Putin foes offer oligarch list names

Treasury roster of potential sanctions targets due Monday

MOSCOW -- Some of Vladimir Putin's longest-standing critics have found what they hope will be a new tool to pressure his regime: They're giving the U.S. Treasury advice on whom to include in a new list of Kremlin-connected oligarchs to target for possible future sanctions.

Three opponents have found a receptive ear in Daniel Fried, formerly the State Department's coordinator for sanctions policy, who has offered ideas on the list to former colleagues now working on it. Just how much influence they've had could become clear Monday, when the roster is due. Although it could be delayed, Russia's richest are already anxious at the prospect they might be included.

"A Russian businessperson has to ask themselves, 'am I part of the Putin machine?'" Fried said. He's consulted on the list with Andrei Illarionov, a former Kremlin aide who now describes the regime as "semi-totalitarian"; Andrei Piontkovsky, who has compared Putin's Kremlin to Mafia boss Al Capone; and Anders Aslund, a Washington-based economist who described it as "kleptocratic."

The men "have criticized Putin's aggression abroad and authoritarianism at home. Are all such persons disqualified from discussing ways to counter it?" Fried said.

Their participation has added to the alarm in Moscow over the list, which has already drawn threats of retaliation from Russian officials. Andrey Kostin, the head of state-owned VTB Group called the sanctions -- which have also hit his bank -- "economic war" in an interview with Bloomberg TV at the World Economic Forum in Davos, Switzerland last week.

The list was mandated in a law passed last summer, over White House objections, that made it harder to lift the sanctions imposed over the Ukraine crisis and called for more restrictions to punish Russia for alleged meddling in the 2016 election. The law mandated that Treasury produce a report listing "the most senior foreign political figures and oligarchs in the Russian Federation, as determined by their closeness to the Russian regime and their net worth."

A Treasury spokesman declined to comment on the process beyond saying that it's working with the director of national intelligence and the State Department on the oligarch list.

Although the list doesn't impose any immediate sanctions, Russia's rich and powerful have been looking for ways to avoid landing on it, according to tycoons and lawyers involved in the efforts. The fact that such longtime foes of the Kremlin were providing advice has only added to the worry.

"These are odious characters," said Konstantin Kostin, a political consultant to the Kremlin, referring to the Putin critics. "What's needed here is work by experts who can do an objective job."

While the group's proposals to the Treasury don't list specific individuals, "everybody knows many of the names," Aslund said. He said the list should include 40 to 50 people to maximize the effect. "To name and shame you don't want too many," he said. Illarionov, on the other hand, called for "hundreds." The law requires that family members also be included, with assessments of their holdings.

"Those who wind up on the list will close ranks around Putin, but hundreds of others will get scared," said Mikhail Khodorkovsky, who was Russia's richest man until the Kremlin stripped him of his Yukos oil company and convicted him on fraud charges. "Forty to 60 names in the 'Kremlin list' is enough to scare the rest."

Fried and the three Putin opponents outlined their approach in a November article on the website of the Atlantic Council, the Washington think tank where Fried now works.

"We provided them with a framework" for building the list, Illarionov said.

Close Putin friends who've already been sanctioned -- such as billionaires Gennady Timchenko and Arkady Rotenberg -- are obvious candidates for inclusion. Children of Kremlin insiders and top officials who got jobs at state companies are another category, along with "people who are holding money for Putin," Aslund said.

Among the so-called golden children who haven't yet been sanctioned are Sergei Ivanov Jr., CEO of diamond miner Alrosa and the son of the former presidential administration chief, and Dmitry Patrushev, CEO of state-run lender Rosselkhozbank, whose father, Nikolai, is secretary of the Kremlin's Security Council.

The November article advised using leaked offshore data from the Panama Papers and research by the Russian edition of Forbes to pick the names. Those could include metals billionaire Alexey Mordashov and Sen. Suleiman Kerimov -- who's facing French money-laundering charges -- and Nikolai Shamalov, a longtime Putin friend.

So far, only two potential targets have been publicly named: Putin ally Prosecutor General Yuri Chaika and billionaire Alisher Usmanov, whom four U.S. senators cited in a Jan. 17 letter to the State Department.

Information for this article was contributed by Ilya Arkhipov and Jennifer Epstein of Bloomberg News.

A Section on 01/28/2018

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