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Thread: Putin, the Kremlin power struggle and the $40bn fortune

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    Ray
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    Putin, the Kremlin power struggle and the $40bn fortune

    Putin, the Kremlin power struggle and the $40bn fortune


    Luke Harding in Moscow
    Friday December 21, 2007
    The Guardian

    An unprecedented battle is taking place inside the Kremlin in advance of Vladimir Putin's departure from office, the Guardian has learned, with claims that the president presides over a secret multibillion-dollar fortune.

    Rival clans inside the Kremlin are embroiled in a struggle for the control of assets as Putin prepares to transfer power to his hand-picked successor, Dmitry Medvedev, in May, well-placed political observers and other sources have revealed.

    At stake are billions of dollars in assets belonging to Russian state-run corporations. Additionally, details of Putin's own personal fortune, reportedly hidden in Switzerland and Liechtenstein, are being discussed for the first time.

    The claims over the president's assets surfaced last month when the Russian political expert Stanislav Belkovsky gave an interview to the German newspaper Die Welt. They have since been repeated in the Washington Post and the Moscow Times, with speculation over the fortune appearing on the internet.

    Citing sources inside the president's administration, Belkovsky claims that after eight years in power Putin has secretly accumulated more than $40bn (£20bn). The sum would make him Russia's - and Europe's - richest man.

    In an interview with the Guardian, Belkovsky repeated his claims that Putin owns vast holdings in three Russian oil and gas companies, concealed behind a "non-transparent network of offshore trusts".

    Putin "effectively" controls 37% of the shares of Surgutneftegaz, an oil exploration company and Russia's third biggest oil producer, worth $20bn, he says. He also owns 4.5% of Gazprom, and "at least 75%" of Gunvor, a mysterious Swiss-based oil trader, founded by Gennady Timchenko, a friend of the president's, Belkovsky alleges.

    Asked how much Putin was worth, Belkovsky said: "At least $40bn. Maximum we cannot know. I suspect there are some businesses I know nothing about." He added: "It may be more. It may be much more.

    "Putin's name doesn't appear on any shareholders' register, of course. There is a non-transparent scheme of successive ownership of offshore companies and funds. The final point is in Zug [in Switzerland] and Liechtenstein. Vladimir Putin should be the beneficiary owner."

    Putin has not commented on Belkovsky's claims. The Guardian put the allegations to the Kremlin but was told Putin's chief spokesman, Dmitry Peskov, was not available.

    Discussion of Putin's wealth has previously been taboo. But the claims have leaked out against the backdrop of a fight inside the Kremlin between a group led by Igor Sechin, Putin's influential deputy chief of staff, and a "liberal" clan that includes Medvedev.

    The Sechin group is made up of siloviki - Kremlin officials with security/military backgrounds. It is said to include Nikolai Patrushev, the head of the Federal Security Service (FSB), Russia's KGB successor agency, his deputy Alexander Bortnikov, and Putin's aide Viktor Ivanov.

    Those associated with the liberal camp include Roman Abramovich, the Russian oligarch and owner of Chelsea football club who is close to Putin and the Yeltsin family. Other members are Viktor Cherkesov, the head of the federal drug control service, and Alisher Usmanov, an Uzbek-born billionaire.

    Insiders say the struggle has little to do with ideology. They characterise it as a war between business competitors. Putin's decision to endorse as president Medvedev - who has no links with the secret services - dealt a severe blow to the hardline Sechin clan, they add.

    Some analysts have said Putin would like to retire but has been forced to carry on to shield Medvedev from siloviki plotting. Others disagree and say Putin wants to stay in power. On Monday Putin confirmed he intends next year to become Russia's prime minister.

    "The siloviki are not at all nice," Yulia Latynina, a Russian political commentator said. Latynina, who hosts a political talkshow on the liberal radio station Ekho Moskvy, was one of the first journalists to draw attention last month to Putin's reported links with Gunvor.

    The company is based in Zug, a picturesque Swiss canton known as a bolthole for publicity-shy international businessmen. Gunvor has neither a website nor a Moscow office - but in 2007 posted profits of $8bn on a turnover of $43bn, an astronomic figure, according to industry experts. Like Putin, its reclusive owner, Timchenko, worked in the KGB's foreign affairs directorate. He is said to have met Russia's president in the late 1980s through KGB circles.

    Gunvor, which has its head office in Geneva, failed to comment.

    Critics say the wave of renationalisations under Putin has transformed Putin's associates into multimillionaires. The dilemma now facing the Kremlin's elite is how to hang on to its wealth if Putin leaves power, experts say. Most of its money is located in the west, they add. The pressing problem is how to protect these funds from any future administration that may seek to reclaim them.

    "There's no point in having all this money if you can't travel to the Maldives or Paris and spend it," Elena Panfilova, the director of Transparency International in Russia said.

    The first hints of the intra-clan warfare gripping the Kremlin emerged last month, when the FSB arrested General Alexander Bulbov, the deputy head of the federal drug agency, and part of the liberal group. His arrest saw a surreal standoff, with his bodyguards and FSB agents pointing machine guns at each other.

    Earlier this month Russia's deputy finance minister, Sergei Storchak - another "liberal" - was also arrested and charged with embezzling $43.4m. He is currently in prison. His boss, Russia's finance minister, Alexei Kudrin, part of the liberal clan, says he is innocent.

    But the liberal group - one of several competing factions inside the Kremlin - has struck back. Earlier this month Oleg Shvartsman, a previously obscure businessman, gave an interview to Kommersant newspaper claiming he secretly managed the finances of a group of FSB officers. Their assets were worth £1.6bn, he revealed.

    The officers were involved in "velvet reprivatisations", Shvartsman, a fund manager, said - in effect forcibly acquiring private companies at below-market value and transforming them into state-owned firms. These assets were redistributed via offshore companies, he said.

    According to Panfilova, the "randomised" corruption of the 1990s has given way to the "systemic and institutionalised corruption" of the Putin era. Members of Putin's cabinet personally control the most important sectors of the economy - oil, gas and defence. Medvedev is chairman of Gazprom; Sechin runs Rosneft; other ministers are chairmen of Russian railways, Aeroflot, a nuclear fuel giant and an energy transport enterprise.

    Putin has created a new, more streamlined oligarchy, his critics say. "The crown jewels of the country's wealth have ended up in the hands of Putin's inner circle," Vladimir Rzyhkov - a former independent MP - wrote in Monday's Moscow Times.

    Belkovsky - who published a book about Putin's finances last year, and who is the director of the National Strategic Institute, a Moscow thinktank - claims he is confident of his assessment of Putin's hidden wealth. "It's not a secret among the elites,' he said. "But please pay attention that Vladimir Vladimirovich [Putin] has never sued me."

    Belkovsky adds that the west has misunderstood Putin and has been distracted by his "neo-Soviet" image. Putin, Belkovsky claims, is ultimately a "classic" businessman who believes money can solve any problem, and whose psychology was shaped by his experiences working in the St Petersburg mayor's office in Russia's crime-ridden early 1990s.

    "He is quite sure of this. A problem that can't be resolved with $1bn can be resolved with $10bn, and if not with $10bn then $20bn, and so on," Belkovsky said.

    In an interview on Wednesday with Time magazine, which named Putin its person of the year, the president vehemently denied that those inside the Kremlin were corrupt.

    Asked whether "some of the people closest to you are getting rich", Putin said: "Then you know who and how. Write to us, to the foreign ministry, if you are so confident. I presume you know the names, you know the systems and the tools.

    "I can assure you and everyone who would listen to us, watch us and read us, that the reaction would be swift, immediate, [and] within the prevailing law."

    Putin, the Kremlin power struggle and the $40bn fortune | Russia | Guardian Unlimited
    And to believe that poor African despots and dictators are accused alone of stashing away fortunes in Swiss banks!! )

    Or is Belkovsky as capitalist media roader and a running dog of the imperialists, bent on sullying the fair name of the glorious leader of the workers, peasants and the toiling proletariat?

    Jokes apart, this is an interesting revelation, and indeed if true, is very alarming. It appears that Russia has been bitten by the bug of making personal fortunes at the expense of the national exchequer. Of course, it is also a truism that no country is free from this affliction.

    Putin will continue to be in power as the PM and so nothing much can come out of it, except that this speculation will surely tarnish his image!


    "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

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    Blasphemy. Our national leader is beyond such things. Don't you know the other National Leader, Mighty U.S. Warlord Premier Bush looked into Mr. National Leaders eyes and saw his soul?

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    The difference of course is that Putin got rich off the enrichment of his nation not at his nations expense. Putin will go down in history as Russia's Ronald Reagen and I think a little personal profit or even a lot of personal profit will be forgiven by Russians as a fair price for what they got out of the deal.

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    BFG
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    Quote Originally Posted by zraver View Post
    The difference of course is that Putin got rich off the enrichment of his nation not at his nations expense. Putin will go down in history as Russia's Ronald Reagen and I think a little personal profit or even a lot of personal profit will be forgiven by Russians as a fair price for what they got out of the deal.
    A good flat in Moscow worth 1.4 m USD. A very good - 3-10 millions. Average 300k-600k. Poor 150k-300k. Any questions left?!

    I doubt this fortune harmed smbd. Everyone understands and no one will blame him. He work for us and we pay good for this. Russian Lujkov is another "barely legal multimillionair". But he made much for the city, no one will blame him too.

    PS
    Just realized: I am multimillionair too!!! Yes!!!

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    Quote Originally Posted by Feanor View Post
    Blasphemy. Our national leader is beyond such things. Don't you know the other National Leader, Mighty U.S. Warlord Premier Bush looked into Mr. National Leaders eyes and saw his soul?
    Yep and McCain looked into his eyes and saw different he saw KGB.

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    I'm rather skeptical. From the accounts I've read of Putin, he doesn't really seem to care about money one way or the other, he's more interested in power.

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    check out these pics of the home of the former health minister of azerbaijan

    English Russia » The Palace in Azerbaijan

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    Quote Originally Posted by bengalraider View Post
    ...health minister of azerbaijan
    Nice work if you can get it... :P
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    The same set of photos have been circulating purporting (falsely) to be the residence of His Excellency Comrade Robert Mugabe!
    Semper in excretum. Solum profunda variat.

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    Corruption everywhere! Urghhh :(

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by Skywatcher View Post
    I'm rather skeptical. From the accounts I've read of Putin, he doesn't really seem to care about money one way or the other, he's more interested in power.
    Men's desires can largely be divided into 3 categories:

    1. power
    2. money
    3. women
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by bengalraider View Post
    check out these pics of the home of the former health minister of azerbaijan

    English Russia » The Palace in Azerbaijan
    Whoever owns this place needs a better TV.
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Padishah Shahanshah Senior Contributor xerxes's Avatar
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    What a house!!!

    It beats Caceascu's palace in Romania - Europe largest palace by the way
    If we contrast the rapid progress of this mischievous discovery of gunpowder with the slow and laborious advances of reason, science, and the arts of peace, a philosopher, according to his temper, will laugh or weep at the folly of mankind. - Edward Gibbon

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    Quote Originally Posted by gunnut View Post
    Whoever owns this place needs a better TV.
    yeah ... I too have noticed it. TV alone stands out as a Sore thumb. I can suggest that guy better one's )

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    I think my house would fit squarelly into his bathroom and they say crime doesnt pay... the dude gets 5 years in jail and has to pay a pittance of his personal wealth as a fine. Hell be back in 3 years living in that monster while most peasants in that country still wouldnt be able to see a doctor or get to a hospital as often as needed. Good work health minister...

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