Bentleys, Palaces, Murders: How the North Caucasus Works

Hi, this is Navalny. Here are two unrelated

facts.

First, people are constantly asking me to do

an investigation about the Caucasus.

Second, since the end of last week I’ve been

getting spammed with a link to a video about

home renovation. Seriously, I was sent

the link to a video called “DIY suspended ceiling made of

drywall” 100,000 times.

What is going on, I thought. A prank? A flash mob?

I clicked on it and immediately noticed that

the comments under the video were full of my

last name, in the sense of: “Navalny will be here

any minute.” Well, I came.

I watched the video and, honestly, was blown away.

At the Anti-Corruption Foundation, we looked into

the situation so I could tell you about it, and

thanks to a suspended ceiling made of

drywall,

here is my video about the North Caucasus, and I

highly recommend that everyone watch it

to understand—and be horrified by—how

power is structured in this part of Russia, how

an entire region can be robbed, stripped bare,

people can be killed, and yet those responsible still

openly enjoy fantastic

wealth while remaining

public officials.

[music]

Back to the beginning—to our video

about drywall. Its author, Ruvim, is a

construction specialist from Rostov-on-Don.

The video really is about renovation; there’s

no trick to it. His channel is fairly

popular: 130,000 subscribers,

millions of views.

But from the very first minutes of the video, it’s

just—wow.

[music]

The filming, the views, the grounds, the house itself—

naturally, I couldn’t shake the feeling

that this looked like something we ourselves had filmed,

only somewhere on Rublyovka (an ultra-elite suburb outside Moscow).

Where else could someone build something like this? Ruvim,

the host of this channel, very

intriguingly teases where exactly he’s filming this.

A 2,000-square-meter house

on a huge plot, with lots of impressive,

interesting design solutions—and all of it very

far from Moscow, very far from St. Petersburg.

Today we’re going to tell you how things work

out in the provinces, far from Moscow, far from

St. Petersburg.

He flew in from Rostov-on-Don

by plane and so on, but of course that only

made us more curious.

So, without waiting for the video

to end, we start figuring out

where exactly this wealth is. We turn

to the details. First, the footage

is recent: the video came out a week ago, and in

the shots there’s no snow and the sun is shining.

So it’s the south. Second, one of the workers

says he lives in Pyatigorsk,

so this must be somewhere nearby—you wouldn’t

haul workers halfway across the country for this.

Third, the foreman Lyokha’s Instagram appears on screen—

hi, Lyokha—and there are dozens

of photos of this house, from the construction phase onward,

and everywhere the hashtag says Cherkessk. Next, we

simply open a map of Cherkessk, the capital

of Karachay-Cherkessia, and this gigantic

thing immediately jumps out. But

see for yourselves: this is what the

republic’s capital looks like from above, and this is what

this giant palace on the river in the center

of the city looks like.

It’s located next to the city’s main

park, and I’m sure every resident

of Cherkessk has driven past it

many, many times. In short, we establish

the exact location of the property

by around the fifth minute of this

video and feel terribly proud

of our own cleverness and investigative instincts.

But by the end of the video, we

end up feeling very stupid, because

none of this would have been necessary

if Ruvim hadn’t just gone ahead and plainly said:

“We’re in Cherkessk, in the city of Cherkessk.” But in any

case, now we know with 100 percent certainty

where this house is located, even if

the people in the video deny everything and

claim they filmed it on the Moon.

Now, of course, we’re very interested

in how much something like this might cost. If it

were on Rublyovka, then a 2,000-square-meter house and

8.5 hectares of land would come to, well,

around 6 billion rubles. But we’re not on Rublyovka, we’re in

Cherkessk, so let’s subtract the cost

of the land entirely—let’s assume

it’s free. But the house still had to be

built. And not only is it 2,000

square meters, plus outbuildings and landscaping,

but the interior is hardly finished in cheap paneling.

You can gather some details from the videos,

for example that the ceilings there are 12

meters high.

That means there will be an enormous

7-meter chandelier hanging

down from the ceiling. And in just one

room, the decorative plasterwork they show

how to install weighs almost two tons. In short,

the total weight of all the plasterwork—without the drywall, without

anything else—is massive.

All in all, we estimate

this property at about 1 billion rubles, and

that raises a logical question: who, in

one of Russia’s poorest regions, where the average

salary is 24,600 rubles, where even the governor

officially earns 74,000 rubles a

month—who can afford to spend

1 billion rubles on a house?

So we dig in to find out the name of this rich man.

We look at the property record extract and don’t understand

what’s going on. In reality, it’s a 2,000-square-meter house,

but on paper it is listed as a

recreation facility.

a wellness complex with an area of 310

square meters (about 3,340 square feet) — so we immediately understand this is not

just a rich man, but a man

who knows how to make the state

do what he wants

if you don’t live in Karachay-Cherkessia

then this surname won’t mean anything to you, well

just as it didn’t mean anything to me myself until last week

but believe me, residents of the republic watching

this video have already understood that we are talking about

people everyone there knows, and who

can afford anything. The owner

of the luxurious house is Ansar Alievich Kaitov

Ansar is very young — he isn’t even 18 yet

but he is already famous. Here he is at his

high school graduation, riding in a Mercedes with

flashing lights and firing an automatic

Kalashnikov rifle

Sweets are bad for you when you’re lying in Rosstat (Russia’s federal statistics agency)

which means no gift

This is certainly a wonderful start

A successful young man speeds around with

flashing lights and fires a Kalashnikov,

only taking breaks to oversee the construction of a house with

two tons of stucco in every room, and

what have you achieved? But we understand that

even if Ansar Kaitov graduated from school with

straight A’s

he still could hardly have bought himself a house like this

Naturally, it came to him from his father. His father

is named Ali Kaitov, and this is exactly

the moment when our video stops

being entertaining. Using this one

estate, registered to a 17-year-old

student

we are now going to crack open the door to

how the world of the North

Caucasus — and Karachay-Cherkessia in particular — works today

Karachay-Cherkessia

is a poor republic, humiliatingly poor, and

you are about to see why everything there

absolutely everything has been divided up

among a few families

having joined together into intricately intertwined

clans that have split among themselves literally

all the money that comes into the region from

the budget — every last kopek, whether it is gas,

electricity, beautification, roads — everything

has been carved up: parliament, government, courts

major enterprises, resorts — absolutely

everything is controlled by a small group of people

blood relatives who, over

the course of decades, have been robbing those who

live on this land. You already know very well about one of these

families — they are in

the news every day. They are the very same Arashukovs

led by Rauf Arashukov,

a senator from Karachay-Cherkessia and, at the same time,

a murderer and a corrupt official

and the leader of a group that, according to

the Investigative Committee, stole more than 30

billion rubles from Gazprom (about $330 million), but

the Arashukovs are not an exception. The Kaitov clan

does exactly the same thing. They have divided up

the republic. Yes, it sounds like the plot of

a film about a post-apocalyptic future, but

that is exactly how the North Caucasus is organized

in modern Russia

We pulled on just one thread — the one tied to

the owner of the house from this video — in order

to tell you who it belongs to, but

what we pulled out was a snake pit of incredible

scale, the size of which we still

cannot fully comprehend

Here is what we ended up with: it is

a gigantic scheme — just one

incredibly wealthy family

They live better than any of you. They

drive Bentleys and sports cars, live in

palaces with exotic animals, their

wives are covered from head to toe in

diamonds

They party around the world, travel,

enjoy life — and almost all of them are

government officials

The owner of the house — I’ll say his name again — is

Ali Kaitov

He is the son-in-law of the former president

of Karachay-Cherkessia

that is, he is married to the daughter of the former

president. Their child, in whose name the house

is registered, is therefore the president’s

grandson. The land around Ali’s palace is registered to another grandson, a 19-year-old

the land around Ali’s palace is registered to

Ali Kaitov was and remains a very influential

man in the republic. He was a deputy

and owned a factory, but now he could probably

already be aiming for governor with relatives like these

but one small circumstance stands in his way

One small circumstance: in 2004

when he was 27 years old, during

a child’s birthday celebration

he killed seven people at his country house

including another deputy. They had apparently

fallen out over business. This mass

murder made headlines in all the media at the time, in

2004 — understandably so. After all, the former president’s son-in-law

had killed people. We are talking about

the kidnapping and murder of seven Circassian

businessmen. What’s more, all of this

happened at his home, and as the investigation established,

it happened on his orders. On top of that, the bodies

of the victims could not be found for a long time because

Kaitov and his accomplices took the

corpses into the mountains, covered them with tires, and

burned them in a mine. Even for the North

Caucasus, such a crime was something

extraordinary

The relatives of the murdered men organized

mass protests and stormed the administration building

Immediately afterward, residents

staged a real uprising and riots

in parliament, and left only when

Dmitry Kozak, who flew in from Moscow,

assured them there would be a trial. There was a trial, and now I ask you this

what do you think, how much

should a person who organized

such a mass slaughter receive?

When he gets out, you just shrug your shoulders

and say, well, of course,

someone serving a life sentence would never be released.

You’re sure a person like that will never get out.

But Alik Kaitov is sentenced to 17 years

in prison.

By partial aggregation of sentences,

the final sentence imposed was

17 years of imprisonment, with

the sentence to be served in a correctional

maximum-security penal colony.

Local media immediately began publishing

reports about the killer’s conditions in custody: for him, in

prison, they made a special cell

consisting of two rooms; people could calmly

bring guests to see him.

And he himself could leave and return

to prison whenever he wanted. And after that, for K

there came a full-blown era

of humanitarianism.

His sentence was gradually reduced — first because of special

circumstances, then because of minor children — and in

the end,

less than 10 years later, Kaitov was already

free.

Here is a 2014 photo of him with the very familiar

Rauf Arashukov (a Russian politician later arrested on serious charges), Rauf

captioning it: “Kaitov, my brother.” So for

the murder of seven people, Kaitov served

less than ten years. Let me quote the well-known

human rights advocate Andrei Babushkin,

who said on the subject: “Such a generous

sentence reduction I have never seen in our

country. This is the first case of its kind.” While

Kaitov was in prison, his father-in-law Mustafa Batdyev

stepped down — though of course not because of

the mass murder. What a trivial detail, right?

And a few years later, it would seem that after

serving time, Kaitov should have been left at

rock bottom, unable to find any decent

job: his father-in-law was no longer president,

and he had formally divorced his wife. But here you and I get

a perfect illustration of how

family clans in the North Caucasus

work. Look at the chart again.

Here is Kaitov’s father, Zaur — he too was

a government official, heading the forestry

agency of the Karachay-Cherkess Republic

(a federal subject of Russia in the North Caucasus).

But that is not the important part right now. Here is his

uncle, a much more serious figure:

Magomed Kaitov.

He was called the energy king

of the North Caucasus. Recognize the wording?

Arashukov was also called a king —

the gas king. I assume one might get

the impression that this uncle

built some kind of

successful energy business that

made him an oligarch. That is, of course, not

the case. In 20

02, he was appointed head

of the Caucasus energy management

company by our “effective manager”

and liberal,

Anatoly Chubais. Chubais, incidentally,

also awarded Kaitov an order for services

to the Russian electric power industry. As a

result of that powerful appointment,

Magomed Kaitov looted

the republic clean.

He stole through utility tariffs — literally from

every resident of Karachay-Cherkessia, straight

out of their pockets. I would tell you myself how he

did it, but better to let

Putin explain it instead — he surely wouldn’t lie, right?

“The energy system

of the North Caucasus region is

to a significant extent controlled by one

family — the family

of Mr. Kaitov. Consumers make payments

for supplied electricity into the accounts

of affiliated companies.

Then part of the funds received

is cashed out through shell companies

or appropriated by family members.”

Thank you, Vladimir Vladimirovich. Magomed

Kaitov was arrested and charged with embezzling

4 billion rubles (about $120 million at the 2013 exchange rate). This was in 2013.

“In Moscow, for 48 hours pending a court decision,

Magomed Kaitov, former

general director of the joint-stock company

IDGC of the North Caucasus, has been detained.” Then

a miracle happens — the same kind of miracle as with

the prison term for mass murder — and we

see Magomed Kaitov on his children’s Instagram,

of course

free. In other words, even if he did serve time,

it was purely symbolic.

If you think that a stern reprimand,

an arrest, and being personally exposed by Putin

somehow affected the life or

wealth of the Kaitov clan, then you are

badly mistaken.

Here is the daughter of the man who stole 4 billion,

the energy boss.

Dzhamilya, founder of her own

“intellectual women’s salon,”

driving around in a Bentley with red upholstery.

She hangs out on luxury boats practically nonstop,

with singer Valeriya, at the Rotenbergs’ (a powerful Russian oligarch family) dacha,

and sails with them on a yacht. Here she is with her

brother, recently released after serving time for mass murder,

in Paris, and here they are again in the south of France,

traveling together. And since she has to travel so much,

she flies by private jet.

She loves Putin — and when standing before Putin,

what else can you say? Her sister Karina lives

in New York and works as a DJ and singer.

She is an official ambassador of the Chanel house in

Russia.

*Tatler* and all that. And here is the wife

of the “honored energy executive” Kaitov,

Madina, also with the Rotenbergs, also on

a private jet. However you look at it,

it all comes down to money. All of them are included in our chart.

Look: here is the family of Kaitov’s own brother,

the killer’s brother — naturally, also a government official.

heads the Karachay-Cherkess door

I mean,

road construction funded by the state budget in

the republic doesn't stop him at all from

giving his wife Madina

a Bentley with a bow on it. And just look at their home

interiors—so refined. Vacationing on a yacht in

Ibiza, the UAE,

Monte Carlo. The child is dressed well too—

ready for school, primer in the backpack, a bunch of fashionable

moccasins—ready for school. You're about to

either laugh or cry, I don't know. So who do you

think is standing there in those gilded

home interiors?

The head of the Karachay-Cherkess door—this is

his wife's father.

Madina Karabash's father, Albert Aliyevich, at that

time was the chief of police

of Karachay-Cherkessia, deputy minister

of the republic's internal affairs ministry. On Facebook

you can find a photo of his younger son

Islam. He is

a prosecutor. If you already feel like banging

your head against the table, hold on—this is Russia, this

is happening right now. These are the people

who have seized an entire region, and this needs

to be talked about. We're returning to the main

to the Kaitovs, to the house and the renovation video

that started it all.

What I'm getting at is this: how does the life

of

Alik Kaitov turn out after serving time for a mass

murder? Just fine, ladies and gentlemen, everything is

perfectly in order. Here's a Bentley

Mulsanne that he bought shortly

after, pardon the expression, getting out of prison.

It was registered in Moscow. Price:

more than 20 million rubles. His eldest son drives it around—

Aslan, 19 years old. What were you driving

at 19? So, he gave the Bentley to his son.

He gave it away.

Now there's no Bentley, so something has to

be done—buy another one, of course.

A Bentley Bentayga SUV was bought in

2017. Cost: 15 million

rubles.

There are plenty more cars too, lots of Mercedes—

this Mercedes, that Mercedes, a set of BMWs. All

of these are cars for Kaitov's teenage children in

Cherkessk.

And guess in one try what Alik Kaitov

starts doing immediately after his release.

He headed the company Integrated

Utility Systems Holding, formerly

known as the Cherkessk City

Electric Networks.

I don't even know whether it's necessary to explain

that among the founders of this company are also

the

wife and daughter of the mayor of Cherkessk.

[music]

[applause]

How they manage the power grid has already been

explained to you by Putin—they simply steal from

every payment, appropriated by members

of the family. Only one important question remains.

It's just hanging in the air, I can feel it:

where is the current head

of the republic, Rashid Temrezov, looking while all this

corruption is unfolding right under his nose?

And Rashid, who now is also tied to the Kaitovs—well,

here's where he's looking: straight into the camera lens,

holding Kaitov's eldest son close

—Aslan, the one who drives the Bentley

Mulsanne around Moscow, if you've forgotten.

They call the head of the republic

of Karachay-Cherkessia 'dear uncle'—dear

Uncle President, a former subordinate

of our killer. Before heading

the republic, Temrezov worked

as general director at Kaitov's energy

networks. When the murder investigation was underway,

local media called Temrezov Kaitov's right

hand man. The boldest even wrote

that he was at that very dacha (country house) on the night of the

murder. Look at this

wonderful president of the republic. He

shouldn't blur together in your mind with the faceless

mass of other governors, because he

even if only formally

bears responsibility for what is happening in

the republic. Listen to how much he loves

Putin. Hypothetically, suppose you

could speak with any political

leader who lived at any time, in any

country—who would you like to talk to?

Who? Who would I like to talk to? Once again,

I've already spoken with the winner of the

president of Russia. No comment.

No comment at all.

We also owe him that Russian-speaking-challenged

Mr. Arashukov in the Federation Council, and

by the way, I assure you, there is still exactly

the same kind of second senator from the republic—Akhmad

Salpagarov.

Only he steals money from capital

construction. So then, dear Uncle

President officially earns 74,000

rubles a month, but wears watches

worth nearly 40

million rubles—and not just one. Here's another Patek

Philippe for 4 million, and a gold

tourbillon for 2 million.

And here you can see one peeking out—worth 5 to 6 million,

or here, look, another wonderful

black one—2.5 million

rubles. They are absolutely shameless—not even

crooks, but criminals, murderers, bandits. They

completely take over entire regions and

can do whatever they want there, of course

in close coordination with Moscow. Do you think the

Kremlin doesn't know, or isn't involved itself?

Just imagine: all of Karachay-Cherkessia

has a population of only 465,000,

less than the population of Tula, but

even out of such a small federal

subject, these clans

still manage to squeeze out tens of billions.

rubles

they literally robbed

everyone there; the state's very purpose right now

is to enrich these

specific families, and the Kremlin benefits from it

it sends subsidies there and then

gets kickbacks in return and covers it all up

with its usual, 'Well, what do you expect, this is'

the North Caucasus—it's always like that there, that's how

it is supposed to be.' That means there's no need

to invest money in development

in the North Caucasus republics

I don't see it that way, and I don't think

there are many people in the Caucasus who consider

what is happening

normal. In any case, I'm very glad

that I was sent that very video about

drywall, and now many more

people will learn about what is happening in the republic of

Karachay-Cherkessia

By the way, this is the answer to the question,

'What should we do with the North Caucasus?' Well, don't

encourage these clans that rob everyone

and don't release murderers from prison

—then everyone there will live

much more prosperously, and everything will become much

calmer. Separately, I really want

to say a huge thank-you to those

few in number but still existing

independent Karachay-Cherkess media outlets and

bloggers who, no matter what,

have continued all this time to write about Protikal

Anna

about all those disgusting Rozhkovs and these

Temrezovs. Thanks to their articles, posts,

and videos, in a relatively short time

we managed, at least partially, to understand and

reconstruct the real picture

of what is happening in the republic. You

are wonderful, brave people and are doing

very important work. Subscribe to our

channel

the truth is told here