On February 13, U.S. Senator Lindsey Graham introduced the “Defending American Security from Kremlin Aggression Act of 2019.”

The bill, which says it seeks “to strengthen the North Atlantic Treaty Organization (NATO), to combat international cybercrime and to impose additional sanctions with respect to the Russian Federation,” targets the Kremlin for interference in the 2016 U.S. presidential election and for its military intervention in Ukraine.

The sanctions are aimed at stopping investments in Russian government bonds, at punishing any financial institutions that financed interference with elections outside Russia and those who have invested in Russian natural gas facilities in the West.

1/4 Updated draft of Defending American Security from Kremlin Aggression Act of 2019 (DASKA) has been posted online. It entails introduction of following punitive measures: (1) Ban on transactions with new sovereign debt with duration more than 14 days; https://t.co/DqjC9aSWnZ pic.twitter.com/0bvMbdhwWG — Alex Melikishvili (@A_Melikishvili) February 27, 2019

Section 711 of the bill, which calls on the Director of U.S. National Intelligence to submit “a detailed report on the personal net worth and assets” of Russian President Vladimir Putin, has raised the ire of Russian presidential spokesman Dmitry Peskov.

Peskov, who said that Putin was “unlikely aware of the initiative,” claimed it had come about because U.S. legislators essentially have too much time on their hands.

Saying the bill could not be taken seriously, Peskov added the initiative was “most probably” another “Russophobic fuss,” which Russian authorities have “long learned” to take “with irony.”

The bill specifically seeks to determine the net worth and known sources of wealth of both Putin and his family members, “including assets, investments, bank accounts, other business interests, and relevant beneficial ownership information.”

It further aims to identify “the most significant senior foreign political figures and oligarchs in the Russian Federation, as determined by their closeness to Vladimir Putin.”

Is looking into Putin’s finances ‘Russophobic?’

It is true that Western governments and intelligence agencies poke around to identify Putin’s wealth. But the inquiries begin inside Russia – as part of Russia’s own election politics and among opposition figures.

In the run-up to the Russian presidential election last year, Russia’s Central Election Commission released information on Putin’s personal assets and income, stating that he earned an average of $112,000 a year between 2011 and 2016, totaling approximately $673,000, the Washington Post reported.

TASS: Kremlin blows off US Congressional crusade to ‘audit’ Putin’s finances as Russophobic fuss https://t.co/d4NpCYdoRw — Investigate Russia (@InvestigateRU) February 28, 2019

Putin listed 13 bank accounts with a combined balance of $241,000, an 800-square-foot apartment in St. Petersburg, 230 shares in Bank Saint Petersburg and three automobiles — two Soviet-era Volga sports cars built in 1960 and 1965 and a 2009 Lada 4×4.

Critics have long claimed his actual wealth is exponentially higher.

In 2007, Russian political expert Stanislav Belkovsky estimated Putin’s wealth at $40 billion, saying the Russian president “effectively” controlled 37% of the shares of Surgutneftegaz, an oil exploration company, and Russia’s third biggest oil producer, worth $20 billion, as well as 4.5% of Russia’s natural gas monopoly Gazprom and “at least 75%” of Gunvor, a Swiss-based oil trader founded by billionaire Putin-confidant Gennady Timchenko.

​According to the New York Times, the CIA produced a secret assessment of Putin’s wealth that also put the figure at $40 billion. Agency officials told the newspaper that assessment “largely tracked” with Belkovsky’s assertions.

The following year, a U.S. diplomatic cable released by WikiLeaks similarly alleged that Gunvor “is rumored to be one of Putin’s sources of undisclosed wealth,” noting that opposition leader Alexei Navalny had “sued Gunvor and several Russian oil companies for information regarding their oil trading practices” and estimating “that Gunvor may control up to 50% of total Russian oil exports.”

Gunvor itself claims to move 2.5 million barrels of oil every day – about 3% of the world’s oil.

But the opaque nature of such alleged schemes has led to widely varying estimates over the years.

In 2012, Belkovsky revised his estimate of Putin’s wealth upwards to $70 billion. Five years later, Kremlin critic and financier Bill Browder assessed Putin’s wealth at $200 billion. ​

Also in 2012, Leonid Martynyuk and then opposition leader Boris Nemtsov released a report entitled “Life of galley slave (palaces, yachts, cars, planes and other accessories),” which claimed that Putin had 20 palaces and villas, including “Putin’s Palace,” a Black Sea property worth $1 billion dollars that was allegedly built through a convoluted cash flow scheme.

They also alleged that Putin owned some 43 aircraft, various yachts (including a $35 million vessel allegedly transferred to Putin via the Russian oligarch Roman Abramovich) and an extensive watch collection.

Signs of Putin’s Opulence

Other signs of opulence have slipped out during public relations events and media “photo ops.” For example, Putin was once seen exercising in a sweat suit worth an estimated $3,200.

Peskov himself caused a stir in 2015 when he was photographed wearing a watch worth upwards of $600,000 dollars. Peskov and his wife were subsequently spotted vacationing on a yacht that cost $388,000 a week to rent during the off season.

Dmitry Peskov, #Kremlin spokesman, wears a $620K watch. A clear sign of corruption – he’s civil servant since 1989.pic.twitter.com/nWFItiSQPw — Alex Kokcharov (@AlexKokcharov) August 2, 2015

In 2016, Adam Szubin, who was then U.S. Acting Under Secretary for Terrorism and Financial Crimes, told the BBC the U.S. government had evidence linking Putin’s wealth to Timchenko’s activities.

Later that year, documents leaked from Mossack Fonseca & Co., a Panamanian law firm and corporate service provider, which became known as the Panama Papers, included personal financial information about public officials worldwide, including several close to Putin.

Putin has Belize accounts via ‘The Caretaker’ Sergey Rodulgin. Wonder if Lord Ashcroft with his close association to Belize has any association with Russian government. https://t.co/IyQx5fhhJE pic.twitter.com/SoQ1ILbjgW — Kath (@mopeng) June 21, 2018

The Panama Papers revealed that Sergei Roldugin, a cellist, lifetime friend and godfather to Putin’s eldest daughter, Maria, had helped moved billions of dollars through a series of shell companies which the Organized Crime and Corruption Reporting Project (OCCRP) said were engaged in:

dubious over-the-counter transactions with shares of the largest state-owned Russian companies such as Rosneft;

“donations” from major Russian businessmen often laundered through paper deals;

preferential loans from the Cyprus-based RCB Bank, a large stake of which is controlled by Russia’s state-owned VTB Bank.

The OCCRP noted that funds accumulated through Rodulgin’s offshore companies that were later reinvested in Russia fell into two categories — strategic assets, and leisure-relate assets like resorts, yacht clubs and palaces.

One such resort, built on land purchased with funds acquired through Rodulgin’s firm Sandalwood Continental, would be used to host the wedding of Putin’s younger daughter, Katerina Tikhonova, and Kirill Shamalov, the billionaire son of long-time Putin friend Nikolai Shamalov.

Putin’s younger daughter, Katerina Tikhonova, was on Russian TV last night promoting her science foundation, which has contracts from lots of big Kremlin companies. I think this is her first official TV appearance. via @rprose https://t.co/6DwMQksy7j pic.twitter.com/TmUk4M7sGs — max seddon (@maxseddon) December 7, 2018



Shamalov is a founding member of Ozero, a dacha housing cooperative in Leningrad Obast near Saint Petersburg that also includes Yuri Kovalchuk, who is chairman of and the largest shareholder in Bank Rossiya, which is also known as “Putin’s Wallet”; former Russian Railways President Vladimir Yakunin; and former Minister of Education and Science Andrei Fursenko.

Putin’s friend Rodulgin linked to Magnitsky scandal: Fraud $ was used to buy shares from him https://t.co/UVzoVwuRQI pic.twitter.com/VxQExd0s1r — Alec Luhn (@ASLuhn) April 26, 2016

Russian Commercial Bank in Cyprus, a subsidiary of the Russian state-owned bank VTB, extended an $800 million credit to Sandalwood Continental from 2009-11.

Why it Matters, Inside Russia and Elsewhere

That Putin’s wealth is allegedly funneled through myriad tax shelters and controlled by proxies explains why the U.S. bill would seek to determine the holdings of those closest to Putin.

Reuters reported in 2015 that many of Putin’s friends “had grown famously rich,” and that their children were on a trajectory analogous to that of China’s “princelings” – the children and grandchildren of Communist Party leaders who gained positions of power and wealth.

Navalny said Russia’s extreme concentration of wealth (it regularly ranks among the world’s most unequal societies) was reflective of a “neo-feudal system.”

“Today in Russia, it is absolutely normal that the boards of directors at state banks are headed by children of security service officials, who aren’t even 30 years old when they are appointed,” Navalny told Reuters. “It is more than just a dynastic succession. Children don’t just inherit their parents’ posts, but also the right to choose any other post they fancy. The danger is that very soon all key resources will end up in the hands of five to seven families.”

Testifying before the U.S. Congress in 2017, Browder, who was once Russia’s largest foreign investor, said the Panama Papers had also indirectly implicated Putin in a $230 million tax fraud scheme uncovered by his accountant Sergei Magnitsky.

Владимир Милов: “Навальный снимает фильм про личное богатство Путина, и вы его увидите”. https://t.co/RH6xCgFPkZ pic.twitter.com/9w87Zj4DY1 — Радио Свобода (@SvobodaRadio) September 10, 2018

Magnitsky died in pre-trail detention in 2009 after uncovering the scheme, allegedly organized by corrupt Russian officials who had seized possession of three companies owned by Browder.

As a result of Magnitsky’s death, Browder successfully lobbied for the Magnitsky Act, the U.S. law that targets Russian officials implicated in human rights and corruption cases. In 2016, the U.S. Congress passed a global version of that bill, allowing foreign officials implicated in human rights abuses worldwide to be sanctioned.

“Information from the Panama Papers also links some money from the crime that Sergei Magnitsky discovered and exposed to Sergei Roldugin,” Browder told the U.S. Congress in his 2017 testimony.

“Based on the language of the Magnitsky Act, this would make Putin personally subject to Magnitsky sanctions,” Browder noted, adding “this is particularly worrying for Putin, because he is one of the richest men in the world.”

According to Vladimir Kara-Murza, a twice-poisoned Russian opposition figure, Putin has taken the Magnitsky Act personally.

“It was the Magnitsky Act that Putin tasked his foreign ministry with trying to stop; it was the Magnitsky Act that was openly tied to the ban on child adoptions; it was the Magnitsky Act that was the subject of the 2016 Trump Tower meetingattended by a Kremlin-linked lawyer; it is advocating for the Magnitsky Act that may soon land any Russian citizen in prison. It was the Magnitsky Act that Putin named as the biggest threat to his regime as he stood by Trump’s side in Helsinki,” Kara Murza wrote.

According to journalist Julia Ioffe, the Magnitsky Act “was the blueprint … for the big sanctions that came in 2014” following Russia’s annexation of Crimea and military intervention in Eastern Ukraine.

“What made Russian officialdom so mad about the Magnitsky Act is that it was the first time that there was some kind of roadblock to getting stolen money to safety,” she wrote.

Four years ago today, my friend and ally Boris Nemtsov was brutally assassinated on Moskvoretzky Bridge in Moscow in front of the Kremlin. The people who ordered his killing remain unpunished. He fought for justice for Sergei Magnitsky. It’s my duty to fight for justice for him pic.twitter.com/7wnSXz4oye — Bill Browder (@Billbrowder) February 27, 2019

According to Browder, Putin’s hidden wealth is his “Achilles’ heel,” which is why Putin made the surprise move of offering up Russians suspected of interfering in the 2016 election in exchange for interviewing people close to the U.S.-born financer during the 2018 Russia–United States summit in Helsinki Finland.

Ultimately, much remains unknown about Putin’s actual wealth. Due to the nature in which Putin’s alleged holdings are managed, Russian security expert Mark Galeotti wrote that “specific assertions rest on rather shakier evidentiary grounds.”

“Putin’s name doesn’t appear on any shareholders’ register,” Belkovsky said in 2007, noting “there is a non-transparent scheme of successive ownership of offshore companies and funds.” He added: “But please pay attention that Vladimir Vladimirovich [Putin] has never sued me.”

The late Karen Dawisha wrote in her book “Putin’s Kleptocracy” said that the proxy system through which Putin’s alleged wealth is distributed means that he, like many of Russia’s oligarch’s, has access to wealth rather than ownership of it.

Another feature of Russian nature reserves is illegal construction of recreation facilities for high ranking poachers and @KremlinRussia_E could not miss chance to build another Putin’s palace “Moonlight Field” though it is not known whether he ever flied there with lovers pic.twitter.com/XFUi0Vr2FV — Andrey Davydov (@FarEasterner) February 9, 2019