wealth distribution

Yuri Milner’s Eastern Promises


What is Yuri Milner thinking? That’s the question I posed last week to Milner’s spokesman, after Russia launched a full-scale invasion of Ukraine, and then again on Monday, after Western governments responded with crippling sanctions. Milner, after all, is easily among Silicon Valley’s most prominent Russians, having made billions of dollars as the force behind DST Global, the venture firm that placed historic bets on Facebook and Twitter, among other Bay Area landmarks. But it was Milner’s embattled friends that put him on my mind: The Russian provenance of DST’s early capital was supplied in large part by Alisher Usmanov, a Russian oligarch who made his fortune in metal and mining before teaming up with Milner in 2008.

The partnership worked out pretty well, for both of them. The Facebook investment in particular turned Yuri into Silicon Valley royalty, with first-name-only status on par with Jack or Sheryl, enabling him to drop $100 million in 2011 for the 25,000-square foot Chateau Loire in Palo Alto, setting a record at the time for the most expensive single-family home. Once a year, he plays M.C. alongside Mark Zuckerberg at the Breakthrough Prize award show, the closest thing this town has to the Met Gala. 

But the last few days have made clear that shaking the past isn’t so easy. On Monday, the European Union added Usmanov to its list of sanctioned Russian oligarchs, as part of the West’s attempt to isolate and punish Vladimir Putin and his allies. And so there is no gotcha when I ask: What does Milner think about the invasion of Ukraine? It may be a tough question, given his fiduciary ties to both Russia and the U.S. But I can assure you that it’s a question that others in Silicon Valley are asking this week, too.

To Yuri, who was born in Russia but later adopted Israeli citizenship, the storyline surely reeks of xenophobia and nativism—there is a categorical difference between an investor of Russian descent and an investor working on behalf of the Russian government. Milner, in his view, is merely the former. There are skeptics, though. In 2017, the Times published an investigative report tracing DST Global’s investment capital, through a labyrinth of shell companies, back to Russian entities including the state-controlled bank VTB and Gazprom, the Russian energy company. Milner rebutted the report’s insinuations as “guilt by association.” “Only a worldview that sees my nationality as inherently suspicious could find such a fairy-tale compelling,” he wrote. “Investments can be made on business merits only. Even by a Russian.”

But last week’s economic sanctions, and the broader war in Ukraine, are a reminder that foreign capital can come with political costs. Is the Russian government, which helped to bankroll Milner’s U.S. investment career, at fault? Are the sanctions against Usmanov, Milner’s former patron, unfair? Milner, for now, is staying quiet on those sorts of questions. When asked, a spokesman provided some helpful context on the current state of DST’s limited partners, or the people on whose behalf DST invests. Despite the early backing from Russian state interests in the aftermath of the financial crisis, the DST cap table is no longer as Russian as you may think: The firm has raised no cash from Russian institutions since 2011, and “did not raise capital from Russian LPs (including Mr. Usmanov) since 2012.” The firm says, therefore, “there is no capital from Russia in the last six funds,” and that, in total, 97 percent of the money “raised over the course of the past 12 years from international institutions and private investors.”

That’s all fine and well—the Russian state investments were years ago—but also sort of irrelevant to the question at hand. What does Yuri think? I asked again, surely belaboring the point. But at a time when there is such unanimity in the Western response toward Russia and its oligarchs, and a time when more entrepreneurs than ever are asking about the foreign entanglements involving their investors, it’s a much-whispered question, and one that I imagine Milner will have to answer at some point.

S.B.F.’s $20 Million Offensive

One question I wasn’t able to answer in my recent column about Sam Bankman-Fried was just how much of his multi-billion dollar fortune he is spending on politics these days. S.B.F., as he is now known, is waging a personal lobbying offensive to prevent the next pandemic. Meanwhile, the crypto king-cum-Democratic megadonor is one of the hottest commodities in progressive politics right now, with nonprofits, operatives and donor-advisers all thirsting after his business or patronage. 

So I asked S.B.F. himself, last week, to estimate just how much he has spent to date on his crusade to beef up America’s defenses against future pandemics. The answer, he told me, is about $20 million. 

That’s honestly a little more than I expected, but it includes an increasingly dizzying number of different ventures and investments: His donations to Guarding Against Pandemics, the political advocacy shop run by his brother Gabe; the $5 million that his L.L.C. dedicated to a California ballot initiative this fall; and the heretofore undisclosed amount he has siphoned off to Protect Our Future, the allied super PAC spending at least $10 million to boost anti-pandemic Democratic candidates in primaries this year. 

The combined sum is pretty extraordinary for a personal lobbying effort. And that doesn’t even include the gusher of money S.B.F. is directing toward other, nonpartisan philanthropic projects that also came into focus this week. On Monday, Bankman-Fried announced new details about the philanthropic arm of his crypto company. FTX’s Future Fund, which is being funded primarily with Bankman-Fried’s own digital assets, will distribute $100 million to $1 billion this year to a variety of effective altruist and related causes. Bankman-Fried and his brother also pulled back the curtain on their family’s personal foundation, disclosing that they recently gave $5 million to ProPublica to fund reporting on “biosecurity and public health preparedness.” If it feels like S.B.F.’s money is suddenly everywhere, you’re not alone. Cheat-sheets are in the mail.

While I had S.B.F.’s ear, I also asked him the question that has been preoccupying the donor-adviser class: Who are you going to hire to do your politics? There has been a feverish, borderline desperate crusade over the last several months to get S.B.F.’s attention and, of course, the associated salary and prestige. S.B.F.’s current stable of political advisers is lean and informal, basically just Gabe and Mike Sadowsky. “We’re considering hiring a bit more, but feel pretty good with the current set of advisors,” S.B.F. told me last week. (That doesn’t include his crypto team at FTX that handles policy work for the company.)

Still, the level of Bankman-Fried’s ambition means he needs more staff. Shortly after connecting with him, I received an interesting tip about some goings-on in the Bahamas, where S.B.F. set up shop earlier this year, in part for the friendlier regulatory regime. Apparently S.B.F. recently summoned about 15 nonprofit advisers and consultants to the Caribbean to mull his next philanthropic moves and how someone with a $25 billion net worth might be smart to spend his resources. Sam told me the conclave was informal—this was not Davos or Bilderberg—and one of “a few gatherings in the last few weeks to talk about the foundation in general.” Nor was it a secret bake-off to become his political sherpa, despite gossip to that effect. But it was an instance where the rumors spoke to a larger truth: People are downright obsessed with him these days.

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