New York employees and taxpayers are unwittingly financing Russian companies and the oligarch pals of Vladimir Putin with at least $519 million invested in assets now frozen by the war-mongering dictator, The Post has learned.
City and state pension systems have pledged to sell off the holdings in protest of Russia’s assault on Ukraine, but Moscow has prohibited foreign investors from dumping the stocks.
“Putin is a thug and he’s holding our money hostage,” said Gregory Floyd, a Teamsters union leader and trustee of the New York City Employee Retirement System, NYCERS.
New York City’s five pension systems – covering teachers, cops, firefighters and other city employees – have invested a total $284.5 million in 33 publicly traded Russian stocks, according to records released to The Post by city Comptroller Brad Lander’s office.
On Feb. 25, the market value of the Russian assets was $185.9 million, nearly $100 million less than the purchase price, the latest available records show.
Lander’s office says it can’t put a finger on what the Russian stocks are worth today.
“The market remains closed to all non-Russian investors,” spokeswoman Shaquana Chaneyfield said. “Strong sanctions are in place that prohibit us from transacting any Russian securities. Given that context and constantly shifting rules in the Russian market, an accurate assessment of their current value is not available at this time.”
The list of Russian investments reveals involvement by a rogue’s list of billionaire oligarchs and close Putin associates, including:
- Herman Oskarovich Gref is a close Putin confidant and CEO of Russia’s largest financial institution, Sberbank. The US sanctioned Sberbank on April 6, barring US citizens or institutions from most transactions with the bank to hit Russia economically after its unprovoked invasion of Ukraine. Gref is also an executive officer in the Russian government.
The NYC pension systems have invested the biggest chunks of their Moscow investment, $133.3 million, in Sberbank.
- Alexei Miller, CEO of Gazprom, a Russian state-owned energy corporation and the world’s largest natural-gas company, called on employees to rally around Putin in mid-March to preserve Russia’s power.
NYC pension systems invested $6.4 million in Gazprom.
- Vagit Alekperov, a billionaire and close Putin ally resigned April 21 as president of Lukoil, Russia’s second-largest oil company, after it was hit with crippling sanctions by the US and other countries.
NYC’s pension investments in Lukoil totaled $22.7 million.
- Oleg Deripaska, a Putin ally and billionaire oligarch who founded Norilsk, a nickel and metal mining and smelting company. The FBI raided two houses tied to Deripaska in Washington, DC, and New York City last October.
NYC’s pension investment in Norilsk: $14.2 million
- Said Kerimov, the majority shareholder in Polyus Gold, Russia’s largest gold producer. His dad, billionaire Suleiman Kerimov, resigned from the Polyus board in April, The elder Kerimov, an alleged money-launderer, is known as the “Russian Gatsby” for hosting lavish parties at his villas on the French Riviera. Fiji seized his $300 million yacht on May 5 at the request of the US Treasury.
The father was sanctioned by the US in 2018, among several oligarchs who profited from the Kremlin “through corruption and its malign activities around the globe, including the occupation of Crimea,” the feds charged.
NYC pension systems investment in Polyus: $3.8 million.
- Igor Sechin, nicknamed “Darth Vader,” was Putin’s right-hand man as deputy prime minister. He is chairman of Rosneft, a Russian state oil company. French authorities seized a $120 million superyacht owned by Sechin in early March in the wake of the Ukraine invasion.
NYC pension investments in Rosneft: $4.6 million.
In addition to the NYC pension systems, the New York State Common Retirement Fund had an estimated $110.8 million in publicly traded Russian securities as of March 1, when state Comptroller Thomas DiNapoli ordered a review.
On March 25, he called for divestment from the “unacceptably high investment risk.” A spokesman did not give the current value of the securities.
The New York State Teachers’ Retirement System, NYSTERS, which represents public-school teachers outside of NYC, passed a resolution on March 4 to divest of Russian-related assets worth $125 million. It did not give the current market value.
“They’re just trapped,” John Murphy, former executive director of NYCERS, said of the pension systems. “There is a risk that they will lose all their money on these companies.”
Even if the pension systems could divest, “They couldn’t sell at any reasonable price. There’s no market for the securities because of global outrage over the war,” said Edward Siedle, a former Securities and Exchange Commission lawyer and investigator.
The city and state’s $519 million is just 0.1 percent of the total $263.2 billion the city pension systems manage as of March.
The state employee pension system’s $110.8 million in Russian stocks, as estimated March 1, comes to .03 of its $279.7 billion in assets. And the state teachers’ pension system had Russian stocks worth $125 million on March 4 — or .08 percent of its $152.4 billion in assets.
But the publicly traded Russian investments are likely “just the tip of the iceberg,” Siedle said.
City and state pension systems, in hopes of making a profit, enter secretive contracts with private equity, hedge funds and real-estate investment firms that do not disclose where they sink hundreds of millions of dollars.
“Given the lack of transparency, I seriously doubt their Russian holdings are limited to the publicly traded securities they’ve disclosed,” Siedle said.
The NYC comptroller’s office makes public the names of private investment firms and the amount of money they manage – but not the specific investments. A Freedom of Information Law request for any Russian investments managed by the firms was denied.
Matthew Sweeney, a spokesman for DiNapoli, said as part of the review “we communicated our concerns to managers (including private equity managers) not to invest in Russia.”
State Assemblyman Ron Kim, D-Queens introduced a bill this month requiring state officials to disclose the contracts governing how the outside firms manage money from New York’s pension systems.
Floyd, president of Teamsters Local 237, which represents school safety agents, housing and hospital employees, said the pension system will sue Russia, or private firms that sunk city pension money into the country, if the investments go bust due to malfeasance.
“This is not going to bankrupt the funds, but you never want to lose money,” he said.
New York state and city pension systems have invested a total of $519 million in Russian securities. In NYC, five employee pension systems invested at least $284.5 million in Russian companies, including many linked to Vladimir Putin’s oligarch allies. Among them:
Sberbank/ Herman Gref /$133.3M
Lukoil/ Vagit Alekperov/ $22.7M
Norilsk/ Oleg Deripaska/ $14.2M
Gazprom/ Alexei Miller/ $6.4M
Rosneft/ Igor Sechin/ $4.6M