Russian oligarchs are more connected to the Kremlin than previously thought
STOP OR MY MOM WILL SHOP
FinCEN, the U.S. Department of Treasury’s financial intelligence unit, was either giving us a Christmas present, or else waiting till no one was paying attention, when it chose December 22 as the date on which to slip out this interesting report on Russian oligarchs. It’s based on analyses of the filings made by U.S. financial institutions to regulators, as required by the Bank Secrecy Act (which is a weird misnomer, since the act actually made bank accounts significantly less secret than they had been when it was passed in 1970 and became the cornerstone of global anti-money laundering policy), between March and October 2022.
The report’s conclusions are based on 454 transactions totaling tens of billions of dollars, and I think they tell us interesting things about oligarchs’ position in the Kremlin hierarchy. As you may remember (though it seems a lifetime ago), when Vladimir Putin launched his all-out assault on Ukraine, there was much debate about what to do about the oligarchs, with people divided as to whether they were independent businesspeople who had gotten rich in Russia but had no influence over the Kremlin, or whether they were essentially shareholders in Kremlin Inc. who could be induced to lean on Putin and stop him from being a vicious, murderous tyrant.
Opinion largely coalesced around the second option, and dozens of oligarchs found their Western-based assets frozen as a result.
Several oligarchs — such as, in this interview from March last year, Mikhail Fridman — complained bitterly, arguing that they in fact had no influence over Putin and that sanctioning them in this way was unfair. But the FinCEN analysis suggests that some oligarchs, at least, were better connected than they were letting on (though perhaps not Fridman, who knows?), had advance knowledge of the assault in Ukraine and took financial evasive action before sanctions were imposed.