Donald Trump spoke during the 2024 campaign about the virtues of a sovereign wealth fund, and soon after taking office he issued an executive order about creating one. My own view, as I explained last year, is that the United States already has a sovereign wealth fund of sorts that generates $8.3 trillion per year through the selling of America’s most prized natural resource, which is debt. We don’t wall off that $8.3 billion inside anything called a sovereign wealth fund because our spendthrift nation needs the cash right away to cover current government expenditures.
In considering the potential virtues and drawbacks of a sovereign wealth fund, the model I had in mind was something like the Alaska Permanent Fund, which distributes annual dividends from the sale of North Slope oil to citizens of that state, or Norway’s Government Pension Fund Global, which invests revenue from North Sea oil to support future generations. But these examples, I now realize, were too high-minded to describe anything President Donald Trump might imitate. Instead, I ought to have envisioned a sovereign wealth fund maintained for the purposes of paying bribes and stealing government funds.
You’re probably aware that negotiations are intensifying right now to end Russia’s war on Ukraine. These talks aren’t being led by career diplomats who might actually give a damn about the fate of Ukraine. They’re being led on the Russia side by Kirill Dmitriev, chief executive of the Russian Direct Investment Fund, or RDIF.
On the American side, the Russia-Ukraine talks are being led by a couple of real estate tycoons. One of these, Steve Witkoff, is a frequent Trump golf partner and father to Zach Witkkoff, chief executive of World Liberty Financial, which is Trump’s current principal vehicle for self-enrichment. Witkoff is also Trump’s special envoy to the Middle East. The other tycoon, Jared Kushner, is the president’s son-in-law. Kushner famously leveraged the Abraham Accords, which he negotiated during Trump’s first administration, into an investment firm called Affinity Partners that’s bankrolled largely by sovereign wealth funds for Saudi Arabia, the United Arab Emirates, and Qatar.
Neither Witkoff nor Kushner has ever once set foot in Ukraine. Dmitriev was born in Kiev and ran a private equity firm there, but he isn’t sentimental about the place, reportedly describing himself emphatically as born in “the Soviet Union.” What interests Dmitriev, Witkoff, and Kushner isn’t Ukraine; it’s money. The headline for a November 28 Wall Street Journal article stated bluntly: “Make Money Not War: Trump’s Real Plan for Peace in Ukraine.”
Neither Dmitriev nor the RDIF has much of a reputation in the United States. As recently as October Treasury Secretary Scott Bessent dismissed Dmitriev as “a Russian propagandist.” A 2022 Treasury Department press release prohibiting Americans from engaging in financial transactions with RDIF said the fund, which was created in 2011, is “widely considered a slush fund for President Vladimir Putin and is emblematic of Russia’s broader kleptocracy.”
Now we’re supposed to take Dmitriev seriously as a diplomat and RDIF seriously as the instrument of a just peace? That will take some effort. The Journal story described an October negotiation at Witkoff’s waterfront estate in Miami Beach attended by Dmitriev and Kushner. The topic was supposed to be Ukraine, but the conversation drifted to a plan Dmitriev proposed for U.S. companies to use $300 billion in Russian funds currently frozen in Europe to engage in joint investment projects, and for the United States to lead reconstruction of Ukraine. The strategy, the Journal said, was to “convince the administration to view Russia not as a military threat but as a land of bountiful opportunity.”
Call me a cynic, but I believe at least some of that bounty will finds its way to the Witkoff or Trump families. A Trump donor and close friend of Donald Trump, Jr. called Gentry Beach— with whom Don, Jr. previously invested hundreds of thousands of dollars—is angling for a stake in a Russian Arctic gas project contingent on current sanctions against Russia being lifted. Another Trump donor, Stephen Lynch, paid a lobbyist close to Don, Jr. $600,000 to help secure a Treasury Department license to negotiate with Russian companies that are currently under United States sanction toward purchase of the Nord Stream 2 gas pipeline that runs between Russia and Germany. The Journal said there was no evidence Witkoff or Kushner knew about Beach’s and Lynch’s aspirations, but they certainly know now.
Then there’s Sheikh Tahnoon bin Zayed Al Nahyan, who controls $1.5 trillion of the United Arab Emirates’ sovereign wealth. Sheikh Tahnoon persuaded President Donald Trump’s administration to ease national-security restrictions on the export to UAE of advanced AI chips two weeks after that same Sheikh Tahnoon purchased $2 billion in stablecoin from World Liberty Financial. Witkoff, whose most recent financial disclosure shows he still owns a piece of World Liberty Financial—he is, with Trump, “co-founder emeritus”—helped secure the chips for UAE.
South Korea’s sovereign wealth fund, the Korea Investment Corporation, may or may not furnish directly some of the $350 billion investment in the United States that Trump’s Commerce Secretary Howard Lutnick extorted in exchange for lowering tariffs from 25 percent to 15 percent. But Lutnick’s sons Kyle and Brandon will likely prosper from dad’s arm-twisting, according to a November 20 New York Times story. A billionaire named Toby Neugebauer engaged Kyle and Brandon to arrange financing for a data center in Amarillo. “Honored to co-lead the IPO for such an innovative and inspiring company,” Kyle tweeted. Now Neugebauer is pressuring Commerce to direct some of South Korea’s $350 billion to his company, Fermi America.
“Do I think it probably gets done?” Neugebauer told the Times, “Yes.”
Me too.
