In-Depth: Rep. Val Demings (D-FL) introduced this bill to direct the U.S. intelligence community and federal government to create and submit to Congress a report on all of Putin’s financial holdings:
“Russia and Putin have been allowed free reign by this administration and as a result our democracy is still at risk. The best way to assail the power of Putin and his enablers is to go after the illegal and secret financial streams that fund their operations. It’s time to fight back and protect our democracy. Twenty-six Russians and three Russian companies have already been indicted for interfering with the 2016 election, but this administration has done little to prevent future attacks. Russia has continued its campaigns of disinformation, propaganda, and political and military pressure against U.S. allies and interests.”
Rep. Elise Stefanik (R-NY), an original cosponsor of this bill, adds that this bill treats Putin and his allies appropriately, as “nefarious political actors”:
“Putin and his political allies seek to weaken democracies worldwide by consolidating their political control through unethical means. I am proud to cosponsor this bill which aims to identify Putin and his allies for who they are: nefarious political actors undermining democracies.”
Many experts agree that a more accurate understanding of Putin’s wealth could help crack down on cross-border corruption and give the U.S. more leverage against Russia. Experts argue that Putin could be the wealthiest man in the world, and many of his assets have been stolen from the Russian state and handed over to a network of allies and oligarchs.
Brian O’Toole, an expert in economic sanctions at the Atlantic Council, added that a public accounting of Putin’s vast wealth and its corrupt origins could hurt him domestically:
“Even though a public report is unlikely to contain great detail on Putin’s illicit wealth, highlighting his family’s vast holdings and placing an estimate on what he has plundered from the Russian state hits at an area of rare weakness—domestic corruption, for a leader who consistently has enjoyed high approval ratings. Beyond that, hitting out at Putin’s wealth and involving his family in the analysis would be certain to annoy him, which is not an insubstantial outcome.”
John Wonderlich, executive director of the Sunlight Foundation, an organization that advocates for transparency and open government, notes that it’s uncommon for the government to pass a bill to collect this type of information, but this approach may be needed in Putin’s case:
“I think it would be useful to have an overall more reliable estimate of Putin’s personal financial wealth because it would be helpful to have a better sense of how his influence is functioning, not just in that region of the world, but all over the world, because that’s the way that global wealth functions. I’m not sure this bill is the right way to go about it. It’s an unusual approach to require the DNI to put together an estimate for a specific foreign leader. Then again, Putin is not just another foreign leader either. It’s an unusual approach to an unusual situation.”
Kremlin spokesman Dmitriy Peskov dismissed this bill as “just some more Russophobic fuss,” telling reporters in Moscow:
“It [this bill] can hardly be taken seriously. Most likely it’s just some more Russophobic fuss. We’ve long learned to take that with irony.”
Alexander Cooley, a Eurasia expert at Columbia University’s Harriman Institute, notes that it’s unsurprising that Russian officials would criticize this bill, and suggests that rather than singling Russia out, it may be better to combat global kleptocracy regardless of where it occurs:
"Institutional efforts to publicize details of Vladimir Putin's personal wealth are likely to be viewed by Moscow as yet another example of the U.S. singling out Russia, and its leadership, for exceptional opprobrium and would likely precipitate some sort of retaliation. It would make more sense, for those committed to the causes of transparency and global anti-kleptocracy, to lay out a set of guiding principles under which information about the overseas money and reputation laundering of political elites worldwide can be compiled and publicized."
Rep. Elise Stefanik (R-NY) is currently this bill’s only cosponsor.
This isn’t the first time Reps. Demings and Stefanik have teamed up to introduce legislation countering Russian influence. In the 115th Congress, the duo, along with Rep. Ted Lieu (D-CA), introduced the Defend Against Russian Disinformation and Aggression Act, which sought to strengthen federal cybersecurity, support intelligence-gathering, and enhance NATO military activities. That bill never received a committee vote.
Last Congress, a bipartisan group of Senators consisting of Sens. Lindsey Graham (R-SC), Cory Gardner (R-CO), John McCain (R-AZ), Jeanne Shaheen (D-NH), Bob Menendez (D-NJ), and Ben Cardin (D-MD), introduced the Defending American Security from Kremlin Aggression Act of 2018, which would have called for strengthened sanctions on Russia and specifically on “political figures, oligarchs, and family members and other persons that facilitate illicit and corrupt activities, directly or indirectly, on behalf of Vladimir Putin” and required a report on Putin’s net worth and assets. The bill never received a committee vote.
Of Note: According to the Washington Post, the Russian government’s official public reports show Putin’s average income from 2011-2016 at approximately $112,000. The Kremlin also reports that he lives in a small apartment. However, outside experts have alleged that his true net worth is in the billions, thanks to extensive corruption and a connection to money laundering and other activities. In 2012, former Russian government adviser Stanislav Belkovsky estimated that Putin’s fortune was worth $70 billion. In 2017, hedge fund manager Bill Browder, the CEO of Hermitage Capital Management and a noted critic of Putin who pushed for the Magnitsky Act’s passage in 2012, leading to U.S. sanctions against Russian oligarchs, told the Senate Judiciary Committee he believe Putin’s net worth is more like $200 billion (which would propel Putin far past Amazon founder and current richest man in the world Jeff Bezos, whom Forbes estimates is worth $150.2 billion). In his Senate testimony, Browder claimed:
“I believe he [Putin] is worth $200 billion. The purpose of the Putin regime has been to commit terrible crimes in order to get that money, and he doesn't want to lose that money by having it frozen. So he is personally at risk of the Magnitsky Act."
Browder also added that Putin’s hidden fortune, if he has indeed accumulated one, would be based on an informal idea of ownership, and compared the system to the mafia:
“There isn't going to be a shares certificate with Putin's name on it, or a bank account linked to him. The way mafia syndicates work is that you have a godfather who does favors for his underlings. In return, at some point in the future, his underlings return the favor... it makes more sense to think about it like that."
Browder points to Russia’s missing money as evidence that Putin has stashed money away:
"After 14 years in power of Russia, and the amount of money that the country has made, and the amount of money that hasn't been spent on schools and roads and hospitals and so on, all that money is in property, bank--Swiss bank accounts--shares, hedge funds, managed for Putin and his cronies.”
Ex-Russian officials have also accused Putin of greater wealth and influence than is officially reported. In 2007, ex-Kremlin official Stanislav Belkovsky claimed that Putin had $40 billion hidden in Switzerland and Liechtenstein — if true, that’d have made him the world’s fourth-wealthiest person at the time. Belkovsy also accused Putin of secretly controlling 37 percent of Surgutneftegaz and 4.5 percent of Gazprom, two giant Russian oil companies, as well as “at least 75 percent” of Swiss oil trader Gunvor. Belkovsy added, “I suspect there are some businesses I know nothing about.” However, Gunvor refuted Belkovsy’s claims, saying that “President Putin does not and never has had any ownership, beneficial or otherwise in Gunvor. He is not a beneficiary of Gunvor or its activities."
Similarly, exiled Russian banker Sergei Pugachev, once nicknamed “Putin’s banker,” told the Guardian, “Everything that belongs to the territory of the Russian Federation Putin considers to be his.” Pugachev claimed that “any attempt to calculate [Putin’s net worth] won’t succeed. He’s the richest person in the world until he leaves power.”
Additionally, the Kremlin’s numbers and reporting don’t match up with most accounts of Putin’s lifestyle, including the so-called “secret palace,” which was reportedly built using illegal state funds at the cost of $1 billion. The residence has a private theater and landing pad with room for three helicopters. In 2012, opposition leader and Putin critic Boris Nemtsov produced a dossier claiming that Putin owned 58 different types of aircraft, including one with an $11 million cabin fitted out by jewelers and a toilet that cost close to $100,000, as well as four yachts, each costing thousands of dollars to maintain. Nemtsov’s dossier also claimed that Putin owned 11 watches, worth a combined $687,000. Nemstov was assassinated in 2015.
In 2015, the Panama Papers suggested that Putin has likely used proxies to conceal his actual wealth. While the Papers didn’t include any files directly pertaining to Putin, they did reveal that his friends had earned millions from deals that seemingly couldn’t have been secured without his patronage. However, Putin and the Kremlin deny that he’s used his role to enrich himself and his friends. In response to the Panama Papers, Putin wrote:
“I am the wealthiest man, not just in Europe but in the whole world: I collect emotions. I am wealthy in that the people of Russia have twice entrusted me with the leadership of a great nation such as Russia. I believe that is my greatest wealth."
Summary by Lorelei Yang
(Photo Credit: iStockphoto.com / dicus63)