They’ve sponsored fellowships at Ivy League schools, have educational centers named after them, and sit on the boards of leading cultural institutions in the United States and Western Europe. They’re celebrated philanthropists and patrons of the arts.
But there’s something else these donors share that other well-heeled benefactors do not: Deep financial ties to Russia.
While there is nothing new about the reputation laundering of the oligarch class, it is facing renewed scrutiny in the wake of Vladimir Putin’s unprovoked invasion of Ukraine. The recent renaming of the “Russian Lounge” at Washington’s John F. Kennedy Center for the Performing Arts underscores the sensitivity surrounding such relationships.
Vladimir Potanin acquired his “philanthropic leadership” at the Kennedy Center — where his name is inscribed on the polished marble walls along with General Motors, Boeing and Capital One — with a $5 million donation in 2011.
Potanin — Russia’s wealthiest businessman who plays hockey with Putin and has so far dodged Western sanctions — made his fortune devising a system for Russian business leaders to loan money to the cash-strapped administration of then-president Boris Yeltsin in the mid-’90s. When Russia could not repay the loans, the businessmen were allowed to buy key state assets for pennies on the dollar. At the time, Potanin and his business partner bought 38% of the mining and metal company Norilsk for $170.1 million, a stake that would be worth nearly $20 billion 15 years later.
But contributions like this appear to serve another purpose.
It is “the classic example of essentially trying to buy a better reputation … to distract from the fact that you’re still very much tied to an authoritarian regime,” said Jordan Gans-Morse, professor of corruption in the post-Soviet era at Northwestern University.
An old American playbook
Nineteenth century robber barons famously splashed their names across orchestra halls and museums to shed their reputations as ethically dubious industrialists who amassed enormous wealth on the backs of America’s most vulnerable. It worked: When most Americans hear the name Andrew Carnegie, they probably think of Carnegie Hall or Carnegie Mellon and not one of the deadliest labor confrontations in American history, which occurred at one of his steel plants in 1892.
In much the same way, Putin’s inner circle — many of whom are oligarchs who have profited off corruption and made their wealth in illicit ways — use philanthropy in the West to launder their reputations and gain access to American and European high society, according to experts.
Dartmouth sociology professor Brooke Harrington said oligarchs of any nationality typically target three kinds of institutions with their donations — cultural, political, and educational.
Seven Russian billionaires donated hundreds of millions of dollars to American universities, charities, museums and foundations just since 2009, according to an analysis from the Anti-Corruption Data Collective and CNN reporting.
Some experts say cultural and educational institutions can do more to prevent the reputation laundering of their donors.
Respected institutions have a responsibility not to glorify those who built their wealth through illicit trade, said Louise Shelley, a public policy professor at George Mason University.
Now, some cultural centers and universities are grappling with what to do with oligarchs’ donations.
“If they can co-opt the thought leaders, as well as the political leaders, as well the cultural leaders — it becomes much harder to stop whatever it is that Putin wants to do,” Harrington, the Dartmouth professor, said.
Viktor Vekselberg’s partnership with MIT: “It is just absolutely wild”
A decade ago, Putin wanted to stop the brain-drain of scientists and engineers to the West and cultivate home-grown tech at a $3 billion Moscow-based innovation center.
At the time, Washington and Moscow were attempting a closer relationship and the prestigious Massachusetts Institute of Technology provided the perfect combination of knowledge, credibility and reputation for the Russian project.
The Skolkovo Foundation — lead by one of Putin’s close allies Viktor Vekselberg — entered into a partnership with MIT in 2011 to build the Skolkovo Institute of Science and Technology, or “Skoltech,” outside of Moscow.
Keith Stevenson, Skoltech’s provost, told CNN in an interview that the main premise of the relationship was to develop “academic excellence and research that could be contributing to the growth of the economy around the world.”
Vekselberg, like many other oligarchs, made his money during the privatization of Russia’s natural resources, specifically oil and metals, after the collapse of the Soviet Union.
However, Vekselberg and Skolkovo quickly caught the attention of federal investigators.
A few months after the Russian invasion of Crimea in 2014, Boston’s local FBI office published an unusual warning:
“This type of activity does not go on at Skoltech,” said Stevenson, claiming the FBI was “talking to people that had really no true understanding of who was initiating the project.”
MIT, too, was quick to dismiss the concerns and even renewed Vekselberg’s appointment to its Board of Trustees in 2015.
Vekselberg made at least four donations to the university between 2015 and 2017, according to the Anti-Corruption Data Collective, and had a scholarship named after him.
In a statement to CNN, MIT confirmed Vekselberg has not donated to the university since 2017.
Involving Vekselberg to build the “innovation ecosystem” at Skoltech was “perfectly logical,” Stevenson said. “He’s a very well-experienced, internationally-known businessman.”
Stevenson added he could not comment on Vekselberg’s relationship with the Kremlin but said that, at Skoltech, his involvement “has been completely on a professional level to help build innovation.”
Vekselberg did not respond to CNN’s request for comment.
“It is just absolutely wild how one of the most notorious oligarchs to emerge from Russia was able to obtain a seat on the actual board of one of the most prestigious universities in the United States of America,” Michel said.
It did not, however, end its partnership with Skolkovo.
In April 2019, MIT announced an enhanced vetting process for accepting donations. In a statement to CNN earlier this month, MIT said its review process “examines risks related to national security, protection of intellectual property, compliance with federal laws, data security and access, and other relevant issues while seeking to support the free and open pursuit of knowledge.”
Harrington, the Dartmouth professor, said that when considering donations, institutions must remember who they are supposed to serve.
“It’s the obligation of these institutions to ask themselves: does it serve the public good?” Harrington said. “Do they exist to do reputation laundering and facilitate the agenda of what is obviously now an enemy state?”
What’s more, Michel argues that universities, especially elite institutions like MIT, have extensive resources in-house to determine where big donors’ money comes from.
“They have to understand themselves as having those resources to be able to actually examine and understand what the implications of these donations, these open doors of access, may be,” Michel said.
“It is incumbent upon them,” he added, “to understand the source of this wealth.”
A Soviet-born billionaire was knighted, but his donations still raise eyebrows
Perhaps the most prodigious example of Russian reputation laundering is that of Len Blavatnik. The Ukrainian-born billionaire made his money during the privatization of state-owned commodities like aluminum and oil following the collapse of the Soviet Union.
Blavatnik and Vekselberg owned major stakes in Russia’s largest aluminum company, Rusal.
“That is the most corrupt industry in one of the most corrupt countries in the world. You can’t disentangle the sources of this wealth from the initial sources of the corruption,” said Michel.
“You cannot have made that money without specific political connections or connections to organized crime or connections to other oligarchic figures,” he added.
As a result, Blavatnik’s donations and ties to oligarchs have raised eyebrows in the past.
When Oxford University accepted more than $100 million from Blavatnik in 2010 to establish the Blavatnik School of Government, critics, in a letter published in the Guardian, insisted the school “stop selling its reputation and prestige to Putin’s associates.”
Since then, Blavatnik has made several other sizable donations, including $25 million to Carnegie Hall in New York — which named a seating section after him; $65 million to London’s Tate Modern — which named a building after him; $35 million to Yale — which named a fellowship after the business tycoon; as well as several multi-million-dollar grants to Stanford University, Columbia University and the University of Pennsylvania.
In 2018, Blavatnik made the largest ever donation to Harvard’s medical school — a whopping $200 million.
“It is our considered view that Blavatnik uses his ‘philanthropy’ — funds obtained by and with the consent of the Kremlin, at the expense of the state budget and the Russian people — at leading western academic and cultural institutions to advance his access to political circles,” the group of 55 American and European foreign policy experts and anti-corruption activists wrote. “Such ‘philanthropic’ capital enables the infiltration of the US and UK political and economic establishments at the highest levels.”
Blavatnik’s success in improving his reputation as an American and British citizen “is just head and shoulders above all these other oligarchs,” said Michel, who believes the businessman owes part of that success to his nationalities.
His passports would also shield him from sanctions, Michel explained.
“There is no capacity for the US to sanction its own citizens, to seize its own assets and to effectively bar them from ever visiting the United States of America — and the same would go for the United Kingdom as well,” he said.
Institutions grapple with what to do
Following the Russian invasion of Ukraine, western institutions have scrambled to distance themselves from oligarchs and their donations.
The Tate Modern in London severed ties with Vekselberg and another oligarch, Petr Aven, who until recently headed Alfa-Bank in Russia and is sanctioned by the European Union.
Other institutions, such as Harvard University, are taking a softer approach.
Harvard’s Medical School, which opened the Blavatnik Institute after the $200 million donation from the oligarch four years ago, has not said it would return the funds or rename the institute. Rather, it has funded several visiting trainee positions at the school for Ukrainian scientists eager to flee their war-torn country.
Harvard declined to comment.
Yale, which has a grant program named for Blavatnik, said the university would not allow individuals subject to US sanctions to make donations.
Potanin resigned from his role as trustee of the Guggenheim Museum in New York after nearly 20 years. The Council on Foreign Relations also dropped him from their board.
The Kennedy Center’s “Russian Room” reopened in March under the name the “Opera House Circles Lounge.” A spokesperson told CNN that the term limit for the name of the room had expired, but separately referenced the war in Ukraine as a factor in the renaming.
“Due to the tragedy in Ukraine, the Kennedy Center and the [Potanin] Foundation have mutually agreed to no longer use the name Russian Lounge,” the spokesperson said.
Potanin did not respond to CNN’s request for comment.
Still, Potanin’s name remains carved in the marble walls of the Kennedy Center.
“It’s embarrassing,” said Michel. “It’s shameful. It’s a blight on the Kennedy Center itself and its only going to continue aging poorly.”