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Russians in Silicon Valley Can’t Shake Hacking’s Shadow

  • Recent investigations have drawn attention to Russian efforts to influence the 2016 presidential election by hacking computers and using Facebook and Twitter to spread inflammatory messages and sow division.
  • Russian immigrants helped build the last generation of Silicon Valley behemoths: The Google co-founder Sergey Brin and the early Facebook investor Yuri Milner are both Russian-born.
Vladimir Putin
Alexander Zemlianichenko | POOL | Reuters
Vladimir Putin

Pavel Cherkashin, a Russian investor based in this city, thought he had the perfect name for a Catholic church that he is spending $11.5 million converting into a tech palace. It would be called Hack Temple.

But that was before the nearly daily deluge of news about Russian efforts to influence the 2016 presidential election by hacking computers and using Facebook and Twitter to spread inflammatory messages and sow division.

“We had so many concerns from our investors saying this would be inappropriate and we should change it,” said Mr. Cherkashin, 44, who planned to officially open Hack Temple this fall. “A bunch of Russian guys opening a hacker temple in the middle of San Francisco at a time when Russian hackers are considered the most evil in the world. They say you can’t.”

With news of the hacking and influence campaigns escalating all year, the Russian immigrant community of Silicon Valley, which numbers in the tens of thousands, is in a strange new position. Some Russian venture capitalists said start-ups were more wary about taking their funding, while several Russian-born engineers said they were being treated differently socially and in their companies. Lawyers also said some tech firms were installing tighter security measures restricting what data foreign-born coders can see.

At the same time, many said that as Russia gained a reputation for its hackers, interest in hiring its tech talent was increasing.

The tension is new. Russian immigrants helped build the last generation of Silicon Valley behemoths: The Google co-founder Sergey Brin and the early Facebook investor Yuri Milner are both Russian-born.

Now when Mr. Cherkashin, a partner at GVA Capital, which is investing $120 million in start-ups, pitches companies on why they should take investments from him, he gets skeptical questions as soon as they hear his accent, he said.

“It feels like if you’re a politician and you fell into a sex scandal, and everybody knows you for this, and every time someone recognizes you they have this smile on their face, ‘So how’s your personal life doing?’ ” said Mr. Cherkashin, whose firm was incorporated in the United States.

“This is how I feel every time I meet with an investor and they hear my Russian accent,” he added. “They have this smile on their face.”

Prospective partners and start-ups invariably ask the same question, Mr. Cherkashin said: Is his money clean?

“This question comes up two or three times a day,” he said. “I don’t think people would ask this question to a manager from another region.”

Julian Zegelman, an entrepreneur and a lawyer who represents and invests in Russian-speaking founders, said potential local tech partners worried they would accidentally get into business with the Russian government.

“They don’t want to be invested or dealing with companies whose technical talent is captive in Russia,” he said.

Mr. Zegelman said he had noticed that some cybersecurity firms, big tech companies, government customers and large venture capital firms were the most wary about working with new Russian immigrants. Yet some start-ups and small investment firms are more interested in Russian talent now.

“If you would have asked 10 years ago what Russia was known for, it would be Putin, the oligarchs and oil,” he said, referring to Russia’s president, Vladimir V. Putin. “Now when you ask folks, ‘What do you think about Russia?’ you get things back like: ‘Oh, great cryptography.’ ‘Oh, it’s a lot of talented engineers.’”

Leonard Grayver, a lawyer specializing in start-ups who is on the board of the American Business Association of Russian-Speaking Professionals, said the hacking had put Russian tech talent at “the forefront.” His firm brokers technology deals between Russia and Silicon Valley, handling tech licensing and talent acquisitions, and he said the average size of a deal had risen to $4 million this year, from $1 million to $2 million last year.

And as companies staff up with Russian talent, he is getting a new question that he finds bizarre: “Are we letting the wolf in the henhouse? ” Some companies have asked him to help arrange for heightened internal security, he added.

“A lot of clients are trying to find ways to hire those Russian hackers and at the same time instituting heightened security protocols internally,” he said. “They’re isolating source code so you don’t have access to the main tree.”

When young Russian technologists first arrive in San Francisco, the person they often text is the investor Nicholas Davidov. Mr. Davidov, 30, said he was part of what he called the New Wave, which is a group of Russian founders and engineers who came over to Silicon Valley in the last few years. They gather at a Russian immigrant-owned bar in San Francisco, Rum & Sugar, and every Wednesday at a smoke shop in Redwood City, Calif., where they share stories.

Most of the comments that Mr. Davidov and his friends now get are couched as jokes, he said.

“Somebody announced me on one of the conferences where I was speaking and said, ‘I invited Nick because I wanted to collude with Russians,’ ” he said. “Just a lot of jokes.”

Mr. Davidov is an investor in Wallarm, a cybersecurity firm based in San Francisco. He attributes Wallarm’s double-digit growth this year directly to the peculiar reputation that has come from the election-influence campaign and the fact that the company’s founders are Russian.

Ivan Novikov, 29, a co-founder and the chief executive of Wallarm, was less enthusiastic about how news of Russian interference in the election has affected his life.

“Technically, any Russian who works in I.T. is a hacker, so we’re all ‘Russian hackers,’ and a lot of people like to mention it, but it’s not so funny when it’s 10 times per day or 10 times per party,” he said. “We definitely don’t like this hype about it.”

More from The New York Times:

Senate Intelligence Heads Warn That Russian Election Meddling Continues
Facebook's Russia-Linked Ads Came in Many Disguises
The Perfect Weapon: How Russian Cyberpower Invaded the U.S.

Some Russian-born entrepreneurs said they had noticed no change in how they were treated. Stanislav Shalunov, a co-founder of Open Garden, which develops peer-to-peer mesh networking software, said he hadn’t experienced anything different.

“With all this hacking news, I don’t think anyone alleges anyone from the Russian tech community in the U.S. is engaged in it,” he said. “And it’s pretty obvious that lots of people from Russia are getting hired.”

Back at what may only briefly be known as the Hack Temple (investors want a new name before it officially opens), two young Russian entrepreneurs made breakfast sandwiches in the rectory kitchen one morning last week. The building has eight bedrooms, some with bunks to fit up to four; a living room full of Midcentury Modern sofas; and a patio covered in artificial turf and often used for beer pong. Before Mr. Cherkashin bought the building in January 2016, it was Nuestra Señora de Guadalupe Church.

In the cavernous nave, the stained-glass saints were covered in gauzy panels to soften the religious feel. Volunteers have fixed the broken organ so it plays again, now for parties.

“If there would be a city in the world where you can go to church and a hackers’ house,” Mr. Cherkashin said, “it would only be this one.”

On the wall along one of the aisles, Evgeniy Lapchenko, the Ukrainian artist, has remade Hieronymus Bosch’s “Garden of Earthly Delights.” Among the twisted human figures are tech luminaries: the Apple co-founder Steve Jobs taking a selfie, revelers at Burning Man and Mr. Brin of Google in a self-driving car.

As for rebranding Hack Temple, Mr. Cherkashin hasn’t found a new name he likes.

“It can be called the Start-Up Temple,” he said. “But it’s just too boring.”