Russia’s unofficial ‘tsarina’ Investigative journalists say they’ve discovered Putin’s ‘slush fund’ and how he showers his rumored lover in luxury

In a two-part investigative report released in Russian and English on Tuesday, February 28, 2023, journalists at Proekt revealed new details about an alleged “slush fund” used to finance Vladimir Putin’s lavish private life and the lives of his closest companions, including retired gymnast Alina Kabaeva, the rumored mother of at least three children with Russia’s president. The investigation focuses first on a Cyprus-based company called Ermira Consultants (including how it profits off vodka merchandized with Putin’s name) and then on a palace constructed outside Valdai. Throughout both stories, readers learn about the enormous entourage of relatives, friends, and acquaintances who serve as nominal owners of Putin’s alleged vast wealth. Meduza summarizes Proekt’s main findings.

Arkady Rotenberg and Ermira Consultants, Putin’s slush fund

Previously, Ermira Consultants was thought to belong more to Arkady Rotenberg than Putin himself, but Proekt argues that the Cypriot company’s personnel patterns and seemingly countless investments say otherwise. For example, the owner until March 2015 was an unremarkable attorney named Vladislav Kopylov who apparently owes his candidacy to serve as a front for Putin’s money to the fact that he met St. Petersburg businessmen Andrey Fursenko and Yuri Kovalchuk — close friends of Russia’s future president — back in the 1990s.

After a company connected to Rotenberg acquired Ermira in 2015, the firm received large loans from offshores linked to Gennady Timchenko, Dmitry Medvedev, Ilya Eliseev, and Igor Antoshin, as well as from Rotenberg’s own Olpon Investments Ltd. Company. Many of Ermira’s senior managers and legal advisers, moreover, have also been linked to other projects involving Putin.

The vodka racket

Proekt devotes significant attention to the alcohol distributor Vinexim, which created the popular Putinka vodka brand, reportedly in close collaboration with Rotenberg to get the president’s permission to use his surname. In March 2004, Vinexim sold the trademark rights to an Ermira subsidiary. After several more transfers, the trademark now belongs to a company reportedly co-owned by Rotenberg and former Russian Judo Federation President Vasily Anisimov.

Proekt calculates that Putinka vodka’s profits between 2004 and 2019 from production, sales, and royalties maybe totaled between $400 and $500 million (considering distributors’ margins, manufacturing income, and royalties). Journalists argue that Putin profiteered from the alcoholism of his own constituents and even lowered the minimum retail price of vodka in early 2015 (purportedly to undermine the sale of bootleg liquor).

Putin’s Gelendzhik palace

In 2010, Ermira Consultants loaned roughly $100 million to a company co-owned by Putin’s then future (now former) son-in-law Nikolai Shamalov and Bank Rossiya shareholder Dmitry Gorelov in a scheme to build a massive palace for the president on the Black Sea near the city of Gelendzhik. After whistleblower Sergey Kolesnikov exposed this arrangement in 2010 in an open letter addressed to then President Dmitry Medvedev, Putin’s inner circle revamped its property racket, creating a whole mess of new legal entities and transferring the property itself to the offshore Savoyan Investments, a subsidiary of Ermira Consultants.

Years later, following a bombshell investigation by Alexey Navalny’s research team into the Gelendzhik palace, state television correspondent Alexander Rogatkin visited the property to debunk the allegations against the president. But a new piece of evidence supporting the palace story slipped through Rogatkin’s segment: his camera footage showed a security guard in a uniform from the Horizon Company, which receives monthly payments from an Ermira subsidiary called Platinum. (In 2004, Ermira also loaned almost $90 million to Platinum, which it used to buy lucrative shares in Gazprom, Bank Rossiya, and a villa in Sochi seized from the oil company Yukos.)

Property for Putin’s pals and paramour

Proekt highlights numerous examples where Putin apparently instructed his “vassals” to delegate housing to people important to him. In some instances, the president’s imperial tastes are on display, and elsewhere he demonstrates that his benevolence comes with conditions. For example, from 2010–2013, when Putin was no longer living together with his wife, but before they made their divorce public, Mrs. Putin’s lover (and future husband) Artur Ocheretny owned an apartment in Moscow that was suddenly transferred to one of Ermira’s offshore companies after the president’s bachelor status was revealed.

According to Proekt, Putin nevertheless ensured a comfortable life for his ex-wife, given that businesses connected to Ermira and Arkady Rotenberg later sold two commercial properties in the Moscow area to Ocheretny, who soon sold them back to another Rotenberg-connected company at a markup high enough to generate the money needed to buy luxury homes in France and Switzerland.

Ermira Consultants also smiled on Jorrit Faassen when he was married to Putin’s eldest daughter, Maria Vorontsova, transferring several luxury Moscow properties to Berocci Investments, an offshore company created for the couple. (In late 2010, Russia’s Interior Ministry pounced on a banker in the neighborhood whose security guards beat up Faassen after he clipped the man’s car.) The president’s goodwill ended with the marriage, however, and Ermira eventually reclaimed the properties.

“Tsarina” Alina Kabaeva

The second half of Proekt’s investigative report is devoted almost entirely to Kabaeva. Journalists identified roughly $120 million in property registered to nominal owners on her behalf (this includes almost $15 million in real estate under the name of Kabaeva’s own grandmother, who lived in a remote log cabin in the Vladimir region until last year, very much not in the style of a multimillionaire). Alina Kabaeva also reportedly earns an annual salary of $10.6 million as the board chairperson of National Media Group — an investment firm controlled by Yuri Kovalchuk.

After describing a penthouse purchased for Kabaeva in Sochi (registered to a nominal owner named Sergey Rudnov, whose late father also acted as a front for property in Putin’s real-estate empire), Proekt names multiple women who allegedly belong to Kabaeva’s circle of friends and support staff, including a team of Swiss medical workers who exposed their identities by sharing a selfie from the VIP section of the 2019 Victory Day Parade in Red Square. Speaking to friends, analyzing public documents, and even studying leaked medical and travel records, Proekt found a handful of women (relatives and some friends) who apparently follow Kabaeva nearly everywhere, which entails frequent trips to Valdai.

Putin’s Valdai palace(s)

On assignment in the Novgorod region, Proekt’s correspondent learned that the local spa run by the Presidential Affairs Department was closed as of late 2022 and being used instead to quarantine Putin’s personal guests before they met with him. Proekt also found a construction manager who worked on the president’s Valdai residence until 2005. Building the facility began almost as soon as Putin took office, the source said, explaining that the president came to inspect the property in 2003 when it was nearly finished but hated the mansion’s “high-tech,” modern vibe. When asked what he would prefer, Putin reportedly said, “Something more like in Petersburg,” which designers interpreted to mean “like the Hermitage Museum.” Accordingly, the crew gutted the home’s interior and installed boatloads of gold. (Proekt obtained photos taken inside the Valdai palace in collaboration with Alexey Navalny’s research team.)

For years, Putin visited the Valdai residence with his wife, but he’s since reportedly brought Alina Kabaeva and her children. In 2020, construction started nearby on a residence allegedly meant exclusively for Kabaeva and her kids. (The home itself is on land registered to a company owned by Yuri Kovalchuk, says Proekt.)

Journalists recently reported that Vladimir Putin now travels domestically by armored train as often as possible; Proekt’s report further corroborates this story, finding that secret railway construction on preservation lands near Putin’s residence in Valdai began in 2018. In a nearby town, there’s now a “secret train station” (closed to the public) with its own helipad, built specially for the president. Also nearby, the military recently installed a Pantsir air-defense system.