Russian oligarchs
In 1992, a handful of young men became billionaires through the voucher privatization program. This scheme allowed them to arbitrage vast differences between old domestic prices for Russian commodities and world market rates. Boris Berezovsky, a mathematician and former researcher, emerged as the first well-known Russian business oligarch during this period. The failing Soviet state left ownership of state assets contested, enabling informal deals with former officials to acquire property. Roman Abramovich, Michail Khodorkovsky, and Vladimir Potanin acquired key assets at fractions of their value via loans for shares auctions. These transactions occurred in the run-up to the 1996 election that secured Boris Yeltsin's presidency. Defenders argued companies were not highly valued because they operated on Soviet principles with non-existent stock control and huge payrolls. The process created a new class of entrepreneurs who started from nearly nothing yet gained immense wealth through connections to the corrupt government.
During Boris Yeltsin's presidency from 1991 to 1999, oligarchs became increasingly influential in Russian politics. A group known as the seven-banker outfit controlled between 50% and 70% of all Russian finances between 1996 and 2000. Economists Sergei Guriev and Andrei Rachinsky contrasted older oligarchs with nomenklatura ties against younger-generation entrepreneurs like Kakha Bendukidze. Boris Berezovsky served as Head of the Department of System Design at an Academy of Sciences research centre before establishing his private company. Mikhail Khodorkovsky began importing computers under auspices of the Komsomol-authorised Center for Scientific and Technical Creativity of the Youth in 1986. Vladimir Vinogradov was chief economist of Promstroybank, one of six banks existing in the Soviet Union. Historian Edward L. Keenan compared these oligarchs to powerful boyars that emerged in late-medieval Muscovy. The Guardian reported in 2008 that oligarchs from the era had been purged by the Kremlin.
With Vladimir Putin's ascent to power, influence of Yeltsin-era oligarchs dissipated through imprisonment or emigration. Mikhail Khodorkovsky was arrested in October 2003 and sentenced to nine years initially, later extended to fourteen years before release on the 20th of December 2013. A second wave of oligarchs emerged in the 2000s including friends and former colleagues from Putin's St Petersburg municipal administration or Dresden tenure in the KGB. Gennady Timchenko became close friends with Russian leader Vladimir Putin since the early 1980s when Putin gave him an oil export license in 1991. Daniel Treisman proposed using term silovarch for a new class of Russian oligarchs with backgrounds in military and intelligence services. Between 2000 and 2004, Putin engaged in power struggles reaching grand bargains allowing oligarchs to maintain powers in exchange for explicit support. An economic study distinguished twenty-one oligarchic groups as of 2003. On the 30th of January 2018, U.S. Treasury published list of oligarchs under CAATSA Act requirement.
Since 2014, hundreds of Russian oligarchs faced US sanctions for supporting malign activity around the globe. In March 2022, United States announced Task Force KleptoCapture targeting oligarchs directly following invasion of Ukraine. This team included officials from FBI, Marshals Service, IRS, Postal Inspection Service, Homeland Security Investigations and Secret Service. Nine Russian oligarchs' yachts turned navigation transponders off after invasion began sailing to ports less likely searched or seized. Russians spent over US $6.3 billion on Dubai property in 2022 as non-resident buyers linked to high-net-worth individuals. The Organized Crime and Corruption Reporting Project launched Russian Asset Tracker on the 21st of March 2022 showcasing profiles and assets of several Russian oligarchs. According to Bloomberg L.P., Russia's wealthiest twenty-five individuals collectively lost US$230 billion from July 2008 to July 2017. Oleg Deripaska, Russia's richest man at time with net worth of US$28 billion in March 2008, became one of first hit by global downturn.
A significant number of Russian oligarchs bought homes in upmarket sections of London dubbed Moscow on Thames or Londongrad. Roman Abramovich purchased sixteen Kensington Palace Gardens for £120 million, a fifteen-bedroom mansion. Mikhail Fridman restored Athlone House in London as primary residence in 2016. Eugene Shvidler, Alexander Knaster, Konstantin Kagalovsky, David Wilkowske and Abram Reznikov are expatriates taking permanent residency in London. Roman Abramovich bought English football club Chelsea F.C. in 2003 spending record amounts on players' salaries. Alexander Mamut invested £100m into Waterstones bookstore chain after acquiring it in 2011 for £53 million. Managing director James Daunt remarked continued Russian ownership would have been catastrophic for chain in 2022. British Government policy encouraged foreign capital flow through investor visa routes introduced during John Major's premiership in 1994.
Dubai and Israel became havens for oligarchs fleeing sanctions following international pressure. The UAE emerged as prominent destination for relocation of yachts, real estate, and private banking services linked to sanctioned Russian elites. In May 2022, the 118-metre Motor Yacht A owned by oligarch Andrey Melnichenko anchored in Ras al-Khaimah remaining largely intact despite sanctions. Russians spent over US $6.3 billion on Dubai property in 2022 as non-resident buyers many linked to high-net-worth individuals. Several dozen business people with family connections to top politicians include President Putin's younger daughter Katerina Tikhonova receiving numerous large contracts from state-owned energy companies. Kirill Shamalov runs largest Russian petrochemicals company Sibur alongside his own investment fund. Son-in-law of Foreign Minister Sergei Lavrov runs investment fund with assets exceeding $6 billion. Viktor Medvedchuk, pro-Kremlin Ukrainian politician and personal friend of Vladimir Putin, maintains close ties with Russian business figures.
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Common questions
Who became the first well-known Russian business oligarch during the 1992 voucher privatization program?
Boris Berezovsky emerged as the first well-known Russian business oligarch during this period. He was a mathematician and former researcher who established his private company after working at an Academy of Sciences research centre.
When did Mikhail Khodorkovsky begin importing computers under auspices of the Komsomol-authorised Center for Scientific and Technical Creativity of the Youth?
Mikhail Khodorkovsky began importing computers in 1986. This activity occurred before he later acquired key assets via loans for shares auctions that took place in the run-up to the 1996 election.
What happened to Yeltsin-era oligarchs when Vladimir Putin ascended to power?
The influence of Yeltsin-era oligarchs dissipated through imprisonment or emigration following Vladimir Putin's ascent to power. Mikhail Khodorkovsky was arrested in October 2003 and sentenced to nine years initially, later extended to fourteen years before release on the 20th of December 2013.
Which city is known as Moscow on Thames where many Russian oligarchs bought homes in upmarket sections?
London is known as Moscow on Thames where many Russian oligarchs bought homes in upmarket sections. Roman Abramovich purchased sixteen Kensington Palace Gardens for £120 million while Mikhail Fridman restored Athlone House in London as primary residence in 2016.
When did the United States announce Task Force KleptoCapture targeting oligarchs directly following invasion of Ukraine?
The United States announced Task Force KleptoCapture in March 2022. This team included officials from FBI, Marshals Service, IRS, Postal Inspection Service, Homeland Security Investigations and Secret Service to target oligarchs directly following the invasion of Ukraine.