Ever since the United States sanctioned 17 Russian government officials, seven oligarchs and the 12 companies they own or control in early April to punish Moscow for its meddling in the U.S. presidential elections, a debate of sorts has sprung up about the wisdom of including two of the most prominent targets, Oleg Deripaska and Viktor Vekselberg, in the roster. Arguments against doing so have appeared in straightforward news stories in major Western papers, as well as in a few op-eds.

For example, a recent Financial Times profile of Deripaska cited a member of Rusal’s board in describing the sanctions as “unfair”: “Deripaska has been good at playing by Putin’s rules, yes,” the individual told the FT. “But to be a billionaire in Russia, you have to be close to the Kremlin.” Similarly, the Washington Post, writing about Vekselberg last week, tracked down Ambassador Mike McFaul, Obama’s main Russia adviser, and asked him his opinion. “I was shocked when I saw [Vekselberg’s] name there,” McFaul told the paper. “I think generally sanctions are the right thing to do. But I know lots of people who work with him. He would not make my top 10, top 20 or top 30.”

Bloomberg’s Leonid Bershidsky has been one of the most outspoken critics making the case that the wrong people are being sanctioned. For example, he tried to explain away the singling out of Deripaska—an aluminum magnate—as part of the Trump Administration’s trade and tariff strategy: “An example is being made of a billionaire who isn’t part of President Vladimir Putin’s inner circle,” he wrote, “but whose business is unpopular with the administration of President Donald Trump.” As to Vekselberg, Bershidsky described the relationship between a certain class of Russian billionaires and the Kremlin in clinical, psychological terms—almost as if talking about Stockholm Syndrome. “Even the wealthiest business owner serves at the president’s pleasure,” he wrote. “It’s not really a game but an abusive relationship with elements of codependency.“

Bershidsky is echoing an argument that first appeared in a policy brief published last November by the Atlantic Council. The document sets out criteria by which the U.S. government ought to consider adding Russian individuals to its sanctions rosters. “Russia’s wealthy businessmen should not be presumed to warrant listing simply by virtue of their wealth,” the document argues. “Many made their fortunes before Putin [emphasis added] and, to survive, are forced to pay large tributes to the Kremlin.”

In one sense, the Atlantic Council brief is correct: A distinction should be made between the genuine entrepreneurs in today’s Russia and Putin’s kleptocratic cronies. But that distinction is now being applied to people like Deripaska and Vekselberg, and by extension casts an entire subset of genuinely bad actors—the hyper-rich “businessmen” who profited from the violent, lawless, mafia-ridden privatizations of the 1990s—as being among Putin’s victims.

Has our sanctions policy thus far been overly broad? In a word: “no.” And the fact that other Western countries—especially the United Kingdom—may be following in our footsteps by digging into the finances and connections of people like Roman Abramovich is welcome news. Moralistic revanchism ought not drive Western policy; the sordid and often murderous provenance of these vast fortunes is not what’s at issue here. Rather, we should be sober about just who these people are, and the roles they play in Putin’s Russia.

It’s true that some of these Yeltsin-era tycoons have spent the last 20 or so years trying to diversify their holdings in a bid to gain some independence from the Kremlin. As Bershidsky notes in his defense of Vekselberg, the sanctioned billionaire has moved some 79 percent of his assets outside of Russia. And it may even be true that many of these people’s financial affairs are now clean—their assets transparent enough for the highest auditing standards Western firms can offer.

That’s all very nice. But what matters is that in continuing to “play by the rules”—which is indeed a necessity to remain a billionaire under Putin—these people remain an integral part of Putin’s system. These are no innocent hostages, nor are they vassals forced to pay tribute to a rapacious czar. These are opportunists who now find themselves on the wrong side of escalating hostilities between sovereign nations. As such, they are legitimate targets of a policy meant to deter the Russian state from a range of harmful behaviors.

Has this policy been successful? That’s a question beyond the scope of this essay. But insofar as we have committed ourselves to an approach that draws thick lines between victims and predators in Putin’s Russia, it’s clear on which side of the line these people lie.

There’s an argument, usually made subtly, especially by a certain kind of Russianist in DC, that while Yeltsin-era oligarchs may not be angels, they are sure to play a constructive role in a post-Putin Russia. In trying to shield these people from measures meant to wound the current Russian regime, there is an element of trying to retain influence in whatever follows it.

As a matter of principle, these people are correct: the United States should avoid the temptation of picking or creating political winners in Russia (or anywhere else, for that matter). The current sanctions policy, effective or not, should be thought of only as a deterrent.

But as a simple analytical matter, these Russianists are badly mistaken. If Russia is to have any kind of decent future in our lifetimes, it will be built by a generation that manages to transcend the sordid legacy of the Yeltsin years, not by those that thrived in them.

On January 30 of this year, the U.S. Treasury released the public version of the so-called “oligarch list”—a list of “significant” wealthy Russian people and political actors “as determined by their closeness to the Russian regime and their net worth.” The list, mandated by a bill passed by Congress and signed into law by President Trump in the summer of 2017—the Countering America’s Adversaries Through Sanctions Act (CAATSA)—was devised as a clever “pre-sanction” device that would put not just the potential targets on notice, but more importantly alert their would-be business partners of U.S. hostile intent. If you were considering doing business with one of these people, the implied message from the U.S. government was that you might want to reconsider. The people identified by Treasury were to be made “radioactive,” in the memorable phrasing of former U.S. diplomat Dan Fried.

When it landed, the list was widely met with derision. The 96 wealthy people on the list appeared to be cut-and-pasted from Forbes’ annual “Billionaire list,” with the cutoff being a net worth of $1 billion or more; the government functionaries, meanwhile, seemed to be directly lifted from the personnel websites of the Presidential Administration and the Prime Minister’s office. Even though its release was accompanied by Treasury assurances that a detailed “classified annex,” both expanding and justifying the public list, had been sent to Congress, most of the coverage remained negative. Leonid Bershidsky’s initial criticism of the list as a whole was on point: The public list was over-broad insofar as it included real entrepreneurs. Any expansion of the list through the classified annex wouldn’t address that fact.

But as we saw, by the time actual sanctions rolled around in April, the criticism subtly shifted, with Yeltsin-era oligarchs now transformed into Putin’s victims. It’s hard to say definitively why this happened; those pushing this line are a diverse bunch. We know nothing, for example, of Deripaska’s unnamed defenders at Rusal, except that they are probably self-interested. And Bershidsky, a successful financial journalist, editor, and publisher in Russia who self-exiled to Berlin in 2014, appears to be on a lonely mission to push back against what he perceives is excessive Russophobia driven by Americans convinced that Putin installed Donald Trump in the White House.

In DC, however, something else is at play—a kind of interpretation of history you detect if you spend time with the generation of people who worked on Russia in the 1990s. Some were friendly with operators like Anatoly Chubais and Petr Aven, members of the young group of reformers-turned-tycoons whose economic policies exacerbated a difficult transition to capitalism. Others, serving in Bill Clinton’s Administration, had doubled and tripled down on the erratic alcoholic Yeltsin, in some cases colluding outright in his desperate bid to cling to power in 1996.

The reckless liberalization policies of the 1990s helped create a generation of gangster-billionaires—the storied class of larger-than-life “Russian oligarchs.” All swindled their way to their riches, and most relied on connections to organized crime to prevail. And yet, for a certain generation of Russia hands, these same people came to represent a credible path to a decent future for a country just getting its footing with capitalism. The late Karen Dawisha, one of the best authorities on the corrupt regime that sprung up under Putin, elegantly described this thinking: “Mancur Olson was right to posit that in the transition from dictatorship to democracy, ‘roving bandits’ will over time gain an interest in laws to vouchsafe their gains and will settle down, and from this interest in the stability and predictability of gains, democracy will emerge.”¹ To Dawisha and many other Russianists of that generation, Putin’s emergence in 2000 represents a kind of coup—a derailment of a country that was progressing, albeit on a bumpy road, toward the inevitable end-point of capitalist, and perhaps liberal, democracy.

That Putin has created a revisionist, expansionist, and increasingly autocratic kleptocracy on his watch is obvious to anyone with eyes. That he strangled an emerging democratic opposition to his rule in 2011/2012 is beyond dispute. But that the Yeltsin-era oligarchs in any way still represent a hope for Russia’s future is a bizarre, if persistent, idea born of a certain kind of dumbed down democratization theory. It seems to lie at the heart of the attempts to whitewash the reputations of the two oligarchs already mentioned, as well as the attempts to keep other supposedly “good oligarchs” found on the pre-sanction list out of Treasury’s crosshairs.

No less bizarre than the concept of a “good oligarch” is the idea that those tycoons cooperating with Putin should be seen as hostages rather than opportunistic collaborators. But the provenance of this idea is also not hard to discern: It is tied to the unhappy fate of Mikhail Khodorkovsky.

In July of 2000, shortly after assuming power, Putin called together the Yeltsin-era billionaires and promised them that their ill-gotten gains would be preserved as long as they stayed out of politics. Putin was already feuding with Boris Berezovsky and Vladimir Gusinsky, two men with massive media empires who were emerging as vocal critics and rivals to his rule. Neither were budding democrats; both were exiled by the end of the year. Most of the rest of the wealthy businessmen opted to keep their heads down and cooperate.

Most, but not all: Khodorkovsky, who by 2003 was the wealthiest man in Russia due to the runaway success of his oil company Yukos, started asserting his political independence. And he genuinely did seem more earnest than any of his peers. Russia’s financial crash in 1998 appears to have shaken him. He started to confront Putin about the cronyism and corruption flowering under his watch. Putin’s furious response, accusing Khodorkovsky’s Yukos of a vast tax-evasion scheme before a gathered press gaggle, sealed Khodorkovsky’s fate: He was jailed for 10 years, and his oil company was picked apart, with its most profitable assets going to the state firm Rosneft, headed by Putin’s ruthless crony, Igor Sechin.

For many Russia experts, the destruction of Khodorkovsky represented the moment that the Putin regime showed its true face. The brazenness of the act, and the fact that Khodorkovsky was giving sizable sums of money to civil society and making reformist noises before he was jailed, has helped cement the myth that Russia’s robber-barons were on the cusp of transforming themselves into responsible stakeholders in a liberal democratic society. But a quick look at how people like Deripaska and Vekselberg have handled themselves since Khodorkovsky’s fall gives lie not only to the “roving/stationary bandit” theory (at least as applied to Russia), but also to any claims of victimhood espoused by these people’s defenders.

“More than any other oligarch, Mr. Deripaska wedded his fortunes to those of Russia’s ruling class,” the Financial Times wrote in a profile of the man in 2010. He married Polina Yumasheva, the daughter of Valentin Yumashev, one of Yeltsin’s senior aides and husband to Yeltsin’s own daughter. Deripaska thereby wormed his way into “the Family,” the group responsible for bringing Putin to power and negotiating their immunity under his regime. Putin’s 2000 meeting could be seen as a codification of that “understanding”—ponyatiye in Russian, business slang with its roots in the Soviet underworld.

According to Konstantin Gaaze at Carnegie, Deripaska is not so much an entrepreneur as he is a networker—his skills are not managerial but political. He has asked for help from the Russian government, both under Medvedev and Putin, no less than 50 times in the past 15 years, and has received it almost every time. It’s true that he was rebuffed in 2008, at the height of the global financial crisis, when he proposed to sell the Russian state three million tons of aluminum at a steep premium in order to help bail out his over-leveraged firm Rusal. But that doesn’t tell us all that much: Around that same time, Putin’s darling Igor Sechin was also having trouble clawing money from the Kremlin’s clutches.

But even if the 2008 aluminum deal fell through, Deripaska got preferential financing from the famously opaque Vneshekonombank (VEB), a former Soviet foreign trade bank with longstanding links to the security services that in 2007 was re-established as a “state corporation.” VEB served as the key government vehicle for bailouts through the recent financial crisis. A cap on bailouts was set by law at $2.5 billion per company, but Deripaska received $4.5 billion anyway. He got the money in order to make good on a loan he had recently taken out with a consortium of foreign banks. Nominally, his bailout was approved so that the collateral Deripaska had put up—shares in the palladium mining concern Nornickel—would not end up in foreign hands in case of default. But practically speaking, the Kremlin simply helped preserve Deripaska’s personal wealth.

Deripaska always knew the game he was playing, and at times he has been candid about it. “I don’t separate myself from the state,” he told the FT in 2007. “I have no other interests.” And indeed, while he did well by Putin, he has also been quite useful to him. Shortly after the Bush Administration revoked Deripaska’s visa in 2006, allegedly due to his ties to organized crime, he was granted a diplomatic passport by Russia, not just for his own business purposes, but also so that he could represent Russia in the international arena. A U.S. diplomatic cable sent in 2006 noted the dynamic: Deripaska was “among the two to three oligarchs Putin turns to on a regular basis” and “a more or less permanent fixture on Putin’s trips abroad.” The conversation unearthed by anti-corruption activist and opposition politician Alexei Navalny last year between Deripaska and Deputy Prime Minister Sergey Prikhodko, a top foreign policy advisor to Putin, suggests that Deripaska’s role as a kind of unofficial intermediary remains unchanged.

Like Deripaska, Vekselberg made his initial fortune in the 1990s in the scramble for Soviet mineral assets—the “aluminum wars”—which were among the bloodiest struggles of the period. He founded his holding company, Renova, in 1991 with Leonard Blavatnik, a Soviet emigré to the United States. Renova still serves as Vekselberg’s main vehicle for conducting business, and as a result it was among the firms sanctioned last month. His Siberian-Urals Aluminium Company (SUAL), founded in 1996, amassed stakes in various mines around the country. The story of how SUAL got control over the Severouralsk Bauxite Mine (SUBR) is a murky case in point. One version of events had the mine’s owner sign over his rights to Vekselberg after his daughter and husband were found murdered in their apartment.

Unlike Deripaska, Vekselberg has been less brazen with his “asks” of the Kremlin, and more ostentatious in his pious displays of patriotism. Shortly after the fall of Khodorkovsky, he famously repatriated the Forbes family’s Fabergé egg collection to Russia at a cost of $100 million, as well as restored the imperial palace in which the eggs were to be displayed for an additional $40 million—a gesture that earned him public praise from Putin and the ponyatiye that they were on the same side.

Though no pauper in Yeltsin’s time, Vekselberg has done well since. The Skolkovo Project—the so-called Russian Silicon Valley, a brainchild of then-President Dmitry Medvedev—was given to Vekselberg to steward in 2010. Vekselberg himself likes to play a martyr, telling journalists that the project is a financial burden for him—a burden he proudly carries for the sake of Russia’s future. That’s a stretch. Skolkovo was designed to be a private-public partnership, and the Russian government initially announced it would invest around $4 billion on the project through 2020. Vekselberg promised to attract three times more in private funds. As of now, however, the biggest visible achievement of Skolkovo has been a cascade of corruption scandals, with allegations that as much as $2 billion has been misused or embezzled.

But all that is peanuts compared to the big cash-out Vekselberg received as a result of his dealings with the Tyumen Oil Company (TNK). He bought into TNK during its privatization in the 1990s, alongside Mikhail Fridman and Petr Aven’s Alfa Group, a bank that was guaranteed a controlling stake in the oil company by Yeltsin’s government at the time. In 2003, when TNK merged with BP, the Russian consortium that held 50 percent of the resulting company was made up of Vekselberg, Blavatnik, Fridman, Aven, and German Khan. Nine years later, BP decided to sell its share in TNK-BP after a bruising, bare-knuckled fight with its Russian partners, who were openly leveraging their connections with Kremlin-connected security services to make trouble for the Brits.

As chance would have it, none other than the state-owned Rosneft emerged as the buyer willing to swallow the whole company—both the British and the Russian halves—once the Brits opted to sell. The Russian shareholders received $28 billion in cash—a record-breaking payout. As Forbes noted, the payment was inflated by some 40 to 60 percent above market valuation, equaling some $8-10 billion in free money for the lucky Russian stakeholders. The deal was reportedly finalized in an all-night round-table session that included Rosneft’s CEO Sechin and Putin himself.

The deal has been criticized as deeply corrupt by former TNK-BP managers, as well as by the late reformist politician Boris Nemtsov, who was gunned down in front of the Kremlin in 2015. It bumped Vekselberg’s net worth up to $19 billion in 2013, putting him in the top spot on Forbes’ Russian billionaire list that year, and made Blavatnik the wealthiest person in Britain. As for Rosneft, the deal saddled the company with huge debt loads, and its capitalization today is still lower than it was before the acquisition.

What was the steep premium “for”? It’s impossible to say, of course. Some of that state largesse presumably ended up as a kickback, held in mysterious trust by someone like Sergey Roldugin. But the important thing to keep in mind is that Vekselberg, along with Fridman, Aven, Khan, and Blavatnik, are complicit in this scheme. They are hardly held hostage to a predatory Putinism.

As if to underline the point, Vekselberg quickly got a bailout from the Russian government after sanctions were imposed. He had asked the Kremlin to refinance a set of loans totaling $950 million through state banks, to let a private bank (whose beneficiaries are his partners) provide loans to his business in violation of counter-party risk assessment laws, to make state companies buy metals from his Yekaterinburg metals factory, and even to ban mineral water imports from Europe in order to bolster the domestic market position of his beverage firm. “Support has already been provided, last week,” the Russian Finance Minister Anton Siluanov said in mid-May. “As to the sum, I’d rather not talk about it.”

Deripaska’s holding company EN+, which last week proposed that energy prices for Siberian citizens be raised to help offset the pain of U.S. sanctions, is still awaiting a decision.

Is there no distinction to be made between people “truly” inside Putin’s inner circle—people like Sechin, Gennady Timchenko, Arkady and Boris Rotenberg, Yuri Kovalchuk—and the Yeltsin-era “businessmen” that still control some of the largest companies in Russia? Of course there is. The former are largely personal friends of the Russian President, dependent sycophants from his time in St. Petersburg whom he has handsomely rewarded with plum jobs at state firms and with fat procurement contracts for white elephant construction projects. The latter, having read the moment correctly in 2000, have used the time to spread their amassed wealth beyond Russia’s shores, investing in Western companies and charities, and procuring second or third passports for themselves in the process. Fridman has perhaps gone the furthest, supporting causes in Ukraine and maintaining an open friendship with the late Boris Nemtsov.

Still, these people have continued to “play ball” with Putin, and have done so not merely transactionally and at arms’ length. They are not captive captains of industry trying to steer healthy companies through a nasty but hopefully brief period of statist authoritarianism, merely doing what they must to stay alive. They are collaborators. To be a billionaire in today’s Russia is to be a regime loyalist: There is no such thing as a free lunch with Vladimir Putin.

Early last week, the Atlantic Council hosted a closed-door private event with Fridman and Aven to discuss the state of the Russian economy. A group of transparency and democracy activists protested the meeting, saying that while in principle there was nothing wrong with talking to such people, the real purpose of their visit to DC—to discourage further sanctions—should not be overlooked.

On the one hand, as heads of Alfa Bank, one of the largest financial institutions in Russia, the two billionaires doubtless had important insights to share with DC’s policy community. If Putin himself agreed to sit down with scholars behind closed doors, the same logic would apply: Understanding what is actually going on inside an adversary’s mind is valuable information. And having the discussion occur in private is often the price of candor.

On the other hand, if Putin was speaking, whatever candor he might display ought to be viewed with skepticism. The same goes for Fridman and Aven, who had been lobbying to not end up on Treasury’s pre-sanction list since well before January. Rumor has it they still retain the services of BGR Group, which helped set up a whole raft of meetings around town for them last week.² Perhaps they criticized Putin at the Atlantic Council, giving off the impression that they were independent actors. We were not at the meeting, but we hope those present were deeply suspicious of their posturing.

It’s a common piety among Russia analysts to say that U.S. policy is directed at the Kremlin, not at the Russian people. But in the gray morass that is today’s Russia, the Yeltsin-era oligarchs are more aligned with the former than with the latter. They have chosen to remain involved with a regime that is increasingly hostile to the interests of the United States, and they have done so for personal gain. If they end up chewed up in the ensuing conflict, that’s on them.