As U.S. President Joe Biden considers sanctions on the personal wealth of Russian President Vladimir Putin, critical questions emerge: How big is that fortune, and how did Putin, a lifelong public official, accumulate it?
Those are mysteries Forbes has grappled with for 20 years. Figuring out Putin’s net worth is probably the most elusive riddle in wealth hunting–harder than the heirs, other heads of state and even drug lords that we’ve financially smoked out over the years. Uncovering private wealth is something we take very seriously, especially in Russia–the founding editor of Forbes Russia, Paul Klebnikov, risked his life for this cause, and was shot in the streets of Moscow in 2004 as he was investigating the fortunes of Russia’s early oligarchs.
So where and how much is the fortune that Biden threatens to sanction over Russia’s aggression in Ukraine? We don’t know. But over the years, leaning on sources and expertise, we’ve developed some theories:
THEORY ONE: THE KHODORKOVSKY MODEL
Forbes’ journey down the rat hole began with research into Russian billionaires, starting in 1997, and a cover story by Klebnikov that we ran in 2002 profiling a rising Russian oligarch named Mikhail Khodorkovsky. At the time, his company, Yukos, accounted for 17% of Russia’s oil production and was seen as having significant influence in the Kremlin. He was personally worth $3.7 billion and was Russia’s richest man. One of his former employees was once minister of fuel and energy. Another was Putin’s then-deputy chief of staff. Khodorkovsky’s fortune doubled over the next year. By October 2003, he was in jail, convicted of fraud and tax evasion (which he denied).
There was little doubt that Putin was behind his arrest, the freezing of his fortune and the eventual breakup of his company. Khodorkovsky’s fate was a powerful lesson to other Russian oligarchs. Yet the question remains: How much of Khodorkovsky’s fortune did Putin take for himself?
One person who has been following this story for years, Bill Browder, an American financier who’s conducted a lot of business in Russia and is behind the Magnitsky laws that enable governments to impose targeted sanctions on human rights offenders by freezing their assets, insists that after Putin arrested Khodorkovsky, he made a deal with the country’s leading oligarchs.
“The deal was, ‘You give me 50% of your wealth and I’ll let you keep the other 50%,’” says Browder. “If you don’t, he’ll take 100% of your wealth and throw you in jail.”
Based on that math, Browder calculated in 2017 that Putin was worth $200 billion, which would have made him the richest person in the world at the time. Browder’s calculation was simple: He added up the net worths of all the Russian oligarchs and divided by two.
Pyotr Aven–who heads Russia’s largest private-sector bank, and who Forbes estimates to be worth $4.8 billion– lent credence to that theory when he told Robert Mueller, as part of his special counsel investigation into 2016 election interference, that he was one of 50 Russian businesspeople who regularly meet with Putin at the Kremlin. “Aven said that he took these meetings seriously and understood that any suggestions or critiques that Putin made during these meetings were implicit directives, and that there would be consequences for Aven if he did not follow through,” the Mueller report reads.
THEORY 2: THE MAFIA MODEL
Another scenario is that Putin’s fortune comes from helping his close circle of friends and family become rich by awarding them government contracts or ownership in businesses. In return, the theory goes, he gets kickbacks of cash or stakes in the companies. In some ways, it sounds like a mafia structure, whereby soldiers and capos (in this case billionaires) are in perpetual debt to the boss (Putin). They do the dirty work, he takes a cut.
According to Swedish economist Anders Aslund, the author of the 2019 book Russia’s Crony Capitalism, Putin has recruited family, childhood friends, bodyguards and others to hold his money. He estimates that each person has between $500 million and $2 billion and that his net worth is anywhere between $100 billion and $130 billion.
Among the Putin cronies who have grown extremely wealthy: His former judo sparring partner, Arkady Rotenberg, with whom he apparently still plays ice hockey, received more than $7 billion in various state contracts in the lead-up to the Sochi Olympics, earmarked for everything from a power plant to the development of ski resorts. More recently, Rotenberg–whose brother Boris and son Igor are also billionaires–called himself the owner of a huge complex of buildings on the Black Sea coast, which Russian opposition leader Alexei Navalny called “Putin’s palace.”
Then there is Kirill Shamalov, Putin’s former son-in-law. The son of Putin’s longtime friend, Shamalov began benefiting from his familial connections when he became chief counsel in the legal department of Gazprombank, one of Russia’s largest financial institutions. But the floodgates opened when he reportedly married Putin’s daughter in a secret wedding. (Even that fact people are reluctant to confirm.) Soon after, Shamalov bought a 17% stake in Sibur from another friend of Putin’s, Gennady Timchenko, after borrowing the funds from Gazprombank, an institution that Aslund estimates is responsible for two-thirds of Putin’s wealth. He became a billionaire at age 34, three years after the wedding. The marriage, however, was dissolved sometime in 2016 or 2017, and Shamalov was reportedly stripped of his wealth and had to sell his Sibur stake.
One of Putin’s closest friends, a cello player named Sergei Roldugin who befriended the Russian president as a young man in Leningrad and introduced Putin to his now ex-wife, was named in the 2016 Panama Papers investigation because of reported his ties to a network of companies with up to $2 billion in cash flows and a report that he was the owner of $100 million in assets. Roldugin told The Guardian that the money came from donations from rich businessmen to buy musical instruments for poor students.
“The richer you get, the more dependent you get,” Aslund says. “Wealth does not give you freedom, certainly in Russia. “There are so many things that can happen when you have too much money.”
THEORY 3: THE BLUSTER MODEL
In short, given the lack of evidence otherwise, it’s possible Putin has little money of his own and simply likes people to think he does because it suggests power.
This is certainly true–on paper, at least. Putin’s official financial disclosure, released annually by the Kremlin, lists his 2020 income at about $140,000. The only assets he claims: ownership of three cars, a trailer, an 800-square-foot apartment and a 200-square-foot garage, plus the use of a 1,600 square-foot apartment and two parking spaces. No mention of his sizable collection of high-end wrist watches, or the “Putin’s Palace” he allegedly owns (which he denies, and a complex that Rotenberg claims to own)—let alone the massive portfolio of palaces, yachts and aircraft he uses as Russia’s unquestioned leader.
Some observers cite those lavish trappings of state power as examples of why Putin doesn’t need personal wealth. “He has the whole country at his beck and call,” Bloomberg Opinion columnist Leonid Bershidsky wrote in 2013. “It is enough for Putin to snap his fingers, and state-owned companies will cede assets to his friends at bargain-basement prices. A whisper from him, and wealthy private businessmen will chip in for the lavish refurbishment of a presidential residence.”
In the end, Putin may not need money, so long as he has the appearance of having it and the power that it would otherwise confer. As Putin bullies and threatens Ukraine, one can look at this model, and hope that, in the end, it’s just more bluster.