Yesterday, Vedomosti published an excellent article, "Viktor Vekselberg’s Company Turned Out to Have Enormous Debts":
The assets of Gazprom Energoholding, on the basis of which the merger is supposed to be carried out (TGK-1, Mosenergo, and OGK-2 with OGK-6 merged into it), were valued at 250 billion rubles. KES Holding, whose assets Renova planned to contribute to the joint venture (TGK-5, TGK-6, TGK-7, TGK-9, and a number of retail energy companies), was valued at 120–162 billion rubles. But on its balance sheet (as of the end of 2011), auditors found 130 billion rubles in debt. If you add the holding’s internal debt to Vekselberg’s Renova, then the debt reaches 160 billion rubles, comparable to the value of the entire company. True, the holding’s companies do have 35–40 billion rubles on deposit, a source familiar with the deal notes.
Very good business indeed: a) pick up energy assets dirt cheap during the “electric power reform” in exchange for promises of massive investment; b) spend several years siphoning cash out of the company and burying it in debt; c) sell it back to the state (in the form of Gazprom).
I’m saying this because many people commenting on the "Hungarian case," which we are investigating, have been asking: "Why would Vekselberg steal $60 million if he’s a billionaire?" Well, as this article shows, a little extra cash is never unwelcome—and every little bit adds up.
That was a lyrical digression. I’m actually writing to report on what we’ve been doing in this very same “Hungarian case.” Read to the end—there’s an interesting document there:
The latest post on this topic is http://navalny.livejournal.com/613616.html, about how the Investigative Committee does not seem to regard corruption as a crime and absolutely does not want to open a criminal case.
Since then:
We filed appeals with the Presnensky District Court of Moscow and with the Moscow city prosecutor regarding:
the investigator’s inaction, specifically the failure to send Alexei A. Navalny, in violation of Part 4, Article 148 of the Russian Criminal Procedure Code, a copy of the August 8, 2011 decision refusing to open a criminal case. They withheld a copy of the decision from us in order to make any further action more difficult.
the August 8, 2011 decision by V.Yu. Veshchikov, investigator for especially important cases in the Second Department for the Investigation of Especially Important Cases of the Main Investigative Directorate of the Russian Investigative Committee for Moscow, refusing to open a criminal case.
On point 1:
Our complaint about the failure to send us a copy of the decision refusing to open a criminal case was upheld by the Moscow prosecutor’s office, and the Main Investigative Directorate of the Russian Investigative Committee for Moscow was instructed to remedy the violation and provide us with a copy of the relevant decision.
Amusingly, friendly sources in the Investigative Committee told us that after receiving this demand from the prosecutor’s office, Yakovenko, the head of the Moscow Main Investigative Directorate of the Investigative Committee, personally went to see Bastrykin to ask whether they should give us a copy of the decision after all—even though this is a direct requirement of Part 4, Article 148 of the Russian Criminal Procedure Code. They’re really protecting dear Mr. Vekselberg and the crooks from Mezhregion.
From that very decision refusing to open a criminal case, which they hid from us for so long, it followed that during the 30-day inquiry, the investigator did not obtain a statement from a single person other than me. Several requests were also sent out, most of which never received any response. The case materials included copies of two state contracts and three reports assessing the building’s market value—the very documents on the basis of which the money was stolen.
There was no real reasoning at all behind the conclusion that Vekselberg’s actions did not constitute a crime (“sufficient objective data have not been obtained at this time”).
On point 2:
The decision refusing to open a criminal case was appealed to the Presnensky District Court of Moscow under Article 125 of the Russian Criminal Procedure Code. Instead of the 5 days required by the Code, our complaint was considered for 4 months. Once again, our Vekselberg-lovers in the Investigative Committee distinguished themselves by failing to provide the judge, upon request, with the inquiry materials. The hearing was postponed no fewer than six times. We even complained about this to the Prosecutor General’s Office of the Russian Federation.
As a result, on December 22, 2011, our complaint was heard and upheld. The decision refusing to open a criminal case was found unlawful and unfounded, and the court ordered the head of the investigative department to remedy the violations.
The Presnensky Court’s ruling is here.
The judge stated directly that, in effect, no real inquiry into the complaint had been conducted, since a statement had been obtained only from the complainant. At the same time, the investigator’s decision refusing to open a criminal case was unreasoned.
An interesting point: the prosecutor participating in the hearing supported our complaint and insisted that the decision refusing to open a criminal case be declared unlawful.
In court, we were able to review the inquiry materials in full and photograph them. Seven volumes, 1,269 pages, with 90% of the material consisting of three valuation reports.
While reviewing the materials, an interesting loose document fell out of one of the volumes.
As we know for certain, on the very day the decision refusing to open a criminal case was issued—08.08.2011—all inquiry materials were immediately sent to the Main Directorate for Procedural Oversight of the Russian Investigative Committee, where they remained until the end of December. That is why the Presnensky Court was unable to consider our complaint. So, this document is most likely a draft memo prepared by a staffer for management during the review and examination of the materials. According to this paper, in order to resolve the question of the legality of the Moscow Main Investigative Directorate’s decision refusing to open a criminal case, a proposal was submitted to Medvedev and Putin to send information about the transaction to the Accounts Chamber (Russia’s state audit body) so it could examine whether budget funds had been spent lawfully. A handwritten note then says: the materials were not sent to the Accounts Chamber because the memo came back without approval.
Translated into plain English: Bastrykin reported to Medvedev and Putin that he had seven volumes of fascinating reading about Vekselberg and certain members of the government, and proposed that they instruct the Accounts Chamber to audit the deal in order to decide whether criminal prosecution should follow. Medvedev and Putin declined. Very interesting, isn’t it?
Of course, we have no way of proving that this piece of paper is genuine rather than fabricated by us—so you’ll just have to take our word for it.
To somehow prod Bastrykin’s subordinates—who seem strangely concerned with preserving Mr. Vekselberg’s peace of mind—we sent the Moscow Main Investigative Directorate of the Investigative Committee a lengthy motion, based on an analysis of the inquiry materials, setting out point by point what needs to be done first in order to bring those responsible to criminal liability.
At present, the Moscow Main Investigative Directorate of the Investigative Committee is conducting an additional inquiry in compliance with the Presnensky Court’s ruling. Its term has been extended to 30 days and expires on 03.03.2012. Since that falls on a Saturday, the next procedural decision will be made on Monday, 05.03.2012. They picked a good day.
And now for the most interesting part. Just yesterday, good news arrived from a place no one expected it anymore. Here is the response to a parliamentary inquiry from State Duma deputy Petrov.
A surprise for you, dear Viktor Feliksovich!
As you can see, the Interior Ministry is officially stating that it sees signs of fraud in the actions of our subjects.
That is an excellent development. We are beginning to look to the future with cautious optimism. At the very least, it will now be much harder for the Investigative Committee to shield the crooks in this case.
We are now waiting for a response from the prosecutor’s office, which we will publish immediately.
That’s how things stand.