Will The Putin-Linked Yacht Raise Corruption Awareness?

Figuring out who really owns a megayacht should not be such a difficult thing.

ITALY-UKRAINE-RUSSIA-CONFLICT

The Scheherazade, docked at the Tuscan port of Marina di Carrara on May 6. (Photo by Federico Scoppa/AFP via Getty Images)

While Ukraine fights the ground war against a land-hungry but militarily incompetent Russia, America and its Western allies continue the war against Russian yacht owners.

And I suppose seizing Russian oligarchs’ yachts (along with providing robust aid packages to Ukraine) is better than nothing.

At the core of their very existence, superyachts all share one common characteristic: their utter and complete unnecessity. No one, anywhere, actually needs a humongous luxury yacht for any purpose beyond ultra-conspicuous consumption. 

Because megayachts, distilled to their essence, are an exercise in extreme frivolity — an ostentatious middle finger to all the people their owners screwed over, stole from, and exploited to get these floating palaces — losing them cannot actually harm the material component of the Russian war machine.

But while seizing Russian yachts won’t harm Russian production, it very well might harm Russian pride. That could count for something in a war that seems largely driven by one man’s pride.

On May 6, Italian authorities announced that they had impounded a 459-foot superyacht believed to be owned by Vladimir Putin himself. The Scheherazade will remain frozen in the Italian port of Marina di Carrara.

Sponsored

On paper, the Scheherazade belongs to Bielor Asset Limited, a Marshall Islands company. It is registered in the Cayman Islands, and reportedly has ties to Eduard Khudainatov, the former CEO of the Russian state-owned oil company Rosneft, as its purported beneficial owner.

But remember Alexei Navalny, the Russian opposition politician who was poisoned, then jailed by Putin? According to an investigation by his anti-corruption foundation, all crew members of the Scheherazade except the captain are Russian citizens (which is unusual in and of itself for the crew of a Russian oligarch’s superyacht), and many are employed by the agency tasked with providing Putin’s personal security, the Federal Protection Service.

A former crew member told The New York Times that it was openly discussed onboard the Scheherazade that Putin is the yacht’s real owner. U.S. officials have also confirmed that the Scheherazade is believed to have ties to Putin, and the vessel has suspiciously frequented known hangouts of Vladimir Putin several times since it was built in 2020.

The Scheherazade is certainly decked out in a manner befitting 2022’s busiest dictator. Features reportedly include two helipads, six decks, a movie theater, a player piano, a custom judo gym, some kind of tiled dancefloor that lowers down to become a pool, the largest television known to exist on any yacht in the world, and yes, even gold toilet paper holders. Estimates of the superyacht’s value vary. More conservative valuators say the Scheherazade is worth just over half a billion dollars, but many insiders claim the superyacht’s true cost is nearly twice that figure.

Now that officials have ensured the Scheherazade isn’t going to slip off to some faraway port that is friendlier to sketchy billionaires, they have the unenviable task of figuring out what to actually do with the damn thing.

Sponsored

Perhaps one silver lining of Putin’s war against Ukraine will be a renewed focus on stemming the tide of corruption that has the superrich hiding their assets away in shell companies, trusts, offshore tax havens, and lax U.S. jurisdiction like South Dakota. We now have a big, important justification that more or less everyone in the western world agrees on that gives us an excuse to ask whether there is really any good reason to allow for anonymous ownership of something like a superyacht through a series of legal fictions. There is evidence that Russia’s invasion of Ukraine has already brought some long-overdue scrutiny to the shadowy world of superyachting.

The fact that a superyacht exists should be enough probable cause to look into the finances of whoever’s on the ownership end of it. And in a just world, figuring out who really owns a megayacht so authorities can check if that person is engaged in some kind of financial impropriety should not be such a difficult thing.

If some law enforcement entity wants to know who owns my 2013 Chevy Sonic, all they have to do is run the license plate number. Yet, as always, the superrich get to play by a completely different set of rules. Maybe impounding one of Putin’s probable superyachts will help wake more people up to that.


Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.