Among the oligarchs who were sanctioned over ties with Vladimir Putin following the war in Ukraine are a few billionaires who hold Israeli citizenship – or are eligible for it ? If they now decide to make their home in Israel, they could change the balance of forces in the local economy
By Shuki Sadeh, HAARETZ
The images last week of Roman Abramovich at Ben-Gurion International Airport, just before he boarded a plane after a quick visit to Israel could be a preview of a much larger tale: that in the face of sanctions, Jewish oligarchs close to Russian President Vladimir Putin flocking to take advantage of their Israeli citizenship, or their right to obtain such citizenship under the Law of Return.
The sanctions prevent the oligarchs from entering Western nations, froze and seized assets, and banned doing business with the oligarchs. An Israeli passport is now much more valuable, certainly compared to a passport from the oligarchs’ favorites up to now, Cyprus and Malta, which are members of the European. Twitter accounts that track the movements of their private planes show travel increasing between Russia and Turkey, Israel and the united Arab Emirates – places where the private jets of Russian billionaires can still land, as opposed to Europe and the United States, there the skies have been closed to them.
The prospect of personal sanctions being imposed on the oligarchs should not have come as a surprise, and it was possible to prepare in advance for such a situation. Back in January 2018, the U.S. Treasury Department released what was dubbed the “Putin list” following suspicions that Russia interfered in the 2016 presidential election. The list included 210 Russians, including 114 senior political figures and 96 oligarchs with a net worth of over $1 billion considered to be close to the Kremlin. No sanctions were imposed at the time, though some people on the list were already under them – but it was clear that further sanctions were quite possible in the future. About 20 of the people on the list were Jewish businessmen, some with Israeli passports.
One example is Jewish businessman Viktor Vekselberg (an investor the company Fifth Dimension that was chaired by Defense Minister Benny Gantz), who was on the list and now is under sanctions. Yuri Milner, an Israeli citizen, was also on the list, but was not one of those recently placed under the new sanctions. Milner is not a “classic” oligarch, but rather a high tech entrepreneur and owner of an investment company, DST Global, which invested in Facebook and is still an investor in many other major companies.
This week, Foreign Minister Yair Lapid declared that Israel would not allowed itself be used to be used to evade sanctions – but Israel has not actually joined in them. Israel does not have any law against granting citizenship to a Jew who has had international sanctions imposed on them – but it does have the so-called Milchan Law from 2008, which grants an exemption from reporting to the tax authorities on foreign income for 10 years after immigrating to Israel.
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All this has laid the ground for a situation in which Israel could well become the place of refuge for the “dirty money fueling Putin’s war,” as U.S. Under Secretary of State for Political Affairs Victoria Nuland said last week in an interview with Channel 12 News.
Here are eight oligarchs, all immensely wealthy, who in theory could exploit their being Jewish and find refuge – for both themselves and their money – in Israel. All of them, except for the Rotenberg brothers and Alishar Usmanov, already have Israeli passports.
How he made his fortune:
In the mid 1990s, Abramovich and his partners bought the Russian government oil company Sibneft for $200 million; 10 years later, he sold his share to the Russian government for $11.9 billion. After that he went into the aluminum business, and sales of his shares in that increased his wealth even further.
Major business holdings:
Abramovich is the owner of the British private investment firm Milhouse LLC, which owns 5 percent of the Russian mining company Norilsk Nickel. He also owns 31 percent of the Russian steel company Evraz and is the owner of the English Premier League soccer team Chelsea, which he is being forced to sell now because of the sanctions.
Sanctions survey:
Abramovich was considered to be very close to Putin for years, and from 2001 to 2008 he served as the governor of a province in far-eastern Siberia. Two weeks ago, the United Kingdom imposed personal sanctions on him, and last week the EU did the same.
Possible economic interests in Israel:
Abramovich has invested in Israeli real estate and high tech. He owns expensive properties in pricey Tel Aviv suburb of Herzliya Pituah and in the Neveh Tzedek neighborhood of Tel Aviv, where the renovations he is doing were stopped last week. He has also invested in 12 high tech-funds and companies in Israel, including the startup StoreDot, which is developing rapid-charging batteries, and AnyClip Media, which analyzes video data and is backed by the Jerusalem Venture Partners fund.
Donations to Israeli or Jewish institutions:
Abramovich is one of the biggest donors to Israeli and Jewish institutions. He has given $30 million to Tel Aviv University, $60 million to the Sheba Medical Center at Tel Hashomer, $5 million to the Jewish Agency to Israel as well as to the Jewish National Fund. He has also given $100 million to Elad – the Ir David Foundation. Two weeks ago, the Yad Vashem Holocaust memorial center in Jerusalem announced it was freezing his contribution of tens of millions of dollars after he was placed on the sanctions list.
How he made his fortune:
Kantor, who has a PhD. in spacecraft automatic control systems from the Moscow Aviation Institute, worked as a scientist for the government and headed one of the institute’s research labs in the 1980s, and then opened a computer networking business. In 1993, during the large wave of privatization in Russia, he bought a large chemical factory, which was later combined with other factories and businesses into the huge Acron Group, one of the world’s largest producers and sellers of fertilizer.
Major business holdings:
Kantor is the controlling owner of Acron, which trades on the stock markets in London and Moscow. He also owns the largest collection in the world of 20th-century avant-garde Russian art.
Sanctions survey:
Kantor has been considered close to Putin for years, but his name never came up as someone who might come under Western sanctions. He has denied he is close to Putin in the past. But in 2018, his name did appear on the “Putin List.” It is possible that Kantor is less worried about the sanctions than others, because he also has links to Western leaders: In 2008, he founded the European Council on Tolerance and Reconciliation, whose members include former British Prime Minister Tony Blair and former Swedish Prime Minister Goran Persson, along with many other major European political figures.
Possible economic interests in Israel:
He owns a large house in Herzliya Pituah, but as far as is known, Kantor has no business interests in Israel. Acron is a major international competitor to Israel Chemicals.
Donations to Israeli or Jewish institutions:
Over the years, Kantor has donated to the European Jewish Congress and is its president; he is also the chairman of the World Jewish Congress policy council. He has donated to Yad Vashem and is the president of the World Holocaust Forum Foundation, which funded the events marking 75 years since the end of World War II, during which Putin spoke at Yad Vashem. Kantor is also a donor to Tel Aviv University, where the Kantor Center for the Study of Contemporary European Jewry bears his name. In 2011, he contributed 40,000 shekels to Benjamin Netanyahu’s campaign for the Likud party’s leadership.
How they made their fortune:
Fridman was born in Lviv in western Ukraine, and according to what he wrote his employees at the start of the war, his parents and relatives still live there. At the end of the 1980s, he began selling computers, photocopiers and photographic chemicals. In 1991, he founded the Alfa Bank and he brought in Petr Aven, a former Russian minister, as a partner. Today, it is the biggest bank in Russia and the second-largest private bank in Ukraine.
Khan, who was born in Kyiv, ran small businesses, including a clothing cooperative in the 1980s, until in 1990 he met Fridman by chance. Fridman brought him into Alfa Group, and they have been partners since. In 2013, the group enjoyed a huge buyout when the TNL-BP oil company was sold for $55 billion to the Kremlin- owned Roseneft oil company. Alfa Group received $14 billion for its share of TNL-BP.
Major business holdings:
The two are the controlling owners of Alfa Bank; X5 food group, the largest Russian food retailer; and the founders of the LetterOne investment fund, which manages $3.5 billion in investments in retailing, energy, health and high tech – which was founded with the money from the sale of TNK-BP.
Sanctions survey:
Fridman and Khan are considered close to Putin. Two weeks ago, the EU imposed sanctions on Fridman. At a press conference he held at the beginning of March in London, Fridman refused to condemn the Russian invasion of Ukraine, saying that such a statement could harm his employees in Russia. He said he would fight the sanctions. Last week, similar sanctions were imposed on Khan.
Possible economic interests in Israel:
As far as is known, Fridman and Khan do not have any businesses in Israel. But in 2019, X5, under the auspices of the Israel–Russia Chamber of Commerce, announced a competition between Israeli startups in the area of technology and retailing – but as far as is known, no significant investments came out of it.
Donations to Israeli or Jewish institutions:
Fridman and Khan donate to the Russian Jewish Congress and the European Jewish Congress. They are the main supporters of the Genesis Prize Foundation, which was founded in 2012 and gives a $1 million prize each year to Jewish figures and is often called the “Jewish Nobel Prize.” Fridman, Khan and others donated $100 million to found the foundation, and the recipient is chosen jointly by the foundation, the Israeli government and the Jewish Agency. At the beginning of the war in Ukraine, the Genesis Fund donated $10 million to the Ukrainian Jewish community.
How they made their fortune:
The Rotenberg brothers, who are Jewish, were owners of a gas station chain in the 1990s, but became real billionaires under Putin. They won a long list of government contract under Putin, including for building infrastructure for the Sochi Olympic games in 2014, which gave them government contracts worth $7 billion.
Major business holdings:
The two brothers own a long list of construction and infrastructure companies, including one for laying gas pipelines. The best known is SGM, and they also own the Sheremetyevo Airport in Moscow.
Sanctions survey:
The two brothers are childhood friends of Putin, and also trained in judo with him. They are considered to be part of his inner circle. Arkady has said he owns a huge mansion on the Black Sea, but opposition activist Alexei Navalny revealed that the palace actually belongs to Putin. The U.S. has imposed certain sanctions on the two since 2014, after the Russian invasion of Crimea – and when the invasion of Ukraine started last month, the sanctions were expanded. Germany and the EU have joined the sanctions against Arkady only, because his brother is a Finnish citizen.
Possible economic interests in Israel:
None.
Donations to Israeli or Jewish institutions:
None.
How he made his fortune:
Usmanov was born in Uzbekistan to a family with quite a few political connections. In the 1980s, he opened a factory for manufacturing plastic bags, and after that he worked for government gas companies in the Soviet Union. After the end of the Soviet Union, he gradually bought government companies that were being privatized and consolidated them into the Metalloinvest conglomerate he owns today.
Major business holdings:
Usmanov is the majority shareholder in the largest mining and metals company in Russia, Metalloinvest. He is also the owner of Russia’s second-largest mobile phone operator, MegaFon. He is also an owner of the large Russian media outlet Kommersant. Usmanov is a large investor in Yuri Milner’s DST investment fund, which was a major early investor in Facebook. Through this fund, Usmanov also owns shares in Twitter and Airbnb. In the past, he was an owner of the English soccer club Arsenal.
Sanctions survey:
Usmanov is considered to be one of the oligarchs closest to Putin, and Western nations imposed sanctions on him at the beginning of March. It was also reported that his huge yacht, worth some $600 million, was confiscated – or detained – in the port of Hamburg in Germany.
Possible economic interests in Israel:
Usmanov has no known investments in Israel, but until December 2021, he owned 45 percent of the stock of VK, formerly known as the Mail.RU Group, which had investments in a number of internet companies in Israel. He sold his shares to state-owned gas company Gazprom. Mail.RU had bought the Russian social network VKontakte, the largest in Europe, from Yitzchak Mirilashvili, who today owns Israeli Channel 14 and is the son of oligarch Mikhael Mirilashvili.
Donations to Israeli or Jewish institutions:
Unknown. Usmanov’s wife, Irina Viner-Usmanova, is a prominent international rhythmic gymnastics coach. She is Jewish, which legally permits Usmanov to move to Israel and become a citizen under the Law of Return. Viner-Usmanova is close to Israel’s former national rhythmic gymnastics coach, Ira Vigdorchik. A few months ago, Viner-Usmanova appointed Vigdorchik as the coach of the Russian national rhythmic gymnastics team.
How he made his fortune:
As opposed to most of the oligarchs, Volozh did not make his money from the privatization of government companies or natural resources. Instead, he founded technology company Yandex in 1997, after he was involved for a few years in the technology and communications sector.
Major business holdings:
Volozh is the founder and owner of Yandex, Russia’s most popular search engine and news portal, known as the Russian Google. The company is traded on Wall Street and in Moscow, and employs 18,000 people around the world, including in Israel.
Sanctions survey:
When Yandex had its IPO on Wall Street, Sberbank – the largest state-owned bank in Russia – received what is known as a “golden share,” which allows it to veto the sale of more than a quarter of the company’s shares. This changed in 2019, when the golden share was transferred to a public fund. Alexander Voloshin, who served as Putin’s chief of staff and is close to him, is a director in the company. Volozh appears on the 2018 Putin list, but no sanctions have yet been imposed on Yandex or Volozh
Last week, however, the EU decided to impose sanctions on a senior executive in the company, Tigran Khudaverdyan, who as a result stepped down from his posts. According to the statement released by the EU, the former head of Yandex’s news portal, Lev Gershenzon, accused the company of being “a key element in hiding information” from the Russian public about the war in Ukraine. At the end of February, Khudaverdyan participated in a meeting of oligarchs with Putin in the Kremlin to discuss the effects of the sanctions on the Russian economy, which demonstrates how close he is to Putin, said the EU statement.
Possible economic interests in Israel:
Yandex operates its Yango taxi application in Israel, as well as its Yango Deli delivery service app, which employ hundreds of people. It also has a development center in Israel, which employs dozens in its autonomous car enterprise. The company is now examining the creation of a large development center in Israel in other areas of its operations, which is expected to employ hundreds of people. It is possible that some of these workers will come from its development center in Russia.
Donations to Israeli or Jewish institutions:
Volozh, who is married to an Israeli woman with whim he has three children, divides his time between Tel Aviv and Moscow. But there is no information on any contributions on his part to Israeli or Jewish institutions.
Already in Israel
While most of the oligarchs live in major international cities, mostly in Moscow and London, a few of them decided a long while ago to make their homes in Israel – unrelated to the international sanctions. Among the best known of them are Leonid Nevzlin – who owns 25 percent of the Haaretz Group – Vladimir Dubov and Mikhail Brudno, who arrived in Israel in 2003 (after Putin persecuted the group that controlled the large oil company Yukos and its head, Mikhail Khodorkovsky, who served 10 years in Russian prisons).
Nevzlin and Brudno moved to Herzliya Pituah and Dubov lives in Kfar Shmaryahu. Led by Nevzlin, the three previously invested in Israel Petrochemical Enterprises and established a philanthropic fund: the Nadav Foundation, named after their initials. Last week, Nevzlin announced that he was renouncing his Russian citizenship as a protest against the war in Ukraine, and criticized Israel’s policies on the war, in an opinion piece published in Haaretz.
Michael Cherney, who is close to Finance Minister Avigdor Lieberman, and who was previously married to Nicol Raidman – a close friend of Sara Netanyahu – is another oligarch who has lived in Israel for many years. He made his fortune in Russia in the 1990s in the aluminum and coal businesses and immigrated to Israel in 2004. Today, he lives in Savyon.
Mikhael Mirilashvili is yet another oligarch who lives in Israel, but also owns quite a bit of real estate in Saint Petersburg, where he made his career as a businessman in the 1990s. He now lives in Herzliya Pituah. His son, Yitzchak Mirilashvili ,made it rich from selling Russia’s largest social media company, VKontakte. He also owns a number of real estate and hig-tech businesses in Israel, as well as Channel 14.
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