Punishing Russian Oligarchs Won't Stop Putin | Opinion

During his State of the Union address two weeks ago, President Biden announced that the Justice Department would assemble "a dedicated task force to go after the crimes of Russian oligarchs," which would work with Europe to "seize your yachts your luxury apartments your private jets." Soon afterwards, the President explained to the G7 that this was necessary because "they support Putin... They're part of that kleptocracy that exists in Moscow, and they must share in the pain of these sanctions." Biden reiterated that "we're going after their super-yachts," apparently a sign of decadence that a politician like Biden can't stop himself from repeating.

The war on oligarchs is the latest front in the West's response to Russia's invasion of Ukraine. It's coalescing around the logic that the West can punish rich people into seeing the error of their ways, forcing them to convince Putin to end the war. In keeping with this policy, yachts and homes have been confiscated—to much fanfare and social media attention, so much so that The Washington Post dubbed it "schadenfreude at sea."

If the goal of sanctioning oligarchs is to please Twitter users with Ukrainian flags in their bios, then the mission has been a stunning success.

But if the goal is turn oligarchs against the war, the Biden administration probably didn't need to bother. Many of them, particularly those that can be reached by Western sanctions, are already against it. This is not surprising; wealthy elites depend on open trade and travel, so they tend not to be the most-pro war demographic. Despite the President's claim that the oligarchs support Putin, several have publicly criticized the effort in Ukraine.

As soon the war started, Oleg Deripaska, founder of the mineral conglomerate Russal, wrote in favor of peace and called for talks to end the conflict as soon as possible. Oleg Tinkov, a banking and consumer goods magnate, was even more emphatic: "Innocent people are dying in Ukraine now, every day; this is unthinkable and unacceptable." When the London-based Roman Abramovich was forced to sell off the Chelsea FC soccer team due to sanctions, he promised to give the profits to Ukrainian war victims.

To some of the supporters of sanctions, this proves the policy is working. Writing in The Atlantic, Dartmouth professor Brooke Harrington argues that "[i]f figures like these are calling for, even demanding, an end to the war, the sanctions are far more effective than past efforts by Western powers to target the Russian elite." Harrington writes that the oligarchs "provide invaluable public support for the regime, lead key companies and institutions, and distract attention from and, by some accounts, help conceal the president's own enormous wealth."

It's important to note that Harrington is notably not an expert on Russia but a sociologist who studies topics like wealth inequality and tax havens; those most familiar with the Putin regime itself almost uniformly take a different view.

Mikhail Fridman is the founder of Alpha Bank and yet another rich Russian who has criticized the war. Fridman acknowledges that sanctions do impose personal costs on men like himself but notes that oligarchs as individuals "do not have any impact for political decisions." While we may not want to simply take Fridman's word for it, his views are consistent with those of close students of Russian politics. As the journalist Max Seddon noted, when Putin summoned business leaders to discuss the war effort, only a few were oligarchs "in the classic sense"—that is, men like Deripaska who got rich from privatized former state-owned industry. Instead, the bulk of them were state company bosses with roots in the KGB.

In other words, Russia today is a government of one man and the national security elites he trusts—not oligarchs.

Daniel Fried served as Obama's Assistant Secretary of State for European and Eurasian Affairs and helped craft the initial sanctions against Russia in 2014. He notes that oligarchs only exist at the sufferance of Putin, who can imprison or kill them any time he wants, which means it's foolish to believe that they can influence his decision making.

So why is the Biden administration going after rich Russians?

This is no mystery in an environment where Russian businesses in the United States are getting vandalized and there are demands that Russian athletes denounce their government in order to compete in sporting events. Rich people are often scapegoats, and when they're foreign rich people from a country that Westerners are upset at, attacking them is a political no-brainer.

Yet there are real costs to letting emotionalism and demagoguery drive our behavior. American global leadership is often justified as necessary to defend the "rules-based international order." But few things are as lawless as the system of American sanctions, which allows the Treasury Department to freeze assets without any finding that an individual violated the law.

Moreover, given that there is no clear definition of "oligarch," this looks more like a war on any Russian with money, which can only help contribute to the atmosphere of ethnic hatred that we now see across the West.

Superyacht Valerie Seized In Spain
An 85-meter yacht belonging to a Russian oligarch was impounded in the Spanish port of Barcelona, Prime Minister Pedro Sanchez said. Above, the St. Vincent and the Grenadines-flagged yacht "Valerie," moored in the port of Barcelona on March 15. Photo by Lluis Gene/AFP via Getty Images

Perhaps most importantly of all, bashing "oligarchs" is yet another distraction from understanding the causes of the war and how to end it.

There was a time when American leaders took seriously the national security concerns of other countries and tried to accommodate them. Instead of developing elaborate theories about how seizing a few yachts can help end a war, they conducted negotiations that tried to find common ground. Nixon's opening up of China and Bush's handling of the end of the Cold War are clear examples of this.

Unfortunately, we have let wishful thinking and demagoguery replace statecraft. The results of this approach can be seen in our hysteria at home and the shattered cities of Ukraine.

Richard Hanania is the president of the Center for the Study of Partisanship and Ideology. Follow him on Twitter @RichardHanania.

The views in this article are the writer's own.