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| Ibid. 169 Jake Bernstein et al., All Putin’s Men Secret Records Reveal Money Network Tied to Russian Leader The Panama Papers, Apr. 3, 2016. Steven Lee Myers et al., Private Bank Fuels Fortunes of Putin’s Inner Circle The New York Times, Sept. 27, 2014. Jake Bernstein et al., All Putin’s Men Secret Records Reveal Money Network Tied to Russian Leader The Panama Papers, Apr. 3, 2016. Sergei Magnitsky Rule of Law Accountability Act, PL. 112-208, Title IV, Enacted Dec. 14, 2012 (originally introduced by Senator Ben Cardin as S. 1039, May 19, 2011). US. Treasury Department, Office of Foreign Assets Control,‘‘Sanctions List Search https://sanctionssearch.ofac.treas.gov (search results under Program ‘‘MAGNIT’’ and the four Ukraine-related Executive Orders, as of Dec. 21, 2017). gains, often made through unscrupulous means. 167 As Putin took power, he seized on this resentment to assert the importance of the state over the individual. The new class of ‘‘bureaucrat-entre- preneurs’’ that emerged, former Soviet apparatchiks drawn disproportionately from the ranks of the security services, were rewarded with complete power over any individual and a helping of corrupt profits as long as they served state interests and remained loyal to the top of this pyramid scheme—Putin himself. 168 As Putin gained, so too did his loyalists, helping to reinforce the system and deter jealous challengers to his rule. Many of these insiders trace their relationships with Putin back to a cooperative he joined in the mid-1990s with seven other owners of modest vacation homes a few hours outside of St. Petersburg, which they named Ozero (Lake. Putin carefully cultivated and relied on these bonds during his rise to power. He helped one such individual, Yury Kovalchuk, to take ownership in the early sofa small firm, Bank Rossiya, whose shareholders included other members of the Ozero cooperative (see Chapter 4 for more on the Ozero cooperative and Bank Rossiya). 169 With Kremlin help to steer lucrative customers its way, obtain state-owned enterprises at bargain-basement prices, and obscure its financial holdings through murky transactions and shell companies, Bank Rossiya grew exponentially, and along the way also amassed significant media holdings that helped the Kremlin influence public percep- tions. 170 Putin has similarly relied on other longstanding friends, such as his former judo sparring partner Arkady Rotenberg, who controls shadow companies that allegedly made huge payments into Putin’s business network, including a loan to an offshore company controlled by Bank Rossiya with no apparent repayment schedule. 171 A number of these insiders have become the targets of international sanctions after the Russian invasion and illegal annexation of Crimea in 2014. Powerful Russian government operators have also been the target of US. sanctions under the Sergei Magnitsky Rule of Law Accountability Act of 2012, which requires the United States government to sanction Russian officials connected to the violent death in detention of lawyer and whistle- blower Sergei Magnitsky, as well as other officials who are gross violators of human rights in Russia. 172 As of the end of 2017, the US. government had sanctioned a total of 49 individuals under the Russia-related Magnitsky Act and 569 individuals or entities under existing Ukraine-related sanctions. 173 The Ukraine-related sanctions list in particular reads like a who’s-who of Putin insiders Arkady Rotenberg, Putin’s childhood friend, along with Rotenberg’s VerDate Mar 15 2010 04:06 Jan 09, 2018 Jkt PO 00000 Frm 00038 Fmt 6601 Sfmt 6601 S:\FULL COMMITTEE\HEARING FILES\COMMITTEE PRINT 2018\HENRY\JAN. 9 REPORT FOREI-42327 with DISTILLER 33 174 Ibid.; James Carli, ‘‘Aleksandr Dugin: The Russian Mystic Behind America’s Weird Far- Right Huffington Post, Sept. 7, 2017. Steven Lee Myers et al., Private Bank Fuels Fortunes of Putin’s Inner Circle The New York Times, Sept. 27, 2014. Putin Signs Law Granting Sanctions-Hit Russians Tax Breaks Radio Free Europe/Radio Liberty, Apr. 4, 2017. Andrew E. Kramer, In Russia, a Bribery Case Lifts the Veil on Kremlin Intrigue The New York Times, Oct. 21, 2017. David Filipov, Russia Dismisses Sweeping Corruption Allegations Against Medvedev,’’ The Washington Post, Mar. 5, 2017. Statement of Boris Nemtsov, Co-Chairman, Republican Party of Russia, A Dangerous Slide Backwards: Russia’s Deteriorating Human Rights Situation, Hearing before the US. Senate Committee on Foreign Relations, June 13, 2013. Matthew Pennington, US. Levies Sanctions Against Myanmar General, Dozen Others Associated Press, Dec. 21, 2017. brother Boris and nephew Roman Yury Kovalchuk, Vladimir Yakunin, and Andrei Fursenko of the Ozero cooperative and Kovalchuk’s nephew Kirill Kovalchuk; Kremlin insiders Vladislav Surkov and Vyacheslav Volodin; Rosneft chairman and head of the Kremlin’s ‘’siloviki’’ faction of security officials-turned-politicians Igor Sechin; billionaire businessman Gennady Timchenko; and even Aleksandr Dugin, whose philosophy of ‘‘Eurasianism’’ pushes for Russia to extend an ultra-nationalist, neo-fascist worldview across the globe. 174 Putin sought to playoff the sanctions as a mere annoyance and soften the blow through directing kickbacks to those impacted, for example by shifting valuable state contracts to Bank Rossiya weeks after it was sanctioned. 175 The Duma also passed a law affording tax privileges to sanctioned individuals. 176 But the combination of sanctions and low oil prices have nevertheless been a dragon the Russian economy in recent years. As The New York Times noted, this has reduced the country’s most privileged players . . . to fighting over slices of a smaller economic pie, seeking an advantage over rivals through the courts and law enforcement officials who are widely seen as vulnerable to corrup- tion.’’ 177 The increasing exposure of Putin’s network has helped to fuel demand for more transparency and questions over the assumed inviolability of Putin’s leadership. A minute video released by Navalny’s Anti-Corruption Foundation in March 2017 alleging lavish luxury holdings by Prime Minister Dmitry Medvedev has generated millions of views on YouTube and was seen as instrumental in bringing thousands of Russians to the streets in protests during the year. 178 Moreover, the prospect of consequences—whether inside Russia or abroad—for the Putin regime’s graft and abuses is helping to chip away at the culture of impunity that has stymied hopes in Russia fora just, secure society governed by the rule of law. In testimony to the US. Senate Foreign Relations Committee nearly two years prior to his murder, opposition leader Boris Nemtsov described the Magnitsky Act as the most pro-Russian law in the history of any foreign parliament for its capacity to end impunity against crooks and abusers.’’ 179 Indeed, since the Act’s passage in 2012, the US. Congress has subsequently passed a global version of the sanctions that was signed into law in 2016, and by the end of 2017 the US. government had sanctioned one Russian individual, Artem Chayka, under this law for significant cor- ruption. 180 Meanwhile, parliaments in Estonia, the United Kingdom, and Canada have passed legislation similar to the US. VerDate Mar 15 2010 04:06 Jan 09, 2018 Jkt PO 00000 Frm 00039 Fmt 6601 Sfmt 6601 S:\FULL COMMITTEE\HEARING FILES\COMMITTEE PRINT 2018\HENRY\JAN. 9 REPORT FOREI-42327 with DISTILLER 34 The Global Magnitsky Human Rights Accountability Act, PL. 114-328, Subtitle F, Title XII, Enacted Dec. 23, 2016 (originally introduced by Senator Benjamin L. Cardin as S, Jan. 28, 2015); The US Global Magnitsky Act Human Rights Watch, Sept. 13, 2017; Mike Blanchfield, Canada Passes Magnitsky Human Rights Law, Sparking Russian Threats The Canadian Press, Oct. 18, 2017. Vladimir Kara-Murza, Answering the Kremlin’s Challenge World Affairs Journal (2017). Magnitsky laws. 181 Vice Chairman of the Open Russia democratic opposition platform Vladimir Kara-Murza has urged more expansive application of US. and European targeted individual sanctions, noting that while the task of building a more just Russia lies with the country’s own citizens, outsiders should not enable Mr. Putin and his kleptocrats by providing safe harbor for their illicit gains.’’ 182 VerDate Mar 15 2010 04:06 Jan 09, 2018 Jkt PO 00000 Frm 00040 Fmt 6601 Sfmt 6601 S:\FULL COMMITTEE\HEARING FILES\COMMITTEE PRINT 2018\HENRY\JAN. 9 REPORT FOREI-42327 with DISTILLER (35) Fletcher Schoen & Christopher Lamb, Deception, Disinformation, and Strategic Commu- nications: How One Interagency Group Made a Major Difference, Institute for National Strategic Studies, at 4, 20, 34 (June 2012). Vladimir Putin, Interview with Megyn Kelly, NBC, June 5, 2017, http://en.kremlin.ru/ events/president/news/54688. 185 Alexey Kovalev & Matthew Bodner, The Secrets of Russia’s Propaganda War, Revealed The Moscow Times, Mar. 1, 2017. Thomas Boghardt, Soviet Bloc Intelligence and Its AIDS Disinformation Campaign Stud- ies in Intelligence, Vol. 53, No. 4, at 1-2 (Dec. 2009). Download 0.63 Mb. Share with your friends:
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