U.S. Sanctions Russians Charged by Mueller for Election Meddling

(Bloomberg) -- The U.S. sanctioned a St. Petersburg-based “troll farm,” a close ally of Russian President Vladimir Putin, two Russian intelligence services and other Russian citizens and businesses indicted by Special Counsel Robert Mueller on charges of meddling with the 2016 U.S. presidential election.

The penalties follow the February indictment and more than a year of criticism from Democrats and some Republican lawmakers that Trump has been too slow to act against Russia for intruding in the election. Russia’s ruble dropped 0.4 percent to 57.3505 per dollar at 11:38 a.m. in New York, the lowest in a month and a fourth straight day of losses.

The U.S. also publicly accused Russian government hackers of attempting since at least March 2016 to intrude into a broad range of infrastructure including electric power and nuclear facilities.

Republican House Speaker Paul Ryan called the measures “long overdue,” adding in a tweet that “we must hold Russia accountable for its dangerous interference.”

The troll farm, called the Internet Research Agency, and all other businesses, entities and people included in Mueller’s Feb. 16 indictment were sanctioned. They include Yevgeniy Prigozhin, a wealthy Russian known as “Putin’s chef,” whom Mueller alleged controlled the IRA through two other businesses. The special counsel alleged a vast scheme to interfere with the campaign through social media and help President Donald Trump win.

The Treasury Department also announced sanctions against Russia’s Federal Security Service, a spy organization know as the FSB, and its Main Intelligence Directorate, a military intelligence service known as the GRU. Igor Korobov, described as chief of the GRU, was also sanctioned, along with five other past or present senior GRU officials.

The two agencies and most of the intelligence officials had been previously sanctioned under the Obama administration.

Low Impact

Treasury’s latest penalties “don’t move the needle much,” said Brian O’Toole, a senior fellow at the Atlantic Council who previously worked in Treasury’s sanctions unit.

O’Toole said the penalties “would have been more powerful” if the U.S. had coordinated the sanctions with the U.K. or also included a roster of rich Russians the Treasury Department has identified as close to Putin.

Congress required the Treasury to compile the list of oligarchs closely involved with the Russian leader under bipartisan legislation passed in August. Treasury Secretary Steven Mnuchin has said that some people on the list will be sanctioned, but none were included in Thursday’s announcement.

“It’s the definition of messaging rather than impact,” said Adam Smith, former senior adviser in Treasury’s sanctions unit and now a partner at Gibson, Dunn & Crutcher LLP in Washington. “Double sanctions is only effective enough that it makes it double hard to get off the list. It becomes more challenging to become de-listed, but it doesn’t change anything.”

Stronger Action

Both Democrats and Republicans are urging stronger action.

The latest sanctions “are an important step by the administration. But more must be done,” House Foreign Affairs Chairman Ed Royce said in a statement, citing concern for midterm elections in November.

Senate Minority Leader Chuck Schumer said Treasury’s action proves that Mueller’s probe on Russian interference in the 2016 elections elections isn’t a “witch hunt” as Trump has said.

“It’s more clear than ever that the president must not interfere with the special counsel’s investigation in any way,” Schumer said in a statement.

The U.S. government also moved against Russia’s targeting of energy and other critical infrastructures. The Federal Bureau of Investigation and the Department of Homeland Security called Russia’s election meddling a “multi-stage intrusion campaign” to gain access into energy sector networks.

“The Administration is confronting and countering malign Russian cyber activity, including their attempted interference in U.S. elections, destructive cyber-attacks, and intrusions targeting critical infrastructure,” Mnuchin said in a statement. “These targeted sanctions are a part of a broader effort to address the ongoing nefarious attacks emanating from Russia.”

Other Threats

The GRU was “directly involved” in meddling in the 2016 election through cyber attacks and was “directly responsible” for the 2017 NotPetya cyber attack, the most damaging in history, according to a statement from the Treasury Department. The statement also cited malicious cyber attacks by the FSB including a 2014 hack that compromised millions of Yahoo accounts.
The U.S. is considering other actions targeting Russia, senior administration officials said in a briefing conducted under condition they not be named.

Russian government cyber actors have taken steps to target the U.S energy sector, the officials said. They’ve also targeted other critical infrastructure including nuclear, water and aviation facilities, the Treasury release said. The efforts are ongoing and involve attempts to conduct reconnaissance on U.S. networks and power grids, the officials said.

The recent use of military-grade nerve agent in an assassination attempt on a former Russian spy in the U.K. is another example of Russia’s malign activity, the officials said.

--With assistance from Erik Wasson Ben Bartenstein and Rita Nazareth

To contact the reporters on this story: Toluse Olorunnipa in Washington at tolorunnipa@bloomberg.net, Saleha Mohsin in Washington at smohsin2@bloomberg.net.

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Mike Dorning

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