The ongoing war in Ukraine has brought up a lot of anger at Russia, and in particular at one vastly-hated group:
We’re told these greedy devils are all working arm-in-arm with Russian President Vladimir Putin to destroy world peace and diabolically scheme against humanity.
They’re practically responsible for you stubbing your toe this morning and the traffic on the way to work. CNN tells us we can be sure: these guys are pure, unfiltered evil in a super-size Slurpee cup.
But who exactly are these Russian oligarchs and how close are they with Putin?
I want to let you in on a little secret, and I swear no shady person with diamonds all over his hands and $75,000 sunglasses has paid me to say this:
Russian oligarchs have feelings too.
And the way the whole world is now hounding them like the antichrist is kind of a bummer.
Why the dehumanization of these silk-clad Sachas?
They’re just trying to buy exotic rare orangutangs and enjoy the company of some beautiful companions who may or may not be called Svetlana and purr like a kitten in front of the gem-encrusted fireplace.
Maybe it’s time to see things from their side for once…
Let’s take a cruise aboard one of the caviar-stocked luxury yachts that hasn’t been seized yet to see who these wealthy vodka-slurpers really are underneath the Gucci suits and Dior dresses.
What is a Russian oligarch?
1) We need to travel back in time
I know, I know…
Why can’t I just cut to the chase already?
Well, in order to explain what a Russian oligarch is we’re going to need to go back to at least the fall of the Soviet Union (USSR) in late 1991.
It was the end of an era, preceded by Mikhail Gorbachev’s perestroika reform policies which the West German rock band the Scorpions even sang about, so that Americans would care.
The dark red dreams and bloody nightmares of Lenin and Stalin came crashing down as the USSR split up and collapsed.
Republics separated and became independent, from Georgia and Armenia to Kazakhstan and Uzbekistan.
It was a world-shaking event, precipitated by many things including the disastrous and horrific Russian invasion of Afghanistan in the winter of 1979.
When the USSR disintegrated many things happened. One of the big things is that some people got very rich, very fast.
2) Meet the oligarchs
When the USSR fell, the nationalized and publicly-owned system changed overnight. Savvy businessmen were able to buy and privatize various assets from telecom companies to banks.
They bought them at fire sale prices in the chaos of collapse, and went on to profit massively as a private market rose up in Russia and it reconnected to the global economy.
One of the biggest factors was that some of the richest people in Russia also got even richer to the point of absurdity.
That’s because in return for borrowing their money, the new non-communist Russian government sold them off huge slices of the country’s resources.
It was a good deal, and these wealthy Russian men and their families benefited enormously.
Their kids started going to Harvard, and they started feeling pretty good about themselves and buying some yachts to tool around the Mediterranean on the odd weekend.
3) What’s the difference between an oligarch and just a really rich person?
What is an oligarch anyway?
It’s basically a rich person who also has a lot of power in society and in influencing government policy.
If you make a billion dollars and then stay in your mansion playing video games and storing your money in a dependable fund while focusing on your cactus collection you are not an oligarch, Russian or otherwise.
If you make a billion dollars and use it to lobby for rules that will help your business, overcome the competition and then work behind the scenes to gather even more power and influence like, say Russian oligarch Mikhail Fridman, then, congratulations you are an oligarch.
“An oligarch is one of the select few people who rule or influence leaders in an oligarchy—a government in which power is held by a select few individuals or a small class of powerful people.
“Oligarchs can be the actual leaders, or they can influence or control the decisions that the leaders make (meaning they’re the ones ‘pulling the strings’ behind the scenes).”
As these ultra-wealthy grew in power and position in Russia, it’s worth asking why they have obtained a special status or reputation of some kind.
Are they different than other rich people in the UK or in Indonesia?
Well, somewhat. But also somewhat not (which I’ll get to later).
Russian oligarchs are famous for being intimately connected to power and being so outrageously wealthy that they are only comparable to a few other places on earth such as the ultra-wealthy of the United Arab Emirates or other unique nations.
Russia’s resources and post-Soviet boom made them into billionaires at lightning-speed, and they went on to use that money to grow in influence and stature.
But when looking at what they did with that influence, that’s where things get a little more complex.
4) Putin and the oligarchs
In order to understand the relationship of the oligarchs to Putin, we need to take a brief overview of Putin’s rise to power.
The executive summary is this:
- Putin earned his stripes as a KGB officer in east Germany helping the USSR combat the evils of capitalism. His disappointment when the USSR fell and Russia lost power was immense.
- He went on to rise up in the mayor’s office of St. Petersburg and became a truly ruthless and savvy political insider.
- Putin went on to make a killing stealing meat and grain shipments bound for Russia that he traded Russian resources for. Let’s just say Putin isn’t one of the richest men in the world for nothing.
- Putin then buddied up with oligarchs to take over Russia.
- Then – and here’s the kicker – he brutally stabbed them in the back and stole their stuff.
As Masha Gessen outlines in her fascinating and disturbing 2012 book The Man Without a Face: The Unlikely Rise of Vladimir Putin, Vladimir Vladimirovitch’s rise to power was no accident.
It was a matter of his strategically partnering with Russia’s richest and most powerful oligarchs and then smashing them and stealing their companies, particularly in Russia’s lucrative oil sector.
Take the example of former Yukos oil titan Mikhail Khodorkovsky.
He was ruling the roost in the early 2000s while the black gold was flowing and he was drowning in gold. But then Putin started to exert enormous pressure on him and steal profits and this poor mega-rich man didn’t like it.
So he spoke out and started getting political and funding opposition. Oops. Putin moved quickly.
Khodorkovsky became public enemy number one, and went to jail after two bizarre show trials.
And Khodorkovsky was only one of those Putin stabbed in the back, also wresting key control of state media and other industries from various oligarchs who he initially supported and then betrayed.
That’s no way to treat an oligarch! There are rules in this gentleman’s club.
5) The Putin-oligarch narrative
As we’ve been hearing a lot from our trustworthy mainstream media friends, oligarchs are basically an invasive species of soulless pro-Putin monsters who need to be dragged out of their gold-plated bathrooms and beaten to death in the streets.
First of all, what about oligarch rights?
We hear so much about “human rights,” but ultra-wealthy white men have rights, too. Let’s not forget that, please.
Secondly, it wasn’t only his initial befriend-and-betray oligarchs who turned away from Putin: the truth about Russia’s upper crust is that it’s not as uniformly pro-Putin as you sometimes hear.
Putin is literally happy that his nation’s oligarchs are getting their yachts seized and accounts frozen. It’s a net plus to him.
As Jemima McEvoy writes at Forbes:
“Others argue that Putin sees the sanctions as a way for him to increase his power over the oligarchs.
“Putin has structured Russia’s economic system so that sanctions would make the billionaires more dependent on him.”
But wait, haven’t we been told these guys are Putin’s best buddies?
Yes, you have been lied to, or at least misinformed…
6) Friends with (monetary) benefits
As McEvoy’s article demonstrates and shows, many oligarchs in Russia have had a rocky relationship with Putin.
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The more powerful he has become, and the more he has cracked down on freedom and political opposition, the more they have been forced to pretend to like and agree with him.
But many do not.
And many have already had a ton of money taken away from them and frozen for being associated with Putin’s government.
Some of the richest and most well-known oligarchs in Russia like Yuri Kovalchuk, Arkady Rotenberg and Boris Rotenberg have all faced heavy sanctions, particularly after the annexation of Ukraine’s Crimea peninsula in 2014.
The fact of the matter is that many oligarchs don’t really like Putin, they’re just scared of him and his stranglehold on Russia’s military, intelligence services, media and state power.
As University of Baltimore professor and Russia expert David Lingelbach puts it:
“He has these alliances with people and then he tosses them overboard when they no longer suit him.”
7) Here’s the Pravda truth, my friend
Oligarchs who have benefited from Russia’s resources and privatization waves didn’t get that way from luck.
They’re smart, ruthless and skilled at navigating the world economy.
The vast majority rapidly moved all wealth possible out of Russia and converted it into US dollars or other more dependable assets and properties.
They took the money out of Russia and if anything dealt and befriended people like Putin out of necessity, not out of some heartless evil.
The more the West hits oligarchs with punitive sanctions, the more they are forced to take a devil’s bargain:
Side with Putin and whatever protection he can still give them or jump ship altogether, which is what NATO hopes.
Some are jumping ship. Many are not, or don’t have that option. Which is exactly the reason many experts feel the hit on oligarchs will have the opposite of the intended effect and only ratchet up war fever and funding.
8) Oligarchs are much less political than previously advertised
Oligarchs didn’t fuel Putin’s rise to power so much as they grudgingly went along with it when they were forced to by his growing machinations and plots to control them.
Those who didn’t want to spend life in jail or end up homeless got the hell out of Russia, did what he said, or found various ways to stay under the radar.
Take Russian oligarch and Israeli and Portuguese citizen and UK football club owner Roman Abramovich. He’s worth an estimated $12.9 billion.
Abramovich is a very powerful man who’s been accused of working closely with Putin and denied it. Maybe he does, and he certainly did. But he’s not a political guy.
He’s a money guy. Just like so many oligarchs, Abramovich doesn’t really care who’s in power, he just cares about business.
“Yachts, sports teams, newspapers and luxury real estate are just some of the assets owned by these billionaires…
“By the time Putin began his presidency in 2000, the government — run in part by the oligarchs — was highly dysfunctional. Putin went to work centralizing his authority and moving the oligarchs out of politics.
“Some of them fled the country. Others were exiled, imprisoned or had their property seized. Those who remained largely agreed to stay out of politics and leave that to Putin.”
9) Ogling the world’s oligarchs
It’s important to understand that Putin intertwined himself with the oligarchs to get power.
He’s also used his money to consolidate power.
He absolutely does not care about how Dmitry Rybolovlev’s daughters Ekaterina and Anna are doing.
The world’s oligarchs from Thailand’s Thaksin Shinawatra to the UAE’s Mohammad bin Rashid al Makhtoum relate to power in a similar way.
Sure they rub shoulders, they make deals. But they aren’t friends with the political class, and the political class isn’t really friends with them.
As we saw with the election of oligarch Donald Trump, when oligarchs transition directly into political power the results can be unpredictable to say the least.
So take it with a grain of Siberian salt when you hear that oligarchs are the real people running Russia and that these sanctions will bring Putin down.
Let’s be clear:
Some oligarchs are definitely close allies of Putin and he even uses them to funnel and hide his own massive mountain of wealth.
But for many others, Putin is simply the price of doing business in Russia, particularly in the resource sector.
10) Where’s the money, man?
The oligarchs of the world are an endangered species.
Last year the average annual salary in Russia was $16,600 USD. That’s not much, even with Russia’s lower prices than the rest.
What are all the ultra-rich supposed to do as more and more people sink into the middle and lower class, particularly now that sanctions are hitting so hard?
They are going to feel left out, left behind and maybe even depressed about having such a spotlight on them.
As for where the money actually is?
Well, Switzerland and the Cayman islands are certainly two big locations, as well as anywhere else that a handshake and a little knowing nod can get you some financial discretion for once.
And you might want to also check the world of high-priced art and billionaire-friendly freeports while you’re at it…
11) The Oligarch World Worker Society (OWWS)
You know what, I think I really see these Russian oligarchs’ point of view.
They were just trying to take advantage of the fall of a nation and profit from political chaos.
Now they’re being blamed for a war!
It’s sad really…
You try to be a good person and seize a monopoly over a long-suffering nation’s resources and future for your own benefit, and you get called a bad guy.
Oligarchs could be the biggest allies for an anti-Putin revolution, if you’d just think about their feelings (and pocketbooks) a little bit more.
You could even form an Oligarch World Worker Society (OWWS) for the benefit and rights of oligarchs everywhere, not just Russian oligarchs.
After all, Finnish oligarchs, American oligarchs, Thai oligarchs and Canadian oligarchs have rights too.
It is time somebody thought of them and their future.
Welcome to the club
Oligarchs are rich people who have a large influence on policy and power in their nations and the world.
I’ve got bad news for you.
If you live in Australia, the United States, the EU, China, Taiwan, or…pretty much anywhere in this old world…you live under oligarchs.
You may not even want to be part of this club, but trust me: in one form or another, you’re in it.
Chances are you’re banking in it in some form, dressing in it in some form and eating, watching and consuming the oligarchic system’s products in some form.
Some call it neo-feudalism. Some call it late capitalism. Others with less tact or patience for foolishness simply call it our world being fucked and polluted to death.
At the same time, there’s no doubt you can have a much larger influence on changing things for the better from inside the “system,” so I highly recommend against being overly idealistic.
Or do you really think Joe Biden or Donald Trump and his friends just want to help the world be a nicer place?
Come on, man.
Why do we celebrate Jeff Bezos but hate Vitaly Malkin? Are we really so pure in our non-Russian societies and far away from the intermixing of political and financial power?
Don’t try to kid yourself that Russia is some uniquely classless nation of rich thugs and we can all be proud of having a much more honorable and principled elite.
If only that were so.