The day before Ukraine President Volodymyr Zelenskyy swept into the United States and delivered an impassioned speech to Congress, he made a quiet phone call to one of the country’s most powerful Republicans: Mitch McConnell.
Among his urgent requests: convince the Senate minority leader to help turn over the seized fortunes of Russian oligarchs — including the proceeds of their yachts, planes and mansions — to help rebuild the Ukraine president’s devastated country.
Two days later, with a rush of Republican support, the wartime leader got his wish.
A special provision was tucked into the government’s massive, end-of-the-year spending bill on Dec. 22 to direct the wealth from some of Vladimir Putin’s closest allies to the country that he invaded.
Three confidential sources, who spoke to The Pittsburgh Post-Gazette on the condition of anonymity, said the rare call to the veteran political operator — just hours after Zelenskyy huddled on the front lines with his soldiers in eastern Ukraine — was part of a back-channel effort to shore up critical support for the besieged country from its most powerful ally.
The personal appeal by the 44-year-old Ukraine leader came as support for Ukraine’s military began to run into opposition from some GOP congressional members and millions of Ukrainian citizens continued to be left without heat or running water from the destruction of the nation’s infrastructure by relentless Russian airstrikes.
“His country has been destroyed,” said Paul Pelletier, a former Justice Department prosecutor and fraud unit chief. “(He) is someone who knows that unusual times call for unusual measures.”
While key support for the amendment came from the co-sponsors, Sen. Sheldon Whitehouse, D-R.I., and Sen. Lindsey Graham. R-S.C., the move by Zelenskyy to reach out to one of the most influential members of Congress amid a legislative debate underscores just how far the Ukraine president is willing to press for additional money for a country steeped in war.
In the first six months of fighting, a third of the country’s power stations were wiped out, and more than 15,000 miles of roads and 300 bridges were destroyed, according to Ukraine government estimates.
The amount of money that can be seized from Russian oligarchs in the United States is just a fraction of what the country will need to rebuild, experts say. But the private call by Zelenskyy shows just how important such aid means to a country where millions of people have been left homeless, said John Herbst, a former U.S. ambassador to Ukraine.
“He is trying to defend his country,” he said.
The elected leader’s request came months after the Biden administration unveiled a series of crackdowns on Russian oligarchs who have long moved their money into the United States in some cases to hide their wealth.
Programs like Task Force KleptoCapture, which was launched in March just days after the Russian invasion, was created partly to seize dollars and property belonging to members of the Kremlin elite caught trying to evade U.S. sanctions.
The U.S. government has held the authority for years to seize assets from kleptocrats and corrupt foreign leaders, but the new legislation allows prosecutors to strip the oligarchs of their villas, jets and money and move the proceeds through the State Department to pay for rebuilding Ukraine, which is expected to cost more than $350 billion.
A Post-Gazette investigation in May, bolstered by hundreds of secret U.S. Treasury records, revealed that at least eight Russian oligarchs and their companies had moved billions of dollars into U.S. banks, even after the institutions found that many of the transfers showed the hallmarks of money laundering.
One of the billionaires who moved his money into the United States was Arkady Rotenberg, a former judo partner of Putin’s and one of his most trusted allies. Another was Igor Sechin, a one-time Russian deputy prime minister who is considered by many to be the second most powerful person in Russia.
Other Russian power brokers who have been hit with U.S. sanctions — penalties that ban them from the U.S. financial system and expose their fortunes to seizures — include Sergey Chemezov, a former KGB agent who was tapped by the Russian president to head the country’s massive defense conglomerate.
Since the Biden administration announced its campaigns against the Russian insiders this year, prosecutors have seized millions in assets, including a 348-foot yacht with a heliport, mosaic-tiled swimming pool, lobster tank and a pizza oven owned by billionaire Suleiman Kerimov.
The estimated value of the vessel, which was seized in Fiji at the behest of the U.S. government: $300 million.
In another case, Spanish authorities took control of a yacht at the request of U.S. prosecutors that’s owned by oligarch Viktor Vekselberg. The value of the 255-foot yacht, which includes an elevator, beauty salon and gym: $120 million.
In signing the court order for the seizure, U.S. Magistrate Zia Faruqui said the enforcement action was “just the beginning of the reckoning that awaits those who would facilitate Putin’s atrocities. Neither the Department of Justice, nor history, will be kind to the Oligarchs who chose the wrong side.”
Although Ukraine’s supporters say the forfeitures will help pressure the Kremlin, it’s not clear how much money will be collected, say legal experts. Erich Ferrari, a Washington attorney who lectures on sanctions law, estimated that prosecutors will net “tens of millions” — not billions — from the program, partly because much of the wealth of the oligarchs is not in the United States. In all, the money “will probably fall far short of what it will take to rebuild a country,” he said.
He said that sanctions can work to punish a regime, but do very little to change a country’s policies. After the invasion of Ukraine by Russia in 2014, the U.S. imposed punishments on a host of oligarchs, but that didn’t stop Russia from invading once again.
Pelletier, the former prosecutor, said the punishments aren’t designed to be used alone, but are among the many weapons that the government deploys in concert with others to bring pressure on an errant nation.
As far as sanctions, they send a direct message: Even the country’s most powerful people can be made to pay. “The yacht we seized — we can rebuild an elementary school in Mariupol. It’s a poke in the eye of Putin and the oligarchs,” he said.
Herbst, the former American ambassador, said many Ukraine supporters would prefer the United States target a much larger pot of money: the billions frozen in U.S. financial institutions belonging to the central bank of Russia — a move the White House has not embraced, partly because the U.S. plays such a key role as a stable force in the international monetary system.
However, Herbst and others say the U.S. has taken similar action in the past against other nations, including Iran.
“I know for a fact that Ukraine would like us to make all the Russian money available and not wait until reconstruction,” he said. But despite the need for more funds to pay for a massive rebuilding, “they will take what they can get.”
Pelletier said the Ukraine president’s call to McConnell after meeting with soldiers in Bakhmut, where fighting has been fierce, shows that he is already planning for a clean-up and recovery that will be massive. “Factories have been destroyed,” he said. “There are cities that used to have 80,000 people. Now they have 10,000.”
The day before Zelenskyy reached out to McConnell, Russia launched drone strikes on Kyiv, inflicting even more damage on the electrical systems and disrupting power in the capital.
By going to McConnell, who has been a stalwart supporter of aid to Ukraine, Zelenskyy was able to push a provision which had passed the House months earlier, but not the Senate.
Two days after his phone call with McConnell, it was approved in a unanimous voice vote in the Senate and included in the government’s $1.7 trillion spending bill. By Friday, it was sent to President Joe Biden for his signature.
McConnell’s office declined to comment about the plea from the Ukraine leader, but the senator told lawmakers in a floor speech two days later that “increasing the pressure on Putin’s regime” should include “sanctions with teeth” that ensure “Russia pays for its misdeeds.”
For Zelenskyy, it was a quiet legislative effort even before his historic address to Congress. “He’s a guy who knows how to get s–t done,” said Pelletier. “The purpose of the sanctions are to attack the financial epicenter of Moscow. To create economic discontent. To have the citizenry of Russia feel the pain of what Putin is doing, so they will rise up in any way they can.”
Original Article: https://americanmilitarynews.com/2023/01/ukraine-president-volodymyr-zelenskyys-secret-call-to-mitch-mcconnell-puts-squeeze-on-oligarchs/
