New QSS faculty member on offshore networks of oligarchs

Ho-Chun (Herbert) Chang `18, who will be starting in July 2023 as an assistant professor in the Program in Quantitative Social Science (QSS), recently published an article in PNAS Nexus titled, "Complex Systems of Secrecy: The Offshore Networks of Oligarchs." Herbert's co-authors, Professors Feng Fu and Dan Rockmore of the Department of Mathematics at Dartmouth, both serve on the QSS Steering Committee. Dartmouth News has written an article about the Chang, Fu, and Rockmore paper, "Targeting Wealth Managers Would Cripple Russia's Oligarchs."


Following the invasion of Ukraine, the US, UK, and EU governments–among others–sanctioned oligarchs close to Putin. This approach has come under scrutiny, as evidence has emerged of the oligarchs' successful evasion of these punishments. To address this problem, we analyze the role of an overlooked but highly influential group: the secretive professional intermediaries who create and administer the oligarchs' offshore financial empires. Drawing on the Offshore Leaks Database provided by the International Consortium of Investigative Journalists (ICIJ), we examine the ties linking offshore expert advisors (lawyers, accountants, and other wealth management professionals) to ultra-high-net-worth individuals from four countries: Russia, China, the United States, and Hong Kong. We find that resulting nation-level "oligarch networks" share a scale-free structure characterized by a heterogeneity of heavy-tailed degree distributions of wealth managers; however, network topologies diverge across clients from democratic versus autocratic regimes. While generally robust, scale-free networks are fragile when targeted by attacks on highly-connected nodes. Our "knock-out" experiments pinpoint this vulnerability to the small group of wealth managers themselves, suggesting that sanctioning these professional intermediaries may be more effective and efficient in disrupting dark finance flows than sanctions on their wealthy clients. This vulnerability is especially pronounced amongst Russian oligarchs, who concentrate their offshore business in a handful of boutique wealth management firms. The distinctive patterns we identify suggest a new approach to sanctions, focused on expert intermediaries to disrupt the finances and alliances of their wealthy clients. More generally, our research contributes to the larger body of work on complexity science and the structures of secrecy.