What is a Russian oligarch?
▶ Watch Video: Russian oligarchs scramble to shield assets as DOJ launches task force to enforce sanctions
The U.S. Justice Department has created a task force to go after the assets of Russian oligarchs, with the Biden administration vowing to seize their yachts, luxury apartments and private jets. But what are oligarchs? And how is their wealth connected to Russia’s invasion of Ukraine?
What is a Russian oligarch?
Oligarchs — or extremely wealthy business leaders who are politically connected — became more prominent in Russia in the 1990s, but they are not unique to Russia.
Many Russian oligarchs are heavily involved in and benefit from Russian President Vladimir Putin’s regime, with some serving in political positions.
For example, when Putin opened a new bridge to Crimea in 2018 — a region Russia had annexed from Ukraine in 2014 — the bridge was built by his friend Arkady Rotenberg’s company and the truck he drove across it was made by Sergei Chemezov’s state corporation Rostec, according to The Carnegie Moscow Center, a think-tank that focuses on domestic and foreign policy.
There is often a line of succession for oligarchs in politics. For example, Dmitry Patrushev, the son of Russian Security Council Secretary Nikolai Patrushev, was appointed as Russia’s minister of agriculture, according to The Carnegie Moscow Center.
Numerous Russian oligarchs and government officials were sanctioned by the U.S. in 2018, in part for the regime’s occupation of Crimea and for continuing to instigate violence in Ukraine, according to the U.S. Treasury Department, which announced the sanctions. Rotengberg’s son and Patruskev were included in that round of sanctions for their involvement with the regime.
“Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities,” Treasury Secretary Steve Mnuchin said in a press release about those sanctions.
Why are some oligarchs being sanctioned now?
The Justice Department says the new multi-agency initiative known as Task Force KleptoCapture aims to enforce the sweeping sanctions, export restrictions and economic countermeasures that the United States and its allies and partners have imposed on Russia following its unprovoked invasion of Ukraine.
The sanctions are designed “to isolate Russia from global markets and impose serious costs for this unjustified act of war, by targeting the crimes of Russian officials, government-aligned elites, and those who aid or conceal their unlawful conduct.”
“To those bolstering the Russian regime through corruption and sanctions evasion: we will deprive you of safe haven and hold you accountable,” Deputy Attorney General Lisa O. Monaco said in a press release. “Oligarchs be warned: we will use every tool to freeze and seize your criminal proceeds.”
While the task force aims to hold the sanctioned Russian elite accountable following the country’s invasion of Ukraine, tracking down and seizing their assets will not be easy.
These extraordinarily wealthy and powerful individuals — including Vladimir Putin himself — have taken elaborate steps to protect their wealth around the globe.
Some oligarchs are trying to dodge penalties by moving assets — like their mega-yachts — into territories where sanctions don’t apply and where their property cannot be seized or their assets frozen.
What happens now?
Financier and anti-corruption advocate Bill Browder told CBS News senior investigative correspondent Catherine Herridge that the goal is to get oligarchs to pressure Putin to stop the war. “We’re not ready to engage in military warfare, so there’s an expression we should fight them in the banks if we can’t fight them with tanks,” Browder said.
Some wealthy Russians have spoken out against Putin’s attack on Ukraine. Mikhail Fridman, who founded one of Russia’a largest largest private banks, said he does not believe war should be a solution.
Evgeny Lebedev, the son of an oligarch and owner of London’s Evening Standard, ran a statement on the front page of his newspaper under the headline, “President Putin, please stop this war.”
“As a Russian citizen I plead with you to stop Russians killing their Ukrainian brothers and sisters. As a British citizen I ask you to save Europe from war,” wrote Lebedev, whose father, Alexander Lebedev, is a former KGB agent turned bank owner.
Another Russian business mogul, Oleg Deripaska, took to the messaging platform Telegram to share his statement. He is considered an ally of Putin, but wrote that “peace is very important” and talks to end the war should begin “as soon as possible,” according to The Associated Press.