Just over a month ago, in the latest round of sanctions against Russia, and specifically Putin's inner circle of advisors and lieutenants, one person was singled out - Gennady Timchenko, part-owner of the Gunvor Group commodities trading company, the fourth largest oil trader in the world with over $90 billion in 2013 revenues.

This name was particularly notable because as part of the justification for adding Timchenko to the list of sanctioned oligarchs, the US Treasury said that "Putin has investments in Gunvor and may have access to Gunvor funds." This is curious because in 2008 The Economist also linked Putin to Timchenko. Timchenko promptly sued but later dropped the case, and The Economist issued a statement. “We accept Gunvor’s assurances that neither Vladimir Putin nor any other senior Russian political figures have any ownership in Gunvor."

Yet somehow, despite the repeated denials that Putin has a direct or indirect interest in the massive oil trading company, the Treasury department apparently knows better. As the NYT reports, "Seth Thomas Pietras, Gunvor’s corporate affairs director, said Mr. Putin “does not and never has had any ownership, direct, indirect or otherwise, in Gunvor,” nor is he “a beneficiary of Gunvor,” and “he has no access to Gunvor’s funds.” After the sanctions statement, Gunvor executives flew to Washington to meet with State Department officials and congressional aides. “We’re providing evidence but have not seen any sort of evidence from them yet and don’t know if we ever will,” Mr. Pietras said. He said the company’s banking partners had been satisfied by its explanations.



The Treasury Department, however, was not. “We remain confident that the information on the relationship between Putin and Gunvor is accurate,” said a Treasury official, who asked not to be identified in a public dispute with the company."

Still, whether or not Putin has a stake in Gunvor is of secondary importance - what matters is that tomorrow, as part of yet another round of sanctions by the US Treasury, among those likely to be on Monday’s list, are Igor Sechin, president of the Rosneft state oil company, and Aleksei Miller, head of the Gazprom state energy giant.

Which brings us to the topic of this post, namely the quest for Putin's billions.

Because if there was anything the Gunvor sanction escalation showed, is that the US is not afraid of going those who are in the Putin circle of not only trust but, certainly, money. To be sure, so far the American government has not imposed sanctions on Putin himself, and according to the NYT, 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. But that doesn't mean the Treasury can't go after those who are nearest to Putin, both in terms of power, and certainly money.

The problem, as the US is starting to realize, is that those alleged billions that Russia's leader may (or may not) have access to are quite difficult to track down. There is much speculation and conjecture, but the facts are still rather slim. Here is what is known:

For years, the suspicion that Mr. Putin has a secret fortune has intrigued scholars, industry analysts, opposition figures, journalists and intelligence agencies but defied their efforts to uncover it. Numbers are thrown around suggesting that Mr. Putin may control $40 billion or even $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 has adamantly denied any financial ties to Mr. Putin and repeated that denial on Friday.

The US may not be sure just where Putin's billions are buried preventing a laser-guided strategy, but that just means it will engage in a shotgun approach and slam all those financiers and oligarchs who are closest to Putin - even those whose goodwill is so critical to keep Russian gas flowing to Germany and the UK.

“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 Senator Robert Menendez, Democrat of New Jersey, the chairman of the Foreign Relations Committee, describing at a recent hearing the way the sanctions are getting closer to Mr. Putin.

Still, this does beg the question - is Putin really a billionaire? Officially, of course not.

Mr. Putin’s reported income for 2013 was just $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 Mr. 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 K.G.B., the Soviet intelligence agency, Mr. 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. “If he really does have all that money salted away somewhere, why?” asked Bruce K. Misamore, who was the chief financial officer of Yukos Oil before the Russian government imprisoned its top shareholder, Mikhail B. Khodorkovsky, seized its assets and gave many of them to Mr. Sechin’s Rosneft. “What good does it do him? Is it just ego? Presumably, it’s not to pass it down to heirs. I doubt we’ll see Mr. Putin becoming one of the leading philanthropists in the world.”

Philanthropist, no. But if indeed Putin has highly confidential access to up to $70 billion, that would probably make him the wealthiest person on earth. And thus most influential.

Still, with no hard numbers and org charts highlight Putin's equity stakes and bank accounts around there world, there is mostly speculation:

The C.I.A. in 2007 produced a secret assessment of Mr. Putin’s wealth that has never been released, according to officials who have read it. The assessment, the officials said, largely tracked with assertions later made publicly by a Russian political analyst who said Mr. Putin effectively controlled holdings in Gunvor, Gazprom and Surgutneftegaz that added up to about $40 billion at the time. ... the assessment roughly mirrored estimates made publicly at the end of that year by Stanislav Belkovsky, a Russian political analyst with ties to the Kremlin whose public attack on oligarchs several years earlier had presaged the arrest and prosecution of Mr. Khodorkovsky of Yukos. Mr. Belkovsky told European newspapers in December 2007 that Mr. Putin had amassed a fortune of “at least” $40 billion through sizable shares of some of Russia’s largest energy companies. Mr. Putin secretly controlled “at least 75 percent” of Gunvor, 4.5 percent of Gazprom and 37 percent of Surgutneftegaz, Mr. Belkovsky said, citing only unnamed Kremlin insiders. “The reality is that Putin has others and entities to move money that he controls or that he might control ultimately,” said Mr. Zarate, the former Bush adviser. “The challenge with him is you don’t have an easy way of drawing the line to the assets he actually owns and controls currently. There’s a dimension of layering and relationships with people with whom he’s close and entities that serve as conduits that make it tricky to determine what is Putin’s and what is not.”

Then, there is the indirect way of estimating Putin's wealth:

In 2010, Sergei Kolesnikov, a businessman, published an open letter saying he had helped Mr. Putin secretly build a billion-dollar palace on the Black Sea. The Kremlin dismissed his claims as “absurd.” In 2012, Boris Y. Nemtsov, an opposition leader, released a report detailing the presidential perks at Mr. Putin’s disposal, including 20 residences, 15 helicopters, four yachts and 43 aircraft.

Indirect estimates, however, always leave much to be desired:

some hunting for Mr. Putin’s private wealth have found obstacles. Last month, Cambridge University Press declined to publish a book by its longtime author Karen Dawisha, a Miami University professor, exploring how Mr. Putin built “a kleptocratic and authoritarian regime in Russia.” The publisher wrote her saying it had “no reason to doubt the veracity” of her book, but deemed the risk of a lawsuit too high, according to letters published by The Economist. In a return letter, Ms. Dawisha called the decision “pre-emptive book burning.”

Which brings us back to Gunvor, which is sternly denying any relationship with Putin, even as the US Treasury openly rejected this explanation, with its explicit language.

Did Putin have some or all of his billions at the Cyprus-based company? Perhaps, but the cross holdings are so well-hidden not even the NSA likely knows who owns what. Indicating the complexity of Russian-oligarch org charts, here is just a "simple" summary of what Gunvor's stakeholder Timchenko owned, via Bloomberg:

The majority of Timchenko's net worth was derived from his 44 percent stake in Cyprus-based oil trader Gunvor Group, which he sold to partner Torbjorn Tornqvist on March 19, 2014, ahead of U.S. economic sanctions. Through Volga Group, his Luxembourg-based investment vehicle, he also holds 23 percent stake in publicly traded Novatek, Russia's second-largest natural gas producer; a 31.5 percent stake in petrochemical company Sibur; and 80 percent of rail company Transoil. He owns Sibur through the holding company Sibur Ltd. with billionaire partner Leonid Mikhelson. The pair acquired the company from Gazprombank, the lending affiliate of state-controlled energy company Gazprom, in 2010 and 2011. The investment cost is calculated using the value stated by Gazprombank in December 2010, when it sold the first 25 percent for $1.3 billion. He also has an 80 percent stake in Russian construction company Stroytransgaz, which is valued using the average price-to-sales and price-to-book value multiples of three publicly traded peers: Mostotrest, Budimex and Polimex-Mostostal. Through Volga, Timchenko holds stakes in publicly traded Rorvik Timber and Russian Sea Group, a fish farm and seafood processing company, as well as 8 percent of Bank Rossia, 12.5 percent of insurance company Sogaz, 49.1 percent of insurance company Sovag and 30 percent of coal mining company Kolmar. Gunvor holds another 30 percent of Kolmar. Through A-group, the billionaire controls 70 percent of Avia Group, which develops ground infrastructure for the business aviation center at Moscow's Sheremetyevo airport, Avia Group Nord, which provides business-aviation services for flights out of Saint Petersburg's Pulkovo international airport, and a 99 stake in private jet operator Airfix Aviation. He also controls Finland's Hartwall Areena along with billionaire partners Boris and Arkady Rotenberg.

Confused yet? Here is more on the ties between the commodity magnate and the Russian president from a 2008 FT profile:

...many wonder whether Gunvor’s rapid expansion over the past five years – just as the Kremlin has moved in on private oil production – is due to more than just vision. The company has “one very good friend,” a former partner says. “He is at the very top level,” says another. Some have speculated whether there are ties that bind Gunvor’s other co-founder, Gennady Timchenko, and Vladimir Putin, Russia’s president from 2000 until last week. As the company emerges from obscurity, some details of the connections between the two are finally becoming clear. The company claims that it has not benefited from any political favours. The company’s rise provides a glimpse into a secretive clique of businessmen close to Mr Putin who have made immense fortunes under his presidency but have so far stayed far away from public scrutiny. Even as Mr Putin completes a stage-managed transfer to the role of prime minister, installing his hand-picked successor, Dmitry Medvedev, as president, they are finding it increasingly hard to escape the spotlight. This year, Mr Timchenko for the first time made it on to the Forbes rich list with an estimated fortune of $2.5bn. In a scanty paper trail, corporate records from St Petersburg show Mr Timchenko and a committee headed by Mr Putin participated in one business in the early 1990s. Bankers say the company, Golden Gates, was established to build an oil terminal at St Petersburg’s port but foundered in a clash with organised crime. Mr Timchenko’s trading company, meanwhile, was a beneficiary of a large export quota under a scandal-tainted oil-for-food scheme set up by Mr Putin when he worked as head of the city administration’s foreign economic relations committee in 1991, local parliament records show. The trader also built close ties with Surgutneftegaz, a Kremlin-loyal oil company, inviting speculation he may have built a significant stake there.

Keep in mind, this is just one billionaire in Putin's entourage: consider the spaghetti chart of cross-holdings, ownerships and stakes if one charts Putin with all his closest oligarchs. As for those who ended up "less than close" with Putin, just Google Khodorkovsky.

And somehow the Treasury is supposed to keep tabs on all such relationships and track stakeholder interests which in all likelihood were defined only by a verbal arrangement? Of course, it isn't.

Which is why in tomorrow's round of sanctions, the US Treasury will most likely push further and, as rumored, may go as far as the two most powerful men in Russia (behind Putin of course) - the heads of Rosneft and Gazprom.

Will Jack Lew's department finally sink a battleship in its shotgun approach to isolating the financial pawns, knights, bishops and rooks in Putin's chessgame? And if so, what happens if suddenly Putin realizes that the US financial trap may be getting warmer and warmer, and even the nuclear option is being contemplated. Will that be enough to force the former KGB spy to backtrack after over 2 months of opportunities to do just that? Somehow we doubt it, and in fact it will likely accelerate the Russian offensive both in the Ukraine and elsewhere around the world.

If nothing else, though, in a few more months of escalating sanctions of those most near and dear to Putin, if not Putin himself, the world may finally have its first official glimpse of what and where are "Putin's billions."