A new trove of leaked documents, the so-called Paradise Papers, have revealed that Yuri Milner, a Russian businessman with extensive investments in Silicon Valley, used funds from two Kremlin-controlled—and now U.S.-sanctioned—banks to make large investments in Facebook and Twitter. Both stakes have been sold off, but Milner’s path to Silicon Valley, where he continues be a power player and lives in a $100 million compound, was paved with the Kremlin’s money and a mutually beneficial relationship.
Milner’s story illuminates the very beginnings of Moscow’s efforts to establish a foothold in Silicon Valley, back in the days when the American president was pushing a thaw with Russia. It was a moment that set the conditions of the current one, in which the Russians’ use of social media and other digital tools to undermine America’s election has driven U.S.–Russia relations to their lowest point in decades. And it’s revealing of the Kremlin’s evolving methods in learning to control and manipulate the internet to advance its own interests—first at home, and then abroad.
Back in 2009, when I was first reporting on Milner in Moscow, his investment fund, called Digital Sky Technologies, was buying up shares in seemingly every company in Russia’s burgeoning tech sector. DST raised eyebrows at the time for several reasons. First, it had a very unusual approach: It invested in competing companies. It bought stakes in VKontakte, the Russian Facebook analog, as well as in Odnoklassniki and MoiMir, two other Russian social-networking sites. “If an industry is in the early stage with no obvious leaders, we want to sponsor all potential leaders,” Grigory Finger, DST’s co-founder, told me at the time. This strategy allowed DST to corner the Russian web market almost completely. By 2010, the company was publicly bragging that 70 percent of Russian page views—and 50 percent of the time spent by Russians online—originated on DST-funded properties. (Milner would not comment on the record for this story.)