A20 EZ RE THE WASHINGTON POST.WEDNESDAY, MARCH 2 , 2022
russia invades ukraineBY ROSALIND S. HELDERMAN
AND TOM HAMBURGERRussian aluminum magnate
Oleg Deripaska was formally sub-
ected to sanctions by the U. S.
government in 20 18, and two
mansions he is linked to in the
United States were searched by
the FBI last year.
But officially, the two proper-
ties — including a 23,000-square-
foot, seven-bedroom mansion in
Washington’s swanky Embassy
Row neighborhood — are held in
the names of anonymous limited
liability corporations. And a Deri-
paska spokeswoman insisted last
year that they are owned by rela-
tives of the aluminum magnate,
not the billionaire facing sanc-
tions.
Property r ecords show that nei-
ther home has been seized or
changed hands in the nearly four
years since the United States for-
mally moved against Deripaska,
considered one of Russian Presi-
dent Vladimir Putin’s closest al-
lies.
Deripaska’s U. S. property hold-
ings demonstrate the difficulty
facing the United States and other
countries in pursuing and seizing
the vast overseas assets of Putin’s
inner circle, as the Russian oppo-
sition and nongovernmental ad-
vocacy groups have urged for
years to r aise pressure o n Putin to
curb his international and domes-
tic aggression.
Experts say it is not yet clear
whether the sweeping punitive
financial measures imposed by
the United States and other West-
ern leaders in response to Putin’s
invasion of Ukraine will have sig-
nificant effects on Russian money
held in the United States. Some
said they believed Putin’s closest
allies have largely avoided U. S.
markets in recent years as ten-
sions have risen between the
United States and Russia — and,
like Deripaska, have particularly
avoided holding assets in their
own names that would make
identification and seizure easy.
“The Deripaska case illustrates
how Russian oligarchs can evade
sanctions and law enforcement by
using shell companies and family
members to control assets in the
West,” s aid Nate Sibley, a r esearch
fellow at Hudson Institute’s Klep-
tocracy Initiative.
In other ways, the punishing
financial measures being im-
posed by Western leaders on Rus-
sia — which have already devas-
tated the Russian economy —
could have rippling effects
through the United States.
Some U. S. companies that do
business in Russia or have invest-
ments in the country have been
racing to voluntarily divest. Oth-
ers have cut ties with Russian
clients because sanctions require
it. But the impact of the sanctions
in the United States is likely to go
beyond these symbolic and legal
actions.
“This is going to be costly” to
the United States, said Schehe-
razade Rehman, professor of in-
ternational finance at George
Washington University. There
will be a slowdown in growth as
sanctions take effect, she said.
“Then there may be price increas-
es and shortages that effect key
sectors of the economy.’’
Representatives of several pub-
lic pension funds in the United
States said this week that they
were exploring divesting from
Russian holdings, particularly in
companies that have been hit by
U. S. sanctions. On Tuesday, trust-
ees of the New York City Police
Pension Fund voted to divest from
securities issued by Russian com-
panies. Also Tuesday, C onnecticut
Tr easurer Shawn T. Wooden an-
nounced he had directed state
pension funds to divest the
$218 million they hold in Russian-
owned companies. “The Ukraini-
an people are experiencing anassault on their freedom & suffer-
ing devastating human loss due to
an unprovoked & unjustified at-
tack by Russia,” he wrote Tuesday
on Twitter.
Officials in Maryland and Colo-
rado have also said they were
examining the issue.
A series of states that sell alco-
hol through government-owned
stores, including New Hamp-
shire, Ohio, Pennsylvania, Vir-
ginia and Utah, also announced
they were removing Russian-
sourced liquor — particularly
vodka — from their shelves.
Washington’s influence indus-
try has also been affected. Several
prominent Washington lobbying
and law firms that represented
Russian banks and companies
targeted with sanctions have ter-
minated their contracts — in
some cases because the law re-
quires it, unless a special license is
granted by federal regulators.
For example, the lobbying firm
BGR Government Affairs an-
nounced it was ending its work
with the Nord Stream 2 pipeline
project, which is controlled in
part by Russian energy corpora-
tion Gazprom, which President
Biden subjected to sanctions. The
exit of BGR and other firms work-
ing on the pipeline was first re-
ported by Politico. On Tuesday,
BGR’s Jeffrey Birnbaum issued astatement confirming that “BGR
is ending its engagement with the
Nord Stream 2 gas pipeline proj-
ect in compliance with economic
and trade sanctions announced
by the U. S. government.”
Similarly, Mercury Public Af-
fairs terminated its relationship
with Sovcombank, for which it
had lobbied to avoid sanctions,
and En Plus Group, a metals and
energy firm once associated with
Deripaska. The termination was
confirmed by Mercury’s John Gal-
lagher, citing Foreign Agent Reg-
istration Act records. He said the
firm declined to comment further.
The law firm Sidley Austin an-
nounced that it had terminated
relationships with another Rus-
sian bank, VTB Group. “VTB
Group is no longer a client of
Sidley Austin LLP in compliance
with U. S. sanctions,” a firm
spokesman said. VTB had been
paying Sidley $30,000 a month
between late April and Septem-
ber, according to the firm’s d isclo-
sure under the Foreign Agents
Registration Act.
Even American businesses
with only symbolic ties to Russia
took pains to distance themselves
from Putin’s Ukraine offensive. A
restaurant owner in Texas told the
Austin American-Statesman that
she was changing the name of her
business from The Russia Houseto The House in solidarity with
Ukrainians. “I am doing this for
the people of Ukraine, because
the name is painful,” owner Varda
Monamour told the Austin paper.
Tom Firestone, a former resi-
dent legal adviser at the U. S. Em-
bassy in Moscow and a partner at
the law firm Stroock & Stroock &
Lavan, said he believed there
would be pressure on American
businesses to take such voluntary
and sometimes symbolic steps to
show solidarity while Ukrainians
are under fire. The pressure could
come, he said, “as part of their
corporate responsibility policies,
not to be doing business that [is]
seen as supporting the Putin re-
gime.”
Western leaders h ave been par-
ticularly keen to impose a finan-
cial crunch on Russia’s wealthy
elite, targeting a network of politi-
cally connected business leaders
seen as key allies to Putin. The
European Union on Monday an-
nounced it was imposing new re-
strictions on a list of more than a
half-dozen Russian b usiness lead-
ers, and the Biden administration
said Saturday it was targeting
Russian officials and their fami-
lies.
Experts said the key to giving
the new measures teeth will be an
effort to track down and expose
worldwide holdings of Russian
business leaders, including luxu-
ry p roperties in London and other
major European capitals and
yachts parked in ports around the
world.
In the meantime, oligarchs in
the United States and abroad have
shielded assets such as high-end
property, yachts and jets by using
anonymous companies and some-
times formally passing ownership
to family members.
In the United States, the Tr eas-
ury Department is still working to
implement a law passed by Con-
gress in December 2020 to require
anonymous shell companies to
disclose their true owners to the
government.
The U. S. properties connected
to Deripaska illustrate the point.
Deripaska was among seven
Russian oligarchs targeted with
sanctions in 2018 by the U. S.
Tr easury Department, which at
the time cited Russia’s worldwide
“malign activity,” including its in-
terference in the American presi-
dential election in 2016 and other
cyberattacks.
By that time, Deripaska was
already an infrequent visitor to
the United States, generally pre-
vented by officials from o btainingentrance visas but traveling from
time to time using Russian diplo-
matic credentials, court docu-
ments show.
T he Washington mansion and
another in Manhattan were
searched by the FBI in October. A
person familiar with the investi-
gation, who spoke on the condi-
tion of anonymity because the
case is pending, said at the time
that the law enforcement activity
was part of an ongoing criminal
investigation. An FBI spokesman
declined t o comment Tuesday.
Even so, neither mansion has
so far been seized nor been sold.
Property r ecords show the New
York City home, a three-story
townhouse in Greenwich Village
that once housed a speakeasy, was
purchased in 2006 by a limited
liability corporation called Luci-
na International. The company
has been linked in court filings to
a Deripaska cousin.
The Washington mansion, lo-
cated about a mile from the Rus-
sian Embassy and featuring Ital-
ian marble floors and a chandelier
that once hung in the Paris Opera
House, was also purchased in
2006 by a different company
called Hestia International.
The Washington Post revealed
in 20 17 that Deripaska was con-
nected to the home, directed ma-
jor renovations there and visited
several times since 20 10. A New
York-based company called
Grace town that oversaw the prop-
erty was run by a Deripaska busi-
ness associate, corporate filings
showed.
A spokeswoman for Deripaska,
Larisa Belyaeva, said last year that
the FBI searches were connected
to U. S. sanctions but said the
homes belonged to relatives of
Deripaska. She reiterated in a text
message Tuesday, “these houses
do not belong to Mr. Deripaska.”
Deripaska on Saturday posted
on social media calling for the war
to end “as fast as possible.”
Firestone said Russian oli-
garchs have generally worked to
hide any American assets they
may hold. “To the extent they own
anything in the U. S., it’s behind a
daisy chain of multiple offshore
accounts,” he said.
But, he added, law enforcement
may well now embark on the diffi-
cult task of finding hidden assets.
“It could certainly be done. It’s
hard work. It takes time,” he said.
“But it can be done with enough
effort.”Devlin Barrett contributed to this
report.Despite sanctions, Russian wealth in U.S. t ough to reach
MANUEL BALCE CENETA/ASSOCIATED PRESS
FBI agents participate in a search in October of a D.C. mansion linked to O leg Deripaska, a Russian
aluminum magnate, but officially held in the name of an anonymous limited liability corporation.BY ROBYN DIXONmoscow — When Russians
showed shame and grief over
President Vladimir Putin’s inva-
sion of Ukraine, his most loyal
propagandist was withering: “If
you are now ashamed that you
are Russian, don’t worry, you’re
not Russian,” the editor in chief
of state-owned broadcaster RT,
Margarita Simonyan, sniped on
Twitter.
The invasion that united
NATO and Europe on sanctions
as never before has also divided
Russians. On one side: an out-
ward-looking urban middle class
who vacation in Europe and
while away spend time scrolling
through Western apps on their
iPhones and send their children
to universities abroad. On the
other: Putin loyalists, many less-
educated Russians or older peo-
ple raised on Soviet propaganda.
In Kamenka village in Russia’s
southern Rostov region, close to
the U kraine border, A lexei Safon-
ov, 47, was horrified at the news
that Russia began its attack last
week. Then he got to work as
chief engineer at an ice-skating
rink and was sickened to find his
colleagues celebrating.
“The feeling was it’s high time
we showed what we could do to
those ‘Nazis,’ so it’s high time we
started this operation,” he said,
referring to Putin’s claim that he
would “denazify” Ukraine a nd its
leadership. “That made me feel
really dejected and depressed.
People around me are enthusias-
tic about it. When I look at them,
I don’t see the light at the end of
the tunnel.”
That night, he wrote an an-
guished social media post, la-
menting the “horror and shame”
of a war that “will be catastroph-
ic.” It initially received 19 com-
ments, most attacking him. A
friend, a local policeman,
warned him to delete it, but he
refused.
At work the next day, the
general director of the complex
stormed in, shouting and swear-
ing at Safonov.
“He said, ‘Either you remove
that post or we don’t n eed p eople
like you around here.’ He told me
to sign a resignation letter, but I
just packed up and left,” Safonov
recounted.
Later, three police armed with
machine guns came to his home,
arrested him and charged himwith showing disrespect for soci-
ety and the Russian Federation.
He faces court on Friday and
fears that authorities may con-
coct a more serious charge.
The war’s seismic impact is
just beginning to dawn on many
Russians, deepening these fis-sures in society. State television
hosts tell viewers that the sanc-
tions prove the West hates Rus-
sians.
Europe’s airspace slammed
shut, and Russia’s now-toxic
brand was shunned in sports,
chess, ice hockey, football, motor
racing, and by art galleries, Har-
ley Davidson, Disney, the film
“The Batman,” the Eurovision
song contest, luxury car compa-
nies, the Maersk shipping line,
the International Olympic Com-
mittee, major oil companies,
Norway’s sovereign wealth fund
and many more.
The cascading effect was s wift.
Google blocked YouTube chan-
nels connected with state-run
media RT and Sputnik. Even
Europe’s far-right leaders and
strongmen in Central and East-
ern European balked. The ruble
crashed and the Central Bank
stopped trading for two days as
Putin barred Russians from de-
positing foreign exchange into
accounts or sending it abroad.
When Foreign Minister Sergei
Lavrov stood up to speak at theGeneva Disarmament Confer-
ence on Tuesday, almost every
delegate stood up and left the
hall. When senior official Vy-
acheslav Volodin flew h ome from
an official trip on the weekend,
his plane was turned away from
airspace in Sweden and Norway.
To be fair, outside of liberal
circles, the public criticism is
still a relative trickle in a country
where dissent is not tolerated. It
has, however, included a few
powerful oligarchs, although
they have little to no sway over
Putin.
Oleg Deripaska, a billionaire
industrialist, called for peace “as
soon as possible” on the Tele-
gram messaging app. Ukrainian-
born mogul Mikhail Fridman
wrote a letter to staff at Letter-
One, first reported by the Finan-
cial Times, saying that war could
never be the answer.
State television host Ivan Ur-
gant posted a black s quare on his
Instagram feed on invasion day,
along with the words “Fear and
Pain. No to war.” His show the
next day was canceled, and it’s
not clear it will ever air again.
Even the daughter of Kremlin
spokesman Dmitry Peskov post-
ed a black banner on social
media with the words “No to
war,” though she swiftly deleted
it.
Anissa Naouai, chief executive
of Maffick, a company with RT
links and one of Putin’s staunch-
est defenders for years, an-
nounced Tuesday she was “cut-
ting all ties with RT,” posting a
black banner on Twitter with the
words “Russia without Putin.”
Apolitical people felt the need
to make their opposition clear.
Peter Svidler, a Russian chess
grandmaster, usually tweets
about chess, Wordle and dogs.
But l ast week he wrote t hat it was
impossible to stay silent. “No to
war,” he posted.
“Let’s at least get some things
stated live on air. I do not agree
with the war my country is
waging in Ukraine. I do not
believe Ukraine, or Ukrainian
people, are my enemies, or any-
body’s enemies,” he said Tuesdayon a Chess 24 stream.
Almost 6,50 0 protesters in
dozens of cities have been arrest-
ed since the invasion, according
to rights group OVD-Info. Psy-
chiatrists, doctors, architects,
journalists, actors, historians,
computer programmers, direc-
tors, Orthodox priests and others
signed open letters protesting
the war.
If Putin did n ot change course,
Russia would “take its place as
an aggressor and rogue state, a
state that will bear responsibility
for its crimes for generations,”
said Ivan Zhdanov, director of
the Anti-Corruption Foundation,
headed by jailed dissident Alexei
Navalny. Zhdanov spoke in a
video urging a national cam-
paign against disinformation.
But as Russia’s economy came
under intense pressure from
sanctions, Russian officials dou-
bled down and hardened their
rhetoric.
In a Russian Foreign Ministry
tweet Monday, spokeswoman
Maria Zakharova questioned if
“the process of denazification in
Germany after the end of World
War II” was really complete,
commenting on Germany’s deci-
sion to send arms to Ukraine.
Lawmaker Andrei Klimov
called for treason charges
against those who “cooperated
with foreign anti-Russian cen-
ters bringing obvious detriment
to our national security.”
The older generation of Rus-
sians who lap up state television
fear the West and admire Putin
for the stability he brought after
the chaotic post-Soviet 199 0s.
But the predictability is gone.
The ice-rink engineer Safonov
said ordinary low-income Rus-
sians would be most hurt, but
wealthy elites “will be fine as
usual,” adding, “Maybe they will
be a little shaken but not much,
I’m sure.
“To Russia, it means we are
going back into the caves,” he
said. “I think it’s like the end, for
Russia.”Natasha Abbakumova contributed to
this report.Some Russians praise Putin, while others risk going to jail to condemn him
AGENCE FRANCE-PRESSE/GETTY IMAGES
A woman walks in front of Russian armored vehicles at a railway station in the Rostov region of
southern Russian last week. The invasion that has united NATO and Europe has also divided Russians.FOR THE WASHINGTON POST
Police put protesters in a police vehicle in St. Petersburg last week.
Thousands of Russian antiwar demonstrators have been arrested.