Former European leaders cut ties with companies in Russia, but not all

Four years ago, former British minister Gregory Barker took leave of his term in the House of Lords to save the companies of Russian tycoon Oleg Deripaska, the target of US sanctions. Last week, it was Barker’s turn to retire to save his own skin.

Last week, Barker resigned as president of the En+ group, which controls mining company Rusal, the world’s second largest aluminum producer, and hydroelectric and thermoelectric plants in Siberia. The group said it would reorganize part of its businesses to distance them from Russian interests.

In 2018, Barker negotiated an agreement with the US Treasury that freed companies from sanctions. Deripaska, who is accused by the US of several crimes and continues with his personal assets subject to various restrictions, was forced to relinquish control of the group, becoming a minority partner.

The tycoon’s companies were not targeted by the new sanctions imposed this time in response to Russia’s invasion of Ukraine, but the crisis spilled over to En+ nonetheless. Members of the British Conservative Party increased the pressure by publicly suggesting that the lord step away from the group.

Like Barker, other former European leaders who made their fortunes in recent years working for some of Russia’s biggest companies have parted ways with them in recent weeks. They did so often begrudgingly, to circumvent sanctions or avoid damaging their reputations.

Former Finnish Prime Minister Esko Aho, who spent six years on the supervisory board of Sberbank, the country’s biggest bank, pulled in line and resigned on the day of Ukraine’s invasion, when the institution was hit by sanctions that restricted their access to the international financial system.

Former Austrian Chancellor Christian Kern, who since 2019 has held a seat on the board of directors of RZD, the state-owned company that operates the railways in Russia, left the same day. “The RZD became part of the logistics of the war,” he told the Austrian newspaper Der Standard. “I’m deeply sorry.”

Former French prime minister François Fillon resigned a day after advice from the petrochemical company Sibur and the oil company Zarubejneft. He condemned the invasion of Ukraine but criticized the West for ignoring Russia’s concerns about the expansion of NATO, the Western-led military alliance.

The association of European politicians with the tycoons who became rich after the end of the Soviet Union and the rise of Vladimir Putin allowed the Russian leader to articulate networks of influence in the West, winning allies for his interests and obtaining resources to finance his companies.

At the end of last year, foreign investors held 86% of shares traded on the Russian market, according to the Moscow Stock Exchange. With the war in Ukraine and sanctions, the market collapsed, and the government banned foreigners from selling their securities, imposing billions in losses.

The most prominent of Putin’s allies in Europe is former Chancellor Gerhard Schröder, who ruled Germany from 1998 to 2005, developed friendly relations with the Russian president when he was in office and took up positions in various state-owned companies after leaving power.

Schröder has been a member of the board of directors of the oil company Rosneft since 2017 and was appointed shortly before the war to a seat at Gazprom, the world’s largest natural gas producer and Russia’s largest company. At Rosneft alone, he received $600,000 in salary and bonuses in 2020.

The former chancellor also chairs the board of shareholders of Nord Stream, a consortium led by Gazprom that has four European companies as partners and has built two pipelines to bring gas from Russia to Germany. The second was ready in December, but has not yet come into operation.

With the outbreak of war, the German government suspended the pipeline certification process, and the consortium was hit with sanctions. The current chancellor, Olaf Scholz, suggested in an interview that his predecessor should distance himself from the Russians, but he was ignored. Both belong to the Social Democratic Party.

In a demonstration on social media, Schröder attributed the war to mistakes made by Russia and the West and suggested caution in the application of economic sanctions to prevent political, economic and civil society organization ties from not being completely broken because of the conflict.

“They are the basis for the hope we all have that a dialogue on peace and security on our continent will be possible again,” said Schröder. According to the website Politico, last week he traveled to Moscow to try to open a channel of dialogue with Kiev, but Putin did not receive him.

For political scientist Oksana Huss, a researcher at the University of Bologna, Italy, Schröder’s situation is delicate because it creates a conflict between his private interests and those of his country, because the war between Russia and Ukraine puts security at stake. energy from Germany.

“Politicians who were once trusted by the public should distance themselves from economic activities that favor foreign countries and be required to undergo longer quarantines after leaving public service, before working in the private sector,” says Huss, who is Ukrainian.

But Schröder is far from an isolated case. “Many Americans also occupy lucrative positions in companies, without this being seen as a source of concern for the country’s foreign policy”, says Susan Rose-Ackerman, professor of law and political science at Yale University in the USA.

Just look at the solution found by En+ for Barker’s output. After a period of transition, the British lord will hand over the chairmanship of the group to American Christopher Burnham, a former US State Department official who has an investment fund and has been on Rusal’s board since 2019.