Putin's Personal Piggy Banks - The American Spectator | USA News and Politics
Putin’s Personal Piggy Banks
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The rumors of Vladimir Putin’s vast fortune held in secret bank accounts in Western banks have been around for years. Such stories titillated the foreign press and the denizens of cocktail parties of Moscow, but nothing solid was uncovered. Even the expatriate oligarchs now living in the West with their billions had remained carefully silent in spite of — or because of — their animosity toward Putin. This has all changed.

The Russian public recently began to sense there was greater weight to these rumors of their muscular leader’s business interests, and they were right. The first detailed account of private financial connections with ties to Putin was made public by a former St. Petersburg banker, Sergei Kolesnikov, who fled to Turkey and eventually to the United States. Britain’s Financial Times joined with Kolesnikov to put together an analysis of his information after he shared his briefcase of documents with Turkish, British and American security officials — and the obligatory brief interview with the Washington Post. The business and intelligence world in and outside Russia has been buzzing with the intricacies of the “wheeling and dealing” of Vlad, his family and friends ever since.

The bottom line — and that’s a particularly appropriate term to use — is that two men with insider relationships with Bank Rossiya in St. Petersburg bought shares in this bank with money funneled to them from offshore companies through a phony order to buy equipment for that city’s hospitals. One of these men, Dmitry Gorelov, was a former KGB colonel, reportedly a trusted acquaintance of Putin .

From this point further investments from similar offshore companies were transferred under cover of Bank Rossiya to purchase assets from the gas giant, Gazprom, of which Dmitry Medvedev, a corporate lawyer, was chairman before he became Putin’s chief of staff. Added to this mix at a later date was Mikhail Shelomov, a grandson of Putin’s uncle, who owned Aktsept, a firm that already had a 4.5% stake in Bank Rossiya. Shares were bought by Aktsept with money borrowed from a convenient Panamanian trading company to obtain a 13.5% ownership of Sogaz, Gazprom’s insurance subsidiary. And just to make things even more intriguing, another of Putin’s cousins is also a Bank Rossiya shareholder.

Medvedev and Shelomov appear to be the key cutouts in Vladimir Putin’s financial involvement in the growth of Bank Rossiya and the subsequent linking of Gazprom, Gazprom Bank, Sogaz and eventually a major Black Sea resort complex and a “palace” of 4,000 square meters for Putin. This massive mansion was built by construction teams of the presidential guard service. The word of the new facility for Putin could not be hidden and one Nikolai Shamalov had his name placed on the title when it was sold to another businessman. Shamalov was the original partner with ex-KGB Colonel Gorelov in the hospital equipment funds scam and co-founder with one Yury Kovalchuk and Vladimir Putin in a lakeside dacha enclave outside St. Petersburg in the 1990s. Kovalchuk and Shamalov are now two of the largest shareholders in Bank Rossiya.

This complicated financial networking is indicative of the type of activity now seeing the light of day as the expected easy transition of Putin back into the presidency in March has stumbled. The recent parliamentary polls show Putin’s party, United Russia, with a slim majority of 238 seats won out of a total of 450 seats in the Duma. The vaunted dominance of Putin’s party has been severely eroded. And the increased public recognition of the reincarnation of a new financial oligarchy under Putin has been a strong factor.

When Mayor Yuri Luzhkov was dismissed from office by President Dmitry Medvedev last year, Luzhkov and his billionaire wife, Yelena Baturina, vowed to get even. Medvedev had made an issue of the history of graft and corruption of Moscow’s city government under Luzhkov. The back-story here is that the Bank of Moscow head, Andrei Borodin, now living outside Russia, was charged with providing a 13 billion ruble (approx. $450 million US) unsecured loan to Luzhkov’s wife’s construction company. The Moscow bank was then bought out by the majority state-owned bank, VTB. For the former mayor this was another Putin & Company slick takeover maneuver and a personal attack on him and his wife.

Medvedev was right, of course, but he underestimated the ability of Moscow’s former leadership to practice the Russian version of “payback.” The police in Moscow played right into the hands of an opposition that had coalesced from disparate groups in the past few weeks around the anti-Putin national opposition party, “A Just Russia.” Luzhkov still has some assets left, according to Moscow news sources, and he arranged to have his former “neighborhood youth” street enforcers of his earlier days join with the growing crowd of protesters against the “illegal” parliamentary voting process. Effectively Luzhkov gained respectability by aiding those demonstrating against the Putin plan for continued political dominance. Luzhkov of course knew all about the connections of Putin with Bank Rossiya and the other deals and remains livid over the hypocrisy of Medvedev/Putin in kicking him out.

The publicizing of the Putin financial network has brought into the open what many Russians had already suspected: That the pattern of Putin behind-the-scenes financial deal making is no longer speculation. Putin’s personal wealth development is marked by a return of the Yeltsin-era commercial oligarch system under new approved tycoons. It seems that the Putin-Medvedev business conglomerate thrives even as their political magic wanes. 

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