Is Harvard Whitewashing a Russian Oligarch’s Fortune?

Originally published in The New York Times on December 5, 2018:

Len Blavatnik made billions as a Kremlin insider. Now he’s writing huge checks to the university.

By Ann Marlowe
Ms. Marlowe is a writer.

Dec. 5, 2018

Len Blavatnik recently pledged $200 million to Harvard Medical School.
Joe Giddens/Pa, via Associated Press

Len Blavatnik recently pledged $200 million to Harvard Medical School.CreditCreditJoe Giddens/Pa, via Associated Press
This article has been updated.

By now, most Americans are aware of the deep and disturbing connections between Russia’s oligarchs and the country’s president, Vladimir Putin, thanks to an onslaught of news coverage and a growing list of sanctions aimed at them and their business empires.

Yet a surprising number of respected American institutions don’t seem to get it, including two that I am connected with: the Hudson Institute and Harvard.

On Tuesday, the founder, director and sole funder of the Hudson Institute’s Kleptocracy Initiative, Charles Davidson, announced that he was leaving his position at the head of the initiative because Hudson had accepted a $50,000 donation for a table at its annual gala from Leonard Blavatnik, a Soviet-born dual British-American citizen who made his money in the rough and tumble of Russia’s commodities privatizations during the 1990s and now owns, among other properties, Warner Music Group.

“Russian kleptocracy has entered the donor pool of Hudson Institute,” he told The New York Post. “Blavatnik is precisely what the Kleptocracy Initiative is fighting against — the influence of Putin’s oligarchs on America’s political system and society — and the importation of corrupt Russian business practices and values.”

Sources at the Hudson Institute said that Kleptocracy Initiative would continue, but did not comment on the Blavatnik gift. (Disclosure: I am a visiting fellow at Hudson, but it is an honorary position, and I have neither received money from the institute nor performed work for it.)

Mr. Blavatnik’s glory at Hudson largely lasted just one night. But he did succeed in attaching his name to Harvard for generations to come. On Nov. 8, Harvard Medical School announced that the Blavatnik Family Foundation had pledged $200 million to the institution, creating the Blavatnik Institute and Blavatnik Harvard Life Lab. This follows on a $50 million gift by the foundation to the university in 2013.

(Asked for comment, a Harvard spokeswoman said in a statement: “Harvard Medical School is deeply grateful for the generous and transformational commitment from the Blavatnik Family Foundation that will support discovery at HMS propelling the school’s mission to transform human health.” She also referred me to someone who handles media relations for the foundation.)

As a Harvard alumna, I find this appalling. Mr. Blavatnik — who, with a net worth of over $20 billion, is the richest man in Britain and the 29th-richest in America — cut his teeth in the brutal aluminum wars in 1990s Russia alongside Oleg Deripaska and Roman Abramovich, who has estimated that every three days someone in the business was murdered. Together, they acquired an empire of recently privatized metals and energy companies, often for outrageously low prices.

Those deals, and others, involved a series of transactions with individuals with checkered pasts, deep Kremlin ties and a reputation for corruption. Though Mr. Blavatnik is not under American sanctions himself, many of his associates are, including Mr. Deripaska. The aluminum giant Rusal, where he is a major shareholder, is facing direct sanctions due to go into effect soon; Rosneft, an energy company owned by the Russian government where he also made millions, expects the ax to fall shortly.

One of Mr. Blavatnik’s early investments, United Trading Company, which he owned with Viktor Vekselberg, another oligarch also under American sanctions, brought him censure from the Russian government.

In 2004 the pair had to give up ownership of United Trading after the Russian government charged it with anti-competitive actions; they sold their shares to three other Kremlin-linked investors, Dmitri Pyatkin, Aleksandr Fraiman and Igor Annensky.

In 1996, Mr. Blavatnik and Mr. Vekselberg helped found SUAL, a large aluminum producer; through it, they own over a quarter of Rusal. The other big shareholder in Rusal is Mr. Deripaska’s En+ Group, which controls 48 percent.

Mr. Blavatnik’s biggest deal involved selling his stake in the Russian oil company TNK-BP to Rosneft in March 2013; he and his partners, including Mr. Vekselberg, together made $27.7 billion. The deal was arranged at the top levels of the Russian government; since 2004, Rosneft has been run by a close ally of Mr. Putin, Igor Sechin, a former deputy prime minister.

To be clear, Mr. Blavatnik is not accused of any crimes, in the United States or in Russia. But he is undoubtedly a Kremlin insider, someone who has made an enormous fortune trading on his political connections to a deeply corrupt circle of oligarchs and a criminal Russian state.

Mr. Blavatnik is entitled to spend his money how he pleases. But institutions like the Hudson Institute and Harvard, which at least in principle stand for the ethical pursuit of knowledge, sully themselves by accepting it.

Accepting gifts — especially naming gifts — from people with dubious sources of funds or close ties to despotic regimes encourages the view that dirty money can be cleansed by charity. What lessons does that teach Harvard students? And what message does it send to citizens of countries troubled by kleptocracy and corruption?

One of the gates to Harvard Yard has a celebrated inscription: “Enter to grow in wisdom. Depart to serve better thy country and thy kind.”

I still remember that. I wonder if Harvard does.

Ann Marlowe is a writer and consultant who specializes in investigating corruption.

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