Ukrainian president’s secret call to Mitch McConnell puts pressure on oligarchs

WASHINGTON — The day before Ukrainian President Volodymyr Zelenskyy stormed into the United States and delivered an impassioned speech to Congress, he made a discreet phone call to one of the country’s most powerful Republicans: Mitch McConnell.

Among his urgent requests: convince the Senate minority leader to help hand over the seized fortunes of Russian oligarchs, including the proceeds from their yachts, planes and mansions, to help rebuild the devastated country of the Ukrainian president.

Two days later, with an outpouring of Republican support, the war leader got his wish.

A special provision was included in the government’s massive year-end spending bill on December 22 to direct the wealth of some of Vladimir Putin’s closest allies to the country he invaded.

Three confidential sources, speaking to The Pittsburgh Post-Gazette on condition of anonymity, said the rare call to the veteran political operative, just hours after Zelenskyy huddled on the front lines with his soldiers in eastern Ukraine, was part of a back- channeling effort to shore up critical support for the besieged country from its most powerful ally.

The 44-year-old Ukrainian leader’s personal appeal came as support for Ukraine’s armed forces began to run into opposition from some Republican Party members of Congress and millions of Ukrainian citizens remained without heat or running water due to the destruction of the nation’s infrastructure by relentless Russian airstrikes.

“Your country has been destroyed,” said Paul Pelletier, a former Justice Department prosecutor and head of the fraud unit. “(He) is someone who knows that unusual times call for unusual measures.”

While key support for the amendment came from the cosponsors, Sen. Sheldon Whitehouse, DR.I. and Senator Lindsey Graham. RS.C., Zelenskyy’s move to reach out to one of the most influential members of Congress amid a legislative debate underscores the extent to which Ukraine’s president is willing to push for additional money for a country mired in war.

In the first six months of fighting, a third of the country’s power plants were leveled and more than 15,000 miles of roads and 300 bridges were destroyed, according to Ukrainian government estimates.

The amount of money that can be seized from Russian oligarchs in the United States is only a fraction of what the country will need to rebuild, experts say. But Zelenskyy’s private call shows just how important that help is for a country where millions of people have been left homeless, said John Herbst, a former US ambassador to Ukraine.

“He is trying to defend his country,” he said.

The elected leader’s request came months after the Biden administration unveiled a series of crackdowns on Russian oligarchs who have long moved their money to the United States, in some cases to hide their wealth.

Programs like Task Force KleptoCapture, which launched in March just days after the Russian invasion, were set up in part to seize dollars and property belonging to elite Kremlin members caught trying to evade US sanctions.

The US government has had the authority for years to seize assets from kleptocrats and corrupt foreign leaders, but new legislation allows prosecutors to strip oligarchs of their villas, planes and money and transfer the proceeds through the Department. of State to pay for the reconstruction of Ukraine. which is expected to cost more than $350 billion.

A Post-Gazette investigation in May, backed by hundreds of secret US Treasury records, revealed that at least eight Russian oligarchs and their companies had transferred billions of dollars to US banks, even after the institutions discovered that many of the transfers bore the hallmarks of money laundering.

One of the billionaires who moved their money to the United States was Arkady Rotenberg, Putin’s former judo partner and one of his most trusted allies. Another was Igor Sechin, a former Russian deputy prime minister, considered by many to be the second most powerful person in Russia.

Other Russian power brokers who have been hit by US sanctions (penalties that lock them out of the US financial system and expose their fortunes to seizures) include Sergey Chemezov, a former KGB agent who was chosen by the Russian president to head the country’s huge defense conglomerate. .

Since the Biden administration announced its campaigns against Russian infiltrators this year, prosecutors have seized millions in assets, including a 348-foot yacht with a helipad, a mosaic-tiled pool, a lobster tank and a pizza oven owned by of billionaire Suleiman Kerimov.

The estimated value of the vessel, which was seized in Fiji at the behest of the US government: $300 million.

In another case, Spanish authorities seized control of a yacht at the request of US prosecutors that is owned by oligarch Viktor Vekselberg. The value of the 255-foot yacht, including elevator, beauty salon and gym: $120 million.

Signing the court order for the seizure, US Magistrate Zia Faruqui said the enforcement action was “only the beginning of the reckoning that awaits those who would facilitate Putin’s atrocities. Neither the Department of Justice nor history will take kindly to oligarchs who chose the wrong side.”

Although Ukraine supporters say the seizures will help put pressure on the Kremlin, it is unclear how much money will be raised, legal experts say. Erich Ferrari, a Washington lawyer who lectures on sanctions law, estimated that prosecutors will get “tens of millions,” not billions, from the program, in part because much of the oligarchs’ wealth is not in the United States. Joined. In total, the money “will probably be far less than what is needed to rebuild a country,” he said.

He said sanctions can work to punish a regime, but they do very little to change a country’s policies. After Russia’s invasion of Ukraine in 2014, the US punished a host of oligarchs, but that didn’t stop Russia from invading yet again.

Pelletier, the former prosecutor, said the punishments are not designed to be used alone, but are among the many weapons the government deploys in conjunction with others to put pressure on an errant nation.

As for sanctions, they send a direct message: even the most powerful people in the country can pay. “The yacht that we seized, we can rebuild an elementary school in Mariupol. It is a poke in the eye of Putin and the oligarchs, ”he said.

Herbst, the former US ambassador, said many Ukraine supporters would prefer the US to target a much larger amount of money: the billions frozen in US financial institutions owned by Russia’s central bank, a move the White House has not accepted, in part because the United States plays a key role as a stable force in the international monetary system.

However, Herbst and others say the United States has taken similar steps in the past against other nations, including Iran.

“I know for sure that Ukraine would like us to make all Russian money available and not wait until reconstruction,” he said. But despite the need for more funds to pay for a massive rebuild, “they’ll take what they can.”

Pelletier said the Ukrainian president’s call to McConnell after meeting soldiers in Bakhmut, where fighting has been fierce, shows he is already planning a massive cleanup and recovery. “Factories have been destroyed,” he said. “There are cities that used to have 80,000 people. Now they have 10,000.”

The day before Zelenskyy closed in on McConnell, Russia launched drone strikes in Kyiv, inflicting further damage on electrical systems and disrupting power in the capital.

By going to McConnell, who has been a staunch supporter of Ukraine aid, Zelenskyy was able to push through a provision that had passed the House months earlier, but not the Senate.

Two days after his phone call with McConnell, it passed by a unanimous vote in the Senate and was included in the $1.7 trillion government spending bill. By Friday, it was sent to President Joe Biden for his signature.

McConnell’s office declined to comment on the Ukrainian leader’s request, but the senator told lawmakers in a floor address two days later that “increasing pressure on the Putin regime” should include “strong sanctions” that ensure that “Russia pays for its misdeeds. ”

For Zelenskyy, it was a quiet legislative effort even before his landmark address to Congress. “He’s a guy who knows how to get things done,” Pelletier said. “The purpose of the sanctions is to attack the financial epicenter of Moscow. Create economic discontent. To make the citizens of Russia feel the pain of what Putin is doing, so that they stand up in whatever way they can.”

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