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US taxpayers paying for seized Russian yachts’ upkeep, maintenance

FBI agents and Spanish civil guard officials board and seize a yacht owned by Russian billionaire Viktor Vekselberg, April 4, 2022. (U.S. Department of Justice/Released)
June 17, 2022

The U.S. government has seized several massive yachts from wealthy Russians to punish them for the war in Ukraine, but U.S. taxpayers are now footing the bill for maintenance and upkeep as the yachts sit in the impound, an administration official revealed this week.

The fact that the U.S. is paying to maintain seized Russian yachts had gone largely undiscussed in the months since they were seized as part of the U.S. Justice Department’s Operation KleptoCapture. It’s not entirely clear how much it’s costing the U.S. to keep these yachts in impound, but White House National Security Advisor Jake Sullivan raised the issue during a hot mic moment during a conference hosted by the Center for a New American Security (CNAS) think tank on Thursday, Business Insider reported.

During the conference, CNAS CEO Richard Fontaine said, “I just wasn’t aware how many super yachts there were in the world. I mean the size of these things, the value of these things is unbelievable.”

“I know. It’s so ridiculous,” Sullivan replied. “But you know what the craziest thing is? When we seize one, we have to pay for upkeep. The federal government pays for upkeep because under the kind of forfeiture rubric, so like some people are basically being paid to maintain Russian superyachts on behalf of the United States government.”

A video of the exchange between Fontaine and Sullivan was shared on YouTube, but the video was quickly switched to private mode after Vox reporter Jonathan Guyther tweeted about the exchange. Switching the video to private mode made it unviewable to most users. A spokesperson for CNAS told Politico reporter Alex Thompson that the video’s takedown was an “honest mistake,” though it has not been restored back to a publicly viewable mode.

Business Insider reported that the U.S. Marshals Service typically takes control of control of seized property. Sarah Krissoff, a former federal prosecutor, previously told Business Insider, “If there’s something that has to be done, like make sure the property doesn’t flood or make sure the water’s turned off in the winter or something — that’s the Marshals’ responsibility.” The Marshals Service typically hires private contractors to handle the day-to-day maintenance.

The Marshals Service did not immediately respond to an American Military News request for comment.

While the U.S. has seized several of the high-priced assets of wealthy Russians in recent months, it may be legally challenging to keep them. In a March op-ed published by USA Today, U.S. attorney and legal scholar Jonathan Turley wrote, “The United States and Western countries have considerable authority to seize property, but less authority to keep it. The reason is that, unlike Russia, these countries are bound by property rights and rules of due process.”

“Prosecutors must show that the property is being used to commit a crime or was purchased from ill-gotten gains, but the oligarchs will try to show revenue sources from established businesses,” Turley added. “In other words, prosecutors would have to show that large corporations that have operated for decades in international markets are now deemed criminal enterprises for the purposes of these properties. It is not clear that governments now seizing the property will be able to establish the nexus between an alleged crime and these proceeds or property for some, if not most, of the oligarchs.”