HOT AIR BALLOON FLIGHT

View in Browser

Tonight: Everyone agrees Putin is filthy rich, but almost no one knows where he hides his money. Plus, vodka boycotts are the new freedom fries. Let's get into it.

By Allison Morrow

💸 MYSTERY MONEY

The US and its European allies on Friday announced new sanctions on Russian President Vladimir Putin, in a rare move targeting a foreign leader's personal wealth. 

But the impact of those sanctions may be largely symbolic. Although Putin is believed to hold billions of dollars in personal wealth, little is known about the exact amount or where it might be. 

Putin has left almost no paper trail for his assets — mostly property — which are hidden behind complex financial schemes organized by his confidantes, according to a 2016 "Panama Papers" report by the International Consortium of Investigative Journalists.

 

Among the luxuries that have been linked to Putin's friends and family, but never directly to him, are a $100 million mega-yacht and a Black Sea palace allegedly built for Putin's personal use. 

 

A $200 BILLION ESTIMATE
On paper, the Russian leader looks like a humble bureaucrat. In 2018, Putin submitted an official income declaration that shows he owns an 800-square-foot apartment in St. Petersburg, along with two Soviet-era cars and an off-road truck. The Kremlin says his annual income is about $140,000 — not an immodest figure in Russia, though hardly one that could keep Putin sporting his rotation of luxury watches. 

"Putin's visible watch collection is worth multiples of his official salary," Bill Browder, an investor in Russia who became a fierce critic of Putin, told CNN in 2018. "The wealth came as a result of extortion and massive theft from state funds."

Browder testified before the US Senate in 2017 that he estimates the Russian leader's wealth to hover around $200 billion in assets, which would make him among the wealthiest people on the planet. 

One theory of Putin's wealth suggests that he has strongarmed Russia's oligarchs, threatening them with arrest or worse unless they fork over cash or stakes in their companies to him.

Still, tracking his wealth has proven next to impossible. Forbes magazine, which counts sleuthing the personal fortunes of the world's elite as part of its core mission, said figuring out Putin's net worth is "probably the most elusive riddle in wealth hunting."

 

THE POWER OF SANCTIONS 

Even though the general public doesn't have a good sense of where Putin's assets are hiding, "we can assume that US and EU intelligence agencies and law enforcement agencies have been tracking his assets for years," said Ross S. Delston, an anti-money-laundering expert.

"If the US government, along with the EU, were to get serious about going after his assets, there'd be a lot of targets to hit," Delston says. "They'd be all over the world ... certainly within the bounds of the EU and the US."

 

The sanctions won't undo the damage Putin has wrought in Ukraine, and in the end they may make only a dent in his total fortune, but they do undermine his credibility on the world stage. 

In stressing how rare it is for the United States to personally target a head of state with sanctions, the US Treasury Department said Friday that "President Putin joins a very small group that includes despots such as Kim Jong Un, Alyaksandr Lukashenka and Bashar al-Assad."

MORE ON THE RUSSIA-UKRAINE WAR

🍸 DON'T DO THIS

Plenty of people are mad at Russia right now, and for good reason. But as is often the case, some Americans are loudly misdirecting their rage.

 

Maybe it makes you feel better, but chucking a case of Stoli into the river ain't gonna do much for the resistance.  

 

Here's the deal: Officials in Ohio, Utah and New Hampshire have called on liquor stores to remove Russian-made or Russian-branded products – namely, vodka. 

• Utah Governor Spencer Cox requested on Saturday that state-run liquor outlets "remove all Russian-produced and Russian-branded products."
• New Hampshire's Governor Chris Sununu made a similar announcement, also asking for the removal of "Russian-made and Russian-branded spirits." 
• Ohio Governor Mike DeWine asked the state's nearly 500 liquor stores to "cease both the purchase and sale of all vodka made by Russian Standard, the only overseas, Russian-owned distillery with vodka sold in Ohio." 

Their hearts are in the right place, but the effect is useful as the "freedom fries" movement of the early aughts. 

  

If you look closely, many of the top-selling vodka brands that trace their origins to Russia are now distilled in multiple countries, including the United States. 

 

Stoli, for one, is Russian only in name. The liquor is actually made in Latvia, and the company's headquarters are in Luxembourg — a member of NATO which has spoken against the Russian invasion. Stoli Group said it "unequivocally condemns the military action in Ukraine and stands ready to support the Ukrainian people, our teams and partners." 

 

Ready to smash that bottle of Smirnoff on ground and light it on fire? Try taking a deep breath, and maybe a shot, instead. Although it traces its heritage to 19th century Russia, Smirnoff has long been owned by British spirits giant Diageo and is manufactured in Illinois. 

 

Less than 1% of vodka consumed in the United States is produced in Russia, and in fact more than half of all vodka consumed domestically is made right here in the U.S. of A. CNN Business' Jordan Valinsky has more. 

WHAT ELSE IS GOING ON?