A Russian oligarch allied with Vladimir Putin will, along with close associates, maintain majority control of a major energy company from which the Treasury Department is lifting sanctions despite the Trump administration’s promise to hold him accountable as a key beneficiary of Moscow’s “malign activity” worldwide.
Oleg Deripaska, along with his ex-wife, ex-father-in-law and a foundation Deripaska launched years ago, will together maintain well over 50 percent of the shares in En+ Group, the most influential of three companies from which the Treasury Department is lifting sanctions, according to an agreement outlining the deal’s terms, a copy of which was obtained by The Washington Post on Tuesday.
En+ Group controls Rusal, one of the world’s biggest aluminum suppliers, and EuroSibEnergo, Russia’s largest private power company, which are also addressed in the Treasury deal.
The New York Times first reported on aspects of the agreement, which appears to show that Deripaska is being treated more generously than the Trump administration has acknowledged.
The Treasury Department did not respond to a request for comment, but administration officials, including Secretary Steven Mnuchin, have vigorously defended the deal. The Post was unable to reach a spokesman for Deripaska.
The Trump administration sanctioned Deripaska and these three companies in April while taking aim at individuals and businesses with close ties to the Russian state. Before that, he was the subject of intrigue for his ties to President Trump’s former campaign chairman Paul Manafort, who once worked for Deripaska as an investment consultant. Deripaska has said Manafort owes him millions of dollars.
While serving as Trump’s campaign chairman, Manafort offered to give Deripaska “private briefings” on the 2016 presidential race — what Manafort’s spokesman has characterized as an effort to settle past debts. Deripaska’s spokeswoman said he never received briefings from Manafort.
Now it appears Deripaska may be the beneficiary of a different arrangement with the Trump administration, as shares in his companies promise to rebound with Treasury’s decision to lift punitive measures against them.
Neither Deripaska nor his allies will retain voting rights in En+ Group commensurate with the holdings they will maintain in the company under the deal’s terms, according to the agreement. But the document has revived frustration among Democrats who, earlier this month, were unable to secure enough Republican votes in the Senate to block the deal.
“My concern all along was that Deripaska would retain control over his companies and benefit personally from this deal,” said Sen. Mark R. Warner (D-Va.), vice chairman of the Senate Intelligence Committee. “This new report suggests that those concerns were valid and that the situation may even have been worse than we thought.”
Last week, more 130 House Republicans, including the GOP’s entire leadership team, joined House Democrats to deliver a rebuke of the deal — and, by extension, of the president and his Cabinet.
“Because we cannot be sure that we have removed the heavy hand of this Russian oligarch, I cannot support the delisting of these sanctioned entities at this point in time,” Rep. Mike McCaul (Tex.), the ranking Republican on the House Foreign Affairs Committee, said just before the vote.
Under the terms of a sanctions bill Congress passed in 2017, lawmakers have 30 days after the administration announces its intent to reduce or remove Russia-related sanctions to prevent that from happening. That window closed Friday.
Deripaska’s agreement details how some of his shares will be dispersed without completely divorcing him and former relatives of a controlling interest in En+ Group.
Although his personal holdings will be significantly reduced, from about 70 percent of shares to no more than 44.95 percent, people and entities close to him will control additional shares, meaning Deripaska could continue to have influence over a majority of the company.
For instance, he is transferring more than 3 percent of En+ Group shares to a charitable foundation he founded in 2008, while his ex-wife and her father will continue to control at least an additional 5.5 percent of the company’s shares. Other Deripaska shares will be transferred to VTB, a Russian bank also under sanctions, and Glencore, a mining firm with ties to the Russian aluminum market, including En+ subsidiary Rusal.
The agreement also outlines new ownership stakes for Rusal that appear to largely protect the holdings of another sanctioned Russian oligarch, Viktor Vekselberg, and his business partner Leonard Blavatnik, who holds U.S. citizenship and has donated tens of thousands of dollars to Senate Republicans and a million to Trump’s inaugural committee.
Vekselberg and Blavatnik are co-owners of SUAL Partners Limited, an aluminum company that will keep a 22.5 percent stake of Rusal under the Deripaska deal.