Sonoma philanthropist helps obtain $135 million to boost Ukraine

As Russia’s deadly invasion of Ukraine continues, longtime Sonoma resident, serial entrepreneur and philanthropist Steve Pease has played a pivotal role in an effort that will provide more than $135 million for venture capital and grants to businesses within Ukraine and $18 million to support independent Russian media and expat projects outside of Russia.

Pease announced the news this month, culminating a long process that involved the U.S. government and other organizations. He said the sum is small compared with the more than $90 billion that the U.S. government has approved to boost Ukraine, but it can help to lift the war-torn nation’s struggling economy.

“The $135.7 million will be used to encourage good government and private enterprise — in this case, small businesses that have been damaged,” Pease said. “It can also be used to support physical facilities and institutions.”

Pease said that recipients of the funding haven’t been determined, so Kaniv, Sonoma’s sister city, hasn’t been earmarked for any money yet.

“But it can request to be put at the front of the line,” he said. “There are good arguments for helping the small businesses there.”

He said that part of the $18 million will help provide funding for independent media that now operate from offices outside of Russia. This includes The Moscow Times, which relocated its headquarters to Amsterdam in the Netherlands due to restrictive media laws passed in Russia after the invasion of Ukraine.

The funds will also be given to other projects as well as to people who fled the country and now face issues such as bankruptcy and legal problems.

Pease is encouraged by the development, but says that he isn’t sure how Russia’s war with Ukraine will ultimately end.

“It’s a game of chicken with (Russian President Vladimir) Putin,” he said. “He’s capable of doing something really stupid.”

He noted that U.S. Secretary of State Anthony Blinken has warned Putin of “dangerous nuclear saber rattling” and has vowed that Russia dropping nuclear bombs in Ukraine would result in “severe consequences.”

Two principal organizations have been involved in the efforts to distribute the funding — the U.S. Russia Investment Fund (TUSRIF) and U.S. Russia Foundation for Economic Expansion and the Rule of Law (USRF).

TUSRIF was established by the U.S. government in 1995 to make private investments in the Russian economy, while the USRF is an American nonprofit organization that was founded in 2008 to strengthen relations between the United States and Russia and to promote the development of the private sector in the Russian Federation.

Pease has worked for USRF since 2008 and was co-chair of its board from 2008 to 2018. He has served TUSRIF since 2002 and has been its board chair since 2006. He has made 50 trips to Russia while doing pro bono leadership for these organizations and the Center for Entrepreneurship — all sponsored by the U.S. government.

TUSRIF has been financially very successful. Congress initially gave it with some $330 million in public funds, and through the 1990s and early 2000s, it put those moneys — plus more than $1 billion in investment profits — into Russia’s economy when it hoped that the country would become a successful democracy.

When Russia’s government became more of an authoritarian regime in the past decade, diplomatic relations with the United States soured and both governmental and nongovernmental groups have been caught in the fallout.

The Russian government ordered that the Moscow office of USRF be shut down because it was regarded as a threat to the security of Russia.

“So, we shut down the Moscow office, but continued to operate — and still do — from our offices in Washington, D.C., doing everything we were doing before,” Pease said.

Also, a letter sent to a U.S. senator accused TUSRIF and its management — but not its board — of corruption and self-dealing, prompting an audit.

“We retained a major U.S. law firm — Skadden, Arps, Slate, Meagher and Flom — to thoroughly investigate the allegations, and they cleared us completely,” Pease said.

Roots of the current funding efforts for Ukraine and expats extend back to the beginning of the Russian siege of Ukraine.

“The U.S. Russia Foundation condemns the Russian government’s unprovoked and unjustified war against Ukraine and we stand with the Ukrainian victims of this cruel aggression,” reads March 1, 2022 post on the USRF website. “To support a sovereign and democratic Ukraine, the boards of TUSRIF and the U.S. Russia Foundation have voted unanimously for a resolution recommending the Executive Branch and Congress that $100 million of TUSRIF’s escrowed funds be immediately directed to the Western NIS Enterprise Fund, and organization devoted to helping the Ukrainian people.”

TUSRIF sent a proposal to the United States Agency for International Development (USAID) on March 16, 2022, requesting it to approve a resolution that would provide a $100 million grant to the Western NIS (Ukraine) Enterprise Fund plus a $53.7 million grant to USRF. On Aug. 8, USAID responded, indicating that it would not be able to support the proposal, saying, “Russia was simply too toxic,” but that it might be able to support a $146 million grant to Ukraine and a $7.5 million grant to USRF.

The U.S. government administration, led by USAID, then collaborated with other agencies to produce a Congressional Notification suggesting that $135 million be provided for Ukraine and $18 million for USRF. It was sent to the Democratic and Republican co-chairs of both the House Committee on Appropriations and the U.S. Senate Committee on Foreign Relations. In his biography, “Nothing Ventured: an American Life,” published in 2022, Pease stated that a hold was put on the request.

“Negative attitudes about Russia, a lack of congressional understanding of our history and the proposal, as well as interparty politics stalled the proposal,” he wrote, adding, “The odds are probably against the deal getting done.”

Matt Rojansky, CEO of the USRF, then visited Capitol Hill and made a group of presentations to 25 to 30 staffers on the four committees with jurisdiction, two in the House and two in the Senate.

“USAID had earlier checked off on the proposed grants, and after the Hill checked off, the proposal had finally been formally approved both by USAID and ‘the Hill,’” Pease said. “The treasury securities have since been transferred and USAID is expected to sign a grant agreement with the Ukraine Enterprise Fund in late January or early February. It will document the agreement.

“With that in place, USAID will then oversee how the Western NIS Enterprise Fund distributes the money. I don’t think there will be any conflicts.”

He said that TUSRIF will be shut down in the coming weeks, now that the escrowed funds have been distributed to the Ukraine Enterprise Fund and USRF.

Pease is pleased that plans call for most of the TUSRIF money to support Ukraine’s enterprise fund and help it rebuild its business sector.

“If so, USRF will be more fully endowed to continue supporting those Russians in and outside the country that want their country to end its horrific and autocratic invasion,” he wrote in his book. “It would be a notable and worthy outcome for all those who have long served The U.S. Russia Enterprise Fund and the U.S. Russia Foundation.”

He said that Russia probably is aware of the efforts to distribute the $153.7 million in funding, but he is not aware of any official reaction from the country.

Pease, 79, says that as long as Putin is in power, he has no plans to visit Russia again.

“Under the circumstances, I don’t think they would let me in,” he said.

Pease was born and raised in Spokane, Washington, and went on to receive a degree in business administration from the University of Washington and a masters from Harvard Business School. He began his career as a management consultant for Cresap, McCormick & Page, an international firm, in 1967 and went on to lead business startup companies, corporate turnarounds and venture capital projects.

He and his wife, Joyce, have lived in Sonoma since 1988 and have been active with the community as philanthropists, including being an adamant supporter of Sonoma Valley Hospital.

Pease also served on the Sonoma Valley Fund board, which offers guidance to the organization and to Community Foundation Sonoma County’s grant-making in Sonoma Valley.

He is also the author of “The Golden Age of Jewish Achievement” and “The Debate Over Jewish Achievement.”

Reach the reporter, Dan Johnson, at daniel.johnson@sonomanews.com.