New York pension money ‘held hostage’ by Vladimir Putin, Russia

New York City employees and taxpayers are unwittingly funding Russian companies and Vladimir Putin’s oligarch cronies with at least $519 million invested in assets now frozen by the belligerent dictator, The Post has learned.

City and state pension systems have pledged to sell the holdings in protest against Russia’s assault on Ukraine, but Moscow has banned foreign investors from selling the shares.

“Putin is a thug and he’s taking our money hostage,” said Gregory Floyd, a Teamsters labor leader and administrator of New York City Employees’ Retirement System, NYCERS.

New York City’s five pension systems — covering teachers, cops, firefighters and other city workers — have invested a total of $284.5 million in 33 publicly traded Russian stocks, according to the records provided to the Post by City Comptroller Brad Lander’s office.

On February 25, the market value of the Russian assets was $185.9 million, nearly $100 million less than the purchase price, according to the latest available records.

Lander’s office says it can’t put its finger on what 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 trading in Russian securities. Given this context and the ever-changing rules in the Russian market, an accurate assessment of their current value is not available to the moment.

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

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

  • Herman Oskarovich Gref is a close confidant of Putin and CEO of Russia’s largest financial institution, Sberbank. The United States sanctioned Sberbank on April 6, barring American citizens or institutions from most dealings with the bank to economically hit Russia after its unprovoked invasion of Ukraine. Gref is also a senior Russian government official.

New York Pension Systems has invested the bulk of its 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, called on employees to rally around Putin in mid-March to preserve Russia’s power.

NYC Pension Systems has invested $6.4 million in Gazprom.

  • Vagit Alekperov, a billionaire and close ally of Putin, resigned on April 21 as chairman of Lukoil, Russia’s second-largest oil company, after being hit with crippling sanctions by the United States and other countries.
A view of the fuel tanks of 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 totaled $22.7 million.

  • Oleg Deripaska, a Putin ally and billionaire oligarch who founded Norilsk, a nickel and metals mining and smelting company. The FBI raided two houses linked to Deripaska in Washington, DC and New York last October.

NYC pension investment in Norilsk: $14.2 million

  • Said Kerimov, the majority shareholder of Polyus Gold, Russia’s largest gold producer. His father, billionaire Suleiman Kerimov, resigned from the Polyus board in April. The elder Kerimov, a suspected money launderer, is known as “RussiananGatsby” for having organized sumptuous evenings in his villas on the Côte d’Azur. Fiji seized his $300 million yacht on May 5 at the request of the US Treasury.

The father was sanctioned by the United States in 2018, among several oligarchs who took advantage of the Kremlin “through corruption and its malign activities around the world, including the occupation of Crimea”, federal authorities charged.

NYC Retirement 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 following the invasion of Ukraine.

NYC pension investments in Rosneft: $4.6 million.

Putin meets with the managing director of oil producer Rosneft Igor Sechin in Moscow in February 2021.
Putin meets with the managing director of oil producer Rosneft Igor Sechin in Moscow in February 2021.
Sputnik/Mikhail Klimentyev/Kremlin/REUTERS

In addition to New York’s pension systems, the New York State Common Retirement Fund had about $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 of “unacceptably high investment risk”. A spokesperson did not give the current value of the securities.

The New York State Teachers’ Retirement System, NYSTERS, which represents public school teachers outside of New York City, passed a resolution on March 4 to divest $125 worth of Russia-related assets. millions of dollars. He did not give the current market value.

“They’re just trapped,” former NYCERS executive director John Murphy said of pension systems. “There is a risk that they will lose all their money on these companies.”

Even if pension systems could divest, “they couldn’t sell at a reasonable price. There is no market for securities due to global outrage over the war,” said Edward Siedle, a former lawyer and investigator for the Securities and Exchange Commission.

The city and state’s $519 million is just 0.1% of the total $263.2 billion that the city’s retirement systems manage as of March.

Russia’s $110.8 million in state employee pension system stock, estimated as of March 1, represents 0.03 of its $279.7 billion in assets. And the state teachers’ pension system had Russian stocks worth $125 million on March 4, or 0.08% of its $152.4 billion in assets.

A Russian ruble coin is pictured with the US dollar
NYC’s five retirement systems cover teachers, cops, firefighters, and other city employees.
AFP via Getty Images

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

City and state pension systems, hoping to turn a profit, make secret deals with private equity, hedge funds and real estate investment firms that don’t disclose where they’re sinking hundreds of millions of dollars.

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

The New York Comptroller’s Office makes public the names of private investment firms and the amount of money they handle, but not specific investments. A Freedom of Information Act request for any corporate-managed Russian investment was denied.

Matthew Sweeney, a spokesman for DiNapoli, said in the review “we have raised our concerns with managers (including private equity managers) about not investing in Russia.”

Police officer outside the home of Oleg Deripaska during a raid.
The home of Russian oligarch Oleg Deripaska was raided on October 19, 2021.
Tom Brenner/REUTERS

State Assemblyman Ron Kim, D-Queens introduced a bill this month forcing state officials to disclose contracts governing how outside companies handle money from New York’s retirement systems.

Floyd, president of Teamsters Local 237, which represents school security guards, housing and hospital workers, said the pension system will sue Russia or private companies that leaked pension money of the city in the country, if the investments fail due to embezzlement.

“It’s not going to put the funds out of business, but you never want to lose money,” he said.

The state and New York City pension systems have invested a total of $519 million in Russian securities. In New York, five employee pension schemes have invested at least $284.5 million in Russian companies, many linked to allies of Vladimir Putin’s oligarch. Among them:

Sberbank / Herman Gref / $133.3m

Lukoil/ Vagit Alekperov/ $22.7 million

Norilsk/ Oleg Deripaska/ $14.2 million

Gazprom/ Alexei Miller/ $6.4 million

Rosneft/ Igor Sechin/ $4.6 million