The Putin Tax isn't Going Away Any Time Soon

There’s a hidden tax that every American is paying, and will probably keep paying well into the future. An organized crime tax, it's one consequence of the steep cost of global corruption on a monumental scale. Let’s call it the Putin Tax.

Putin’s Russia is a mafia state, a kleptocracy from top to bottom. Russian organized crime is indistinguishable from the police, the judiciary, the military and the intelligence communities. They are all part of the same under-the-counter economic system, a system that runs on bribes, kickbacks, and all manner of extortion.

This creates large-scale market inefficiencies, which in turn inflate the cost of virtually everything in its path — especially oil, gas, aluminum, and other “extractive” natural resources.

The effects ripple upward through the global supply chain. Everyone in the racket kicks a share of the proceeds up to the next level, and with each kick upward, new costs are added to the final product, driving up prices at every level. It's a perfect inflation machine.

These added costs are, in effect, a tax. They don’t appear on any balance sheet, or any IRS form, yet they’re embedded in every product we buy, every service we use. Its aggregate value can’t be calculated, but surely runs in the hundreds of billions, possibly the trillions. This was a burden on society long before the invasion of Ukraine, but the war made it significantly worse.

If it were just a Russian problem, we might shrug it off. But the costs are being borne increasingly by Americans. Part of this is fallout from the war. But a much bigger part has been building for decades, right here in America.

Because in a very real sense, the United States is being actively subverted by Russian organized crime. The stuff we’re finding out about Oleg Deripaska and Charles McGonigal is only what we see on the surface.

Beneath that surface lurk all the layers of criminal behavior we associate with the Cosa Nostra of urban myth — but which are now effectively owned by the Russian “mafiya.”

It went somewhat under the radar that the colorful old Italian thugs had been elbowed aside by Eastern European thugs. The old crowd, having grown softer with each generation, was no match for the new kids in town. Collectively referred to as ‘the Russians,’ they came to our shores with vast amounts of money — enough to buy off, blackmail, and occasionally execute anyone in their way. And their brutality was enough to make even the old Sicilians squeamish.

They took over existing rackets, so they wouldn’t have to reinvent the wheel —those nice Italian boys still have their jobs, but they now kick up to the Russians.

The new guys took over existing businesses, as well. They moved in on useful front companies, through which they could launder their cash and conduct “legitimate” business when it suited them. New York real estate was ideal for such purposes, especially when their landlord was himself a Russian asset.

They took over criminal franchises in seaports, airports, rail terminals, and trucking companies from coast to coast.

And to keep all the wheels well-lubricated, they took over cops and councilmen, lawyers and judges, mayors and congresspersons, and — it is widely speculated — several senators.

Most of us will go a lifetime without encountering organized crime, at least not directly. We won’t see the bribes and kickbacks. We’re oblivious to the black market economies — to the protection rackets, front businesses, stolen merchandise, and illicit financing of criminal activity — that add hidden but significant costs to our everyday life.

Not all of these costs are attributable to Russian mobs, but the Russian share-of-market is known to be substantial. We don’t see the crime, but we do pay the tax.

Scams of the healthcare industry alone are in the tens of billions, and the added costs are inevitably passed on to us. Medicare is a huge target for thieves, and not just Russian thieves. Now-senator Rick Scott’s company paid $1.7 billion in fines for Medicare fraud, and we only know about that because they were caught.

Now let’s add to those costs the claims paid by the insurance industry, in compensation to the companies that were victims of those scams. The huge financial payout on those claims gets passed along, in the form of higher premiums to their claimants, and higher prices to us.

Then let’s add in the higher gas prices that derive from the extra-legal “diversion” of energy commodities — strategic and otherwise — some of which are nuclear, and only one of which is gas.

Then let’s add in the costs associated with the systemic theft of goods and services, and with the additional security required to mitigate it.

Then add in the cost of cybercrime. For every hospital that gets its data held hostage, that’s another few bucks added to your doctor bills or your health insurance. For every school system that pays a malware ransom, there’s a property tax that’s about to go up.

Finally, let’s add in the cost of corrupt politicians.

Senator Mitch McConnell has still not explained the coincidence of his pushing through the removal of sanctions on Deripaska in 2019, just as Deripaska was announcing a new $200 million aluminum processing plant in Kentucky. Of all the states he could have chosen.

Senator Rand Paul, also of Kentucky, has still not explained his trips to Russia. Or how he went from vocal Trump-hater to Trump’s loudest defender in the blink of an eye. Or why he was one of the only senators who went on record in support of Trump’s public fellating of Putin in Helsinki.

Senator Ron Johnson has still not explained why, after traveling to Russia in 2018, he suddenly concluded that Russian interference in the 2016 election was “overblown.” Or why, as chair of the Homeland Security committee, he openly speculated that it was really Ukraine, not Russia, that drove that interference. Or why he ignored, one month before the 2020 election, an FBI warning that he was a target of Russian disinformation.

These are just the senators, and just the most obvious Russian pawns. How many more are there? And what about those in the House? Marjorie Taylor Greene, Matt Gaetz, and Paul Gosar certainly behave like useful idiots, but it’s hard to know for sure. It is, after all, in the nature of Russian espionage that agents often don’t know they’re agents.

But perhaps the biggest cost, the most onerous tax of all, is in all the government programs that never happened, in the opportunity cost of all the legislation that was willfully sabotaged for reasons that smell, more and more, of Russian influence.

How deep does this sedition go? Does Deripaska have the whole Freedom Caucus on his payroll? They’re certainly doing his bidding, whether they know it or not.

Think of the Putin Tax as the sum total of all these costs, each cost traceable — one way or another — to Russian influence and subterfuge. That sum is, quite literally, incalculable. But it has surely, through the years, made a serious dent in our standard of living. We’re all kicking up to Putin.

Yes, I sound paranoid, even to myself. It sounds like conspiracy theory, but the more I read about it, the uglier it looks. It’s hard to escape the conclusion that Russian organized crime holds considerable sway in American life, and not in a good way.

And a lot of Americans, who should know better, are complicit.