Since the collapse of Wagner’s ill-focused mutiny against the Russian state, new information has emerged about the status of the organization’s finances. Wagner isn’t just about murdering Ukrainians, shooting down Russian aircraft, and launching mutinies against the Russian state; it’s also about looting money from Africa.
Between 2018 and 2021, Wagner collected some $250 million from African holdings, mostly through resource intensive operations like mines. Indeed, money is at the core of Wagner’s operations, even in Ukraine. What happens when we follow that money?
Wagner Finances in Africa
For decades, Wagner has made money in overseas interests, including most notably Syria and various locations across Africa. Wagner fights at the behest of a local government, then takes long-term interests in resource producing operations such as mines and plantations. The entire enterprise is colonialism-in-microcosm, with Russian mercenaries propping up corrupt governments in return for resource concessions. Much of the proceeds of Wagner’s operations have come in the form of gold, diamonds, and other media that avoid the difficulties of cash. But then Wagner’s operations have never been self-sustaining. The Russian government has helped equip and maintain Wagner in its overseas operations, footing part of the bill in return for strategic influence and flexibility. Indeed, Putin admitted that Russia had paid Wagner nearly $1 billion for support in military operations against Ukraine prior to the mutiny. Effectively Wagner offered Russia the opportunity for presence in Africa and Syria without the need to deploy front-line Russian forces.
Squeezing Wagner’s Money
Part of the downside of being a Russian mercenary captain is that there are only so many places these days where you can stash your money. In January the Department of the Treasury designated Wagner as a transnational criminal organization, enabling a variety of legal tools for attacking the finances of the group and any other organization that would do business with Wagner. This only served to increase the sharpness of the teeth of American sanctions. Consequently, hiding money in the West is out, and forensic accounts are hunting Russian money in all of the traditional havens.
This leaves Russia, but that’s also a problem. On the Saturday of the mutiny, as Wagner’s forces moved north along the road to Moscow, Russian authorities seized some $47 million in cash from a St. Petersburg safe room, although apparently a great deal of cash and gold was returned to Prigozhin in St. Petersburg. Indeed, changes in Wagner’s status as a military contractor apparently threatened some of its reliable streams of financial support, providing some of the motivation for the rebellion. In the wake of the mutiny, the Kremlin has tried to resolve at least some of its problems by showering money on the remains of Wagner and its competitors. As a short-term strategy this may work, although given Russia’s economic and financial difficulties it cannot be a welcome burden for the Kremlin’s treasury.
What Now for Wagner Group?
Mercenary companies necessarily operate according to different logics than national military organizations. Their financial situations are often complicated, but their detachment from the state enables flexibility in location, operations, recruitment, and retention. Wagner is part of a broad and deep family of mercenary companies stretching back into European history, and part of a more modern family of military contractors that came to prominence in the Wars on Terror. While Wagner operations have largely continued unabated in Africa, the ability of Moscow to control the organization has obviously come into question. Wagner remains an enormous political and financial problem for the Kremlin, as the decision to reunite Prigozhin with his money demonstrates. But as long as Wagner (and groups like it) continue to give the Kremlin flexible tools for influence and warfighting, it is likely that they will persist in Russian service.
A 19FortyFive Contributing Editor, Dr. Robert Farley has taught security and diplomacy courses at the Patterson School since 2005. He received his BS from the University of Oregon in 1997, and his Ph. D. from the University of Washington in 2004. Dr. Farley is the author of Grounded: The Case for Abolishing the United States Air Force (University Press of Kentucky, 2014), the Battleship Book (Wildside, 2016), Patents for Power: Intellectual Property Law and the Diffusion of Military Technology (University of Chicago, 2020), and most recently Waging War with Gold: National Security and the Finance Domain Across the Ages (Lynne Rienner, 2023). He has contributed extensively to a number of journals and magazines, including the National Interest, the Diplomat: APAC, World Politics Review, and the American Prospect. Dr. Farley is also a founder and senior editor of Lawyers, Guns and Money.
