U.S. Treasury’s List of Putin ‘Oligarchs’ Jolts Russia’s Elite Class

The U.S. Treasury Department is nearly concluding its first official list of “oligarchs” closely related to President Vladimir Putin’s government, setting off a burst of moves by wealthy Russians who are trying to protect their fortunes and reputations, Bloomberg informs.

Some people who think they’re likely to land on the list have stress-tested the potential impact on their investments, two people with knowledge of the matter said. Others are liquidating holdings, according to their U.S. advisers.

Russian businessmen have approached former Treasury and State Department officials with experience in sanctions for help staying off the list, said Dan Fried, who previously worked at the State Department and said he turned down such offers. Some Russians sent proxies to Washington in an attempt to avoid lobbying disclosures, according to one person that was contacted.

The report is expected to amount to a blacklist of Russia’s elite. It was mandated by a law President Donald Trump reluctantly signed in August intended to penalize the Kremlin for its alleged meddling in the 2016 election. A rare piece of legislation passed with a bipartisan veto-proof margin, the law gave Treasury, the State Department and intelligence agencies 180 days to identify people by “their closeness to the Russian regime and their net worth.”

The list has also become a headache within Treasury, where some officials are concerned it will be conflated with sanctions, a person familiar with the matter said. Treasury officials are considering keeping some portions of the report classified, which the law allows, and issuing it in the form of a letter from a senior official, Sigal Mandelker, instead of releasing it through the Office of Foreign Assets Control, which issues sanctions. That would help distinguish it from separate lists of Russians subject to U.S. economic penalties, said the person, who spoke on condition of anonymity.

“You’re going to have people getting shamed. It’s a step below a sanction because it doesn’t actually block any assets, but has the same optics as sanctions — you’re on a list of people who are engaged in doing bad things,” said Erich Ferrari, who founded Ferrari & Associates in Washington and has helped people get removed from the sanctions designation list.