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Pauper or Oligarch – The Strange Case of Putin’s Wealth

Posted in Putin, wealth on January 4, 2008 by accidentalrussophile

As Putin seeks to move from the role of President to Prime Minister of the Russian Federation, we’ve witnessed a possible inside look into the financial windfall he may have amassed during his time as President.

According to the Central Election Committee, President Putin declares the following assets:

77.7 square meter apartment in St. Petersburg
150 square meter land parcel in the Moscow region
2 Volgas registered in his name (1960 and 1965 vintage)
230 Shares of St. Petersburg Bank Stock
R3,700,300 ($151,409) in total savings (3 bank accounts)
R2,011,611 2006 annual earnings of ($82,311)

It was widely reported at the time of a European Union summit in October that this declared income and assets would make Vladimir Putin among the poorest of the developed world’s leaders. There was also some casual debate among bloggers and commentators that this didn’t include assets in his wife’s name, which may be substantial.

Since that time, we have been treated to the declarations of Stanislav Belkovsky, supposed Russian analyst, and his assessment that Vladimir Putin is worth over $40 billion and among the richest men in the world.

Belkovsky lists as Putin assets, owned secretly through various other parties and nefarious private means:

37% of Surgutneftegaz (estimated worth of $18 billion)
4.5% of Gazprom (estimated worth of $13 billion)
over 50% of Gunvor (estimated worth of $10 billion)

Small wonder that he can afford all those expensive tailored suits.

Today via Forum.MSK and Johnson’s Russia List, we are treated to the long-winded and rambling observations of Julia Latynina, who sees the scandal of these two disparate assessments of Putin’s wealth growing.

It is amazing that Belkovskiy already said this a couple of weeks or three weeks ago, and everything was somehow kept quiet in the beginning, but now the scandal keeps spreading and spreading and spreading.”

“I can tell you from my own experience, that a colossal number of correspondents from Western publications started calling me just in the last week to ask me what I think of this.”

Belkovskiy stated “that Putin controls 37 percent of the stock in Surgutneftegaz, 4.5 percent of the Gazprom stock, and 75 percent of the stock in the Gunvor company,” the writer went on to say. “I should remind you that the Gunvor company, with capitalization estimated at $15-20 billion, now sells a huge amount of Russian oil, including the oil belonging to Yuganskneftegaz.

“I should also remind you that Khodorkovskiy was once accused of minimizing his taxes by selling oil from a company he owned through offshore firms also owned by him. This was called a crime.

“Obviously, if you calculate the price at which the Rosneft state company must have been selling oil to the non-state Gunvor offshore company for it to amass capitalization of $15-20 billion — and I have never heard that any of Khodorkovskiy’s offshore firms had capitalization approaching this figure — you have to wonder: If what Khodorkovskiy was doing, moving money from one of his own pockets into another of his pockets, is a crime, then what would you call what people are doing when they move money from the state’s pocket, namely the Rosneft company, to a private pocket, namely the Gunvor company?

“Gennadiy Timchenko is believed to own 50 percent of the stock in the Gunvor company. This elderly man has been in the oil business for a long time and has been a close friend of President Putin for a long time. In view of how many points Putin lost in the international arena because of the YuKOS affair, we have to conclude either that Putin is an extremely bighearted man, giving presents of this type to his friends, or that these friends are just the front men for someone else.

“Going back to Belkovskiy’s statements, I certainly cannot imagine how he could prove them, and I seriously doubt that anyone ever will be able to prove that the figure of $40 billion is correct. In general, Vladimir Vladimirovich is a cautious man, and we saw, for example, that when the transfer of the controlling interest in AO (Joint-Stock Company) Rossiya to another president became inevitable, President Putin did not go against the Constitution and he did make General Director Dmitriy Anatolyevich Medvedev the titular owner of AO Rossiya.

“I think it would also be impossible to prove that Putin is the actual beneficiary of the Gunvor company or any other company, just as it would be impossible to prove that Putin is the actual beneficiary of AO Rossiya, whose titular owner will be President Dmitriy Anatolyevich Medvedev. It is difficult to believe that after being so excessively scrupulous in the constitutional matter, Putin would be less scrupulous in matters connected with property rights.

“And there is something else, or actually two things, that should be borne in mind. The first is that Putin, as I already said, apparently is an extremely generous man if he gives presents like these to his friends even though they create foreign policy problems for him. The second is that the issue of property ownership was not raised just before 2008 by accident, because it plays an extremely important role in politics, after all: When President Putin was deciding what he should do after 2008, whether he should go or stay, or when the Kremlin was deciding this, the following consideration must have been taken into account.

“If he had stayed on after 2008, there was a chance that the regime would have been illegitimate because it would have violated the Constitution, and the West does not like this, so it might have taken an interest in the Gunvor company at the very least. If he had not stayed — i.e., if he had left — another problem would have come up, because the people who are the official owners of various companies and who amassed considerable wealth during the Putin years, might say: ‘Yes, we are the real owners, no one helped us, and we are not serving as a front for anyone else,’ and there would be no way of proving the opposite.

Latynina goes on from there for a while, spinning sort of dark theories about how the US had to know about Putin’s ill-gotten gains. Sure. Like we knew about WMDs.

No matter how you slice it, something doesn’t match up with Putin’s lifestyle and is declared wealth. There was some speculation a couple of years ago that with so many lesser mortals accumulating vast sums in the private sector, that Putin may seek to leave office for a high-paying role in Gazprom or heading some other lucrative gas or oil project (such as Nord Stream AG).

Putin once said, “Надо исполнять закон всегда, а не только тогда, когда схватили за одно место” (“You must obey the law, always, not only when they grab you by your special place”). Some Russians have taken a small measure of pride in judging their President as being a tough and, in their perception, honest man. He was bringing the oligarchs to heel, after all and making them pay for their thefts from the Russian people. Could it be that Putin is the biggest thief of all?

We are left wondering what will happen when that inevitable day comes when Putin is no longer in power and the law potentially grabs him by his special place. It would certainly prove an incentive to retain political power in Russia at the highest level possible, for the greatest length of time available.

We are also left wondering about how these clues and details have been planted in the news media, along with other small revealed scandals such as velvet re-privatization.
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Putin Announced as Time Magazine’s "Man of the Year"

Posted in Man of the Year, Putin, Time Magazine on December 19, 2007 by accidentalrussophile

Perhaps not-so-surprising announcement regarding Time Magazine naming Vladimir Putin as their “Man of the Year” for 2007. Reuters has the story of one of the more negative sounding pronouncements of “Man of the Year” in recent memory.

Russian President Vladimir Putin was named Time magazine’s “Person of the Year” for 2007 on Wednesday for bringing his country “roaring back to the table of world power.”

“He’s not a good guy, but he’s done extraordinary things,” said Time managing editor Richard Stengel, who announced Putin’s selection on NBC’s “Today Show.”

“He’s a new tsar of Russia and he’s dangerous in the sense that he doesn’t care about civil liberties; he doesn’t care about free speech; he cares about stability. But stability is what Russia needed and that’s why Russians adore him.”

Not a good guy? What, like he beats up old ladies and kicks dogs? I find the statement that he “doesn’t care about civil liberties” a bit odd also – I think Putin’s perspective is likely quite different, more of a first-things first approach. As much as our press would like to hand-wring about it, I think most Russians aren’t feeling their civil liberties being squashed any more than Americans do.

Personally, these aren’t the items or policies for which I would first criticize Putin. Then again, I also think that he gets too much credit for an economic recovery that actually started at the end of Boris Yeltsin’s time.

There is always something to be said for being in the right place at the right time. Putin deserves the most credit for simply having clear ideas on asserting Russia’s influence on the international stage, now that the nation has resurgent economic prowess.

To commemerate the occasion, I’m sharing the following Putin cut-out figure. Now you too can have a little Putin, Man of the Year, watching over your desk!

When completed, the figure will look like this:

Variations on the theme can be found here.

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Putin Ready to Be Medvedev’s Prime Minister

Posted in Medvedev, Prime minister, Putin on December 17, 2007 by accidentalrussophile

Like Batman and Robin, Bush and Cheney, Sherlock Holmes and Dr. Watson, Sancho Panza and Don Quixote, Festus and Marshal Dillon, Burns and Allen, chocolate and peanut butter, and, well you get the idea. Medvedev and Putin are part of a team.

“If Russian citizens express their confidence in Dmitry Medvedev and elect him as the country’s president, I will be ready to head the government,” Putin told a congress of his United Russia party held near Moscow’s Red Square.

“(We) shouldn’t be ashamed or afraid of transferring the key powers of the country, the destiny of Russia to the hands of such a man,” he added.

Of course, the real reason that Putin nominated Medvedev has nothing to do with all the speculated political intrigues and loyalties.

The real reason is Medvedev is the only man in the Kremlin shorter than Putin.
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Hey – Doesn’t Bush Have a Beer Named After Him?

Posted in Medvedev, Putin, vodka on December 17, 2007 by accidentalrussophile

Seems to be a really successful President of the Russian Federation, you need a vodka named after you!

I can hear the slogan now – “It takes a big man to make a pure vodka…”

Interesting side bar: whenever I see Putin walk, I can’t help but think of George Jefferson. Really more like a one-armed George Jefferson – he only swings his left arm.
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Preved, Medved!

Posted in Medvedev, Putin, presidency. on December 10, 2007 by accidentalrussophile

Well … ain’t that a kick in the pants. Turns out the man Putin wants to succeed him is the guy we were all talking about a year ago. All these machinations, promotions of Ivanov, analysts timing the minutes Medvedev and Ivanov appear on television, and other speculations were merely to throw us off the scent.

Dmitry Medvedev is the man.

So what does this mean? I very much doubt it will affect any change in the direction of Russia, Inc. In fact, Medvedev’s strong business experience and persona lend itself to Russia as the emerging corporate state, a nation that is run like a business. Most analysts tend to cast Medvedev as a liberal – I think this is a mistake. He simply isn’t the sort of Russian man who shoots his mouth off to show what a real man he truly is. He’s another sort. I also disagree with analysts such as Yevgeny Volk of the Heritage Foundation, who says

“The choice of Medvedev…reflects Putin’s desire to have the most obedient figure. Putin views Medvedev as a subordinate on whose loyalty he can count.”

Putin has no need for a trained dog. Subordinate seems like an inappropriate word here. Trust in politics is a fleeting thing. It seems unlikely that Medvedev will conduct his business any differently now than he has in the past. And business would seem to be the most appropriate word – this will be business as usual for Russia, Inc.

But, alas, I am afraid the days of juicy quotes like they should keep their booger-noses out of our business or You must obey the law, always, not only when they grab you by your special place or He raped 10 women. I never expected it from him. He surprised all of us. We envy him or We’ll follow terrorists everywhere. We will corner the bandits in the toilet and wipe them out. Medvedev won’t lend himself to the easy, knee-jerk, “He’s a fascist” kind of blogging. He doesn’t appear to be so vain as to appear shirtless for photos while fishing with some prince. He is unlikely to kiss children on the belly.

In short, the man is a professional.

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Putin: Mein Plan

Posted in Plan, Putin, satire on November 26, 2007 by accidentalrussophile

I have some larger articles in the works for this week, but wanted to pass along this image from volodymir_k, via a conversation with Megan Case.

Along this line, there is something weirdly insecure about a President who enjoys 60% to 70% approval ratings in his country, pointing the finger at other nation’s ghostly support of political fringe candidates in Russia.

Is he really so out of touch with reality as to suggest that a “color revolution” might be in the works in Russia?

The Presidentially election isn’t until March, but Dr. Case (inside joke) observes that Russians are already suffering election fatigue from Plan Putina.
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Putin Grows a Heart?

Posted in Butovo, Purges, Putin, Stalin, heart on November 1, 2007 by accidentalrussophile

Well, in Whoville they say that the Grinch’s small heart grew three sizes that day.

Earlier this week, Vladimir Putin did something even more unexpected than kissing a boy on the belly. Even more daring than fishing without a shirt. Even more sensitive than remarks about the Israeli President.

He honored those murdered during Stalin’s purges.

Reuters has the story of his appearance and comments at Butovo, a facility near Moscow where tens of thousands were murdered under Stalin’s Operational Order No. 00447.

The victims included priests and royalists but also huge numbers of people who were simply caught up in an indiscriminate spiral of killing. This year Russia marks the 70th anniversary of the bloodiest period of the purges.

Putin attended a memorial service with Patriarch Alexiy II, head of the Russian Orthodox Church, after passing a field criss-crossed with mass graves.

“We know very well that 1937 was the peak of the purges but this year was well prepared by years of cruelty,” Putin said beside a mass grave after laying flowers at a memorial.

Putin said such tragedies “happen when ostensibly attractive but empty ideas are put above fundamental values, values of human life, of rights and freedom.”

“Hundreds of thousands, millions of people were killed and sent to camps, shot and tortured,” he said. “These were people with their own ideas which they were unafraid of speaking out about. They were the cream of the nation.”

In an appeal for national unity, Putin said: “To develop the country and choose the right path, we need political debates and even battles but to make this process creative they should not be conducted outside the cultural framework,” Putin said

When I read such quotes, I can’t help but wonder – does Putin see those who speak out in opposition of his own government and corruption of police and public officials, as the “cream of the nation”?

Would he say that Kirill Formanchuk is the “cream of the nation”?

Would he say that Anna Politkovskaya is a member of this “cream of the nation?”

And what exactly is meant by – to make this process creative they should not be conducted outside the cultural framework? Who defines the cultural framework – the government, or the people of the nation? Is Putin suggesting that if Russians culturally prefer to discuss politics around the kitchen table, that is where such discussions should remain?

Of course, nothing is happening now in Russia on the scale of the murders under Stalin. But, when it suits the government or public officials, citizens are still oppressed, beaten, or even murdered when they speak in opposition. The devices of suppression are still the same, even if they are not resulting in the murder of tens of millions. Perhaps this is the cultural framework he references. Speak out in Russia if you wish, but be prepared to have your ass kicked if someone doesn’t like what you have to say.

And despite his successes for Russia, I don’t see Putin or his government doing a damn thing to change that.
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The Puff Pastry Opposition

Posted in Kasparov, New Yorker, Putin, Remnick, politics on September 25, 2007 by accidentalrussophile

David Remnick of The New Yorker has a god-awful lengthy 12-page article on Garry Kasparov titled “The Tsar’s Opponent“. Apparently it isn’t cool to compare Putin to Stalin anymore – he’s a Tsar. I’ve seen a steady increase in these references in the past month or so.

Anyway, the article is pretty much standard issue diatribe against Putin, with plenty of no-brainer references to the K.G.B/F.S.B., siloviki, oligarchs, and perceived thievery by the government. How strange is it for American capitalists to now be accusing the Russian government of exploitation and thievery of profits? There are also references to how, due to the chaos of the 90’s, the word demokratia is now dermokratia or “shit-ocracy.”

It bothers me with all the substantive criticism that could be aimed at Putin and his government, the best most Western news columnists can come up with is the lame K.G.B./spy angle and equating him to a dictator. I suppose it won’t be anytime soon that Western writers will begin to simple take a measure of the man as a politician and count his successes and failures.

This article, thankfully, doesn’t make a realistic case for Kasparov’s chances. Not so thankfully, they attribute this to the Kremlin control of the news media and squashing of all opposition. Obligatory references to Kasparov as being half Armenian and half Jewish not exactly an ideal ethnic mix for a politician in a country with deep currents of anti-Caucasian and anti-Semitic feeling.Kasparov is made out to be some sort of idealistic hero or perhaps a Don Quixote figure, who just happens to be 44 years old and living with his mom. Imagine how that would play for a presidential candidate in the U.S.

He also doesn’t demonstrate a single political idea in this article. He’s just presented in some vague way as being pro-democracy.

The part of the article I found most truthful was the conclusion, where Remnick decides to talk with – you know, an actual Russian with no political agenda. Someone who might vote. Someone who isn’t involved with Russian politics and either an opponent of Putin or friend of Kasparov. What an interesting article this could have been if Remnick had chosen to do that all along.

From Alexander Pachulia, deputy director of the October Chess Club Moscow:

“Usually, chess people are not very attached to their regular careers. They are almost uninterested in anything other than chess. If we didn’t close up at ten, people would play until ten in the morning and die of hunger right in their chair.”

Like several other denizens of the club, Pachulia acknowledged Kasparov’s genius as a player but was cool to him as a person and as a politician. “I rooted for Kasparov against Karpov in the eighties because of Kasparov’s anti-Communism and Karpov stood for Soviet power,” Pachulia went on. “But now we live in a different world. We need to be more assertive in the world. If NATO includes Ukraine and Georgia and other states on our border developing so-called democracy, that tells us that you” — the United States — “are putting arms on our borders. Democracy! Nonsense!”

Pachulia, like the majority of Russians, would prefer to see Putin remain President for at least another four years. To elect anyone else, he said, even one of Putin’s handpicked protégés, would be a risk that the country could ill afford. “Russia is gigantic and needs a strong hand,” he said. Kasparov’s politics and language were too foreign, and it made the players at the club dubious not only about his capacities as a politician but even about his loyalty to the Russian state. “The West needs someone to run Russia for them, someone to order around as their instrument, and they want to do that with Garry Kasparov,” Pachulia said. “The West is worried about the strength of Vladimir Putin.”

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Putin’s Hudsucker Proxy – Zubkov Nominated for Prime Minister

Posted in Hudsucker, Prime minister, Putin, Zubkov on September 12, 2007 by accidentalrussophile

Recent news reports have Vladimir Putin accepting the resignation of Prime Minister Mikhail Fradkov today and nominating virtual unknown financial monitor Victor Zubkov for Prime Minister. State Duma Speaker Boris Gryzlov says the lower house could vote on Zubkov for PM as soon as this Friday.

Speculation has been that Putin’s annointed choice for the next elected President would be nominated as Prime Minister first. This would indicate a path to the presidency that Putin traveled, as he was similarly nominated as Prime Minister by Boris Yeltsin. With the recent resignation of Fradkov, rampant speculation was either Sergei Ivanov or Dmitri Medvedev would be nominated.

However, I had been pointing out in other forums for weeks now that if Putin plans a return to the presidency in 2012, it would serve his purposes to nominate someone less powerful and entrenched than either Ivanov or Medvedev. After all, why would either one of those candidates step aside for Putin 2012? And wouldn’t a successful 4 years in office by either Ivanov or Medvedev create a greater potential for a political split or division in Russia?

This has been designated as the Hudsucker Proxy theory, after the Coen brothers film of the same name. I had been thinking his choice would be someone such as Valentina Matviyenko, mayor of St. Petersburg. Putin might still do something of that nature, nominate a different candidate for the presidency. The more divisions he creates in Kremlin power, the easier it will be for him to sweep into office in 2012.
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