Northwest Arkansas Democrat-Gazette
New U.S. sanctions hit Russians
Executive tied to Manafort among politicians, oligarchs on list
WASHINGTON — President Donald Trump’s administration imposed new economic sanctions on Russian politicians, tycoons and businesses Friday in its most aggressive response to Moscow’s attempts to undermine Western democracies and recurring cyber offensives.
The measures take aim not only at Russians directly connected to the Kremlin but also several with links to Trump’s campaign or his associates who have been scrutinized in special counsel Robert Mueller’s investigation.
The sanctions continue the Trump administration’s
trend of taking increasingly bold moves against Russia under pressure from Congress even as Trump holds out the possibility of warmer relations with Russian President Vladimir Putin. Trump recently invited the Russian leader to meet with him, possibly at the White House.
“The Russian government operates for the disproportionate benefit of oligarchs and government elites,” Treasury Secretary Steve Mnuchin said in a statement. “Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.”
Russia’s Foreign Ministry vowed a “harsh response” and said the measures would be just as ineffective as previous rounds of sanctions.
It described the sanctions as “absurdity,” arguing that the U.S. was punishing companies that have long-standing business ties to the U.S. and that the U.S. was “striking at ordinary Americans” by jeopardizing “thousands of jobs.”
At the White House, press secretary Sarah Huckabee Sanders said discussions with Moscow about a Trump-Putin summit would not be called off. “Not at all,” she said. “We’ll continue.”
Trump last week reiterated his assertion that “there’s nobody been tougher on Russia” than he has. He added in a Tuesday news conference that “getting along with Russia is a good thing” but “there’s also a great possibility that won’t happen. Who knows?”
Those penalized include seven Russian oligarchs, 12 companies and 17 senior government officials under provisions of a law Congress passed last year to retaliate against Moscow for meddling in the 2016 presidential election. Several of the individuals have close ties to Putin, including the son of a childhood friend of the Russian president, and an energy executive who vacationed near the Putin family and married his daughter.
Some of the oligarchs, such as natural resources magnates Oleg Deripaska and Viktor Vekselberg, made their fortunes in the 1990s and have looser connections to Putin. Others got rich running some of Russia’s biggest state-controlled energy and financial firms, including the energy giant Gazprom and the state-controlled bank VTB.
But what sets Deripaska and Vekselberg apart from the many other Russian tycoons who did not make the list is their connections to the Trump world.
Deripaska, for example, was once a business partner of former Trump campaign chairman Paul Manafort, who is facing money-laundering charges. A top executive at a U.S. company affiliated with Vekselberg donated to the Trump inauguration fund, and Vekselberg attended the inauguration.
Other people whose names have surfaced in connection with the Russia investigation also ended up on the Treasury’s list.
Konstantin Kosachev, a Russian lawmaker who led soft-power initiatives for the government and surfaced in a dossier containing allegations concerning Trump campaign coordination with the Kremlin during the 2016 election, was sanctioned Friday.
So was Alexander Torshin, a little-known deputy central bank governor who rose to public interest in the United States only after his efforts to promote gun rights in the United States landed him at a table with Donald Trump Jr. during a 2016 National Rifle Association conference.
The list of targets also includes Igor Rotenberg, the son of a Russian tycoon who grew up taking martial-arts classes with Putin, and Kirill Shamalov, who also grew up in a family close to the Putins and who the Treasury said married Putin’s daughter in 2013.
The action also sanctioned top national security officials, including Nikolai Patrushev, a former KGB officer and longtime secretary of the Security Council of Russia, who is one of Putin’s top national security advisers, and Vladimir Kolokoltsev, Russia’s interior minister.
The sanctions freeze any assets the individuals or entities named hold in the United States and prohibit U.S. citizens from conducting business with them — even if they work for international companies outside the United States. The Treasury Department said it would issue guidance to Americans on how to unwind from any business interests they have with them in a way to avoid being punished for violating sanctions.
ACTIONS, CONSEQUENCES
The real power of sanctions is they discourage international financial institutions, which typically conduct business at least partially in U.S. dollars, from doing business with them. The administration explicitly warned that non-Americans may face sanctions themselves for facilitating significant transactions with the people and companies named.
Senior administration officials stressed Friday that the sanctions were not aimed at the Russian people. Instead, they were meant to cripple the finances of those elites who have “disproportionately benefited from the bad decisions made by the Kremlin on their behalf,” one of the officials said.
The officials declined to elaborate on why Putin was not directly targeted, but they said several people in the Russian leader’s inner circle were being sanctioned.
“I think it’s important to see in today’s action, a message. And that message is that actions have consequences,” said another senior administration official, who spoke to reporters only on the condition of anonymity. “Today’s announcements are the result of a decision that the Russian government has made and continues to make in choosing a path of confrontation.”
Deripaska’s business interests were among those targeted.
En+ Group, of which Deripaska is the majority shareholder, is the largest operator of Siberian power plants. That company was among those sanctioned, as was GAZ Group, Russia’s leading manufacturer of buses, in which Deripaska holds an 83 percent stake.
En+ Group has a major stake in Rusal, Russia’s biggest aluminum producer, which also was sanctioned and whose shares dropped 11 percent after the announcement. Deripaska’s recently listed En+ holding company dropped 20 percent.
The ruble was little changed on the news.
After the sanctions announcement, Russian officials vowed to retaliate.
“This is an unfriendly act and we must respond, whether we do that tit for tat or in some other way is something we need to think about,” said Andrei Klimov, a member of the upper house of parliament. “The harm inflicted should be comparable,” he said, suggesting that cooperation in areas such as aerospace and nuclear power could be targeted.
In recent weeks, Trump’s top advisers have pushed for tougher actions against the Kremlin after the poisoning of a former Russian spy in Britain, interference in the 2016 U.S. elections and a cyberattack against Ukraine and other countries last year that was described as the most costly in history.
The sanctions won quick support from Congress, which pushed for tough moves against Putin’s inner circle since last year when it passed legislation requiring the Treasury Department to publish a list of Russian oligarchs. Trump signed the legislation after it passed with a veto-proof majority, even as he called it a seriously flawed and unconstitutional bill.
“The sanctioning of oligarchs like Oleg Deripaska, who is linked to Paul Manafort, Alexander Torshin, and Putin’s son-in-law will send a strong message to the Kremlin,” said Rep. Adam Schiff of California, ranking Democrat on the House Intelligence Committee. “By isolating Putin’s regime and financially punishing his support base among the oligarchs, we may be able to induce a change in Moscow’s behavior — if not, we will have to explore other options to pressure the Kremlin to chart a new direction.”
Sen. Marco Rubio, R-Fla., agreed that the sanctions would make a strong point that Putin’s actions, including “efforts to undermine Western democracies,” would “continue to result in severe consequences for him and those who empower him.”
The Kremlin has expressed increasing exasperation with Washington’s policies under the Trump administration despite hopes the president would take a softer approach toward Moscow. Last week, the United States expelled 60 Russian spies and diplomats in response to the poisoning of Sergei Skripal, the former Russian spy, and his daughter. It was the largest expulsion of Russians in U.S. history. Russia, in turn, expelled 60 U.S. officials.
Trump’s outgoing national security adviser, H.R. McMaster, publicly called for a tougher line against Russia in a speech Tuesday, saying in the face of Putin’s increasing aggression around the world, “We have failed to impose sufficient costs.”
Russian opposition figure Alexei Navalny, meanwhile, tweeted that he is “looking at the new US sanctions list of Russian officials and oligarchs and thinking back of the day when they had champagne celebrating Trump’s victory. I am laughing.”
Information for this article was contributed by John Hudson, Paul Sonne, Amie Ferris-Rotman, Seung Min Kim and Carol Morello of The Washington Post; by Josh Lederman, Matthew Lee, Catherine Lucey, Vladimir Isachenkov, Nataliya Vasilyeva and Jim Heintz of The Associated Press; and by Saleha Mohsin, Justin Sink, Ilya Arkhipov and Gregory L. White of Bloomberg News; and by Greg Gordon, Kevin G. Hall, Anita Kumar and Peter Stone of the Tribune News Service.