Russian 'dark money' stretches around the globe
WASHINGTON — As Russia's military assault on Ukraine continues, several Western governments have begun to punish the country's wealthiest people, the oligarchs who’ve made billions of dollars doing business with President Vladimir Putin's government.
From government officials to media CEOs to business moguls, a small cadre of people have grown in power and wealth in Putin's Russia, and they now face scrutiny and sanctions from governments and businesses around the world that are announcing plans to try to freeze their assets.
But tracking the wealth of Russia's ruling class isn't a simple thing. It is tied in with major businesses, institutions and pieces of land scattered around the globe. A look at the spread shows the challenges of attempts to disentangle it.
Even getting a full accounting of the foreign investments of Russia's oligarchs is difficult, but forensic accounting and analyses offer some insights.
The Atlantic Council estimates $1 trillion in Russian "dark money" is hidden in countries and enterprises around the globe. Meanwhile, the National Bureau of Economic Research estimates that 60 percent of the wealth of Russia’s richest households is parked outside the country's borders.
The figures are all estimates because exact numbers are hard to gather. The money of Russia’s oligarchs is invested in varied ways, and the amounts are staggering. Still, looking back over the last few decades, a long list of examples shows just how widespread the money is, from sports to tourism to tech.
Russian billionaire Roman Abramovich purchased the English Premier League's Chelsea Football Club in 2003 for about $90 million. The club is now worth billions. (Last week the U.K. government froze Abramovich's assets, meaning the club’s ownership is in limbo.) On the European continent, Russian Alexei Mordashov was the single largest shareholder in the German tourism giant TUI, with a stake worth about $1.4 billion, when Ukraine was invaded.
The investments are in the U.S., too. Russia's Oleg Deripaska pledged $200 million to help build an aluminum plant in Kentucky in 2019 before he suspended the investment last year. Meanwhile, in 2016, Mikhail Fridman invested $200 million in what was the world’s most valuable private startup company, Uber. He sold his shares in 2019.
And those are just a few high-profile investments in the public eye. There are certainly scores of others, many of which are quieter and much harder to track.
Beyond business, there are the oligarchs’ real estate holdings around the world. When you're a billionaire who travels, why not travel in style? But the properties the oligarchs own are more than simple pieds-à-terre — they are investments.
An article in Forbes this month pointed to 62 properties held by 13 targeted Russian oligarchs worth about $2.5 billion.
Abramovich has properties in Aspen, Colorado; France; St. Barts in the Caribbean; and the U.K. worth about $620 million, the magazine reported. Andrey Melnichenko has properties in New York, France, Italy, Monaco, Switzerland and the U.K. worth $400 million. Alisher Usmanov has $250 million in properties in the U.K., Germany, Switzerland, Monaco and Italy.
In fact, Russian real estate investments are spread so far and wide that trying to find them all is nearly impossible. Many U.S. cities have at least a few properties. Look online and you'll find stories about oligarchs' holding property in Miami, Los Angeles, Cleveland and Washington.
And with all that money and all that spending, Russian oligarchs have made connections with some well-known and powerful institutions in the U.S. In a report on "reputation laundering," the Anti-Corruption Data Collective built a database of oligarchs and their gifts to the country's elite organizations.
The Massachusetts Institute of Technology has received at least $900,000 in donations from Russian oligarchs, according to the database. New York University has brought in more than $4 million. Brandeis University has received more than $10 million.
In Washington, the John F. Kennedy Center for the Performing Arts has received more than $5 million from Russia's billionaire class. The Mayo Clinic has collected at least $1 million, according to the database.
And that doesn’t begin to show the oligarchs' impact, said David Szakonyi, one of the co-founders of the Anti-Corruption Data Collective. The group knows of scores of cases of gifts and donations, but there's no way to know how much.
That's true across the board with many of the investments of Russia's oligarchs. The billionaires aren't new to the scene. And as their wealth has grown, it has become more difficult to track. Walk down the street in a major city today and you may be walking by a property or a business one of them owns or an institution one of them has endowed.
There might be a strong desire to punish the billionaires who have benefited from Putin's regime in Moscow, but carrying through on those desires isn't going to be easy.
