Putin’s ‘palace’ pocket change: How billions in leftover construction funds went to the Russian president’s rumored romantic partner 

The company that financed the construction of Vladimir Putin’s infamous Black Sea mansion ended the project with a 6.5-billion ruble surplus (approximately $84 million today). This “change” was transferred to Putin’s longtime rumored partner, Alina Kabaeva, according to a new investigation by the Anti-Corruption Foundation (FBK).

Rumors of a romance between Putin and Kabaeva, a former Olympic rhythmic gymnast, surfaced back in 2008, several years before the Russian president’s divorce from his wife. Kabaeva is reportedly the mother of Putin’s two alleged sons, born in 2015 and 2019. However, neither Putin nor Kabaeva has ever acknowledged their relationship publicly.

Located near the resort town of Gelendzhik, in Russia’s southern Krasnodar Krai, the luxury estate known as “Putin’s palace” was revealed by opposition leader Alexey Navalny and his team of anti-corruption researchers in 2021. However, Putin and Kremlin spokesman Dmitry Peskov have repeatedly denied that the mansion belongs to the president.

The property is officially owned by the firm Investitsionnye Reshenia (“Investment Solutions”) through a web of shell companies. Its shareholders are three of Putin’s oldest associates: lawyer Nikolai Egorov, businessman Ilham Rahimov, and former classmate Viktor Khmarin. Bank records obtained by the FBK show the firm received loans from offshore entities in the British Virgin Islands, funneling the cash down the chain to fund the construction of the residence. 

When the project wrapped in 2023, Investment Solutions had 6.5 billion rubles left over. It donated almost half of these funds — three billion rubles ($39 million) — to the Alina Kabaeva Charitable Foundation. However, the FBK notes that the foundation’s charitable spending — supporting female athletes, organizing the Alina Rhythmic Gymnastics Festival, and restoring a church in occupied Crimea — totaled only tens of millions of rubles. Meanwhile, the bulk of the money was placed in an interest-earning deposit account. 

The remaining 3.5 billion rubles ($45 million) went to Kabaeva’s rhythmic gymnastics non-profit Nebesnaya Gratsiya (“Heavenly Grace”). Expense reports revealed that the “charity” spent more than 30 million rubles ($389,000) at the Imperial Peterhof Factory, a luxury watch manufacturer favored by Putin, who owns at least two of their models.

The funds also financed gymnastics camps in Valdai, held less than a mile (1.5 kilometers) from Putin’s private residence in Russia’s Novgorod region. The FBK argues that these camps served a hidden purpose: providing a chance for Putin and Kabaeva’s children, who reportedly live in near-total isolation at the Valdai residence, to interact with kids their own age. The investigation even features a video clip of a young boy, identified by the FBK as Putin’s son Ivan, saying he enjoyed the training sessions.

The majority of the funds that went to Heavenly Grace were also placed in an interest-earning deposit account. According to the investigation, the foundation earned 435 million rubles in interest in 2024 alone (about $5.6 million today). The FBK concludes that Kabaeva’s foundations are simply “slush funds” used by Putin’s inner circle to finance his secret family’s lifestyle and hobbies “under the guise of philanthropy.”