When President Putin grants an audience to his compliant Oligarchs, Viktor Vekselberg is usually high up in the queue to kiss the ring.  The mining magnate knows which nationalist buttons to press.  In 2004 Vekselberg demonstrated his patriotic credentials by spending $100 million of his $13 billion fortune to bring back the Faberge Easter eggs back to Russia and allow them to be placed on display in the Kremlin.  It was part of Putin’s passion to make Russia great again and restore its national identity.  The Oligarch regards himself as a devoted nationalist.  When asked about Putin’s reaction to the return of the eggs, he replied: “I’ve seen the emotion of our President”

And so it is tempting to conclude that the eight payments to Michael Cohen’s company by Columbus Nova, the US affiliate firm of Vekselberg’s investment vehicle Renova, as yet more evidence of Putin trying to compromise and ingratiate himself with President Trump via a favoured Oligarch.  After all, Vekselberg attended Trump’s Presidential inauguration and was present at the infamous gala dinner with Putin and former National Security Advisor Michael Flynn to celebrate the 10th anniversary of the pro-Kremlin RTN television channel

In fact, it is more likely that Vekselberg regarded the secret payments as part of an influence-cultivating operation which he regards as standard practice in countries where he has commercial aspirations.  After all, the Oligarch also donated $100,000 to the Clinton Foundation.  And before the disclosure of the payments to the President’s lawyer, he backed a $1.6 million lobbying campaign to support his interests in Washington DC, according to the Associated Press.  Now more than ever he needs to extend his political influence after the US Treasury imposed sanctions on him and 23 other Russian nationals.

The sanctions will hurt because Vekselberg has long favoured the US as a place to invest and park his wealth accumulated in the 1990s when he acquired valuable state-owned aluminium and oil companies at a fraction of their real value.  After all, he founded Renova as an American-Russia joint venture and he bought an apartment on West 67th Street in New York City and a $10 million house in Weston, Connecticut.  He had a US green card until recently and once told a US diplomat that he felt “half-American”.  And during the Obama administration he courted Silicon Valley investors, supported programs at a California state park, a western-themed resort amid the Joshua trees near Scottsdale, Arizona, and even lent money to a Baptist Church in Savannah, Georgia.

While Vekselberg is connected to Putin, they are not blood brothers.  The Oligarch always clears a business deal with the Kremlin when he invests in a company or launches a corporate raid on a substantial scale.  But he is not dependent on the President’s largesse and consulting Putin – as he did before proceeding with a multi-billion joint venture with BP – is pure commercial expediency.

For the Ukrainian-born plutocrat, politics is a necessary evil, like the media.  He views government, like the judiciary, as an entity to be cultivated and influenced rather than a source of power.

In South Africa he wanted to invest in the lucrative platinum metals market and so he became a member of the shadowy International Investment Council purely because it was a useful conduit for access to then President Mbeki.

Like many oligarchs, Vekselberg was a mathematician and has a scientific background (he was a computer studies graduate and then worked as an engineer in a pump manufacturer).  While he may look like Father Christmas, he is ruthless and strategic like the best Russian chess players.  He is calm, under-stated and has a temperate approach to business and avoided the Mafia methods of some of his fellow Oligarchs during the 1990s.  “He negotiates as quietly and secretly as possible”, said a British businessman who dealt with the multi-billionaire.  “He has zero interest in personal publicity and self-aggrandisement or politics”

The source of Vekselberg’s fortune was rooted in manipulating the political process.  In 1994 he set up Alfa-Access-Renova (AAR) with two fellow western Ukrainians, Leonid Blavatnik and Mikhail Fridman, to cash in on the privatisation process which even Pyotr Aven, then the Economic Relations Minister, called “pure stealing of Russian property”.  In 1997 the three oligarchs snapped up the state-owned oil giant TNK for a mere $1.08 billion – an asset worth 10 times that price.  This was borne out in 2013 when AAR sold 50 per cent stake to BP for $14 billion.

Despite being a rapacious billionaire, Vekselberg – like Putin – has a nostalgic misty-eyed view of the Soviet Union.  He once remarked that the post-Communist era has “a destructive character” and he prefers an authoritarian, intervenionist state operating within a market economy.  “The capitalist system has destroyed our values”, he said.  “At least the Communist system required that workers lived decently and that science, medicine and culture was developed”.

But Vekselberg knows that he needs to stay out of politics to protect his business empire.  It is no secret that the Kremlin can redistribute his wealth, produce a punitive tax bill or authorise a criminal prosecution on a Presidential whim.  That is why so many Oligarchs export so much of their wealth abroad via impenetrable offshore companies and trusts and buy properties at huge prices “off plan” which remain unoccupied.  It is an insurance policy.

But the Oligarch also realises that he has to engage in the political process at home.  While his nationalistic gestures of buying iconic Russian artefacts are sincere, they are also strategic in protecting his financial interests.  If he could avoid government intervention and politicians, he would gladly do so, but he has no choice.  An estimated $1.75 billion of his personal and corporate assets have been sanctioned by the US Treasury and as a result the dollar bank accounts of his companies have been frozen.  The challenge for the US authorities is untangling the bewildering web of offshore and shell companies and opaque trusts and foundations that control his assets.  It is highly likely that Vekselberg has secret shareholdings in US companies that the Treasury does not even know about.

And so Vekselberg’s motive in courting President’s principal lawyer was commercial and old-fashioned political access and influence rather than providing a secret intelligence back-channel to Trump on behalf of Putin.  It was a form of security or “krysaha” – the Russian word for “roof”.  There is an old Russian saying that a rich man’s wealth today can be taken away tomorrow.  And this Oligarch has always borne this in mind.

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