How did Russian oligarchs get so rich? WRAL Investigates
Posted March 18, 2022 2:43 p.m. EDT
Updated March 18, 2022 6:26 p.m. EDT
The international effort to seize money and property from Russia’s richest is picking up steam with a new international task force. Known as the oligarchs, the 100 richest account for 35% of all the wealth in Russia. That’s the biggest portion of a nation’s wealth owned by 100 people of any country in the world.
So WRAL Investigates wanted to know exactly how they got so rich.
"These folks really gamed the system," said Simon Miles, a Cold War expert at Duke University.
Miles said the collapse of the Soviet Union in the early 1990s created opportunity for the oligarchs.
"We’re talking about people who profited enormously and unfairly from the rapid and turbulent privatization of the Soviet economy," he said.
When the Soviet Union collapsed, the government sold profitable, state-run companies in oil, natural gas, transportation and more. The initial idea was to have all of Soviet citizens buy small portions of those companies.
But that’s not what happened.
"Let’s make it really easy for Russians to become equity owners in these massive firms. What actually happened was very, very few people acquired enormous wealth," said Miles.
Some of the companies hit the auction block in the middle of the night in a remote town in Russia. Only the eventual buyer knew about the sale, so they were only bidding against themselves.
"People found ways in order to adjust the process or adjust the price," said Miles.
Political connections led to some of the secret sales. In other cases, Miles said, force was used.
"We’ve got stories of bribery, stories of kidnapping, ransoming basically for compliance," he said. "That’s a really cheap way to acquire a lot of wealth really quickly."
Thirty years and approximately $420 billion richer, the oligarchs continue to pay off their debt with loyalty to Russian President Vladimir Putin. Miles said the war with Ukraine and economic sanctions – including seizing the oligarchs money and property are testing that loyalty.
"It’s going to be interesting to see what the club looks like, right, because the entire Russian economy is changing," said Miles.