U.S. SANCTIONS

Senators Urge Adding Usmanov To Official Oligarch List, Citing Paradise Papers Revelations

The formal request from four Republicans suggests that links between Russia and social media companies may be a potential factor in new U.S. sanctions.

Putin and Usmanov

On Wednesday, Senator Marco Rubio (R-FL) and three other Republican senators formally asked the Trump administration to consider adding Uzbek-Russian billionaire Alisher Usmanov to a forthcoming official list of oligarchs who may be subject to the United States’ latest round of sanctions against Russia.

A metal mining magnate, Usmanov is one of Russia’s wealthiest individuals. He also has been cited as having particularly close ties to Russian President Vladimir Putin – a potentially hazardous relationship in the face of the latest U.S. move to punish Kremlin-adjacent actors for Russia’s meddling in both the Crimean Peninsula and American elections.

In discussing Usmanov, the senators’ letter primarily cites ICIJ’s reporting on the billionaire’s connections to Russian state money having quietly found its way to investments in the U.S. social media industry several years ago.

In November, ICIJ reported that the investment fund run by tech mogul Yuri Milner, who has been a close business partner of Usmanov, received $191 million in 2011 from a Russian government firm, VTB Bank, and invested that money in Twitter. Documents reviewed by ICIJ also show that another state-controlled financial institution, Gazprom Investholding, funded a shell company that invested in a Milner-affiliated company that held roughly $1 billion in Facebook shares shortly before the social network’s 2012 initial public offering.

Usmanov was one of Milner’s most prominent co-backers of Milner’s investments in U.S. social media. While he invested in Facebook, Usmanov was also the general director of Gazprom Investholding. The shell company that received funding from Gazprom Investholding was a player in both Milner’s Facebook and Twitter deals and has several close connections to Usmanov himself.

In response to a question from ICIJ and its partners about the shell company’s ties to the Facebook deal, Gazprom Investholding stated that its loans to the firm “were provided for general corporate purposes.”

In response to our previous reporting, Rollo Head, a spokesman for Usmanov, said Usmanov “has been a highly successful investor in Russian and international assets utilizing a combination of his own and borrowed funds.”

Head said none of Usmanov’s investments in Facebook used money borrowed from state institutions. As a passive investor in Milner’s deals, the spokesman said, Usmanov had no control over funds controlled by Milner or their underlying investments.

For his part, Milner confirmed VTB’s involvement in the Twitter deal but said he was unaware of any possible involvement by the Gazprom subsidiary in any of his deals. He said that none of his many investments have been related to politics.

Milner emphasized that the investments took place years before renewed tensions between the United States and Russia. “It never even occurred to me back then that VTB Bank was not just another investor for us,” Milner said.

Facebook and Twitter said they had properly reviewed Milner’s investments

Wednesday’s letter suggests that links between Russian state funds and U.S. social media companies are now being eyed by Washington lawmakers as a potential factor in new U.S. sanctions. Senators Lindsey Graham (R-S.C.), Cory Gardner (R-CO) and Roger F. Wicker (R-MS) joined Rubio in signing the letter.

The senators sent separate letters to Secretary of State Rex Tillerson (who also appeared in the Paradise Papers), Secretary of the Treasury, Steven Mnuchin, and the Director of National Intelligence, Daniel Coats. The oligarch list their agencies must produce is mandated under the Countering America’s Adversaries Through Sanctions Act of 2017, which President Trump signed under congressional pressure in August. The law is among the most significant measures the United States has undertaken in an effort to punish Russia for meddling in the 2016 elections.

In the letter, the four senators also asked for scrutiny of another oligarch: citing ties to organized crime and politically connected business deals, the letter also requests that Russian Prosecutor General Yuri Chaika be placed on the forthcoming oligarch list, which is due to be presented to congress January 29.

A spokesperson for Mr. Usmanov did not provide a response to a request for comment on the letter.

 

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