Remember the classic: Everyone talks about the Kremlin, the Kremlin. I’ve heard about it from everyone, but I’ve never seen it myself. It’s the same with this gas war topic, which has already gotten on everyone’s nerves a bit: on TV they keep saying Gazprom, Gazprom... but where is it? Over the past few days, a lot of people have written to me saying: comment on the gas conflict with Ukraine, as a Gazprom expert. Well, first of all, I’m no Gazprom expert. I’m just privately trying to investigate a few isolated shady schemes. And second, my friends, a lot will become clear to you as well if you make use of the World Wide Web. Type in the word "RosUkrEnergo" (since that’s the formal side of the conflict) and enjoy. Switzerland, Zug, Bahnhofstrasse 7, CH-6300 Harmony of management — perfection of results. There is no better website illustrating the phenomenon of "a money-laundering outfit doing everything it can to prove how transparent it is." This site is a masterpiece. T*he company ROSUKRENERGO is the center for coordinating the interests of Russia and Ukraine in matters of cooperation in the gas sector. On the one hand, the company acts as guarantor of gas supplies to Ukraine at prices acceptable for that country’s economy; on the other, it serves as a financial guarantor to Gazprom, which consistently receives payment from ROSUKRENERGO for gas supplied to Ukraine. ** On* TV we see the mugs of Messrs. Kupriyanov and Miller, but really we ought to be hearing comments from a certain Lars Haussmann, the cheerful, toothy fellow heading the company that supposedly "acts as guarantor." Reading Mr. Haussmann’s very brief biography, we come to the line: Moreover, Mr. Haussmann is a member of the boards of directors of several Swiss companies operating in various fields. That gives one pause. And once again, the classics come to the rescue: -- "Do you need a chairman?" Funt asked. "What kind of chairman?" Bender exclaimed. "An official one. In short, the head of the institution." "I’m the head myself." "So you intend to do the time yourself? You should have said so right away. Why have you been wasting my time for two hours?" The old man in Easter trousers grew angry, but the pauses between his phrases did not shorten. "I am Funt," he repeated feelingly. "I am ninety years old. All my life I’ve done time for others. That is my profession — to suffer for others." "Ah, so you’re a front man?" "Yes," said the old man, shaking his head with dignity. " I am Chairman-for-Show Funt. I have always done time. I did time under Alexander II the ‘Liberator,’ under Alexander III the ‘Peacemaker,’ under Nicholas II the ‘Bloody.’" And the old man slowly bent his fingers, counting the tsars. Times have changed. Instead of Easter trousers, it’s a Brioni suit. And Haussmann is hardly planning to do any jail time. But the essence is the same. Let’s move on. RosUkrEnergo, as befits any Very Transparent Outfit, posts a document with its financial figures. The document is two pages long. In very large font. Behold. The 2007 report says the company’s gross profit was $1 billion. But that’s not what bothers us. What bothers us is that RosUkrEnergo is supposedly just a formal intermediary. Yet Gazprom does everything. And everything is done at Gazprom’s expense. On TV they say: Gazprom did this, Gazprom did that, Gazprom representatives traveled there, meetings were held at Gazprom’s offices, and so on. In other words, in the distant city of Zug, not much seems to happen apart from favorable taxation. If we go to the "news" section of Gazprom’s website, we won’t even find the word "RosUkrEnergo." And despite that, RosUkrEnergo’s operating expenses came to $118 million a year. (gas transportation charges are accounted for separately). Of that, some mysterious "fixed costs" amounted to $59 million. And "marketing and travel expenses" came to $4 million. (Well of course — people working alongside the "national treasure" can hardly be expected to travel any way other than by private jet.) Taxes paid totaled $72 million (it’s unclear where, but apparently in Switzerland). And the company’s net profit was $800 million. That’s all? So what was the whole elaborate setup for? Gazprom will spend almost three times as much just on building that idiotic tower in St. Petersburg. There is plenty more sensible commentary on RosUkrEnergo. The curious can read the analysis by user r**usanalit.** There’s also an interesting article by Shleynov. There are many valid questions: does Gazprom actually get any profit out of it at all? why the hell are taxes being paid in the canton of Zug? why is RosUkrEnergo needed in the first place? and others. But you don’t even have to dig into the details — just look at this diagram and ask yourself: can reasonable and honest trade in Central Asian gas through Russian pipelines really be arranged with this kind of contraption? That’s what all the commotion is for. Sometimes the saying "money likes silence" doesn’t apply. Sometimes it’s more выгодно to drown out the saw that’s being used to carve up the cash with screaming from the television. And one end of that saw is being held by our crooks, and the other by Ukrainian ones. Ukraine of course should pay for gas, but it should pay into the Russian state budget through Gazprom. But if Mother Russia is straining to force Ukraine to pay for some shady bastard’s private jet and yet another house in Marbella, that somehow lacks dignity. That’s all. That’s how I see it. Of course, this doesn’t rule out additional factors: for Russia, the gas issue is like the Black Sea Fleet is for Ukraine. A couple of times a year, the topic has to be stomped on to the fullest. A couple of months ago Yushch (Viktor Yushchenko) was dancing in circles with the Huron crowd in the squares of Tbilisi, and now he’s getting hammered over gas. And rightly so. It’s hard for me to say this as a fervent supporter of the "Orange Revolution," but it’s true. Gazprom is very interested in a scandal, because it gets trump cards for lobbying its far-from-obviously-beneficial projects, like all those various "Streams." Yulia is using this to drive a few more nails into Yushch’s coffin and so on. But in general I stick to the principle: "don’t look for a complicated explanation when there’s a simple one." While I was writing this post, I had the following exchange with my wife: She: - What are you writing about? Me: - About Gazprom. She: - Specifically what? Me: - That they’re crooks. She: - God, how banal. No one will even read that. Well yes, banal))) And of course, as we all remember, in this journal I’m constantly trying to talk everyone into not just calling crooks crooks, but actually doing something unpleasant to them. Even if it’s only a symbolic virtual spit. So for the most hardcore truth-seekers, I propose an action similar to the one that was a great success on my blog. 1. Go here (the website of the President of the Russian Federation). Click "write a letter." Enter your full name and address. Any category in the form will do. Copy and paste the short text below. If the formatting gets messed up, that’s not a problem. Changes and additions to the text are welcome and left to your discretion. As usual with this kind of action, spreading it around is encouraged. If you don’t like linking to other people’s posts, don’t link. There’s obviously no copyright here. Post the appeal in your own name. The text below should really be addressed to Gazprom, of course, but if you’re not a shareholder, Gazprom simply won’t reply. So we write to Monsieur President instead. As citizens of the Russian Federation. The reply will come by regular mail. It won’t take much time, but you’ll feel like a Citizen. Text of the letter: Dear Dmitry Anatolyevich, For the past two weeks, all Russian media outlets have been very actively covering the so-called "gas conflict" between OJSC Gazprom and NJSC Naftogaz of Ukraine. As a patriotically minded citizen of the Russian Federation, I have been deeply troubled by this issue. I would like to understand the matter in greater detail. To that end, I ask you to provide me with the following information (if necessary, please request the information from OJSC Gazprom): What explains the decision to register the company RosUkrEnergo — whose activities are based on the purchase, transit, and storage of gas, as well as supplies of Central Asian and Russian gas to Ukraine and to the countries of Central and Eastern Europe — in the city of Zug, Switzerland? What volume of tax revenue has the activity of RosUkrEnergo generated for budgets at all levels in the Russian Federation? What amount of funds has OJSC Gazprom received from RosUkrEnergo in the form of dividends or by any other means? I also ask you to instruct the law enforcement agencies of the Russian Federation and the Accounts Chamber of the Russian Federation to verify whether RosUkrEnergo’s expenditures were justified (the company’s expenses for 2007 amounted to US$117,118,387). Please send your reply in the prescribed manner.