BY AMY MACKINNON
Just after returning to Russia last week after a near-fatal poisoning at the hands of Russian agents, Navalny released his biggest expose yet: an extensive investigation of what he claims is Putin’s “palace” on the Black Sea. The sprawling complex is estimated by Navalny’s Anti-Corruption Foundation to be worth $1.4 billion.
While pledging loyalty to a regime increasingly hostile to the West, Russian oligarchs and political elites have long enjoyed the lifestyle and financial security of stashing their cash in Europe and the United States. An analysis by Columbia University professor James S. Henry for the Tax Justice network estimates that some $800 billion to $1.3 trillion in Russian wealth is parked outside of the country, much of it believed to be illicit.
And Putin is continuing his efforts to whitewash the regime’s face in the West. Putin’s spokesman Dmitry Peskov confirmed on Monday that the Russian president will speak at the World Economic Forum in Davos, Switzerland, on Wednesday. The announcement came the same day as European foreign ministers met in Brussels to discuss their response to Navalny’s arrest and the police crackdown on protesters.
“These people should lose the opportunity to use the benefits of the West and Western democratic societies to export dirty money, dirty capital, and dirty corrupt practices to the West,” said Mikhail Khodorkovsky, an exiled Russian businessman and founder of the pro-democracy initiative Open Russia, in a call with journalists on Saturday.
In the nearly seven years since Russia invaded Ukraine and annexed Crimea, some 700 companies and Russian individuals, including some of Putin’s close allies, have been hit with U.S. sanctions. But to little avail. Shortly before his return to Russia, Navalny told the executive director of his Anti-Corruption Foundation, Vladimir Ashurkov, that sanctions weren’t working “because the West has refrained from sanctioning the people with the money,” Ashurkov wrote in a Facebook post. He said that Navalny had drawn up his own list of wealthy and politically connected Russians who he believed should be sanctioned.
Those calls have been reinforced by Navalny’s latest expose, which garnered millions of views. His video investigation of Putin’s Black Sea estate, replete with its own “Aqua disco,” strip club, and onsite winery, included detailed allegations of how Putin’s close allies have helped bankroll his decadent lifestyle. It underscored how widespread corruption has helped to create and sustain Russia’s political status quo—and by extension its disruptive policies.
“Only Russians can, should—and, I may add, will—change the political situation in Russia,” said the Russian dissident Vladimir Kara-Murza, the vice president of the Free Russia Foundation.
“The only thing that we do actually ask of the West is that it stay true to its own values, and that it stop enabling the Putin regime, the Putin kleptocracy, by allowing Kremlin cronies to stash away the money that they’re looting from the people of Russia in Western countries,” said Kara-Murza, who was himself poisoned twice by an unknown substance.
U.S. President Joe Biden is expected to make anti-corruption efforts a key part of his foreign policy. And on Capitol Hill, there is a growing bipartisan consensus that kleptocracy presents a national security threat, with legislation banning shell companies passed as part of the annual defense spending omnibus late last year.
That push comes as Biden is taking a tougher line against Russia than his predecessor. On his first full day in office, Biden ordered a series of intelligence reviews into Navalny’s poisoning, the SolarWinds hack on federal agencies, and reports that Russia paid bounties to the Taliban to kill U.S. troops.
In response to Navalny’s poisoning and arrest, “there’s a need for Congress to move forward themselves, putting on the table possible sanctions,” said Rep. Bill Keating, the chairman of the Europe, Eurasia, energy, and environment subcommittee of the House Foreign Affairs Committee. “And they can be not only for violations of the Chemical Biological Weapons Act, but also violations of Magnitsky,” he said, referring to legislation passed in 2012 that gives the U.S. government the ability to sanction Russian officials involved in human rights abuses and major corruption.
“We don’t need new legislation. We just need to upgrade the application, the implementation of the Magnitsky Act so it includes the billionaire cronies of Vladimir Putin,” said Bill Browder, the American-born financier who lobbied for the act.
But it’s unclear whether broad-brush sanctions against this elite would actually change the Kremlin’s behavior when years of targeted sanctions have had little effect.
“The evidence on sanctions is that they’re most likely to work when it’s clear what they’re in response to, and what it takes to lift them,” said Olga Oliker, the director of the Europe and Central Asia Program at the International Crisis Group. “The idea that the oligarchs will somehow put pressure on the government is not supported by the reality up until now. I think most of these people are much more motivated by their relationship to the Russian government than they are by a fear of sanctions.”
“I understand the need to clamp down on kleptocracy, that’s a separate issue. But to think that would suddenly lead to Navalny being released from jail, it doesn’t work like that,” said Angela Stent, the director of the Center for Eurasian, Russian and East European Studies at Georgetown University.
“It’s not as if they’re going to get together and say, ‘We need a new president,’” said Stent, the author of Putin’s World: Russia Against the West and With the Rest.
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