Let me tell you about the most important points in the excellent OCCRP investigation that everyone is talking about, but that few are likely to read in full because of its sheer size and the different languages in which it was published.
Let me answer right away: it is important to understand that this investigation is based on leaked data from one of Panama’s law firms. So this is not even the “tip of the iceberg” of officials’ offshore holdings, but only a very small part of it.
Even so, this small part is enough to warrant impeachment. Here are the most striking facts and findings that directly concern Russian citizens:
1. Cellist Roldugin is one of Putin’s money holders.
One of Putin’s very real financial proxies has come to light. This is not some businessman cashing in on state contracts. Sergei Roldugin is an old friend of Putin’s and the godfather of one of his daughters. A man who aroused no suspicion and had no apparent connection to business. A musician—what money, what offshore accounts could he possibly have? And yet it turns out that at least $2 billion was funneled into offshore accounts belonging to this modest musician.
When you are the president of an authoritarian country, stealing money from the budget is very easy. Hiding it is harder. Spending it is harder still. Of course, we understand that the fortunes of Timchenko, the Rotenbergs, and the Kovalchuks also belong to Putin to one degree or another. But you still cannot treat, say, the Rotenbergs as purely nominal holders—they fully run their businesses. And when you use Rotenberg’s money to buy apartments for your girlfriends (and their grandmothers), scandals like the recent one can happen.
Putin’s idea was to keep his personally stolen money in the most unexpected place, with the most unexpected figure imaginable: a famous cellist, a man loyal and honest (toward the boss), and, it seems, fairly modest even in everyday life. No red Ferraris or other such nonsense.
But this clever plan has a weak point. A musician, even the most talented and most famous in the world, simply cannot have that much money. State banks do not issue cellists loans worth hundreds of millions of dollars. Oligarchs do not lend cellists billions of rubles—and certainly do not later forgive those debts. Executives at Rosneft and Sberbank do not carry out obviously criminal deals just to enrich a musician’s offshore company by another million or two dollars.
Roldugin cannot say a coherent word about “his” offshore empire. And really, what is there to say? It is a delicate matter:
2. How Putin’s wallet was filled: Mordashov, Kerimov, the Rotenbergs, Sechin, Miller, Kostin, and others.
And the most interesting part of the Russian section of the investigation is not Roldugin himself, but the description of how the country’s main corruption scheme works—the scheme for enriching Putin personally and his family. Where the money came from, how it was moved around, how it was laundered, and what it was spent on.
Where did the money come from? Mostly from manipulations involving securities and loans. The investigation describes a case involving the sale of Rosneft shares. On the same day, a contract to sell shares was signed with Roldugin’s company and then immediately canceled. Under the terms of the contract, Roldugin was entitled to a $750,000 penalty payment. Wonderful.
Or take another example. A company owned by Alexei Mordashov (Severstal) lends Roldugin’s company $6 million—and then immediately forgives the debt. Similar stories recur with Kerimov and the Rotenbergs (including Igor, the owner of the Platon road toll system).
So the next time someone asks why the Platon road toll system was created and who benefits from it, you can confidently say: Putin.
Who else joined in this celebration and chipped in to Putin’s offshore fund? Why, state banks, of course. Here we see ACF’s old favorite, Russian Commercial Bank, VTB’s Cypriot subsidiary, which issued non-repayable loans to Roldugin’s offshore company. They opened a $650 million line of credit for the Panamanian company (!!!), effectively giving it more or less unlimited access to money. Sberbank was involved too (through its subsidiary Troika), participating in sham share-sale transactions in which the original owners bought the shares back the very next day.
All of this, by the way, looks a bit like the financing scheme for Putin’s palace in Gelendzhik—the first corruption scheme exposed as having been organized personally for Putin by his friend Shamalov, the father of Kirill Shamalov, the husband of one of Putin’s daughters.
Those implicated in the scheme for filling Putin’s wallet—and this is documented—include Kerimov, Mordashov, Kostin and VTB management, Sechin and Rosneft’s leadership, and Sberbank’s leadership. All of them should be held accountable and, without any doubt, added to every existing sanctions list. This is documented money laundering and bribery of a public official. It would be one thing if they were paying bribes out of their own pockets, but no—they are paying them out of the funds of state banks and companies.
What was the money spent on? Mostly on entertainment for Putin and his family.
For example, on the Igora ski resort near St. Petersburg (formally registered to Kovalchuk). That is where Putin’s younger daughter Katerina Tikhonova and Kirill Shamalov held their wedding.
3. Putin owns a ski resort, as well as stakes in KAMAZ, AVTOVAZ, and Video International.
In addition to the resort mentioned above, money from Roldugin’s offshore company was spent on stakes in KAMAZ, AVTOVAZ, and Video International. All three companies can breathe easy: the crisis and other upheavals apparently will not affect them, since they are under the president’s special protection. Particular attention should be paid to Video International, a company that significantly controls Russia’s advertising market. Its shareholder structure is normally a closely guarded secret, but yesterday we learned that the very same Roldugin offshore company acting as a front for Putin personally owns 20%.
4. Lesin knew in detail how “Putin’s offshore” worked.
Mikhail Yuryevich Lesin was the founder and a shareholder of Video International. At the very least, it can be said that Lesin could not have failed to know that a major shareholder in his brainchild was President Putin.
But that is not the most interesting part of the story.
Another curious detail was described in the British newspaper The Guardian, but for some reason was not mentioned on Novaya’s website. The Guardian writes directly that in 2012 “Putin’s circle” began to get nervous and stopped using the Panamanian offshore company. All the financial manipulations were moved from Panama to the British Virgin Islands. According to the journalists, the new offshore structure is linked to Mikhail Lesin’s companies.
So the popular version that “Lesin knew nothing” and “Lesin had nothing to tell” is, at the very least, untenable.
Let us recall that in November 2015, Lesin was found dead in a hotel room in Washington. According to the investigation materials, he died as a result of blunt-force trauma.
I understand that all this sounds like a cheap detective story, but that is exactly what it is. A corrupt official who helped place Putin’s personal money decided to move to the United States, where he bought a large amount of real estate, but then somehow died under strange circumstances from blunt-force injuries in a hotel.
I want to end the section about Putin with his own remarkable speech on de-offshorization. Resolute de-offshorization, I would even say:
5. Navka “gave” Peskov a watch, and he, it seems, gave her a Panamanian offshore company.
Other interesting findings include, for example, an offshore company belonging to Peskov’s wife, Tatyana Navka.
It was registered in 2014, meaning when she was already in a relationship with Peskov (their daughter was also born in 2014, though the exact date of their marriage registration is unknown).
The most interesting part is that Navka does not know she has an offshore company. Apparently in much the same way that she did not know she had given Peskov a $620,000 watch.
6. Liksutov makes money not only from commuter trains and the metro, but also from methanol.
From the Panama leak, we learned that Liksutov’s business interests are quite diversified. Moscow’s transport chief makes money not only from transportation, but also from methanol trading.
7. Another old acquaintance of ours, Alexander Babakov, turned out to be the owner of a Panamanian offshore company.
We have been writing extensively for a long time about Alexander Babakov, who, judging by his declarations, is one of the poorest deputies in the State Duma (the lower house of Russia’s parliament). We have already found a château outside Paris and an apartment near the Eiffel Tower linked to him. The Panama Papers connect him to one of the biggest players in Ukraine’s energy market—VS Energy.
We kept wondering why the Ukrainian authorities, despite putting Babakov on a sanctions list, were taking no action against him. Now it is clear—undeclared Panamanian offshore companies have also been found for Petro Poroshenko.
8. A number of officials are directly violating the law that forbids them from owning foreign assets.
They simply do not comply with the law. Because they can. De-offshorization? Never heard of it.
On this list are United Russia deputies Zvagelsky and Slipenchuk, Chelyabinsk Region governor Dubrovsky, and the gangster-governor Turchak.
9. The relatives of the fiercest patriots keep their money offshore. In fact, everyone keeps their money offshore.
Those caught up in this include relatives of Security Council chief Patrushev, Rostec head Chemezov, and Deputy Interior Minister Zubov. Another deputy interior minister, Makhonov, was found to have no fewer than five active offshore companies. Even Chechen senator Geremeev—the uncle of the Geremeev who organized Nemtsov’s murder—had an old offshore company. So did a former deputy to Kozhin from the Presidential Property Management Department. And the son of the “liberal” Ulyukaev and his wife—again, an offshore company in Panama.
Does it seem like there are too many names to remember? Let me remind you once again: this is a leak from ONE registration company. And only in Panama, which is not even the most popular offshore jurisdiction.
How many more officials and their relatives are hiding their money in the British Virgin Islands, Belize, the Cayman Islands, Bermuda, Liechtenstein, and Cyprus?
The example of the Panama leak proves to all of us that sooner or later even the best-hidden assets will become public knowledge. Thanks to the journalists of the OCCRP consortium for work of enormous scale and importance.
ACF continues to study the published documents, and soon we will explain the formal legal steps we plan to take.