Russia: Abramovich steps down from politics role

Roman Abramovich has homes around the world and a 160ft super-yacht. Picture: Getty

Roman Abramovich has homes around the world and a 160ft super-yacht. Picture: Getty

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BILLIONAIRE Roman Abramovich has given up his seat in a Russian regional parliament to comply with new laws that forbid state officials from holding bank accounts or other financial assets abroad.

The Chelsea Football Club owner, who has a fleet of luxury cars, a collection of modern art, homes around the world and a 160ft super-yacht with room for three helicopters and its own submarine, has stepped down as head of the legislature in the remote Chukotka region.

“Much of his business interests are abroad and it just did not seem feasible to change that, especially under the short deadline given,” his Moscow spokesman, John Mann, said.

The laws, which came into effect this month and extend to state officials’ partners and children, are part of a campaign by president Vladimir Putin to force wealthy officials to keep their money in Russia.

His supporters say the measures will help fight corruption and ensure officials have the country’s interests at heart. “Those who consider themselves Russian politicians, not foreign or foreign-dependent politicians, will undoubtedly take action to transfer all their financial assets to Russia,” said Irina Yarovaya, a pro-Putin deputy.

But the president’s opponents say the laws, which also require officials to file declarations of all foreign real estate they hold, give Mr Putin another tool to control Russia’s elite, as he tries to tighten his hold on power following protests against his rule in 2011 and 2012.

Dmitry Gudkov, a politician critical of the Kremlin, said he had opted to give up a stake in a Bulgarian firm and declare two flats he owns there, in order to be in line with the laws. But he said he does not expect the measures will do much to fight corruption. “In Russia, all the power is concentrated in one pair of hands; there is just nobody to fight graft as there are no independent institutions of power,” he said.

Mr Abramovich is not the only billionaire to resign an official post since the laws were enacted. Two of Russia’s other richest men, Andrei Guriev and Dmitry Ananyev, have quit the upper house of Russia’s parliament.

Mr Guriev said he wanted to focus on his businesses, which include fertiliser company PhosAgro, while an aide to Mr Ananyev said the co-owner of Promsvyazbank wanted to pursue other projects.

The measures appear set to limit the political careers of other tycoons with high-profile foreign business interests, such as Mikhail Prokhorov, the owner of the Brooklyn Nets basketball team in New York, who was third behind Mr Putin in the presidential election last year.

Maria Lipman, a political analyst at the Carnegie Moscow Centre, said the measures ensured those who remained in politics were more easily kept in line.

“Having assets abroad means a person is less vulnerable to Russian authorities,” she said. “This is a campaign to ‘nationalise’ the elites. It’s aimed at intimidating them, ensuring they are fully under control.”

Russians have become accustomed to the great wealth and power of their “oligarchs” – billionaires who were in and out of high office under Boris Yeltsin, after the fall of Communism.

When he first came to power, Mr Putin took several of them on, driving some out of the country and jailing the richest and most outspoken, Mikhail Khodorkovsky. Those who stayed in Russia toned down their political activities or acted as supporters of the Kremlin.

But the mega-yacht-owning tycoons are not the only Russians who have assets abroad. Many in the emerging middle class have kept their money overseas to protect it from a domestic banking system that collapsed in 1998, wiping out savings of depositors.

Mr Gudkov estimated that one in three lawmakers was in business and under suspicion of having assets abroad.

Another lawmaker said in July that only 39 members of the 450-seat lower house had acknowledged having foreign accounts or assets abroad.

Ownership of foreign property has brought down officials, including Vladimir Pekhtin, who quit as head of the lower house’s ethics committee and resigned his seat this year to try to disprove accusations he owned real estate worth $2 million in Florida that he had not declared.

But critics say the new measures are full of loopholes, can be easily bypassed by transferring assets to adult children, and fail to tackle offshore havens.

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