Why tracking Putin’s wealth is so difficult

Buried in a 421-page legal filing in an obscure court case is a single sentence, offered almost as an afterthought, about a meeting at a Geneva restaurant where two businessmen chatted about “a yacht which had been presented to Mr. Putin.”

The passing reference, cited in a 2010 judge’s decision in London on a financial dispute involving a shipping company, is the rare bit of public evidence directly linking President Vladimir Putin of Russia to any of the luxury boats, planes or villas associated with him over the years. It has taken on new significance as U.S. and European authorities pursue the hidden wealth of Putin and people close to him.

But the British court document also holds a clue to why it has been so hard to connect the Russian president to his rumored riches. The yacht, called the Olympia, was managed by a company in Cyprus, where corporation filings show that the true owner was not Putin — it was the Russian government.

Indeed, it is one of many extravagant assets long speculated to be Putin’s that actually are owned or controlled by the state, showing how much the private interests of the president and his inner circle have merged with those of the government he has dominated for two decades.

The United States and its allies have created a multinational task force to track and seize assets of at least 50 wealthy Russians, including Putin. But some analysts question whether it will have much effect on the Russian president, who has never been found to personally own much worth confiscating.

While there has been much media and public discussion that oligarchs and old Putin friends could be holding valuable property secretly on his behalf, or keeping his cash for him in offshore companies and Swiss bank accounts, many of his more obvious luxuries are embedded in stateowned enterprises and largely beyond the reach of Western sanctions.

Alina Polyakova, an expert on Russian foreign affairs who leads the Center for European Policy Analysis, said that because government resources and agencies most likely were used to shield at least some of his purported wealth, targeting Putin personally with sanctions was mainly symbolic.

“To get to him, as well, we’d have to sanction the entire Russian government,” she said.

Economically blocking the whole of the Russian state would mean, for instance, fully blacklisting Gazprom, one of the world’s largest energy companies and a major source of natural gas in Europe.

Gazprom figures in any calculus of Putin’s possible wealth. Although luxury real estate would seem to have little to do with its core mission, the state-run gas company built a plush hideaway that the Russian president enjoys in a mountainous region of Siberia.

The mountain resort was among 20 properties described in the 2012 report by Putin critic Boris Nemtsov as being available to Putin, along with dozens of luxury aircraft, four yachts and 11 wristwatches with a retail value of nearly $700,000, all allegedly paid for with public funds.

Nemtsov was assassinated in 2015.

Because of the efforts by the few independent news organizations operating in Russia before the recent crackdown on free speech, as well as opposition voices such as Nemtsov and Alexei Navalny, the notion that Putin is living large on the taxpayers’ dime is hardly a secret. The Kremlin has long denied that he lives beyond his means — officially, he collects a salary of about $140,000 and has a small apartment in Moscow. But his spokesperson told a Russian newspaper that Putin also uses stateowned residences and vehicles.

The presence of Putin’s protective detail has been seen as a telltale sign of his hidden ties to various extravagances. Sergei Kolesnikov, a former business partner of a Putin ally, wrote an open letter in 2010 asserting that government funds had been diverted to help develop a $1 billion estate on the Black Sea.

Most recently, Navalny’s team reported that it had linked crew members on a $700 million superyacht to the same Kremlin protective detail.