The FBI raid on homes in Washington and New York City linked to the Russian oligarch Oleg Deripaska on October 15 is a reminder of two facts crucial for an understanding of Russia’s ongoing hybrid war on America and her European allies (notably Ukraine). 

First, the good news: Russia’s wealthiest people are dependent on the West and are thus vulnerable to Western pressure. 

Deripaska’s luxury mansion in Washington (which he says is owned by relatives and is estimated to be worth $15m) is one of the many examples of Russia’s super-wealthy and their relations investing in lavish lifestyles in the West. According to Russia’s Federal Tax Service, Russian individuals and legal entities hold $180bn abroad. According to an unofficial estimate in 2018, some $315bn controlled by 30,000 Russian millionaires was kept in Western banks (and another $140bn of their funds in Russian institutions).

This tiny group includes not only businessmen like London football club and luxury yacht owner Roman Abramovich, but also, according to media investigations, relatives of the pro-Putin TV channel manager and propagandist Konstantin Ernst, Putin’s foreign minister Sergey Lavrov, Putin’s exwife, Putin himself, and — the recently leaked Pandora Papers say — Putin’s alleged lover. While some super-wealthy Russians like Abramovich reject allegations of inappropriate ties to the Kremlin, others like Deripaska wear it as a badge of honor. “Deripaska has said that he does not separate himself from the Russian state,” as the US Treasury tartly noted when it sanctioned him in 2018. 

It is hard to understate the reliance of this gilded class on the property portfolios, shops, educational facilities, and financial investments in the democratic West, where ownership rights are established by law. It is very clear that they value these legally enshrined and hard-to-breach asset vaults that contain their extraordinary wealth. 

This is where the collective West can strike if it chooses. Russia continues to wage war on Ukraine and to interfere in the internal affairs of countries around the world, but there is no need for a risk-averse, post-Afghanistan West to become militarily engaged. Western democracies (the US and UK in particular) have a powerful non-military tool for not just “containing Russia” but forcing a return to peaceful behavior. FBI and Scotland Yard’s boots on the ground in New York and London will suffice — if there is the political will to tackle the Kremlin’s trans-border kleptocracy. 

The second, saddening fact, exemplified by the Deripaska family’s US presence, is the infiltration of the West’s business and political elite by Russian capital — creating yet more vulnerabilities. 

As the UK House of Commons stated in a landmark 2020 report: “[Russian] money was . . . invested in extending patronage and building influence across a wide sphere of the British establishment — PR firms, charities, political interests, academia and cultural institutions were all willing beneficiaries of Russian money, contributing to a ‘reputation laundering’ process. In brief, Russian influence in the UK is ‘the new normal,’ and there are a lot of Russians with very close links to Putin who are well integrated into the UK business and social scene, and accepted because of their wealth.” 

This is what makes today’s strategic situation so different from the 20th century. The Cold War adversaries were much more fenced off from each other, and much less capable of action behind enemy lines. Now, Russia employs retired senior Western officials; funds Western political parties and media via her oligarchs; directly influences Western public opinion via state propaganda and covert social media armies, all of which was made possible, at least in part, through the infiltration of Russian funds at a scale unimaginable from the 1950s-1980s. 

Despite the 2018 ban on Deripaska and some other Russian oligarchs, his work in the West continues. He has lobbied (successfully) for the lifting of US sanctions from companies in his portfolio. The need to work unencumbered in the West is clear both for Russian businessmen and for their friends in the Kremlin; for example, Rusal needs to sell aluminum, nickel, and silicone worldwide but is also a key element of Russian weapons manufacturing. And while Deripaska has assured the West that has relinquished control of his firms, officials have briefed journalists that this is not the case.  

This Russia-West confrontation requires the re-learning of lessons from the Cold War. The Kremlin is not our friend, nor is anyone reliant on the Kremlin, however wealthy. Despite its bluster, its massive military, and its hyperactive intelligence agencies, Russia is not a great power; its influence is merely magnified by a too-often supine West willing to tolerate its serial misbehavior and acts of aggression.  

The only way to change this is through sanctions so biting that they pacify the Kremlin’s lust for conflict. Not only would this be good for the West, but it would also assist ordinary Russians seeking change and greatly reduce the risk of what should really frighten us: a hot war. 

Failure to act would be an error; bringing the Kremlin closer to its ultimate goal of using these enormous funds to make further attacks on the West and on the domestic figures challenging Putin’s unwavering grip on power. 

Mykhailo Basarab, a political science Ph.D., is a Ukraine-based political analyst and consultant. 

Oleksiy Panchenko is a Ukraine-based analyst specializing in politics, security, and infrastructure.