A Russian oligarch prominent in Silicon Valley bought into Facebook and Twitter with money from two Kremlin-affiliated banks, newly leaked documents show.
The funds were part of larger investments Yuri Milner made into the social media companies, eventually gaining an 8% share of Facebook and 5% of Twitter.
His backers’ identities were not known for years, until the Guardian and the New York Times reported Sunday he got money from the Russian banks.
He has since sold off most of those shares, but invested in other tech companies and a real estate fund created by Jared Kushner, President Trump’s son-in-law and senior adviser.
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The revelation is part of the so-called “Paradise Papers,” a trove of 13.4 million documents detailing how leaders such as Queen Elizabeth move money through offshore accounts.
VTB invested about $191 million into Twitter six years ago, the Guardian reported, while Gazprom Investholding poured money into a bigger entity that would control a sizeable share of Facebook.
Both banks were later sanctioned by the U.S. in 2014 as Russia tried to wield influence in a warring Ukraine.
Milner told the Times the investments were “nothing more than business.”
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“We are getting money, and we are putting them in Facebook and Twitter,” he told the newspaper. “We are making money for our limited partners, and we are giving money back to them. For me, it’s a commercial arrangement.”
But the news comes as Facebook and Twitter are under fire for Russia’s use of the social media platform in a bid to influence the 2016 U.S. election. Milner hasn’t been accused of doing anything illegal, and it’s wasn’t against the law for the banks to invest with the firms, according to reports.
VTB made the massive 2011 investment into Twitter with Milner’s company, DST Global.
Around the same DST partnered with billionaire Alisher Usmanov, general director of Gazprom Investholding, who poured large amounts of money into DST.
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Gazprom Investholding steered millions into Kanton Services — a firm closely tied to Usmanov — which owned one of the entities used by DST to buy into Facebook, the Times reported.
Kanton received at least $197 million from Gazprom three months before Milner and Facebook announced their investment.
Milner told the Times he wasn’t aware of a state-run financing, saying Usmanov had numerous flows of capital.
“I had no knowledge of him using state funds to invest with us,” he told the newspaper.
Usmanov’s roughly $200 million investment into Facebook ended up earning him $1 billion, the Guardian reported.
A Facebook spokeswoman told the newspaper Usmanov’s shares were sold off after the social network went public in 2012. A Twitter representative added it doesn’t discuss transactions before its IPO in 2013.
Milner recently told Forbes that DST and VTB sold off its shares of Twitter before the U.S. hit the bank with sanctions.
He first started buying into Facebook in 2009 — with co-founder Mark Zuckerberg reportedly attending his wedding — but sold off most of his holdings four to five years ago.
Milner’s since gone to invest in Cadre, the real estate fund Kushner set up with his younger brother, Joshua. The Silicon Valley investor put in $850,000 of his personal money, and a representative recently told Bloomberg VTB wasn’t involved in that investment.
He made the investment in June 2015, joining the likes of Goldman Sachs and George Soros. He told the Times he met Kushner, a former real estate developer, only once at an event in Aspen.
Kushner came under fire for initially not disclosing the stake he holds in Cadre as he went through White House security clearance.
The investment fund initially said DST was the investor, but later said it was personally Milner, who told the Guardian it was strictly a money making venture.
“I just thought it was an attractive opportunity,” he said.
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