Sanctioning Russia’s oligarchs and wealthy businessmen likely won’t stop Russian President Vladimir Putin from continuing his invasion of Ukraine, according to analysts who argue that oligarchs hold little sway over the Kremlin strongman.
The Biden administration has announced sanctions against numerous Russian businessmen and billionaires, and White House press secretary Jen Psaki said Thursday that “one of the big factors is, of course, the proximity to President Putin. We want him to feel the squeeze, we want the people around him to feel the squeeze.”
“We are at war with Vladimir Putin. We are not at war with a bunch of oligarchs,” Dan Hoffman, the CIA’s former Moscow station chief, told the Washington Examiner. “If you’re upset that they made money and maybe they’re corrupt, well, OK, fine, then take all of your legal stuff and go deal with it from a legal perspective, but don’t be under any illusions that these guys are part of Vladimir Putin’s inner circle or that they can hold any sway over him — they can’t.”
A Biden White House fact sheet released Thursday said that the United States “will sanction an expansive list of Putin’s cronies and their family members.” Among those named was Alisher Usmanov, described as “one of Russia’s wealthiest individuals and a close ally of Putin,” as well as Kremlin spokesman Dmitry Peskov.
The Justice Department launched a “KleptoCapture” task force aimed at prosecuting Russian oligarchs and enforcing U.S. sanctions. Attorney General Merrick Garland said Thursday that “we will leave no stone unturned in our efforts to investigate, arrest, and prosecute those whose criminal acts enable the Russian government to continue its unjust war against Ukraine.”
DOJ LAUNCHES ‘KLEPTOCAPTURE’ TASK FORCE TO TARGET RUSSIAN OLIGARCHS
Hoffman called the focus on Russian oligarchs a “rallying cry” but also a “sideshow” when it comes to dealing with the Russian invasion.
“No way — zero,” Hoffman said when asked if the oligarchs could dissuade Putin on his war. “They’re not talking to him about that. He doesn’t care. He’s not listening to them about that … He doesn’t care what the oligarchs think … Look what he did to the Russian economy. It cratered … A bunch of rich guys living overseas? Same thing. Doesn’t matter. I don’t think he cares one lick about that.”
Hoffman is also on the advisory board for lobbying firm BGR, which has worked with Russia’s Alfa-Bank, sanctioned by the U.S. last week. The Russian bank was the subject of debunked Trump-Russia collusion claims in 2016.
Hoffman said that there were some “inner circle guys” who might be able to sway Putin, pointing to Minister of Defense Sergei Shoigu, national security adviser Nikolai Patrushev, and FSB Director Alexander Bortnikov. He said that “those guys have their constituencies, so they matter.”
“Stay on our mission. Our mission is: Defeat this invasion of Ukraine while not going to war with Russia,” Hoffman said. “The real tactical issue right now is: What are you giving Ukraine to stay in the fight? And how much do you have to bloody the Russians so they get to the point where they disobey the orders of Vladimir Putin?”
Nate Sibley, a research fellow at Hudson Institute’s Kleptocracy Initiative, told the Washington Examiner that a lot of the public discussion about “oligarchs” is outdated thinking, noting that Putin “appears to have succeeded in taming the oligarchs, ensconcing himself in the Kremlin instead with strongmen who rose through Russia’s security apparatus.”
“The ‘oligarchs’ will be dismayed at the collapse of their personal fortunes and international reputation, and some have called for an end to the war — but none dares criticize Putin personally,” Sibley said. “The ‘oligarchs’ are clearly not the powerful frenemies they once were to Putin and do not feel immediately capable of challenging his decisions, let alone his rule.”
Sibley added, “That said, we should absolutely apply targeted pressure not only on Russia’s ‘oligarchs’ but a broader swathe of its business, political, and security elite.”
John Hardie, a research manager with a focus on Russia at the Foundation for the Defense of Democracies, told the Washington Examiner that “there really aren’t any ‘oligarchs’ in Russia anymore in the sense that word was used in the 1990s” and that “those oligarchs have either bent to Putin’s will, been imprisoned, or fled.” He said the wealthy Russian businessmen of today “typically don’t wield anywhere near the political power the term ‘oligarch’ would suggest.”
“The Kremlin can and does at times ask oligarchs to do things, and if an oligarch lives in Russia or has assets or family there, then the Kremlin has leverage and can impose consequences on those that disobey,” Hardie said, adding that “the politically powerful ones owe that power to Putin, not vice versa.”
Hardie predicted that “Western sanctions will likely lead the oligarchs to look for offshore destinations beyond the reach of Western authorities or return those assets to Russia” and said some of that is already happening.
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President Joe Biden vowed during his State of the Union speech that “I say to the Russian oligarchs and corrupt leaders who have bilked billions of dollars off this violent regime — no more. We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets. We are coming for your ill-begotten gains.”
Mikhail Fridman, a co-founder of Russia’s Alfa-Bank, has voiced objections to Putin’s war. Oleg Deripaska, known for his prior business relationships with former Trump campaign manager Paul Manafort and British ex-spy Christopher Steele and accused of assisting the Russian government’s influence operations worldwide, also piped up for peace. Both men avoided directly criticizing Putin.
“At most, strong sanctions targeting Russian oligarchs might make life a little more difficult for Putin, but it won’t change his behavior,” Luke Coffey, the director of the Heritage Foundation’s Douglas and Sarah Allison Center for Foreign Policy, told the Washington Examiner. “Putin is an imperial-style leader. Just the other day, when the Russian spy chief failed to answer a question posed by Putin, the Russian president treated him like a dog for all the Russian people to see on national TV. So, if Putin is willing to treat his spy chief this way, he will not be too bothered about his oligarchs.”
