses.
"We will leave no stone unturned in our attempts to investigate, arrest, and prosecute those whose illegal conduct let the Russian government to continue this unlawful war," Garland stated.
What are the prospects of gaining access to Putin's and his associates' wealth?
It won't be quick or easy, and in certain situations, finding proof of Putin's holdings may be impossible until he is no longer in office.
"There is political intent to go after this on a systematic level, but it will take time." "You have to mean it, and it won't happen overnight," said Daniel Fried, a former US ambassador to Poland and current Atlantic Council fellow in Washington.
Jamison Firestone, an American lawyer who once practiced law in Russia and is now working with Russian dissident Navalny's group, believes the West's response is considerably different in scope and severity than in the past.
"Previously, we weren't punishing family members, and we weren't removing their visas," he explained. "And what we've seen thus far is merely the tip of the iceberg." I can't imagine, as Kiev is bombarded from the air, that as circumstances worsen and we see those images on TV, we're not going to keep rolling these out. "I believe we're only scratching the surface here."
What are the sanctions likely to achieve?
The idea is not to reduce Putin to poverty. Its goal is to disrupt Putin's inner circle's life so that they can put pressure on the Russian leader to control his behavior.
Even under financial duress, it's uncertain whether the billionaires would dare to urge Putin to leave Ukraine, let alone try to depose him. Putin is employing people who are incredibly devoted to him and, more than likely, reliant on him.
According to Olga Khvostunova, head of the Institute of Modern Russia in New York, he has developed several networks based on personal favors and kompromat, or negative information, that give him a lot of control over people.
Nonetheless, some argue that the billionaires who struck a Faustian bargain with Putin have gotten accustomed to a luxury lifestyle, which they may not want to give up.
"It's not just about money," Firestone explained. "It's about a way of life." The West has done something incredible that we have never seen before.
"We're no longer interested in whether you did something wrong. We're basically suggesting that everything you have is a result of your support for this one dictator. You must now choose a decision. You can't appreciate our system while yet supporting this regime."
"If Putin leads the country into economic disaster and isolation, as he appears to be doing, and the conflict becomes increasingly unpopular, suddenly Putin's position is untouchable until it's insecure," said Fried, the former ambassador. I'm not saying it'll happen tomorrow. But I recall [former Romanian President Nicolae] Ceaușescu as well. In about a week, he went from being a dictator to being dead."
How might Putin be reacting to the sanctions aimed against him and his associates?
Putin gathered 37 Russian business representatives to St. Catherine Hall in the Kremlin on February 24, the day he launched an invasion of Ukraine, according to the Russian news service Tass. It was a veritable who's who of Russian industry, with a handful of millionaires who have since been sanctioned by the West.
Putin explained why he had decided to attack and appeared to be preparing them for possible penalties. According to reports, Putin departed the room without giving any of the business leaders a chance to speak.
The sanctions imposed on Putin are undoubtedly considerably more symbolic than anything that would be harmful to him in and of themselves. Nonetheless, the symbolism is potent. "We're meant to see Putin's wealth as a tribute. "It's not just that he's another billionaire who hides his wealth," Yale historian Timothy Snyder explained in a speech on Wednesday. "No, it's a memorial." It's a feature of his power."
"It's not that Putin has assets outside the nation that are vulnerable to confiscation that he's afraid about losing," said Daniel Treisman, a UCLA professor who specializes in Russian politics and economics. I doubt he'd ever put all those billions of wealth to good use. It will almost definitely not cause him to reduce the opulence of his existence."
"It will surely be regarded as a personal attack," Treisman added, "and he's extremely thin-skinned about those things." And how Putin reacts as the West increases pressure on him and supportive oligarchs is concerning, especially given his nuclear bluster.
“I think we have to be worried about his emotional and psychological state,” Treisman said. “He’s clearly extremely emotional about these issues. And any leader when backed into a corner may make decisions that previously seemed unlikely.”