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What are the ripple effects of sanctioning Russia's richest and most powerful?


Russian President Vladimir Putin says Western sanctions on his country have failed.


PRESIDENT VLADIMIR PUTIN: (Non-English language spoken).

FADEL: That's the Russian leader speaking in a televised video call with top economic officials yesterday, where he claimed that sanctions backfired and instead are causing a, quote, "deterioration of Western economies." But the Russian central bank is warning that the full effects of the West's pressure campaign have not been felt yet. Many of those sanctions are focused on the wealth of Russia's powerful oligarchs. By some assessments, they've cost these ultra-rich and powerful elites billions of dollars so far. To learn more, we're going to speak to Alex Finley. She's a former officer with the CIA's Directorate of Operations and lives in Barcelona near the port where large private yachts are docked. Some of them belong to Russian oligarchs. Good morning, Alex.

ALEX FINLEY: Good morning.

FADEL: Thanks for being on the program.

FINLEY: Thank you for having me.

FADEL: So we've heard a lot about sanctioning oligarchs since the start of the war on Ukraine. Help give us a sense of their influence in Russia and how these rich and powerful citizens connect to Putin and the war.

FINLEY: Well, I think, contrary to what President Putin is saying there, my guess is these sanctions actually are having some sort of an influence there. The fact that he even denied it makes me think that. And just yesterday, Italian Prime Minister Mario Draghi said that he thinks that Russia is marching towards bankruptcy. So I think these are having an effect. And part of the reason is because we - through these sanctions, what we are trying to do is to destabilize this system of corruption that Putin has set up. And the people closest to him and who have the most access to him for years now have been benefiting from a very corrupt system, but it was stable.

And Putin is what made it stable. He allowed everybody to sort of steal out of Russia as long as they supported him. And now those very same people, by being sanctioned, by not having access to their bank accounts and their villas and their yachts, there's a little bit of destabilization there. They're wondering what they're getting out of this relationship anymore. And so what we hope, then, is that there will be some pressure internally in Russia to maybe force Putin's hand or maybe create such instability that Putin gets taken out of office.

FADEL: Have there been any signs that there's been an impact on the relationship between the oligarchs and the Kremlin?

FINLEY: I don't think anybody actually knows right now what's going on inside the Kremlin. Putin has been more and more isolated. COVID isolated him even more. And now with the war, he's even more isolated. So very few people, I think, have access to him. We do have some indications that some of these oligarchs have met with him. When the invasion first began, he called a number of them back. So they have had some access to him. But I think it would be very difficult to really say what we think is happening inside the Kremlin at the moment.

FADEL: You talked about this corrupt system. And some of that corrupt system involves operating in the West, right? But it's - so it's not as simple as sanction the rich and powerful and pressure Russia to get in line with the West. There are ripple effects that play out when you sanction these really wealthy people.

FINLEY: Correct. Part of what the oligarchs, particularly, have done, because they've been integral to Putin's efforts to destabilize the West - and that includes interfering in Western elections, trying to buy influence over Western politicians. The oligarchs have really played a key role in that. And part of what they have done is brought that corrupt system into our own system. So they use our rule of law. They use our bank systems. They use our real estate to park their money, to launder their money and to buy influence. Some of these people are very well-known with high-level politicians throughout Europe and the United States. They have access to people who have influence over policymakers. And that's part of what they did.

On top of that, the services that go to help these oligarchs - if you look at London, for example, they - there's some places they call Londongrad. There's so much Russian money going through it. And there are a number of services that are there simply to serve these oligarchs as they buy their real estate, as they buy their yachts, as they put their money through the Western system. And so we, ourselves, make money from them bringing that dirty money to us. And so in many ways, it's in our hands to try to stop this corruption. It's up to us to put an end to this.

FADEL: But it could be painful, it sounds like. I mean, there will be loss of money and jobs.

FINLEY: There will be. And I really think that part of why Putin decided to launch this invasion when he did was because he really thought he had divided the West enough with his destabilization efforts. I think he really thought he had bought enough influence with enough politicians that we would not be able to unify ourselves and to say, OK, we're ready to make the sacrifices that we need to stop this. And we did see it. And we still see it across Europe, for example. The Italians were a little bit nervous to block luxury goods, for example, in the sanctions because they make a lot of money from that. Germany was very slow in terms of the oil and gas because they had this Nord Stream 2. And so being able to unify the West and bring everybody together and say, this is more important - there is no villa in Antibes, there is no gas line, there is nothing that is worth more than democracy. So we need to stay unified.

FADEL: Really quickly, before we let you go, you mentioned yachts. Western authorities are seizing flashy yachts. On your Twitter feed, you track these seizures. What's the significance of these yachts?

FINLEY: For me, the yachts are very much this symbol of this extravagance. They're something visually that we can capture, we can see and we can imagine. And they're just so extravagant and opulent. These yachts are $600 million. One of Abramovich's yachts is rumored, after refit, to be worth $1 billion. And you just see the corruption and the inequality, that so much money is in so few hands. And that is so much of what brings this corruption to our system and causes problems.

FADEL: Alex Finley is a former CIA officer and yacht watcher under the Twitter hashtag #YachtWatch. Thank you so much for your time.

FINLEY: Thanks for having me.