It’s been a rough week for Russian Federation President, Vladimir Putin. The European Union imposed sanctions under Euro-Magnitsky; Australia is expected to pass its own Aussie-Magnitsky; and imprisoned anti-corruption crusader, Alexei Navalny, is leading a growing Russian protest movement from behind bars. Oh yeah, Pussy Riot is back!
Putin is considered the richest man in the world for the amount of wealth he controls, not the amount he owns. Alexei Navalny is considered the bravest man in the world for returning to Russia after recovering from Novichok poisoning in Germany. Putin had Navalny’s returning flight diverted to avoid mobs of protestors, then arrested Navalny at the airport.
Never lacking a certain Russian sense of humor, Putin charged Navalny, whom he calls “the blogger,” with violating parole while in a coma being treated from Novichok poisoning in a German hospital. Navalny, not missing a beat, has begun to refer to Putin as “Vlad the Underpants Poisoner” after Navalny tricked a Russian intelligence agent into revealing how the deadly nerve agent had been administered.
Navalny sprang his next trap while in custody. He released a video documentary called “Putin’s Palace” about a billion-dollar private estate on the Baltic Sea built by Russian taxpayers and given to Putin as a gift. Of course, Putin does not own anything; he controls everything. It took him a couple weeks to create an origin fairy tale for his Palace. Russians are not fools. They know corruption when they see it.
They know, for example, that when President Vladimir Putin decided to exercise his control over the Hermitage Capital hedge fund in 2008, siphoning off $230 million of tax payments and beating the company’s 37-year-old accountant to death after a year in confinement, that he did not die trying to escape. Russians are not fools. The accountant’s name was Sergei Magnitsky. In death, he has become one of the most famous Russians in history.
The death of Magnitsky might be the beginning of the end of Putin, just as the death of Jamal Khashoggi might be the undoing of Prince Mohammed bin Salman of Saudi Arabia, who ordered the journalist killed and dismembered at the Saudi embassy in Istanbul on October 2, 2018. The death of Magnitsky turned Bill Browder, Magnitsky’s employer, from an investment banker into an oligarch slayer.
Browder devised legislation that is often described as “surgically precise” for its ability to create sanctions that hit the oligarch, not the people. These sanctions attach to individuals, not countries. They should result in freezing any assets held by the sanctioned persons in the sanctioning country, as well as the prohibition of financial transactions involving sanctioned persons, and the denial of entry into the country.
Those are a lot of words for saying Putin and his pals can no longer pay cash for condos in Trump Tower to launder the hundreds of millions plundered from Hermitage and similar companies. Now they have to build things domestically, like Putin’s Palace or yachts or rocket ships, to launder all the loot. Russia retaliated for the sanctions in 2012 by prohibiting the adoption of Russian babies by U.S. families.
The number one thing President Vladimir Putin wanted from his considerable investment in Donald J. Trump was the elimination of the Magnitsky Act. That’s what the infamous Trump Tower Meeting on June 9, 2016, was all about. Don Trump Jr. and Paul Manafort and Jared Kushner met with representatives from Moscow to discuss “Russian adoptions,” code for the Magnitsky sanctions.
Trump tried to unilaterally remove the Magnitsky sanctions the first week of his presidency. Horrified, Congress passed legislation giving themselves the authority to overrule any sanctions relief enacted by the president. It didn’t stop Donald Trump from lifting sanctions against Russian oligarch and Mitch McConnel supporter, Oleg Deripaska.
Russia responded by hosting seven Republican U.S. Senators in Moscow for the Fourth of July in 2018. It was four months to the day since Sergei and Yulia Skripal were poisoned with Novichok in Salisbury in the U.K. I told you Putin has a sense of humor. In 2020, the U.K. passed their own version of the Magnitsky Act, much to the dismay of Vladimir Putin, and used it to sanction both the Russians and the Sauds.
Putin was truly astonished when all 28 voting nations of the European Union agreed to adopt Euro-Magnitsky in 2020. He couldn’t even muscle or buy off Hungary. This week, Putin’s life got a lot worse when all 28 EU nations voted unanimously to impose those sanctions on individuals in Russia implicated in the Navalny poisoning and the suppression of subsequent protests.
Putin called the EU’s bluff, expelling three E.U. diplomats from Russia during a visit by the EU’s foreign minister, Josep Borrell, on February 5. Putin’s pugnacious foreign minister, Sergey Lavrov, spoke disapprovingly of the E.U. in a press conference standing right next to the humiliated minister. This is the same Lavrov seen laughing in a famous White House photo with U.S. President Donald J. Trump on the day after Trump fired FBI Director, James Comey.
With the E.U. suddenly voting 28-0 against Russia, with Joe Biden proclaiming “America is back,” and with Tony Blinken promising Russia must pay for the recent SolarWinds cyber attack against the U.S., Vlad the Underpants Poisoner must be feeling his briefs getting uncomfortably snug.
As Putin desperately tries to wriggle out of the sanctions surrounding him and his oligarch buddies, he faces the ultimate decline in his fortune: the green new deal. The majority of Putin’s wealth is still in the ground, and it’s worthless if the world turns away from fossil fuels as quickly as it appears to be. Without the NORD-2 pipeline shipping gas from Russia to Germany, without the corrupt contracts to supply satellite nations with fuel, Russia has nothing to sell except tourism and nesting dolls.
Putin will encounter the same problem the nations of the Arab Spring encountered: domestic youth realizing their futures look nothing like the lives they see on their phones. The Russian people are not stupid. They know they’re not enjoying the same quality of life as their European neighbors. Even though Western Democracies fail to provide for basic living needs, they are at least exciting and hold the possibility of getting unbelievably rich.
There isn’t a good path forward for Putin. The prisons are already full and the protests have barely started. In Moscow, Putin projects force, but in the outlying districts, he has little support and little control. The protesters are much more clever and organized than brute force protestors. They have a sense of humor, too. It looks like he’s going to have to find a safe way of disappearing to his Palace and handing over the failed petrostate to a new wave of Russian leadership. Cue Pussy Riot!