The first Google hit that surfaces when you search “Vladimir Putin’s net worth” is from something called Wealthy Gorilla, which bills itself as “one of the leading self-improvement blogs on the web.” It pegs the Russian president’s wealth at $70 billion — a figure that, like much else on the site, is offered without evidence.
Bill Browder, a U.S. investor who made a fortune in Russia before becoming a prominent Kremlin critic, told the U.S. Senate in 2017 that Putin was worth $200 billion. Browder is more credible than Wealthy Gorilla, which may not be saying much, but he didn’t share his math, either. Putin “keeps his money in the West and all of his money in the West is potentially exposed to asset freezes and confiscation,” Browder said.
Then there are the numbers from the Russian government, which said last year that Putin took home a $131,900 salary in 2020 and listed some modest assets: a 77-square-meter apartment, an 18-square-meter garage, “two vintage Volga GAZ M21 cars,” a Lada Niva SUV and a trailer. “All these items are in Russia,” the Kremlin added. One missing item: a lavish Black Sea palace that supporters of jailed Russian opposition leader Alexei Navalny say Putin owns.
The reality is that there are probably few people other than Putin who know how much loot he has and where he keeps it. That will make it difficult to figure out which financial switch to flip to deter Russia from invading Ukraine, or to penalize Putin personally if it does. Difficult, maybe even impossible — but definitely worthwhile.
There’s precedent for using the global banking system to crack down on rogue states — Iran was successfully cut off a decade ago. International financial transactions are funneled through a digital network called the Society for Worldwide Interbank Financial Telecommunication, or Swift. Banks, brokerages and about 11,000 other financial institutions in 200 countries use Swift to transfer money across borders or settle securities trades, often in minutes. It’s based in Belgium; member banks control it and central banks from the Group of 10 supervise it.
No single member can tell Swift what to do. But the U.S. is its most influential constituent. If the U.S. wants to lock a country out of the system, it can. So why not close the door on Russia, an autocracy and kleptocracy with a currency and economy that would seize up if it were denied access to Swift?
Some critics say that, overall, economic sanctions haven’t been effective deterrents. They also say that denying Russia access to Swift would spur it to hasten development of its own global payments system (something China has pursued as well). Besides, they say, Russia has been stockpiling reserves of gold and dollars, and can wait out any economic storm.
That argument doesn’t hold water. Yes, Russia has developed its own payment system, but it appears to handle only about 20% of the country’s domestic transfers. Global partners, including China, have been hesitant to use it. And it’s not clear that its prospects will brighten; Russia doesn’t exactly have a stellar reputation when it comes to honoring the security and reliability of digital transactions, particularly when money is involved.
It’s also not clear how long Russia can rely on hard currency reserves if it’s isolated from the banking system. The financial pain and inconvenience would quickly become debilitating. That’s the reason that cutting off access to Swift is so threatening.
But here’s the rub: Putin — and the coterie of advisers who have grown wealthy alongside him, as well as Russia’s military — may be quite content to put their country through intense economic pain if it serves their interests.
It’s also uncertain how much financial pain can be visited upon Putin himself. Oligarchs beholden to him have divided Russia’s spoils among themselves, as shown by the Pandora and Panama Papers, and reporting from the International Consortium of Investigative Journalists, Novaya Gazeta and Bloomberg News.
That reporting indicates that Putin stashes his wealth, and his shares in state-owned enterprises, in networks controlled by family members and close advisers. To make Putin feel the same financial pain as his fellow Russians if the country is locked out of Swift, the West would have to identify his networks and freeze accounts located outside of Russia.
Even then, Putin may have an out. As Stephen Kotkin, a historian and Russia expert at Princeton University once told me, the entire country is Putin’s piggy bank. He can reach into any company or account he wants whenever he needs something. He probably doesn’t need to hide money outside of Russia at all.
So maybe Putin’s own wealth is not only unknowable but also untouchable. Either way, that shouldn’t keep the White House from sanctioning those closest to Putin — and, if necessary, cutting Russia off from Swift.
More From Bloomberg Opinion:
• How Vladimir Putin Keeps Everyone Guessing: Bobby Ghosh
• Putin Wins So Long as Schrodinger’s Cat Lives: Andreas Kluth
• Biden’s Diplomacy With Putin Is Dangerous: Eli Lake
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Timothy L. O’Brien is a senior columnist for Bloomberg Opinion.