The Real Russia. Today. The West's hacker spies in Russia, students threatened in Vologda, and ‘Bloomberg’ on Vekselberg's fall from grace in America

Friday, December 7, 2018

This day in history. On December 7, 2003, Russia held parliamentary elections. Formed only two years earlier, the pro-Putin political party United Russia won 37.6 percent of the vote. United Russia has also won the most votes in every State Duma election since, grabbing 64.3 percent in 2007, 49.3 percent in 2011, and 54.2 percent in 2016.

• Russian cybersecurity company says hackers are stealing financial data for future Western sanctions
• Russia's Constitutional Court overturns a popular ruling by Ingushetia's Constitutional Court, ignoring one of the latter's main arguments
• Students at a grade school in Vologda are reported to the police after posting memes about teachers and Russia's president
• What's the mood at Vedomosti's business breakfast this year? Oof.
• Bloomberg on Viktor Vekselberg's fall
• AP on Russia's rap crackdown
• AFP on Yakutia's environmental struggle

Hacker spies 👾

Multiple hacker groups are currently active in Russia, gathering intelligence about Russian citizens to justify new sanctions by the United States and other countries, Ilya Sachkov, the head of the information security company Group-IB, announced at this year’s “AntiFraud Russia” international forum. “Their assignment is to replenish American sanctions lists, not to steal money from banks. It’s a completely different target of attack,” Sachkov said on December 7, without citing specific examples.

A source in the cybersecurity industry confirmed to the magazine RBC that there have been two or three known incidents in Russia, where hackers penetrated Russian banks’ computer systems, studying customers’ transactions and account balances, seeking candidates for foreign sanctions.

Speaking to RBC, Sachkov said there are several “pro-government hacker groups” operating around the world, collecting information about businesses and individuals that could be used to justify sanctions by multiple states, and not just by the U.S. and European Union. According to Group-IB, these groups exist in Russia, but they’re even more active in China, North Korea, and Iran.

Sachkov says these hackers don’t always target banks. Groups often go after business partners and subcontractors, whose computer systems are usually easier to penetrate. Hackers looking for sanctionable offenses aim to establish “a long-term presence on the networks of critical infrastructure,” Sachkov explains, adding that Group-IB has worked with companies that were under the control of hackers for an entire year without realizing it.

• In August 2016, a hacker group called “the Shadow Brokers” (with suspected ties to Russian intelligence) released a treasure trove of apparent NSA hacking tools, including exploits allegedly used to target the Dubai-based EastNets SWIFT service bureau. Part of the leaked data “appears to confirm that the NSA had successfully set up backdoor monitoring,” Forbes reported in April 2017.

Constitutional supremacy ⚖️

On September 28, Ingush leader Yunus-bek Yevkurov and Chechen leader Ramzan Kadyrov signed an agreement formally establishing the boundaries between their two republics. Technically, the boundary between Ingushetia and Chechnya had been in limbo since 1992, when Chechnya tried to secede from the Russian Federation. On October 4, the parliaments of Ingushetia and Chechnya adopted special laws approving the deal.

In Ingushetia, the decision sparked major protests, sending thousands of people into the streets who oppose the redistribution of land. On October 16, the agreement entered force. Two weeks later, however, on October 30, the Ingush Constitutional Court overturned the Ingush Parliament’s decision, ruling that it violates the republic’s constitution.

The Ingush Constitutional Court’s position

Adopting legislation wasn’t enough to approve the agreement reached by Yevkurov and Kadyrov. According to “interconnected norms” laid out in the Ingush Constitution and local constitutional law, the government also needs to hold a republic-wide referendum to determine the views of the Ingush people.

The Ingush Parliament also violated legal procedures when adopting the legislation that approved the border deal. Deputies voted by secret ballot on all three readings at once, and an act of parliament never verified the tally committee’s minutes, which theoretically could have led to fraudulent results.

The Russian Constitutional Court’s position

The Ingush Constitutional Court violated Ingushetia’s own constitution, which doesn’t empower the local Constitutional Court to challenge agreements that have already entered force. The agreement with Chechnya had already entered force, thanks to the Ingush Parliament’s legislation. Yes, the law was adopted with procedural violations, but this is just a mere technicality — an improper execution of the deputies’ intentions.

A referendum isn’t necessary. The Ingush Constitution is misinterpreting its own Constitution and local laws, which only require a referendum when changing the republic’s boundaries. In this case, the boundaries are being established for the first time, not revised, which is the exclusive competence of state officials in Ingushetia and Chechnya. So there’s no need to ask local citizens for approval.

The Ingush Parliament has the right to vote openly or by secret ballot. All three readings of the law were adopted in one vote, but deputies couldn’t make any amendments, regardless, given the nature of the issue. They could only approve or reject the agreement as it was already signed. Furthermore, only a dozen members of the Ingush Parliament challenged the law in the Ingush Constitutional Court, meaning that “no one else has any doubts” that the final vote reflects the will of the legislature.

Russia’s Constitutional Court effectively overturned the decision by Ingushetia’s Constitutional Court

The Russian Constitutional Court ruled that the border agreement between Ingushetia and Chechnya is absolutely legal, making it impossible to invalidate. Decisions by the federal court are mandatory for all public authorities, organizations, and citizens. The ruling is final and cannot be appealed.

Why only “effectively”? Russia’s Constitutional Court acknowledges that it lacks the explicit right to overturn Ingush Constitutional Court rulings for noncompliance with the Russian Constitution. Judges determined, however, that the Ingush court exceeded its authority by invalidating an agreement that had already entered force.

Representatives of the Ingush Constitutional Court did not attend the Russian Constitutional Court’s hearings and have not yet commented on the ruling.

Russia’s Constitutional Court ignored one of the Ingush Constitutional Court’s main arguments

Russia’s Constitutional Court ignored the fact that an act of parliament never verified the tally committee’s minutes, when the Ingush Parliament adopted its law approving the border deal. Officially, 17 deputies supported the legislation, three voted against, and five abstained. Immediately after the vote, however, 11 deputies signed a declaration stating that they voted against the law, accusing the tally committee of falsification.

Hey! Teacher! Leave them kids alone! 🎒

The “CARtON_83 Studio” Vkontakte community is the creation of sixth graders at the Vologda Multi-Disciplinary Lyceum, a school for gifted children from across Russia, according to the institution’s website. “Carton 83” got its start in March 2018 as a closed group, but the students later opened it up to the public, and membership peaked at about 80 people.

According to one ninth-grade student at the school, who asked Meduza not to reveal his name, people in the group shared jokes about teachers and other students. “The goal wasn’t to offend anyone,” he says. “We had a disclaimer: ‘This group is just for fun and nothing more. We do not encourage insults.’” An eighth grader, who also asked Meduza not to name him, says the group was harmless. “People posted stuff about teachers that definitely wasn’t offensive,” he told Meduza. “For example, about the math teacher who’s always on her phone during class, also looking at memes. Or the PE teacher, who swears. Or there was this meme about the principal: ‘What do vampires fear? Garlic. What do mosquitoes fear? OFF! What do I fear?’ And then there’d be a photo of the principal.”

The school’s administration found out about the group’s existence when a member reposted a meme about a seventh grader who’s known for playing on his phone during class. The school took immediate action.

The principal's office summoned the students’ parents and said “warnings are over,” arguing that mocking President Putin is tantamount to extremism

On December 3, the principal's office summoned the father of one of Carton 83’s creators. At the meeting, he met the mother of the student who’d written more posts than anyone in the group. “When we got there, principal Andrey Platonov, the vice principal, and several teachers were there waiting for us,” says one student, who asked not to be named. “They started shaking sheets of A4 paper at us. They’d printed out the memes. And then they said someone from the district attorney’s office had come to the school last academic year and warned students that extremism is prohibited. And now, as they put it, ‘warnings are over.’” The student says the vice principal also pointed out that the group had posted “something about Putin,” and making fun of the president is tantamount to extremism.

A ninth grader at the school told Meduza that no one in the group posted anything offensive about Vladimir Putin. “We wouldn’t joke about the state,” he says. “We understand what’s allowed and what isn’t.” The student says his teachers probably detected “extremism” in a photograph where classmates were pictured making faces in front of a portrait of Putin in the school’s foyer. The student says Carton 83 members also joked about the deputy principal, and now he’s making this personal. “A lot of kids dislike him,” the student says.

The school’s administration threatened students with “administrative supervision,” and the principal says he filed a police report

An eleventh grader at the school told Meduza that one of the vice principals went around on December 3 to the seventh- and eighth-grade classes (where most of the group’s members were), and said, “Anyone who doesn’t leave the group will be summoned to the principal.” Three days later, Carton 83’s membership had fallen from 80 to 28, and almost all its content was deleted.

An eighth grader told Meduza that another vice principal stopped by before class. “She said the city no longer has schools where teachers will work with students until late at night [on extracurriculars]. But we’re still doing it.” He says the school’s computer science teacher then came to his class and explained how nothing on the Internet ever disappears, saying that you can even find things that were [supposedly] deleted 20 years ago. After this, the homeroom teacher gave a legal science lesson, threatening the students that Roskomnadzor (Russia’s federal censor) would come to the school, and warned that “administrative records are no joke.”

Representatives for Roskomnadzor’s regional office in Vologda told Meduza that they know nothing about Carton 83, but they also suggested a “statement” might be made in the future.

The school’s principal, Andrey Platonov, told Meduza: “The group had offensive memes directed at teachers, using photographs taken in secret during class, in violation of school policy. A police report has been filed. The police are dealing with it. As for the allegations of extremism and anti-state activity — that’s conjecture by the parents.”

The father of one of Carton 83’s creators says the school has scheduled a parent conference on December 7. “The other parents and I figure we’ll hear all about how making memes is prohibited,” he told Meduza.

What's the mood at Vedomosti's business breakfast this year? Oof. 🥞

Read it elsewhere 📰

📉 Bloomberg on Vekselberg's fall

A new report published by Bloomberg looks closely at Russian oligarch Viktor Vekselberg's “fall from grace in the U.S.” The story is based on interviews with “more than a dozen people in the billionaire’s orbit in both countries.” Following American sanctions, Vekselberg has lost about $3 billion of his-now $13.4 billion fortune, “mainly due to declines in the market values of his minority stakes in Swiss industrial companies and [Oleg] Deripaska’s Rusal,” Bloomberg says. (This ignores another $2 billion of frozen stocks and cash.)

“The Treasury’s decision in April to put Vekselberg in the same category as Deripaska stunned corporate Russia,” the article claims, given that “Vekselberg, unlike Deripaska, has never been particularly close to Putin and sold his main Russian asset six years ago.” Nevertheless, by April 2014, inroads into Silicon Valley by Vekselberg and Skolkovo “prompted the FBI to issue a rare public notice to the entire industry. Skolkovo, it warned, was a potential Trojan Horse for electronic espionage.” Read the whole story here.

🎤 AP on Russia's rap crackdown

In a report for The Associated Press, Francesca Ebel writes about the police crackdown on Russian rappers and other controversial artists, including the “dark rave” duo Nastya Kreslina and Nikolay Kostylev, known as IC3PEAK. Ebel argues that the new trend “evokes Soviet-era restrictions on the music scene” and “follows the 2012 jailing of Pussy Riot,” saying the authorities are demonstrating their “uneasiness with the musicians’ broad reach and challenge to official policies.”

The article quotes several prominent performers, pundits, and music critics, who generally espouse one of two different views: either the crackdown reveals how the Kremlin fears influential musicians, or it's the result of “stupidity among officials in the regions.” Trifon Bebutov, the former digital editor of Esquire Russia, tries to split the difference, however, telling Ebel that the Kremlin wants “a dialogue” with popular artists, albeit because of the government's “worries.” Read the article here at The Associated Press.

🏞️ AFP on Yakutia's environmental struggle

In a report for AFP, Maria Antonova writes from Yakutia about the aftermath of broken dams around the Vilyuy River, which deprived local villages of the river as a water source and caused an estimated 22.1 billion rubles (almost $330 million) in damages. The dams were built by Alrosa, which produces a third of the world's diamonds, but Russia's environmental agency says the company won't be held accountable for the destruction, as the accident was the result of “a natural disaster.” “Community leaders in Yakutia, however, are convinced the company provoked the accident when it moved its mining equipment on the river without permission,” Antonova reports. Read the article here, and watch video footage from her trip to Yakuta here on YouTube.