The Effects of Sanctions Targeting Russian Oligarchs: NPR
MICHEL MARTIN, HOST:
Russian President Vladimir Putin called the economic sanctions imposed by the United States and other Western countries, in quotation marks, “akin to a declaration of war”, without quotation marks. But President Biden says Putin chose this war and his country will bear the consequences. And a priority among the administration’s targets will be those who have built their wealth through close ties to Putin. Here’s what President Biden said during his State of the Union address.
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PRESIDENT JOE BIDEN: I say to the Russian oligarchs and corrupt leaders who have swindled billions of dollars from this violent regime – no more.
MARTIN: This is where he announced a new task force called KleptoCapture, to enforce sanctions and seize oligarchs’ assets like luxury real estate, yachts and private jets worth hundreds of millions of dollars. At least eight oligarchs have been added to a US sanctions list, along with their family members, and travel restrictions have been imposed on 19 others and 47 of their associates.
We wanted to know more about the effect these sanctions could have and how they will be applied, so we called Paul Massaro. He is a congressional foreign policy adviser specializing in sanctions, illicit financing and anti-corruption. And he is with us now. Mr. Massaro, thank you very much for joining us.
PAUL MASARO: Oh, my pleasure. Thank you very much for having me.
MARTIN: Could you just give us an idea of the scope of these sanctions aimed at the oligarchs? I was wondering how they compare to what has been taken in the past. And what does that tell you about the administration’s intentions?
MASARO: Oh, sure. So it’s totally new. We are innovating here and perhaps some of the most important ground we have ever crossed. We have been calling for many years to punish the oligarchs, to prosecute the oligarchs who are effectively appendages of the Putin regime, Putin’s now rogue state in the West. However, there has always been a bit of reluctance to do so, given their power, their lawyers, their lobbyists, the billions of dollars they control. But it looks like all of that has kind of been wiped off the board, and here we go.
MARTIN: I want to dig a little deeper into who was targeted and why, but I want to pick up on something you just said, which is that people like you, I know CIA analysts – who we We’ve spoken to a number of people over the past week – say they’ve been calling for these sorts of measures for years. So these people, their wealth, their possible criminal connections, their connection to President Putin are nothing new. So why now? Why did Russia have to invade Ukraine to take these steps?
MASARO: Well, yeah, I mean, that’s the big question, is how did we get here? With the attack on Kiev and this all-out war on Ukraine, even the West, which had been kind of asleep for so long, almost in wishful thinking or self-imposed denial of who Putin is, has woken up massively and said, OK, enough is enough. We’re going to target this state like we’ve never targeted it before and target this tyrant like we’ve never targeted it before.
MARTIN: Do you have any idea why specific people were targeted?
Massaro: Yeah. So I mean, these are oligarchs who are very close to Putin. I think right now we think in terms of who do we have the most evidence for? Who has the most obvious assets? Who would do the most damage to Putin’s rogue state? It’s very important that we do this in coordination with our allies, and I think we’ve seen that because so many of these oligarch assets are held in London, their yachts that are held in Europe.
So I think we have to underline the difficult task ahead of us. You know, there are now 20 years of financial anonymity, anonymous trusts, anonymous front companies. You know, it’s – it – it’s not like you can magically snap your fingers and have it all. We don’t really know where much of it is either, but we’ll find out.
MARTIN: Alright. Can I just ask a question? – because one of the New York newspapers actually printed a map with some of the properties owned by some of these personalities with names attached. Some of them have two or three multi-million dollar properties in the same neighborhood. So I guess I’m just wondering why, if a New York newspaper has a map with these people’s properties, why doesn’t the US government know where they are?
MASSARO: So properties, physical property, will be the easiest things to get. Some of the things that are harder to get and worth a lot more are slush funds, anonymous bank accounts and so on. It’s not something you can do immediately. There are very strong protections against – you know, government seizure of property in the United States, and for good reason. You know, you have a right to your property in this country, and that’s a very important right.
MARTIN: But I can also see where ordinary citizens see where someone is, for example, crossing state lines with a large sum of money, and their vehicle is seized. And the attitude of law enforcement is that we’ll sort this out later, or people are taken into custody with properties that look suspicious, and they’re – you know, those properties are seized, and the forces of the order say, we’ll sort it out later. And I think a lot of ordinary people would wonder why a guy who crosses state lines with $20,000 in a suitcase can have his property seized and the courts will sort it out later, but these multi-millionaires – in some cases billionaires – appreciate this protection. Do you see my question?
MASARO: I see your question, and I want to tell you that’s what makes oligarchs so dangerous. It is not fair. I mean, these guys have billions of dollars to invest in this stuff. The British – this was in a parliamentary intelligence report – are losing cases against these individuals because they cannot complete the cases. They literally run out of money before they can complete the deal. These are state actors, you know, with many billions at their disposal that have been told by Putin and given – have been empowered by Putin and control state-owned and state-influenced Russian companies and huge stakes and other types of investments that are here to subvert our democracy and subvert our commerce and the rule of law and so on. So if you screw up a legal case against these guys, they’ll go through with it.
MARTIN: Before I let you go, I feel like you’re saying it’s a very long process. And so if so, how will this be useful in the current crisis…
Massaro: Yeah. So I mean…
MARTIN: …While so many people are literally slaughtered? So what is it – the end goal would seem to me to require long-term responsibility. But is there a short-term benefit to this?
MASARO: Yes, there are. And that’s where the sanctions come in and the kind of ability to grab and then give up all the way – right? – come, can you – in the short term, we can deactivate these people. In the long run, we’re going to be able to get that money. And then I will also say that there is at least one bill floating around in Congress right now that would essentially allow a special authority to confiscate this property given the nature of what happens in wartime. It would be a temporary authority to move more quickly on these things so that you can move more quickly from punishment to seizure and forfeiture.
MARTIN: It was Paul Massaro. He is a congressional foreign policy adviser specializing in sanctions, illicit financing and anti-corruption. Mr. Massaro, thank you very much for speaking to us.
Massaro: With pleasure. Thank you for hosting me.
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