To get a sense of just how swift and hard the newest sanctions are coming down on the kleptocrats of the Kremlin, look at what the oligarch closest to Vladimir Putin tweeted last Sunday.
“Peace is the first priority. Negotiations must start ASAP,” wrote Oleg Deripaska, the metals magnate with an estimated net worth of about $4 billion. Of course, those billions might melt away thanks to Putin’s war of choice in Ukraine, as well as the West’s opening of a second front in the form of a sanctions war.
In normal times following a missive like that, Deripaska would be looking to hire a food taster. But these are not normal times.
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After Putin did the unimaginable and invaded Ukraine, the U.S. and its European allies decided squeezing his oligarchs was a way to launch a direct attack without firing a shot. Thus began an unprecedented effort to hunt down and seize the expensive toys of the rich and infamous who keep Putin and the most lucrative criminal enterprise in the world going.
On Tuesday in his State of the Union address, President Joe Biden warned Putin’s enablers that his administration and its allies would “seize their yachts, their luxury apartments, their private jets.” On Wednesday they began to do just that—taking over two mega-vessels, one in the French Riviera, the other in a German port.
The oligarchs, however, are taking steps to protect themselves. Well-known sports entrepreneur Roman Abramovich joined Deripaska’s mini-rebellion early this week, hastily offering to sell the Chelsea Football Club he built into a powerhouse to a Swiss businessman. Just so there’d be no mistaking where he stood on Putin’s war of attrition, Abramovich said the “net proceeds” from the sale would be donated “for the benefit of all victims of the war in Ukraine.” That’s not enough to put Abramovich on the right side of history, but it is enough to add to Putin’s worries.
The war is barely a week old and Putin is already seeing his cronies go wobbly. That’s why he called a meeting at a table the size of a soccer field to reassure them he had no choice but to do what he did—an effort met with silence, according to Reuters, before they resumed defensively moving their assets out of harm’s way.
Deripaska, sensing Putin wouldn’t be taking his advice to negotiate for peace ASAP, had his superyacht hauled to the Maldives, an island lacking an extradition treaty that’s now jammed with mega-vessels eluding seizure.
Unfortunately for those oligarchs who laundered their money in real estate, you can’t move a brownstone in Manhattan or London—the latter of which has been dubbed “Londongrad” on account of how many kleptocrats have bought mostly empty high-rise “ghost buildings,” any number of which are reported to be privately on the market. And there’s no telling what the oligarchs will do to keep their kids—whose tuitions are paid with blood money—from being frog-marched out of Choate and Harvard.
Deripaska, infamous in Washington for loaning embattled lobbyist Paul Manafort $10 million, came by his fear of sanctions after he was personally slapped with them in 2018 for alleged Russian interference in Donald Trump’s election.
That meant the oligarch’s opulent Beaux Arts property—the most expensive mansion in the nation’s capital and a stone’s throw away from several high-ranking Trump administration officials—would not be hosting cocktail parties for the elites, and Deripaska would not be D.C.’s favorite Oligarch Next Door.
Deripasksa’s vacant house isn’t in a neighborhood where you borrow a cup of sugar, but it is one where you could walk a few blocks and get Steve Mnuchin (in his $12 million house with an indoor pool) to help with your legal troubles. The former Trump administration treasury secretary, over the objection of Democrats in Congress, lifted sanctions on three of Deripaska’s businesses in 2019—a move he told CNBC Thursday he now regrets.
The West can’t win the ground war in Ukraine because it’s decided that it’s too dangerous to fight one. Militarily, Putin has an insurmountable advantage over Ukraine, even though his lightly trained troops are performing poorly—and probably wondering why, if they’re peacekeepers, their Ukrainian brothers and sisters are shooting at them.
But sanctions-wise, the allies have all the power, and sooner, rather than later, the bite of them could come to destabilize Putin as well. While the oligarchs owe the president for their disgusting wealth, as the captains of Russia’s industries, Putin owes them, too.
The West’s great hope is that Putin’s mercenary inner circle will be so threatened with the loss of their precious baubles that they’ll force Putin to withdraw his army. Without firing a shot, the West could spare Ukraine the worst of what Putin has in store for them and a sovereign people will get their country back.
