Ukraine's Deportees and Putin's Assets
A few recent pieces that say a lot about what modern Russia is like, where it’s going, and what it’s doing.
I won’t be doing this a lot, but there are so many good things being published. So I thought today I’d do a bit of a grab-bag.
Read on for stories about:
How Putin’s wealth is managed
the “executive morons” who run Russia
What happened to Ukrainian refugees who ended up in Russia
Ukraine’s Deportees
Starting with the latter: For my employer, OCCRP, I recently edited a feature story about what it’s like, as a Ukrainian, to have survived the siege of Mariupol — only to be evacuated into Russia, the very country that devastated your city.
The initial draft was much shorter, but I wanted to add as many Ukrainian voices as possible, so I translated and added a lot more quotes. The stories these people tell are nearly unbelievable: One woman describes blindfolding her children so they wouldn’t see the corpses on the road; another explains what it was like to lose touch with her grandmother, and never to see her again.
But what struck me the most was the Ukrainians’ bizarre experience of coming to depend on humanitarian and administrative assistance from the very country that destroyed them.
On arriving in Russia, one woman described being plied with donations from locals who had heard on TV that the poor Ukrainians were on the way. “The most disgusting thing was that they felt sorry for us, without understanding that it was their country that had destroyed us,” she said.
Another Ukrainian man told of countless functionaries who arrived at a refugee camp to offer jobs, suggest university courses, and enroll children in school. The administrative apparatus was following the propaganda line — that the Ukrainians were, in reality, enthusiastic members of the “Russian world” who had been victimized by the fascist Kyiv regime and were now liberated and grateful to be in the motherland.
Meanwhile, they were only there because they were forced, almost literally at gunpoint, or had no other choice!
Read the full story here: Ukrainian Refugees Recall Ordeal of ‘Forced’ Deportations to Russia
Putin’s Wealth
This is a complex story I spent months on with several colleagues, including the brave and brilliant reporter who made it happen, Olesya Shmagun.
For years, activists and reporters have been looking for Putin's wealth. And they've found a lot. Most notoriously, a huge palace on the Black Sea thoroughly investigated by imprisoned opposition leader Alexei Navalny. But also multiple villas and residences, a hotel, a ski resort, and much more.
However, Putin's name has never appeared on any document. The connections to him have always been made through other sources: locals' sightings, whistleblowers, the involvement of federal security services, corporate connections to his cronies, suspicious flows of money, and so on.
All of these pieces of real estate are owned by different obscure companies. Also, Putin's wealthy friends often pop up and say: "Hey, this is actually mine." This makes it really hard to pin him down, and, along with the Kremlin’s official denials, gives him a lot of plausible deniability.
What we found in this investigation is that all of the major assets ever ascribed to Putin — held by many different companies — have a secret interconnection. All of these companies (we found 86 in all) are united by an email domain called llcinvest.ru.
Some use an llcinvest.ru email in their registration documents, while others have shareholders or directors who have llcinvest.ru mailboxes. What's more, we found that these mailboxes are not empty — they're actually used for communication. Though the companies seem to have little to do with each other, leaked emails show their employees discussing common business matters, making the whole thing really look like one big system.
Another piece of the puzzle is that, in various ways — including through the IT company that hosts the llcinvest.ru domain — the companies all seem to be tied to Bank Rossiya.
This sanctioned lender has been involved in a lot of shady schemes and is often called “Putin's bank,” but it's been hard to nail down what that means. Our story provides part of the answer. Bank Rossiya — whose low-level employees often pop up as “directors” of LLCInvest companies — appears to anchor a kind of decentralized informal “cooperative” that Putin can use to his benefit.
Why “cooperative”? Because it's not just Putin. The 86 companies also own a lot of assets that have never been tied to him. Not palaces and villas, but actual businesses, including boutique hotels and vineyards in Crimea.
Some of Putin's wealthy friends appear as the beneficiary owners of many of these companies. And we sometimes see them moving assets into the system. In short, LLCInvest looks like a shared informal holding that some of the most powerful men in Russia — not just Putin — can use.
So what are the upshots? For me, these findings exemplify the informal nature of Putin's grip on wealth and power. Sanctioning him is basically meaningless. Nothing will ever have his name on it. But because all the levers are within his reach, he has access to most of Russia's wealth — especially when it's illicitly gotten (this gives leverage).
This also belies a truism that's become very In Vogue among certain journalists and anti-corruption activists: That rogue regimes’ survival depends on elites’ ability to siphon their wealth out.
In many respects, this is true. Our reporting at OCCRP finds billions of dollars every year that originated in countries with poor rule of law and is laundered into the West. For example, last year we found $600 million in London real estate owned by Azerbaijan's Aliyev family.
But this investigation is a reminder that that's not the whole story. Much of Putin's "wealth," and not just his, appears to be within Russia, not vulnerable to sanctions or even easily understood from the outside.
And I think that's my final take-away: These structures and arrangements are all thoroughly Russian. Governed informally by Russians, in Russia, using Russian structures, located on Russian soil.
For all the pressure the outside world exerts — and don't get me wrong, I believe sanctions are fully justified — Russia's future will be determined by Russians, in Russia. Given what opinion polls are showing, and Putin's tightening grip on the media, that's a sad thought. But it's the reality.
If this piqued your interest, read the full investigation here: Mysterious Group of Companies Tied to Bank Rossiya Unites Billions of Dollars in Assets Connected to Vladimir Putin
“Executive Morons”
Finally, here’s a story about the kind of people who rule Russia today. It’s a translated excerpt of a Russian-language story published by Roman Anin, the editor of OCCRP’s Russian partner, Important Stories.
Roman is one of the best-sourced and best-connected Russian journalists in the world. He’s also incredibly fair. So when he writes something like this, it’s worth paying attention.
It’s about the kind of people who work at the FSB, the successor to the Soviet KGB. I think it says a lot about how Russia is ruled today.
***
The filters for selecting [FSB] operatives stopped working a long time ago. The leadership of both the FSB and of the country prefers "executive morons," as my sources call them. And the "executive morons," in turn, recruit others like them.
Outside observers can hardly imagine the extent to which the "executive morons" have penetrated Russian life. … The FSB permeates all government agencies in the country: police chiefs, judges, governors, ministers, presidential administration officials, top managers of state-owned companies, university chancellors — all candidates for these positions are approved by the FSB.
This does not mean the special services know everything, see everything, and hear everything. This ubiquity does not increase their own effectiveness or that of the agencies and companies they infiltrate. However, their ubiquity does shape the general mentality: everyone is forced to make decisions based on their opinion.
…
It’s important to understand what is in the minds of these people to understand how they could have made such a disastrous decision — to attack a once fraternal country.
In the 15 years that I’ve been engaged in investigative journalism, I have more than once talked, argued, and drank with various representatives of the Russian special services.
Among them were quite a few people of Putin's age and even some who had served with him and socialized with him in Germany. It’s impossible to lump them all together, but they were all strikingly united by one dangerous malaise — a “Versailles syndrome” resulting from the collapse of the Soviet Union, which Putin described back in 2005 as "the greatest geopolitical catastrophe of the 20th century.”
It’s worth noting that I almost never met a communist among them. Most (but not all) accepted Russia’s new capitalist opportunities with great pleasure and became owners of billion-dollar fortunes. … They took from the 21st century only the things that allowed them to make money or produce weapons, but mentally they continued to live in the same offices of the 1970s and 1980s — with their tea in cup holders and red carpets in the corridors. And they looked at the world the same way: “‘They’ are over there, “We’ are over here, and in the middle are the buffer zones.”
I once had a drink with a former high-ranking official and a colleague of Putin's from the KGB. We met in a surprising way: I wrote about a landfill near Moscow that was poisoning the air for local residents, and he had land plots in the area. So in the confrontation between the landfill owners and environmental activists, he supported the latter.
And so we were sitting at the table with the activists, and he raised his glass and gave a toast in which he warned against active coverage of the landfill problem in social networks. Those social networks, he said, were monitored by the CIA in order to create tension in Russia. And he ended his toast — to the open mouths of the listening activists — with a story about how his colleagues had once intercepted and shown him a plan by former CIA director Allen Dulles for the collapse of the USSR. "The Dulles plan is a myth, a conspiracy theory," I tried to object. In response, he looked at me like a naive fool.
I would not have told this story if this man had not once held one of the highest positions in the Russian state. And secondly, if his colleagues — those who continue to lead Russia and make decisions to wipe Ukrainian cities off the face of the earth — did not think in this way as well. For example, Security Council Secretary Nikolai Patrushev, who said in 2015 that the U.S. "would very much like to have no Russia at all”
“We have enormous wealth,” he continued. “And the Americans believe that we possess it illegally and undeservedly, because, in their opinion, we do not use it as we should. You will probably remember Madeleine Albright, former U.S. Secretary of State, saying that neither the Far East nor Siberia belongs to Russia.”
That would be all right, but Madeleine Albright never said any such thing. The phrase was born somewhere in the endless forums about conspiracy theories about the collapse of Russia, and then was replicated by Major General Boris Ratnikov, who claimed in 2006 in an interview with Rossiyskaya Gazeta: “A couple of weeks before the U.S. bombing of Yugoslavia began, we had a session to tap into Secretary Albright's subconscious. I won't retell her thoughts in detail ... We found pathological hatred against Slavs in the thoughts of Madame Albright. And she was also outraged that Russia has the largest mineral wealth in the world.”
One could laugh at all this if these people had not made the decisions about the war that led to the deaths of tens of thousands of people.