NEW pension money ‘held hostage’ by Vladimir Putin, Russia

New York employees and taxpayers are inadvertently financing Russian companies and Vladimir Putin’s oligarch friends with at least $ 519 million invested in assets now frozen by the war-torn dictator, The Post has learned.

City and state pension systems have promised to sell off the holdings in protest of Russia’s attack on Ukraine, but Moscow has banned foreign investors from dumping the shares.

“Putin is a bully, and he’s holding our money hostage,” said Gregory Floyd, a Teamsters union leader and administrator of New York City’s employees’ pension system, NYCERS.

New York City’s five pension systems – covering teachers, police, firefighters and other city employees – have invested a total of $ 284.5 million in 33 listed Russian stocks, according to records released to The Post by City Inspector Brad Lander’s office.

On February 25, the market value of 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 not put a finger on what Russian shares are worth today.

“The market remains closed to all non-Russian investors,” said spokeswoman Shaquana Chaneyfield. “Strong sanctions are in place that prohibit us from trading Russian securities. Given this context and constantly changing rules in the Russian market, an accurate assessment of their present value is not available at present.”

Sberbank is Russia’s largest state-owned banking and financial company.

The list of Russian investments reveals the involvement of a crook’s list of billionaire oligarchs and close Putin associates, including:

  • Herman Oskarovich Gref is a close confidant and CEO of Russia’s largest financial institution, Sberbank. The United States sanctioned Sberbank on April 6, excluding US citizens or institutions from most transactions with the bank in order to hit Russia financially after its unprovoked invasion of Ukraine. Gref is also an executive officer of the Russian government.

NYC pension systems have invested the largest chunks of their Moscow investment, $ 133.3 million, in Sberbank.

  • Alexei Miller, CEO of Gazprom, a Russian state-owned energy company and the world’s largest natural gas company, urged staff to gather around Putin in mid-March to maintain Russia’s power.

NYC Pension Systems invested $ 6.4 million in Gazprom.

  • Vagit Alekperov, a billionaire and near Putin ally, resigned on April 21 as president of Lukoil, Russia’s second-largest oil company, after being hit by crippling sanctions by the United States and other countries.
A picture of fuel tanks from the Russian multinational energy company Lukoil at its headquarters in Brussels, Belgium.
Lukoil, a Russian energy company, is headquartered in Brussels, Belgium.

NYC’s pension investments in Lukoil amounted to $ 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 Retirement Investment in Norilsk: $ 14.2 million

  • Said Kerimov, the majority shareholder in Polyus Gold, Russia’s largest gold producer. His father, billionaire Suleiman Kerimov, resigned from Polyus’ board in April, the eldest Kerimov, an alleged money launderer, is known as the “Russian Gatsby” for hosting lavish parties in his villas on the French Riviera. Fiji seized his $ 300 million yacht on May 5 at the request of the US Treasury Department.

The father was sanctioned by the United States in 2018 among several oligarchs who served on the Kremlin “through corruption and its malicious activities around the world, including the occupation of Crimea,” FB accused.

NYC Retirement System Investment in Polyus: $ 3.8 Million.

  • Igor Sechin, nicknamed “Darth Vader”, was Putin’s right-hand man as deputy prime minister. He is the 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 Retirement Investments in Rosneft: $ 4.6 Million.

Putin will meet with Rosneft CEO Igor Sechin in Moscow in February 2021.
Putin will meet with top executive of oil producer Rosneft Igor Sechin in Moscow in February 2021.
Sputnik / Mikhail Klimentyev / Kremlin / REUTERS

In addition to the NYC pension systems, the New York State Common Retirement Fund had estimated $ 110.8 million in listed Russian securities per annum. March 1, when State Comptroller Thomas DiNapoli ordered a review.

On March 25, he called for a waiver of the “unacceptably high investment risk.” A spokesman did not disclose the current value of the securities.

The New York State Teachers’ Retirement System, NYSTERS, which represents elementary school teachers outside NYC, passed a decision on March 4 to divest $ 125 million worth of Russian-related assets. It did not provide the current market value.

“They’re just trapped,” John Murphy, former CEO 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 sell, ”they can not sell at any reasonable price. There is no market for the securities because of the global outrage over the war, ”said Edward Siedle, a former lawyer and investigator at the Securities and Exchange Commission.

The city and state $ 519 million is just 0.1 percent of the total $ 263.2 billion that the city’s pension system manages in March.

The state employees’ pension system’s $ 110.8 million in Russian equities, as estimated on March 1, comes to 0.03 of its $ 279.7 billion in assets. And the state teacher pension system had Russian shares worth $ 125 million on March 4 – or 0.08 percent of its assets of $ 152.4 billion.

A Russian ruble coin is denominated in US dollars
NYC’s five retirement systems cover teachers, officers, firefighters and other city employees.
AFP via Getty Images

But the listed Russian investments are likely “just the tip of the iceberg,” Siedle said.

City and state pension systems enter into hopes of making money secret contracts with private equity, hedge funds and real estate investment companies that do not disclose where they are sinking hundreds of millions of dollars.

“Given the lack of transparency, I seriously doubt that their Russian holdings are limited to the listed securities they have published,” Siedle said.

NYC’s audit office publishes the names of private investment firms and the amount of money they manage – but not the specific investments. A request from the Freedom of Information Act for information on Russian investments managed by the companies was rejected.

Matthew Sweeney, a spokesman for DiNapoli, said as part of the review, “we have communicated our concerns to executives (including private equity managers) about not investing in Russia.”

Police officer outside Oleg Deripaska's home while being assaulted.
The home of the Russian oligarch Oleg Deripaska was raided on October 19, 2021.
Tom Brenner / REUTERS

State Attorney Ron Kim D-Queens this month introduced a bill requiring government officials to disclose contracts governing how external firms manage money from New York’s pension systems.

Floyd, president of Teamsters Local 237, which represents school security agents, housing and hospital staff, said the pension system would sue Russia or private companies that have cut city pension money in the country if investments stall due to abuse.

“This is not going to bankrupt the funds, but you never want to lose money,” he said.

New York’s state and city pension systems have invested a total of $ 519 million in Russian securities. In NYC, five employees’ pension systems invested at least $ 284.5 million in Russian companies, including many associated with Vladimir Putin’s oligarchs. Among them:

Sberbank / Herman Gref / $ 133.3 million

Lukoil / Vagit Alekperov / $ 22.7 million

Norilsk / Oleg Deripaska / $ 14.2 million

Gazprom / Alexei Miller / $ 6.4 million

Rosneft / Igor Sechin / $ 4.6 million

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