Palace for Putin -- anatomy of corruption

[LupusDei]

If you have ever wondered how modern Russia is governed, this an open window to peek in.

While most of it was well known for people with some interest into it, put together in almost two hour video by Alexei Navalny and his team it's quite an interesting work.

https://www.youtube.com/watch?v=ipAnwilMncI

The video is in Russian of course, so make sure captions are on.

(Also, if you absolutely must, feel free to see it as his revenge for being poisoned, and yes, it is propaganda content to at least some degree, but I believe hard data are accurate and honest.)

 

[LupusDei]

Okay, upon popular request (I wonder how many of the 30 views were search engine crawlers) there's the English text (retelling, not quite a transcript) from Meduza:

Putin’s palace

Following the money

Excerpts:

Not far from the Black Sea resort town of Gelendzhik, there is a 17,700-square-meter (more than 190,500-square-foot) palace built exclusively for Russian President Vladimir Putin, says a new investigation from Alexey Navalny’s non-profit, the Anti-Corruption Foundation (FBK).

Word about the palace first got out in 2010 — it was revealed by businessman Sergey Kolesnikov, who claimed to have been involved in the building project. Kolesnikov published plans, contracts, and other documents linked to the construction, and said that the project was being overseen by businessman Nikolai Shamalov on behalf of Vladimir Putin. This provoked a major media scandal and a few months later Shamalov sold the property to billionaire businessman Alexander Ponomarenko, who said he planned to finish building the palace as a hotel complex.

The residence is located on a 68-hectare (168-acre) property overlooking the Black Sea. The site of the palace itself includes a helipad, a full-fledged ice palace, a church, an amphitheater, a greenhouse, a 2,500-square-meter (nearly 27,000-square-foot) tea house, as well as an 80-meter (about 260-foot) bridge. A special tunnel was built into the seaside cliff to provide access to the beach, and it also includes a tasting room in the middle with the “best possible view of the sea.”

The 7,000-hectare (nearly 17,300-acre) plot of land adjacent to Putin’s residence belongs to the Russian FSB, though it has been transferred to the firm that owns the palace until 2068. The FBK believes that the “only purpose of the lease is to create some sort of buffer between the palace and Putin.” The anti-corruption activists also discovered that the FSB doesn’t allow fishing on the cape where the palace is built, and that there is an official no-fly zone above the property.

The FBK also uncovered that not far from the palace there’s 300 hectares (about 740 acres) of vineyards, a chateau, wineries, and oyster farms — according to the investigation, these are also “Putin’s possessions.” The wineries are furnished with luxury items, as well — the FBK points out a coffee table worth 4.3 million rubles (more than $58,000), an Italian toilet brush that costs 62,000 rubles (about $840), and a toilet paper holder valued at 92,000 rubles (nearly $1,250).

According to the FBK, the construction of the complex was financed by companies linked to Vladimir Putin’s friends — including the state-controlled companies Rosneft and Transneft — with the help of bogus lease payments and other corruption schemes. The anti-corruption activists call this scheme “the world’s largest bribe” and estimate the total amount spent on the palace and the vineyards to be at least 100 billion rubles ($1.35 billion).

The report begins with a trip in time back to the 1980s, when Vladimir Putin was still serving with the KGB in Dresden. Navalny argues that Putin was essentially a nobody in these days, though he was making important personal connections that would lift his career back in Russia and later protect untold riches.

...linking the Putins to the mobster Ilya Traber (who controlled commerce at the seaport at the time) and Matthias Warnig (another Stasi colleague from Putin’s days in Dresden who later founded a bank in St. Petersburg and helped the Putins with various expenditures, like travel and medical costs). For this benevolence, the family friend was “rewarded with interest,” Navalny says, referring to Warnig’s current position as the managing director of the Nord Stream AG

Navalny says corrupt officials in the Yeltsin administration tapped Putin to run the FSB because they needed someone who would protect them, which is precisely what Putin did.

According to this text, in the early 1990s, Kolesnikov and a retired KGB colonel named Dmitry Gorelov founded a medical supplies company based in St. Petersburg called “Petromed.” The Petersburg municipal government acquired a stake in the firm and Deputy Mayor Vladimir Putin dutifully represented the city’s interest. In early 2000, Nikolai Shamalov (whose son would later marry and then divorce one of Putin’s daughters) later proposed that oligarchs like Roman Abramovich and Alexey Mordashov donate money to Petromed. Kolesnikov says 35 percent of these funds were funneled through a special offshore firm owned (de facto) mostly by Putin, in part to finance the construction of a fabulous mansion on the Black Sea coast.

Ponomarenko later told reporters that he bought the property for $350 million through a Cypriot offshore, intending to turn it into a hotel. Navalny’s researchers, however, say they discovered records showing that the palace was sold for a measly $350,000. Suspiciously, despite the sale to Ponomarenko, Nikolai Shamalov’s “Nogata” LLC remained the property’s management company.

The bulk of the Gelendzhik palace, however, isn’t the mansion but the grounds: 19,275 acres of land, including almost 740 acres of vineyards.

Today, the palace itself is registered to the “Binom” Joint Stock Company, a surprisingly meager operation based in a 100-square-foot office on St. Petersburg’s outskirts. Somehow, this tiny firm owns the most valuable private residence in all of Russia, according to Navalny’s research. Binom’s employees apparently work for another company called “Aktsept,” which is owned by Mikhail Shelomov, Putin’s cousin once removed.

Mikhail Shelomov has apparently enjoyed different nepotistic appointments for the past 20 years. In the early 2000s, Aktsept actually acquired shares of the SOGAZ insurance company and Bank Rossiya worth hundreds of millions of dollars. Through Aktsept, Shelomov apparently owns 0.2 percent of Gazprom — worth more than 8 billion rubles ($108.6 million). The annual dividends alone amount to more than 560 million rubles ($7.6 million).*

Despite apparently becoming one of Russia’s richest people, Shelomov keeps his day job and continues to live relatively modestly. This is because the wealth in his name really belongs to Vladimir Putin, says Navalny.

A convoluted network of transfers and shell companies facilitates the finances needed to sustain Vladimir Putin’s palace and vineyards, and large chunks of this money come from suspicious rental agreements between state corporations and firms that operate in Gelendzhik. For example, Rosneft has paid 1.7 billion rubles ($23.1 million) to one of Putin’s supposed vineyards “in rent,” shelling out 40 million rubles ($540,000) a month. Transneft has apparently paid 4.3 billion rubles ($58.4 million) to Binom in a similar arrangement. In fact, to legitimize monthly payments of 120 million rubles ($1.6 million), Transneft head Nikolai Tokarev makes annual visits to the area to deliver speeches and pose for photos.

Navalny calculates that these bizarre payments, as well as millions of rubles in questionable loans, amount to roughly 35 billion rubles ($475.3 million). This money is in addition to the $1 billion invested in Putin’s palace before 2017, he says.

Navalny’s team says it managed to confirm recent reporting by Proekt about Svetlana Krivonogikh, one of Putin’s alleged lovers, and their child together. Multiple companies registered to Krivonogikh apparently receive large sums of money from Mikhail Shelomov’s firm Aktsept.

Putin’s better-known mistress, retired rhythmic gymnast Alina Kabaeva, has allegedly received even more lavish gifts and favoritism over the years. For example, Gennady Timchenko gave Kabaeva’s grandmother an apartment. Petr Kolbin later treated her to two more homes, and the businessman Grigory Baevsky gifted Kabaeva’s grandmother two whole mansions outside Moscow, which Kabaeva later bought for herself.

Alina Kabaeva was also hired to head the board of directors at the National Media Group, which belongs to Yuri Kovalchuk (allegedly Putin’s main “moneyman”). For an athlete with no special training or experience in the industry, Kabaeva rose far and fast. Two years ago, she was earning an annual salary of 785 million rubles ($10.7 million). Navalny says the registration paperwork for a small apartment in Sochi is the first and only document in known existence that formally links the families of Putin and Kabaeva: Her grandmother sold it in 2011 and Putin’s cousin bought it, a few years later.