An Unprecedented Shift: U.S. Transfers Seized Russian Oligarch's Assets to Aid Ukraine's Rebuilding
In a historical first, the US Attorney General, Merrick Garland, has greenlighted the transfer of confiscated Russian assets to Ukraine
Photo: Konstantin Malofeyev (Wikimedia Commons)
The assets, moved in February 2023, are earmarked to assist in Ukraine's rebuilding efforts following the war. "This signifies the United States' first transfer of seized Russian funds earmarked for the reconstruction of Ukraine, but it certainly won't be the last," Garland told the Financial Times.
The World Bank projects that the cost to rebuild Ukraine could exceed $411 billion over the next decade.
The assets in question belonged to Russian oligarch Konstantin Malofeyev, a figure closely tied to the Kremlin. Often dubbed the "Orthodox Oligarch," Malofeyev owns Tsargrad TV, a Christian Orthodox television channel with a pro-Russian stance. His net worth in 2022 is estimated to be in the billions of dollars.
As reported by weeklyblitz.com, leaked documents suggest that Cypriot corporate service provider MeritServus assisted Malofeyev in transferring debt worth tens of millions of dollars, even after he was blacklisted.
Tsargrad, the old Slavic name for Constantinople, started as a YouTube channel and is often considered Russia's answer to "Fox News". Malofeyev hired former Fox News producer John "Jack" Hanick to launch the channel. As reported by Slate.com in 2014, Malofeyev said, “We want to establish a network based on Orthodox principles similar to how Fox News was built.”
The channel commenced broadcasting in 2015. Malofeyev, also the founder of the “buy out” firm Marshall Capital, maintains close ties to many other Russian Orthodox oligarchs, many of whom are closely aligned with Putin.
TheBell.io reports that Malofeev’s most significant investment is his stake in the state-owned telecommunications giant, Rostelecom, believed to be worth one billion dollars. This investment positions him as a key figure in Russia's telecommunications industry.
As per Reuters, Malofeyev was subjected to U.S. and EU sanctions in 2014, accused of funding pro-Moscow separatists engaged in the Ukraine conflict - allegations he denies.
Hanick was arrested in London on February 3, 2023, for violating Crimea-related sanctions. Assistant Attorney General Matthew G. Olsen told wbal.com that even after Malofeyev was sanctioned for threatening Ukraine and financially supporting the separatist region of Donetsk, Hanick "willfully aided Malofeyev in disseminating his destabilizing messages by setting up, or attempting to set up, TV networks in Russia, Bulgaria, and Greece, in direct contravention of these sanctions.”
The indictment was disclosed a day after the U.S. Department of Justice launched KleptoCapture, a task force aiming to pursue both civil and criminal forfeitures of assets owned by Russian oligarchs believed to have facilitated Russia's invasion of Ukraine.
Tsargrad TV also ran afoul of YouTube. The platform blocked the Russian media outlet and its former chief editor, Aleksandr Dugin, in 2020. Dugin, a pro-Kremlin analyst, is viewed by many as a fascist, nationalist, and imperialist. Google, YouTube's parent company, stated on July 28, 2020, that the accounts were blocked for violating sanction-related laws and trade regulations.
ZeroHedge reported that Zelensky met with U.S. bank, JPMorgan Chase, in February 2023 and signed a memorandum of understanding following the discussions. CEO Jamie Dimon then committed "the full resources of JPMorgan Chase to Ukraine as it forges its post-conflict path to growth." JPMorgan Chase has a history of extending financial support to Ukraine.
The recent activities of banking institutions supporting Ukraine, the numerous sanctions imposed on Russia and Putin-aligned oligarchs, and this inaugural transfer of seized assets to Ukraine hint at concerted plans for a post-war Ukraine. Western financial powerhouses such as JPMorgan Chase and BlackRock seem to already be viewing Ukraine as a potential site for multi-billion dollar reconstruction investments.
The transfer of Malofeyev's assets to Ukraine signifies an aggressive new approach in the international community's strategy to counteract the influence of Russian oligarchs and support Ukraine's recovery. As the geopolitical landscape continues to shift, it's clear that the financial sector will play a pivotal role in shaping the region's future.