The Trump administration’s deal with Russian oligarch Oleg Deripaska — which eased sanctions on three companies he controls — was not as punitive as it was billed, according to The New York Times.
Despite being sold as tough on both Russia and the oligarch, the deal leaves Deripaska and his allies with majority ownership of the most important company and frees him of hundreds of millions of dollars of debt, according to the binding confidential agreement signed by both sides.
With the special counsel’s investigation into Russia’s role in the 2016 election continuing to shadow President Trump, the administration’s decision to lift sanctions on Mr. Deripaska’s companies has become a political flash point. House Democrats won widespread Republican support last week for their efforts to block the sanctions relief deal. Democratic hopes of blocking the administration’s decision have been stifled by the Republican-controlled Senate.
The Treasury Department sanctioned Deripaska, six other Russian oligarchs, and their companies last April, which Secretary Steven Mnuchin said at the time were in response to “a range of malign activity around the globe” by Russia.
Though Mnuchin also said the administration had agreed to lift sanctions in exchange for a promise “to significantly diminish Deripaska’s ownership and sever his control,” the actual agreement reviewed by the Times reveals that the oligarch will retain significant ownership stake in aluminum giant Rusal.
The department laid out the broad contours of the agreement in a letter to Congress, which was released publicly. But the confidential document, which was not released publicly but was reviewed by The New York Times, describes the deal in considerably greater detail, including proprietary information about the corporate restructuring, much of it not previously reported.
It shows that the sanctions relief deal will allow Mr. Deripaska to wipe out potentially hundreds of millions of dollars in debt by transferring some of his shares to VTB, a Russian government-owned bank under limited United States sanctions that had lent him large sums of money.
The confidential document, titled “Terms of Removal,” also shows that the agreement would leave allies of Mr. Deripaska and the Kremlin with significant stakes in his companies. The document is signed by executives representing Mr. Deripaska’s three companies as well as the official in the Treasury Department who oversees the division that handled the negotiations.
In response to questions about the agreement, the Treasury Department issued a statement:
“Deripaska’s control over these entities is severed by this delisting, and he can no longer use them to carry out illicit activities on behalf of the Kremlin,” the statement said. “En+, Rusal and ESE have committed to provide Treasury with an unprecedented level of transparency into their dealings to ensure that Deripaska does not reassert control. Treasury will be vigilant in ensuring these commitments are met, and failure to comply will bring swift consequences, including the reimposition of sanctions.”