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Real Estate - FEBRUARY 15, 2019

Interview: Kleptocrats’ ‘ill-gotten fortunes’ being parked in U.S. real estate

by Andrea Zander

Atlantic journalist Franklin Foer says American real estate became a “giant magnet” for Russia’s kleptocratic fortunes after lobbyists pushed to allow anonymous shell companies to buy properties.

So what do you mean when you say kleptocracy? And when you say that Russian-style kleptocracy is infiltrating America, do you mean we’re getting the money of the kleptocrats who are hiding their money here or that America is becoming like a kleptocracy?

Franklin Foer: All of the above. So there are an enormous number of fortunes in this world — some of the largest fortunes in this world — that have been amassed through outright theft. We live in this age of smash and grab. And so in the case of Russia, you have all of these fortunes that begin with the dissolution of the Soviet Union. And so in the dying days of the Soviet empire, the KGB took billions of dollars, and they hustled them offshore into foreign banks. And then over the course of that decade, you had the privatization of the vast Russian economy. And the privatization process was done in a cronyistic (ph) fashion, where businesses were acquired at cut-rate prices through connections.

And so what I mean by kleptocracy — and this is not just a Russian problem — is that we have these ill-gotten fortunes, and these fortunes can’t be kept in the country where they’re obtained.

 

To hear the full interview, click here.

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