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Putin’s secret bankrollers How the president’s re-election campaign relies on contributions from sponsors tied to Gennady Timchenko and Moscow’s governor

Source: Meduza

Russia’s next presidential election will take place on Sunday, March 18, and Vladimir Putin will win. As always, the incumbent president has refused to participate in any debates, but his campaign has been busy blanketing the country in billboards and other outdoor advertisements. This year, Putin’s sponsors aren’t individual people or companies, but the political party “United Russia” and a group of 22 affiliated nonprofits. Meduza presents an investigation by Roman Shleynov, a regional editor at the Organized Crime and Corruption Reporting Project (OCCRP), about the organizations sponsoring Putin’s re-election campaign and what they have in common with Moscow Governor Andrey Vorobyev, entrepreneur Gennady Timchenko, and the relatives of several high-ranking state officials and politicians.

On December 14, 2017, during his annual press conference, Vladimir Putin announced that he would seek his fourth presidential term as an independent, running without party affiliation. “Of course, I’m counting very much on the support of those political forces that trust me and share my vision for the development of the country, and I’m generally counting on the broad support of citizens,” the president said.

In practice, the broad support Putin’s re-election campaign has received (at least financially) has come from organizations tied to a single “political force”: the country’s ruling political party, United Russia. In 2012, various commercial organizations and individuals sponsored Putin’s campaign, but the president’s entire 400-million-ruble ($7-million) warchest in 2018 (the maximum allowed by law) has come from United Russia and 22 nonprofit groups affiliated with the party. Many of these organizations are registered at different United Russia party offices, and all of them were known as “United Russia support foundations” until 2015, when they rebranded themselves as “regional cooperation and national development foundations.”

Russian law defines a foundation as a nonprofit organization created for social, charitable, cultural, educational, or other publicly useful purposes. Any foundation is required to publish financial disclosures, but the groups sponsoring Putin’s re-election bid have taken careful steps to hide their funding sources. Meduza was unable to find any websites containing a transparency report for a single foundation that’s funding the president’s campaign.

Future generations’ secret

The information Meduza was able to find suggests that at least some of the money and resources raised by these “regional cooperation and national development foundations” came from the state and different state companies. The Khanty-Maniisky Support Foundation, which gave Putin’s re-election campaign 12 million rubles ($210,900), received a grant from the Yugorsk Territorial Energy Company in 2015 to assist local children. The Samara Foundation, which donated 15 million rubles ($263,550) to Putin’s campaign, is registered at the same address as the city’s public utilities workers’ training office and the local United Russia headquarters. Similar regional foundations (including groups that didn’t contribute to Putin’s campaign) also received state support. For example, the state company Omskenergo donated to the Omsk Foundation in 2015, and in 2016 local officials in Voronezh granted the Voronezh Foundation a free five-year lease on 121 square meters (1,300 square feet) of municipal premises.

Financial statements filed by foundations in Russia that donate to presidential campaigns are available in the “SPARK database.” According to this resource, some of the regional groups that contributed to Vladimir Putin’s re-election campaign apparently came into serious money over the past two years. For example, the Kaluga Foundation to Support Regional Cooperation collected a little more than 500,000 rubles ($8,785) in 2016, and this year the group gave Putin’s campaign 15 million rubles ($263,550). A similar foundation in Volgograd collected 5 million rubles ($87,850) in 2016, and donated twice as much money to the president’s re-election campaign in 2018. A foundation in Pskov raised less than 1 million rubles ($17,570) in 2016, and this year it cut the Putin campaign a check for 3 million rubles ($52,710).

The Putin campaign’s most secretive sponsors, incidentally, are some of its stingiest supporters. The Popular Projects Foundation and the Future Generations Support Fund are both registered at 3 Bannyi Pereulok in Moscow, at the same address as United Russia’s Central Executive Committee. In 2016, these two groups raised more than a billion rubles ($17.6 million), but they only donated 2 million rubles ($35,120).

It’s unclear how either of these organizations supports future generations or popular projects. All that’s known about either group’s activities is that they’ve sponsored political campaigns by candidates from United Russia seeking office as deputies and governors in places like Chelyabinsk and Ryazan. Neither foundation has a website, and their founders — Olga Shabalina and Yuri Puzynya — told Meduza that they left the organizations more than two years ago, and refused to answer any further questions. Before hanging up, Shabalina said she hasn’t worked for United Russia since 2015, explaining that “all cases were transferred.” Olga Tomenko, the president of the Popular Projects Foundation, asked Meduza to call back, and then stopped answering her phone. A representative for United Russia told Meduza that the party knows nothing about either organization.

The National Foundation for Supporting Regional Cooperation and Development (previously known as the United Russia Support Foundation) is also registered at 3 Bannyi Pereulok, where they don’t take kindly to journalists.

“There’s no website and all disclosures are with the Justice Ministry and tax services,” a secretary told Meduza coldly over the phone. “We’re not a public company, so let’s wrap up this little chat. Your calls are getting old fast.”

United Russia’s sympathizers

“You snooze, you lose. There were no instructions here. The initiative [to donate money to Putin’s re-election campaign] came from the foundations themselves,” insists Oleg Polozov, the president of NFPR, the National Foundation for Supporting Regional Cooperation and Development. Polozov eventually agreed to meet with Meduza, explaining that the campaign’s sponsors “got together, discussed everything, and within a few days made contributions to [Putin’s] special campaign account at Sberbank.”

A source who worked for United Russia told Meduza that the idea for financing Putin’s re-election campaign through the NFPR was first discussed informally “at the top,” and there were no objections. A source close to the Kremlin told the magazine RBC that this funding scheme “allows [the Putin campaign] to minimize its legal and political risks.”

Oleg Polozov’s Moscow office is located in the same building as United Russia’s Central Executive Committee. In the waiting room, the walls are decorated with portraits of Vladimir Putin and Dmitry Medvedev. Until 2015, NFPR was known as The United Russia Support Foundation, which was created in the early 2000s to finance the formation of the party that would come to dominate Russian politics. A kind of “head organization” for the groups donating money to Putin’s re-election bid this year, NFPR is also the founder of all the similarly named regional foundations participating in the campaign.

Polozov isn’t a member of United Russia. He says he “sympathizes with its projects,” but insists that “the party doesn’t influence the foundations.” “It’s never even helped found one of them,” Polozov points out. “And since 2014 it’s been illegal for foundations to raise money for projects by political parties, though they can support parties’ social projects — gardens, sporting events, and so on.”

While NFPR and its regional affiliates share a common past and often the same addresses with United Russia offices, its registered telephone number links it to several curious companies and individuals. The phone number is still active today, and in January 2018 it resurfaced in the contact information listed by the Future Generations Support Fund, which together with the Popular Projects Foundation donated 2 million rubles to Putin’s campaign.

The governor’s brother and his fish

In the early 2000s, the Russian Fish Company’s registered phone number was the same one now used by NFPR. The company was created by Andrey Vorobyev, the current governor of the Moscow region and an old friend of Defense Minister Sergey Shoigu. (Vorobyev’s father, Senator Yuri Vorobyev, worked for many years as Shoigu’s first deputy when he still headed Russia’s Federal Emergency Management Agency.)

In 2000, Andrey Vorobyev left business and entered politics. First, he served as an assistant to Shoigu after he became a deputy prime minister, and then he took over the United Russia Support Foundation (now known as NFPR). A source who used to work at United Russia told Meduza that Vorobyev’s role at this time is precisely why the organization shares a phone number with the Russian Fish Company. (Incidentally, the same contact information appears in registration paperwork for a fish association created by the company in 2006.)

“If it’s not a mass registration number that dozens of firms use, the number of an office center housing multiple companies, or the number of a legal, accounting, or management office, then a shared phone number can mean that the same person is in charge of these organizations’ management, finances, or legal matters,” a lawyer with experience in nonprofit and commercial matters told Meduza, asking that we not reveal his name. “This can be one of the signs that organizations are linked,” says Alexander Zakharov, a partner at Paragon Advice Group and a former advisor to the legal department of Russia’s Tax Ministry.

Representatives for the Russian Fish Company told Meduza that they don’t know anything about sharing a phone number with NFPR, insisting that the company “has not and does not provide any financial, legal, or technical support to any foundations or social organizations tied to political activities.”

When Andrey Vorobyev left for the civil service, he transferred the business to his brother, Maxim. The Russian Fish Company enjoyed the same growth as Andrey Vorobyev’s political career, soon being acquired by the “Russian Aquaculture” holding company, which became one of the Russian market’s biggest fish suppliers. In 2011, Maxim Vorobyev’s company got a new investor: billionaire and old Putin friend Gennady Timchenko. Three years later, Timchenko sold his share to his son-in-law, who in turn cashed out in 2016, when Russian Aquaculture sold the Russian Fish Company to new owners.

Governor Vorobyev’s office and representatives for Russian Aquaculture did not respond to Meduza’s questions about the Russian Fish Company’s links to foundations affiliated with United Russia.

The minister’s wife and her laboratory

NFPR’s phone number does more than tie it to the Russian Fish Company. The same number appears in reference paperwork for the company “Arleia Palatium,” 60 percent of which NFPR owned until 2005. This firm also has links to businesses owned by Gennady Timchenko and the Vorobyev brothers, and not only them.

Arleia Palatium was initially registered at the same address as United Russia’s building on Bannyi Pereulok in Moscow, but in 2005 it was transferred to the same companies in Cyprus that owned the Vorobyev brothers’ fish business.

Arleia Palatium has extensive operations. According to official documents, the company works with health and fitness initiatives, and with renting and managing real estate. The firm has repeatedly benefited from deals with the government — particularly thanks to support from Sergey Shoigu. In 2004, when Shoigu was still the agency’s head, Russia’s FEMA advised the city of Moscow to involve Arleia Palatium as an investor in the construction of a multi-use complex not far from Stalin’s old retreat in Matveyevskiy Les. The facility was intended for the rehabilitation of firefighters and paramedics. As a result, the city exempted Arleia Palatium three years later from payments needed to develop Moscow’s urban engineering systems (like the heating and water supplies).

Once the complex was finished, Arleia Palatium moved in, relocating itself to Davydkovskaya Street. At the same address (actually in the same room, according to documents), there was a diagnostic laboratory registered under the name “Dr. Wang.” This firm’s co-owners are listed as Irina Shoigu (the defense minister’s wife) and Ekaterina Zhukova (the wife of State Duma Deputy Speaker Alexander Zhukov).

The administrators of “Rekapmed,” which owns Dr. Wang, told Meduza that the company was created to study Oriental medicine and doesn’t interact with the other businesses registered in the same complex. According to Rekapmed’s spokespeople, Shoigu and Zhukova served “temporarily” as the laboratory’s founding members until 2015. As recently as February 2018, however, both women were still listed as Dr. Wang’s founders in Russia’s Uniform State Register. A representative for Alexander Zhukov told Meduza that his wife has nothing to do with the business. Defense Minister Sergey Shoigu refused to comment.

In addition to NFPR’s office number, Arleia Palatium’s contact information lists a mobile phone number that appears in the registration paperwork for one other company: Gennady Timchenko’s “Kordex.” Before Timchenko acquired Kordex, it was owned by the companies “Rosinvest” and “Elbrus,” which reportedly helped finance the construction of Vladimir Putin’s so-called “Black Sea palace.” After the West added Timchenko’s name to its sanctions list, he transferred Kordex to his daughter.

Twelve and a half percent of Kordex is owned by “SOGaz,” Gazprom’s primary insurer. In 2013, these shares were valued at 6 billion rubles ($105.5 million). Arleia Palatium has another connection to Russia’s natural gas monopoly: in 2016, Gazprombank verified the company’s annual financial disclosure. Gazprombank refused to speak to Meduza about its ties to Arleia Palatium.

The governor’s mother and the Night Hockey League

When it was still known as the United Russia Support Foundation, the group regularly created organizations with unusual ties to the relatives and partners of high-ranking state officials. For example, the foundation created the social group “Culture and Law” (with which it later co-founded Arleia Palatium). The registration paperwork for Culture and Law lists the same telephone number as NFPR, and the address matches the contact information for a real estate development company called “Grand Land” operating outside Moscow.

Grand Land belongs to Lyudmila and Maxim Vorobyev, the Moscow governor’s mother and brother. The company’s business partners include Sergey Shoigu’s wife and daughter, as well as the son of Federation Council Speaker Valentina Matvienko. An assistant to Grand Land’s director told Meduza that neither the company, nor Maxim or Lyudmila Vorobyev have any connection to foundations sponsoring Vladimir Putin’s re-election campaign.

The United Russia Support Foundation also created a firm called “Arleia” (not to be confused with Arleia Palatium), registering the organization once again with its own phone number. According to Arleia’s financial disclosures, its general director is Guram Adzhoyev, one of the founders of the “Night Hockey League,” an amatuer ice hockey group that’s staged friendly games involving Maxim Vorobyev and Gennady Timchenko playing with Vladimir Putin and people from his entourage. In a past interview, Adzhoyev (a retired professional soccer player and the former sports director of Dynamo Moscow) recalled that he knows Sergey Shoigu and the Rotenberg brothers, Arkady and Boris, who sponsored Dynamo Moscow. In a telephone call with Meduza, Adzhoyev refused to discuss Arleia’s activities or whether it donated to the United Russia Support Foundation.

In 2004, the foundation used its phone number again to create the “National Innovation Company” (NIK) to start investing in a variety of businesses. The co-founder of the company’s management company, “NIK Razvitie,” was a man named Igor Vasiliev, who headed the investment commission of United Russia’s Central Committee in the early 2000s. In the 1980s, he served in the KGB, working alongside future President Vladimir Putin. In an interview in 2004, Vasiliev said his acquaintance with Putin “wasn’t one-sided.”

Igor Vasiliev has served as Kirov governor since September 2017, replacing Nikita Belykh, who was recently sentenced to eight years in prison for accepting large bribes. NIK Razvitie currently owns “Troika-D Bank” almost completely, and that bank is merging with “Alma Bank.” The chairman of Troika-D Bank’s board of directors and the honorary president of Alma Bank is a Kazakh businessman named Zhomart Yertayev. Until 2016, he managed the assets of Nursultana Nazarbayeva (the eldest daughter of Kazakhstan’s president), including the country’s biggest cable television operator. Vasiliev and Yertayev refused to answer Meduza’s questions. NIK Razvitie also ignored all inquiries.

NFPR President Oleg Polozov denies that his organization is connected in any way to businesses owned or operated by state officials or their relatives. “The foundation hasn’t owned any commercial enterprises for a long time,” he told Meduza.

Those wishing to contribute

Polozov says it’s perfectly normal that the foundations bankrolling Vladimir Putin’s re-election campaign are so categorically secretive. “In many traditions, it’s not customary to shout from every street corner that you’re doing a good deed,” he explains. “Also, there are different organizational cultures. In some, you need PR and publicity to attract sponsors. In others, a group of sponsors materializes and you no longer need to advertise yourself. If the foundation’s goals and objectives have already been met, what use is a website?”

Asked how certain foundations have managed to contribute more money to Putin’s campaign than they raised in all of 2016, NFPR’s president says these organizations’ permanent financial backers likely made “targeted donations,” specifying that the funds were needed for the presidential race. Polozov also says NFPR hasn’t had any contact with businesses owned by Timchenko or the Vorobyevs since 2013, and he says the foundation hasn’t received and doesn’t receive any support from them. He ridicules the idea that nonprofit foundations were made into the Putin campaign’s sponsors in order to hide the president’s real donors.

Other sources told Meduza a different story. A former Kremlin official says Sergey Shoigu, Gennady Timchenko, and the Vorobyev brothers are a tight-knit group that enjoys Putin’s confidence, and the president may have entrusted them with assembling the infrastructure to build his campaign warchest, if not with funding the campaign themselves.

Meduza’s sources name several reasons the Kremlin may have decided to bankroll Putin’s campaign through nonprofit foundations. On the one hand, this approach manages “not to spoil the overall picture with specific firms and individuals,” which could reveal connections to foreign capital or other factors that would require the campaign to return some contributions. On the other hand, the turn to NFPR could be the result of international circumstances. “Some people might be worried about the risk of showing up suddenly on a [Western] sanctions list for supporting Putin,” speculates Stanislav Andreichuk, the coordinator of the voters’ rights group “Golos.” “Others might already be on sanctions lists, and they don’t want themselves or their companies named publicly as donors to the president’s campaign.”

Either way, Andreichuk admits that the Putin campaign’s new opaque fundraising system causes a “headache.” “Before, we could at least see the legal entities and individuals who formally and directly gave money,” he explains. “Now we don’t know who’s even behind these contributions.”

Oleg Polozov argues, however, that NFPR carefully monitors all campaign contributions, all of which are also known to and verified by Russia’s Justice Ministry. He says any suspicions about the foundation’s support for President Putin’s re-election are groundless. “If someone wanted to hide, then he would hide,” Polozov explains. “Thanks to the foundations, we’ve managed to eliminate unacceptable situations where people started to wonder why one donation was accepted but another was rejected. There are a lot of people who wish to contribute to the presidential campaign, who don’t want to be singled out. The foundations solved this problem.”

Polozov refused to name any of these numerous people.