The Wagner Group led an armed rebellion within Russia, dramatically expanding cracks between its leader Yevgeny Prigozhin and his former ally Russian President Vladmir Putin.
The Wagner mercenary group shifted from assisting Russia’s invasion of Ukraine to briefly rebelling against President Vladimir Putin this weekend, a dramatic shift after the group and its owner—oligarch Yevgeny Prigozhin—amassed power and reportedly earned hundreds of millions of dollars by securing Russian government contracts, capitalizing on other nations’ natural resources and backing unstable regimes.
Key Takeaways
- The Wagner Group has offered security services to scores of weak and war-torn African and Middle Eastern countries, and companies allegedly linked to Prigozhin generated $250 million from natural resources in those nations in the four years before Russia’s invasion of Ukraine, an investigation from the Financial Times found.
- Syria: Wagner has reportedly helped Russian-allied President Bashar al-Assad fight rebel groups and the Islamic State, and Prigozhin-connected oil companies like Evro Polis were offered a 25% cut of any earnings from oil and gas fields that the group freed from the Islamic State’s (or ISIS’) grip, the Associated Press revealed in 2018.
- Evro Polis generated $134 million in gross sales and $90 million in profit in 2020 alone from recapturing oilfields from ISIS during the Syrian Civil War, the Financial Times found, despite the company being sanctioned by the U.S. years earlier.
- Central African Republic: In exchange for providing mercenaries to prop up the government and stop a coup against the country’s autocratic leader, firms linked to Wagner reportedly maintain substantial control over gold and diamond mining in the country, as well as forestry rights.
- While estimates vary, revenue in the Central African Republic is sizable: A diplomatic cable obtained by Politico earlier this year suggested Wagner’s mining profits could be near $1 billion, while CBS estimated Wagner-related forestry businesses brought in nearly $1 billion in revenue and one gold mine could generate up to $2.7 billion.
- Sudan: Prigozhin runs similar endeavors targeting gold mining rights through a company he allegedly controls called M Invest—at one point under former dictator Omar al-Bashir, the Sudanese government waived its right to own 30% of a subsidiary of M Invest, according to the Organized Crime and Corruption Reporting Project.
- Even though al-Bashir is no longer in power, an M Invest subsidiary still runs a Sudanese gold processing plant, the New York Times reported, and Russian groups are responsible for the bulk of a gold-smuggling market that took as much as $1.9 billion worth of gold out of Sudan in 2021, CNN reported (Prigozhin denies ties to the gold mining company).
- Russia: Prigozhin got his start in his home country’s catering industry, so in addition to foreign mercenary contracts and mineral rights, Prigozhin-tied entities take in money from “inflated Russian government contracts,” a recent U.K. government report said.
- Companies run by Prigozhin were awarded at least $3 billion from 2011 to 2019 in Russian government contracts that said they were for catering, reports Current Time, a U.S. government-backed news outlet.
Surprising Fact
Victoria Nuland, the U.S. undersecretary of state for political affairs, told Congress earlier this year gold mining in countries like the Central African Republic and Mali “directly funds the combat that [the Wagner group fighters] are engaged in in Ukraine.”
What To Watch For
Because of the strong grip the Wagner Group has on a number of resource-rich countries, the U.S. government is worried about the potential future encroachment of the Prigozhin-led group. The Wall Street Journal reported the U.S. is particularly worried about the group attempting to access Libyan oil as it remains active in the conflict-ridden country, and leaked U.S. government documents show Wagner is interested in getting a contract with the Haitian government to crack down on gangs.
News Peg
Prigozhin led the Wagner Group in an armed rebellion on Friday, after he accused the Russian military of attacking one of the group’s camps. The Wagner Group—which had fought alongside Russian troops in Ukraine—subsequently claimed control over military facilities in the Russian cities of Voronezh and Rostov. Fighters marched toward Moscow, but before they made it to the capital, Prigozhin and Putin agreed to stop the rebellion. The terms of the deal said Prigozhin would move to Belarus and no one involved in the armed rebellion would face charges, according to Kremlin spokesperson Dmitry Peskov. On Sunday, Wagner troops began pulling out of Rostov and Voronezh. The rebellion followed months of squabbling between Prigozhin and Russian military leaders, whom he accused of mismanaging the Ukraine invasion and depriving Wagner forces of supplies.
Key Background
Prigozhin’s powerful role in Russia began when he was introduced to Putin in the 1990s. A former convict-turned-restaurateur, Prigozhin became known as “Putin’s chef” because of his catering business that earned contracts with the government, leading to a close relationship with Putin. In 2014, Prigozhin founded the mercenary firm the Wagner Group, though he repeatedly denied owning the group until last year and has frequently denied any connections to African mineral businesses. The group, which includes an army of more than 25,000, reportedly helped Moscow during the annexation of Crimea in 2014, and sought out contracts with African governments for commercial and geopolitical reasons. The group has also been heavily involved in Russia’s invasion of Ukraine, including recruiting inmates from Russian prisons to fight in the war. Throughout the years—while earning millions—the Wagner Group has been accused of numerous human rights violations such as murder, torture and rape in many of the African and Middle Eastern countries where he has a foothold on natural resources.
Crucial Quote
“The Russians control everything,” Abdoul Aziz Sali, a mining economist from the Central African Republic, told the New York Times late last year. “They are arrogant and violent. When they come to a meeting, they do not even sit down.”
Contra
Earlier this year, the U.S. Treasury Department designated the Wagner Group as a transnational criminal organization, an attempt to further sanction the private military company and limit its ability to conduct business around the world. The group has faced other sanctions, including some against individual members of the group as well as the entity as a whole. Foreign companies that trade with entities sanctioned like the Wagner Group can be stripped of their rights to use the U.S. dollar or the U.S. financial system, though Prigozhin-linked companies have allegedly kept business alive through a complicated web of firms.
Tangent
Prigozhin is also responsible for financing the Internet Research Agency, a “troll farm” that was blamed for interfering in the 2016 presidential election. Prigozhin eventually admitted to the election interference after he was charged by federal prosecutors in 2018.
This article was first published on forbes.com and all figures are in USD.