Thu, May 01, 2014 - Page 9 News List

Sanctions revive search for secret Putin fortune

The Russian president may have US$40 billion or even US$70 billion stashed away, and these alleged illicit funds are being targeted for sanctions

By Peter Baker  /  NY Times News Service, WASHINGTON

Illustration: Mountain People

When US President Barack Obama’s administration imposed sanctions on individual Russians last month in response to Moscow’s armed intervention in Ukraine, one of the targets was a longtime part-owner of a commodities trading company called the Gunvor Group.

His name, Gennady Timchenko, meant little to most Americans, but buried in the US Treasury Department announcement were a dozen words that Obama and his team knew would not escape the attention of Russian President Vladimir Putin.

“Putin has investments in Gunvor and may have access to Gunvor funds,” the statement said.

For years, the suspicion that Putin has a secret fortune has intrigued academics, industry analysts, opposition figures, journalists and intelligence agencies, but defied their efforts to uncover it. Numbers are thrown around suggesting that Putin may control US$40 billion or even US$70 billion, in theory making him the richest head of state in world history.

For all the rumors and speculation, though, there has been little if any hard evidence, and Gunvor, for its part, has adamantly denied any financial ties to Putin.

However, Obama’s response to the Ukraine crisis, while derided by critics as slow and weak, has reinvigorated a 15-year global hunt for Putin’s hidden wealth. Now, the Obama administration is sending a not-very-subtle message that it thinks it knows where the Russian leader has his money and that he could ultimately be targeted directly or indirectly.

“It’s something that could be done that would send a very clear signal of taking the gloves off and not just dance around it,” said Juan Zarate, a White House counterterrorism advisor to former US president George W. Bush who helped pioneer the government’s modern financial campaign techniques to choke off terrorist money.

So far, the US government has not imposed sanctions on Putin himself and officials said they would not in the short term, reasoning that personally targeting a head of state would amount to a “nuclear” escalation, as several put it.

However, officials said they hoped to get Putin’s attention by targeting figures close to him like Timchenko, and other business magnates like Yuri Kovalchuk, Vladimir Yakunin and Arkady and Boris Rotenberg.

Among those likely to be on the list, officials said, are Igor Sechin, president of the Rosneft state oil company, and Aleksei Miller, head of the Gazprom state energy giant.

“It’s like standing in a circle and all of a sudden everyone in the circle is getting a bomb thrown on them and you get the message that it’s getting close,” said US Senator Robert Menendez, chairman of the US Senate Foreign Relations Committee, describing at a recent hearing the way the sanctions are getting closer to Putin.

PUTIN’S DENIALS

Putin’s reported income for last year was just US$102,000, according to a Kremlin statement this month. Over the years, he has crudely dismissed suggestions of personal wealth.

“I have seen some papers about this,” he said at a news conference in 2008. “Just gossip that’s not worth discussing. It’s simply rubbish. They picked everything out of someone’s nose and smeared it on their little papers.”

How much Putin cares about money has long been a subject of debate both in Russia and in the West. On government payrolls since his days in the KGB, the Soviet intelligence agency, Putin to many seemed driven more by power and nationalism than by material gain. With access to government perks like palaces, planes and luxury cars, he seemingly has little need for personal wealth.

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