Home Uncategorized How Roman Abramovich, a Russian Oligarch, Found Himself Under Sanctions

How Roman Abramovich, a Russian Oligarch, Found Himself Under Sanctions

146
0
How Roman Abramovich, a Russian Oligarch, Found Himself Under Sanctions


As Russian troops massed near the border with Ukraine last month, the American ambassador to Israel received an appeal on behalf of Roman Abramovich, the most visible of the billionaires linked to President Vladimir V. Putin.

Leaders of cultural, educational and medical institutions, along with a chief rabbi, had sent a letter urging the United States not to impose sanctions on the Russian, a major donor, saying it would hurt Israel and the Jewish world. Days later, Mr. Abramovich and Yad Vashem, the Holocaust memorial, announced a partnership that a spokesman for the organization said included a pledge of at least $10 million.

The request to the diplomat reflects the extraordinary effort Mr. Abramovich, 55, has made over the last two decades to parlay his Russian fortune into elite standing in the West — buying London’s Chelsea soccer team, acquiring luxury homes in New York, London, Tel Aviv, St. Barts and Aspen, collecting modern masterworks and contributing to arts institutions around the world. With two superyachts, multiple Ferrari, Porsche and Aston Martin sports cars, and a private 787 Boeing Dreamliner jet, Mr. Abramovich wanted everyone to know that he had arrived.

But now the backlash against the Russian invasion of Ukraine is tarnishing the status that Mr. Abramovich and other oligarchs have spent so much to reach. On Thursday, British authorities added him to an ever-expanding list of Russians under sanctions for their close ties to Mr. Putin.

Mr. Abramovich, whose fortune is estimated at more than $13 billion, was barred from entering Britain or doing any business there — disrupting his plans to sell his soccer team and prohibiting it from selling tickets to matches, even blocking him from paying to keep the electricity on in his West London mansion.

Oligarchs like Mr. Abramovich “have used their ill-gotten gains to try to launder their reputations in the West,” said Thomas Graham, a Russia scholar at the Council on Foreign Relations. “But the message of these sanctions is, that is not going to protect you.”

On Friday, Canada announced sanctions of its own against Mr. Abramovich. The United States has not imposed sanctions on the billionaire — so far, at least. In a statement explaining its actions, the British government said that the businessman had profited from transactions with the Russian government and special tax breaks. The statement also suggested that a steel company Mr. Abramovich controlled could contribute to the war against Ukraine, “potentially” supplying steel for Russian tanks. The business, Evraz, said in a statement that it had not done so. A representative for Mr. Abramovich did not respond to a request for comment.

“The blood of the Ukrainian people is on their hands,” Liz Truss, the British foreign secretary, said of the oligarchs under sanctions. “They should hang their heads in shame.”

Michael McFaul, an American ambassador to Moscow during the Obama administration, recalled that while Mr. Putin’s government claimed to despise the United States and its allies, his foreign ministry was constantly trying to help the oligarchs around him, including Mr. Abramovich, obtain visas so that they could ingratiate themselves with the Western elite.

“On our side, we have been playing right along,” he said, overlooking the oligarchs’ ties to Mr. Putin and welcoming them and their money.

Orphaned as a child in a town on the Volga River in northern Russia, Mr. Abramovich dropped out of college and emerged from the Red Army in the late 1980s just as the Soviet leader Mikhail Gorbachev was opening new opportunities for private enterprise. Mr. Abramovich plunged into trading anything he could, including dolls, chocolates, cigarettes, rubber ducks and car tires.

His big break came in the mid-1990s, after the collapse of the Soviet Union, when he and a partner persuaded the Russian government to sell them the state-run oil company Sibneft for about $200 million. In 2005, he sold his stake back to the government for $11.9 billion. Other deals followed, including the formation of a mammoth aluminum company. Many involved the Russian state, and some ended in bitter litigation.

After Mr. Putin was inaugurated president in 2000, he quickly moved to dominate the billionaire businessmen who had profited from privatization, sending a message by jailing the richest and most powerful oligarch. Mr. Abramovich is one of the few early elite who remain in his circle.

As Mr. Putin was consolidating power, Mr. Abramovich served as governor of a desolate northeastern province from 2001 until 2008.

“I started business early, so maybe that’s why I’m bored with it,” he told The Wall Street Journal in 2001 about his interest in the region, saying he wanted to lead a “revolution toward civilized life.”

But like other oligarchs wary of the new president’s power to make or break them, Mr. Abramovich also began looking for footholds outside Russia.

Mr. Putin’s display of force “increased the incentive for the oligarchs to have acceptance in the West,” said Stephen Sestanovich, a professor of international relations at Columbia University and former ambassador at large to the former Soviet Union. “Who knows when you might fall out with Putin and need an alternative place to land?”

In spring 2003, Mr. Abramovich was in Manchester, England, to watch the legendary Brazilian forward Ronaldo score a game-winning hat trick for Real Madrid. The Russian had never shown much interest in soccer before, but that night he was smitten.

He soon began shopping for a team — looking in Spain and Italy before settling on England and finally on Chelsea. His $180 million takeover — completed in quick, stealthy talks with the British financier Keith Harris over a single weekend — transformed the club. In his first summer, he went on the largest single spending spree for players that English soccer had ever seen.

Within two years of his arrival, Chelsea was the English champion for the first time in a half-century, and the team has since won four more championships. A Russian flag has hung outside the stadium for years, emblazoned with the words “The Roman Empire,” alongside a stylized image of its owner’s face. (Britain on Friday said it would consider proposals to buy the soccer team under special conditions.)

At a news conference when Russia won the right to host the 2018 soccer World Cup, Mr. Putin commended Mr. Abramovich for the development of Russian soccer, too, and suggested he might play a role in “a public-private partnership” to prepare for the tournament. “He has a lot of money in stocks,” Mr. Putin noted, smiling.

While looking after his London soccer team, Mr. Abramovich met and married his third wife, Dasha Zhukova, the daughter of a Russian oil magnate, who had grown up partly in Los Angeles; studied Russian literature at the University of California, Santa Barbara; and tried fashion design in London.

In 2011, he bought an elegant 15-bedroom mansion near Kensington Palace for a reported price over $140 million, which was expanded a few years later to include a huge underground swimming pool.

Then he turned heads in Manhattan in 2014, paying $78 million for three adjacent townhouses on East 75th Street, in a landmark district of the Upper East Side. He proposed combining the three homes of different styles into a single mega-mansion, with an elevator, a new glass-and-bronze rear facade and a pool in the lower level. The Historic Districts Council, an advocacy group, called the plan “a whole new level of egregious consumption.” But he ultimately managed to win city approval, in part by purchasing a fourth adjacent townhouse for nearly $29 million and revising his alteration plans.

Ms. Zhukova had developed a growing interest in art, and in 2008 she and Mr. Abramovich founded Garage, a seminal contemporary art center in Moscow. (Amy Winehouse performed at the opening, and early shows included works by Cindy Sherman and Jeff Koons.) He joined the board of the Bolshoi Theater. And Mr. Abramovich started to earn a reputation as one of the biggest spenders in the art world, known for buying pieces by blue-chip artists. He spent nearly $120 million at auctions in the same week, acquiring a Francis Bacon triptych and Lucian Freud’s “Benefits Supervisor Sleeping.”

It struck one figure in the New York art world as “a trophy approach to collecting.”“It’s like when you go to a hunter’s house,” said Todd Levin, an art adviser. “There’s the elephant on the wall, there’s the rhino, there’s the tiger and the lion.”

Although he rarely gave interviews, Mr. Abramovich was often photographed alongside the rich and famous at fashionable spots around the world, and his New Year’s Eve parties at his estate on the French island of St. Barts — reportedly a $90 million property covering 70 acres — have made tabloid headlines. One year, Paul McCartney joined the Killers to sing the Beatles classic “Helter Skelter.” Entertainment in other years included the Red Hot Chili Peppers and Prince.

Mr. Abramovich and Ms. Zhukova divorced by 2019, and he transferred to her the New York townhouses, plus two nearby apartments, for $92 million, according to public records. She lives in the city with their two children — he has seven in all. She serves as a board member of the Metropolitan Museum, one of the premier positions in New York philanthropy, and is a fixture in the city’s art and fashion scenes. Her network of friends includes Ivanka Trump, the daughter of former President Donald J. Trump; Jared Kushner, the former president’s son-in-law and adviser; Josh Kushner, Jared’s brother and an investor; and Josh’s wife, the model Karlie Kloss.

On Thursday, Ms. Zhukova distanced herself from Mr. Abramovich. “Dasha has moved on with her life and is happily remarried,” a spokesman for Ms. Zhukova said in a statement. She issued a second, more personal statement denouncing the Russian invasion as “brutal,” “horrific” and “shameful.”

“As someone born in Russia, I unequivocally condemn these acts of war, and I stand in solidarity with the Ukrainian people,” Ms. Zhukova said.

Mr. Abramovich has struggled to escape the stigma of association with Mr. Putin. In 2018, after Russian spies poisoned two people in Britain, the British authorities delayed renewing his business visa, reportedly seeking additional disclosures from him about his dealings.

He turned instead to Israel, where his status as a Jew allowed him citizenship. He now owns mansions in Tel Aviv and the seaside city of Herzliya, and Haaretz ranks him among the richest people in the country.

There, too, Mr. Abramovich’s big spending has set him apart. He donated $30 million to Tel Aviv University in 2015, and has since given tens of millions of dollars to the Sheba Medical Center near the city, according to a hospital official.

He has also donated more than $100 million to an Israeli settler organization. An investigation last year by the BBC News Arabic service found that companies controlled by Mr. Abramovich had given that money to the City of David Foundation, which buys up Palestinian property and moves Jews in as part of an effort to bolster Israel’s claim to sovereignty.

Last November, President Isaac Herzog of Israel flew to London for the opening of a Holocaust exhibition Mr. Abramovich had funded at the Imperial War Museums. He called the Russian “a shining example of how sports and teams can be a force of good,” citing the “Just Say No to Antisemitism” banners that his Chelsea soccer team was hanging at its games.

When reports emerged of the recent appeal to the United States not to subject Mr. Abramovich to sanctions, Dani Dayan, the chairman of the Yad Vashem Holocaust memorial and a former diplomat, initially defended the letter.

“I don’t see any reason to reject a gift by a Jew, an Israeli citizen, a person that for a decade is committed to very worthy causes,” he said. He was “not a judge” and was not aware of any wrongdoing by Mr. Abramovich, Mr. Dayan added.

But after Britain imposed sanctions against Mr. Abramovich, the Israeli Holocaust memorial said it was suspending its relationship with him. A spokesman declined to say whether the memorial had received any of the multimillion-dollar pledge. “In light of recent developments,” the organization said in a short statement, “Yad Vashem has decided to suspend the strategic partnership with Mr. Roman Abramovich.”

Reporting was contributed by Graham Bowley, Stephen Castle, Stefanos Chen, Michael Forsythe, Kimiko de Freytas-Tamura, Robin Pogrebin and Rebecca R. Ruiz.

Previous articleWetherspoons will increase the price of pints in all pubs in the UK – this is another blow for the British
Next articleCristiano Ronaldo was “inspired” by retired Tom Brady