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Putin on the Ritz

21 March 2014 By Kevin Allison

Barack Obama is hitting Vladimir Putin where it hurts – his inner circle. New U.S. sanctions against a Russian bank and a host of tycoons are ostensibly just an escalated response to the annexation of Crimea. But they also allege a link between the Kremlin boss and Gunvor, a secretive Swiss oil trader. Washington seems determined to reveal how Putin and his comrades have amassed immense personal wealth at public expense.

Rumors of the Russian president’s hidden fortune have swirled for years, including in classified U.S. diplomatic cables published by Wikileaks. But the Obama administration’s public statement that Putin “has investments in Gunvor and may have access to Gunvor funds,” means it’s now official U.S. policy that Putin has secretly gained enormous riches.

Gunvor, whose marketing documents state that it earned $433 million on $93 billion of turnover in 2012, said the Kremlin leader “has not and never has had any ownership, beneficial or otherwise” in the company and “any understanding otherwise is fundamentally misinformed and outrageous.” The firm added on Thursday that its founder, Gennady Timchenko, one of a handful of people that Treasury called a member of Putin’s “inner circle,” had sold his shares in the firm to a fellow co-founder on Wednesday in anticipation of U.S. sanctions.

Timchenko isn’t the only Putin confidant in Washington’s sights. Treasury also singled out two brothers, Arkady and Boris Rotenberg, alleging they received “high price contracts for the Sochi Olympic Games and state-controlled Gazprom.” The United States also sanctioned a company, Bank Rossiya, which it described as “a personal bank for senior officials of the Russian Federation,” and its biggest shareholder, Yuri Kovalchuk, whom the Treasury called a “close adviser” to the Russian leader.   

The logic is, presumably, that part of Putin’s hold on power depends on his ability to reward his cronies financially. The U.S. reach in financial markets goes far beyond its borders and could easily cause the Russian president and his circle private pain. Going public with suspicions about his links to Gunvor, denied by the company, is another way to ratchet up the pressure.


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