A Tale of Two Oligarchs

This was a bad week for the Russian oligarch Alisher Usmanov.

First, Usmanov had his $600 million yacht, the Dilbar, seized by German authorities. Now, Usmanov, a reputed gangster and early Facebook investor, will have to say goodbye to his luxurious English properties after the UK joined the Americans and the European Union in sanctioning him. He will also have to give up his years-long quest to own a British football club. Usmanov ended the week on the sanctions lists of the US, UK, and the European Union.

It was a different story his fellow oligarch Roman Abramovich, who shares Usmanov’s taste for megayachts and storied English football franchises. Abramovich has somehow managed to avoid any sanctions at all.

Abramovich describes himself “a successful Israeli-Russian entrepreneur and businessman.” Alexei Navalny, the jailed Russian opposition leader, puts him at the top of the list of 35 kleptocrats and human rights abusers primarily responsible for looting the Russian state and repressing human rights.

“It is a mystery to me why Roman Abramovich has not yet been sanctioned,” remarked British MP Chris Bryant, who has been bringing this issue up every chance he gets. Bryant told the House of Commons that Abramovich “is terrified of being sanctioned.” Rumors are swirling that Abramovich is selling the 15-bedroom mansion in London’s Kensington Palace Gardens he bought for £90m in 2009.

Bryant read earlier from a leaked Home Office document from 2019:

“As part of [Her Majesty’s Government]’s Russia strategy aimed at targeting illicit finance and malign activity, Abramovich remains of interest to HMG due to his links to the Russian state and his public association with corrupt activity and practices. An example of this is Abramovich admitting in court proceedings that he paid for political influence. Therefore, HMG is focused on ensuring individuals linked to illicit finance and malign activity are unable to base themselves in the UK and will use the relevant tools at its disposal (including immigration powers) to prevent this.”

UK Prime Minister Boris Johnson slipped up last month when he told Parliament that Abramovich “is already facing sanctions.” He later said he “misspoke.”

Abramovich earned his massive fortune by acquiring Russian state resources at bargain-basement prices during the vicious “aluminum wars” of the Yeltsin era. He and his partners acquired a majority stake in the oil giant SIbneft in 1995 for $100 million. Abramovich sold Sibneft a decade later to the state-owned gas giant Gazprom for $13 billion in cash. He also acquired a 50 percent stake in the aluminum giant Rusal, which he sold to Oleg Deripaska.

In court papers filed in London, Abramovich admitted agreeing to pay billions of dollars for political favors and protection fees to obtain his stakes in the former Soviet Union’s mineral wealth, the Times of London reported.

Abramovich insists he’s not, as he has been described, “Putin’s cashier.” Journalist Catherine Belton wrote in her indispensable book, Putin’s People, that Putin directed Abramovich to buy England’s Chelsea football club in 2003 for $240 million to build a beachhead into British society. That earned Belton a libel lawsuit from Abramovich. (The case was settled after the book’s publisher agreed to amend the text to include the oligarch’s denials and make clear that the claim that the oligarch bought Chelsea on Putin’s orders was not a statement of fact.) Abramovich announced this week that he will be selling Chelsea FC.

The UK has always been slow to take action against Russian oligarchs. But there’s no sense of urgency in the United States either to sanction such a tempting target.

President Biden, in his State of the Union address Tuesday, warned oligarchs that America was coming for their ill-gotten gains. “We are joining with our European allies to find and seize your yachts your luxury apartments your private jets,” Biden said.

Abramovich owns a fleet of yachts, including the $500 million Eclipse, one of the world’s biggest. The Eclipse has two helicopter pads, 24 guest cabins, two swimming pools, and a disco hall. It also features a German-built missile defense system, which has led to speculation that the yacht really belongs to Putin. But as I write this, the Eclipse is sailing the Caribbean unmolested.

The Eclipse

Abramovich also owns a fleet of private plans. His Boeing 787 Dreamliner is in Dubai today.

Nothing is stopping Abramovich from flying to New York where he is combing three adjacent buildings to build the biggest single-family home in Manhattan. Or he can head to Colorado where he owns nearly $50 million worth of properties around Aspen. He has an 11-bedroom house on 200 acres of land in Snowmass purchased in 2008 for $36.375 million, according to property records. Abramovich also purchased a 5,492-square-foot ski-in, ski-out house on 1.8 acres of land in Snowmass Village for $11.8 million.

Wherever he goes, Abramovich smartly gives to charities to buy goodwill. If you stroll past the Jewish Community Center in Aspen, you’ll see Abramovich’s name proudly displayed on the front of the sandstone facade. Israel’s Channel 12 reported that, before Russia invaded Ukraine, the chairman of the Yad Vashem Holocaust Memorial Museum, the Ashkenazi chief rabbi of Israel, and representatives of several other major Israeli organizations and charities appealed to the US ambassador to Israel, urging Washington not to impose sanctions on Abramovich. In late February, Yad Vashem, Israel’s Holocaust authority, announced a donation from Abramovich, said to be in the eight figures. This may be why the sanctions on Abramovich have been slow in coming.

I understand why Israeli charities want to protect a major source of funds. But as the investors now holding worthless shares of Sberbank know all too well, corrupt money should never be trusted.

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