Monday, March 21, 2022

Why the Russian Oligarchs Won’t Defy Putin

By Jim Geraghty

Monday, March 21, 2022

 

I’m all for seizing yachts and properties, freezing financial assets, sanctioning, and generally making life miserable for Russian oligarchs close to Putin. They’ve feasted on Russia’s economic and natural resources for three decades, all the while obeying and enabling a malevolent thug’s ruthless pursuit of ever-expanding power. It is good to send these men a clear signal that their time of feasting is over and that none of them are safe from the consequences of their actions.

 

But it is likely an American misperception to think that the oligarchs have a power base independent of Putin, or that they are likely to go to Putin and pressure him to stop the invasion of Ukraine. The oligarchs are in the positions they’re in precisely because they’re the last people in the world who would ever stand up to Putin.

 

Pressuring the oligarchs to change Putin’s mind is like pressuring the Dallas Cowboys ticket-sales manager to change team owner Jerry Jones’s mind. Could it theoretically happen? Sure, but it is extremely unlikely.

 

If you’ll pardon one more quote from Fiona Hill and Clifford Gaddy’s biography of Putin, Mr. Putin: Operative in the Kremlin:

 

The special closed world of the oligarchs at the core of Putin’s informal system echoes the relationship between the tsar and his elite servitors. Neither the current crony oligarchs nor the original post-Soviet oligarchs are oligarchs in the Western sense. They are not a single group or even a set of groups with an independent base of power. They are all part of Putin’s one-boy network. They do not jockey for power with Putin, although they do clearly try to get access to the person of the president to transmit their views and concerns and have some influence over his decisions. As in earlier, historical versions of this system, their positions and status are entirely dependent on Putin. So is the oligarchs’ property — it is a privilege that flows from their relationship with the president. As president, Putin protects the oligarchs and his inner circle. The oligarchs steward and manage the key sectors of the Russian economy. They pay formal taxes and also deliver tribute to Putin and the state through the informal systems of taxation. They prosper because they deliver and precisely because they have Putin’s protection.

 

Putin’s’ informal, unofficial system and the formal world of the state apparatus both depend upon unity of command. Putin may have rejected the idea of a unipolar world dominated by the rules and institutions of the United States and its Western allies, but he is very much a unipolar president. Others can bring ideas to the table and criticize the president during the deliberative part of the policy process, but his word is final. What he says, goes, once the decision is made. . . . In Putin’s conceptualization of himself as CEO of Russia, Inc., and in his conceptualization of the vertikal vlasti” — a top-down, strict chain of command — “everyone beneath him is an operational manager. They implement, they do not set the strategic direction.”

 

According to an anecdote described by Ben Mezrich, author of Once Upon a Time in Russia, a profile of Russia’s oligarchs written in 2015, Putin established who was boss practically from Day One:

 

In the first week, Putin invited all of the oligarchs out to Stalin’s old house. This is a place where there’s like bullet holes in the walls where people used to get lined up and shot. He had all the oligarchs sit down at a table. He got up in front of them, and he said, you’ve all made tons of money. You’ve all done really, really well. You can keep your money. But from here on out, you stay out of my way. All the oligarchs who stayed out of his way are the oligarchs who are around today doing very well, and the oligarchs who did not, who spoke up, all died or were exiled — were found hanging in their bathroom or fell down an elevator shaft or fell out of a helicopter. It was not good business going up against Putin. Putin very quickly became the most powerful oligarch of all.

 

Mezrich says the oligarchs probably secretly think the Russian invasion of Ukraine is a disaster, but he doubts that they’ll stand up to the Russian leader much:

 

Putin is so powerful. He’s weeded out everyone who’s an enemy. The oligarchs who remain are utterly loyal to him, and, honestly, very afraid of him. . . . These sanctions, I think, are pretty intricate when they go after these people who have so little to gain from what’s going on right now and have everything to lose. I do think you’re seeing cracks appear, and I do think as a class, the oligarchs want this war to end.

 

But there’s little reason to think that Putin respects the opinions of these men, much less that he will listen when their advice is contrary to his desires. Last week in a speech, Putin sneered that Western powers are betting “on national traitors — on those who earn money here, with us, but live there”:

 

[The West] will try to bet on the so-called fifth column, on national traitors, on those who earn money here, with us, but live there, and “live” not even in the geographical sense of the word, but in their own way. thoughts, in his slavish consciousness. I am not at all judging those who have a villa in Miami or the French Riviera, who cannot do without foie gras, oysters or so-called gender freedoms. The problem is absolutely not in this, but, I repeat, in the fact that many of these people, by their very nature, are mentally located precisely there, and not here, not with our people, not with Russia. This is what they think — in their opinion! — a sign of belonging to a higher caste, to a higher race. Such people are ready to sell their own mother, if only they were allowed to sit in the hallway of this very highest caste. They want to be like her, imitating her in every possible way. But they forget or do not understand at all that if they are needed by this so-called higher caste, then as expendable material in order to use them to inflict maximum damage on our people.

 

The U.S. and its allies are putting a lot of effort into squeezing these oligarchs, creating “Task Force Kleptocapture.” In fact, the Department of the Treasury has the authority to offer rewards of up to $5 million for “information leading to seizure, forfeiture or repatriation of stolen assets, linked to corruption involving the government of the Russian Federation.” The department has a list of 50 targets and it has publicly released 28 names of individuals from the list who have been sanctioned by multiple jurisdictions. These include the U.S., Australia, Canada, France, Germany, Italy, Japan, and the U.K. who are teaming up with the U.S. on the asset hunt.

 

At least some of the oligarchs are likely to respond to their predicament by running away. As Putin pledged a “cleansing” of Russian society, at least four private jets flew from Moscow to Dubai. (A friend of mine who was in Dubai last week said his high-end hotel was full of Russians.)

 

Meanwhile, there’s an excellent chance that those seized yachts will fall into disrepair while in government custody, because the government doesn’t want to use taxpayer dollars for maintenance on some corrupt rich bastard’s yacht, and the corrupt rich bastard doesn’t want to pay for maintenance on a yacht that he can’t use. A wiser, faster-moving government would quickly auction off the seized yachts to raise funds for victims of the war.

 

If the U.S. government and its allies want to seize the assets of corrupt men who profited from relationships with a brutal, autocratic regime, they should go right ahead. There’s some grim satisfaction in demonstrating to these men the ways in which Putin cannot protect them, and that being a yes-man to a malevolent dictator carries a heavy price. But we shouldn’t have any illusions that doing this is likely to pressure Putin to change his mind.

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