The Real Russia. Today. Russia's skyrocketing wealth inequality, a TV czar's secret real estate, and homophobic mobster advice
Wednesday, January 23, 2019
This day in history (73 years ago): On January 23, 1946, future oligarch Boris Berezovsky was born in Moscow. He was found dead in his home at the age of 67 in the U.K. on March 23, 2013. He apparently hanged himself.
- The top 1% controls a third of the wealth, and the poor are getting poorer. How Russia became one of the most unequal places on Earth.
- New report finds the de facto curator of Russian state TV owns major real estate and has ties to oligarchs
- Parents in Russian town say mobsters delivered homophobic lectures at local school. Officials say don't worry, they weren't mobsters.
- Duma deputies want the author of Russia's latest draconian Internet legislation to present it in person. He refuses.
- Diplomat Nigel Gould-Davies defends the sanctions against Russia
- Political scientist Alexander Kynev says the Kremlin's regional mismanagement is radicalizing a new political opposition
- Read it elsewhere: dirty banks, an interview with Bellingcat's founder, Russian mercs in Sudan, Russia's challenge to U.S. aerial dominance, Moscow's beef with Turkey over Idlib, inside Russia's lying TV news
The authors of last year’s World Inequality Report warn that “no single scientific truth exists about the ideal level of inequality, let alone the most socially desirable mix of policies and institutions to achieve this level.” The only indisputable fact is the growing wealth disparity worldwide. Whatever the disagreements about economics and ideal societies, however, there’s little to embrace about inequality in Russia, where most of the wealth produced domestically is hoarded and invested abroad.
Fighting inequality in Russia today is especially difficult. The best way to become richer is to be rich already, and the only means of reigning in these disparities have been special taxes on “crooked privatizations,” high inheritance taxes, different forms of nationalization, and so on.
Combating income inequality, on the other hand, is simpler: the first step would be progressive income taxes. In addition to its existing flat income tax, Russia currently taxes mining and drilling operations, which is how the state seizes some of the super-profits earned by billionaires. But this isn’t enough. Over the next several years, the Russian government plans to spend trillions of rubles on several massive construction projects. The money needed for these colossal undertakings will come from ordinary taxpayers, and the few citizens whose wealth and income have skyrocketed over the past three decades are contributing the same 13 percent as everyone else.
- Read Meduza's special report on Russian wealth disparity.
The online media outlet Proekt (Project) has released a new investigative report about the Russian presidential administration’s first deputy chief of staff, Alexey Gromov—the man responsible for state propaganda on Russian television. Proekt reported that Gromov owns a country home in the wealthy Rublyovka district as well as an apartment in central Moscow whose cost greatly exceeds his income.
In 2002, Alexey Gromov received more than 30,000 square feet of land in Rublyovka that had previously belonged to the Russian government. According to Proekt, his property is located in the elite town of Ilyinskye Dachi and includes a home with over 10,000 square feet of floorspace. A similar property in the same neighborhood costs about 12.6 million dollars.
Gromov also owns three apartments in Moscow that contain almost 5,500 square meters of floorspace. Proekt reported that they are worth approximately 2.2 million dollars. Gromov received two of the three apartments from the government even though Russian law entitles him to only one government-provided home. The third apartment is reportedly owned by Gromov’s son, who is also named Alexey. Proekt noted that Gromov has been a government employee throughout his career and never officially earned more than 10.5 million rubles (almost $160,000) per year.
The report also noted that the junior Alexey Gromov has ties to the businessmen Oleg Deripaska and Roman Abramovich, the first of which has recently made headlines for his alleged ties with the model and sex worker Nastya Rybka. The younger Gromov is a collaborator of Deripaska’s in a project that aims to produce aluminum disks for use in automobile construction. In addition, the junior Gromov became a shareholder in Abramovich’s waste management company MKM-Logistika in 2017 before selling his shares in the corporation several months later to Abramovich’s business partner, Alexander Chigirinsky. Proekt estimated that Gromov’s son made more than 10.5 million dollars in profit in the bargain.
Alexey Gromov has worked in Russia’s presidential administration since 1996, longer than any other bureaucrat in the Kremlin’s leadership. He is responsible for the Kremlin’s political information operations, and Proekt described him as “the real boss of Russian TV in its entirety.” Every week, typically on Thursdays, Gromov holds briefings that include TV station directors as well as representatives of press teams from the president’s administration, the executive branch more broadly, the Duma, the Foreign Affairs Ministry, and other government agencies. During these meetings, Gromov reportedly gives recommendations about what kind of light participants might or might not shed on recent events and reminds them not to air negative stories about regions where important events such as gubernatorial elections are ongoing.
Gromov’s acquaintances say he is personally involved in everything that has to do with Russian television. For example, in 2018, he forbade TV channels from displaying shots of an attack on a polytechnic institute in Kerch after the frames were broadcast on the Rossiya and Rossiya-24 stations. He also controls the Kremlin’s press pool and has the authority to exclude journalists from receiving important information if they publish negative stories about Vladimir Putin.
Mikhail Bryukhanov leads Rossotrudnichestvo, a federal Russian agency responsible for ties with Russian-speaking communities abroad. He has close ties with Mosko, the company that controls the Kremlin press pool’s travel—and he has reportedly been close with Gromov since their college years. Bryukhanov also owns shares in Mosko along with the pro-Kremlin actor Nikita Mikhalkov, the company confirmed. One of Bryukhanov’s acquaintances claimed that he has confidentially yielded control over those shares to his business partners. Members of the Kremlin’s press pool have said Mosko has forced media agencies to pay exaggerated costs for housing during international trips, charging 400 extra euros for a hotel room in Paris or $800 extra for a bus ride in Brazil.
Proekt’s sources told reporters that Alexey Gromov had previously carried the surname Grobov but changed his name before enrolling at Moscow State University. The word “grob” means “coffin” in Russian. It is also widely known that Gromov is a collector of rare coins and enjoys gathering mushrooms. He is not, however, a fan of new technology. The man in charge of the Russian government’s propaganda carries a telephone with physical buttons.
Prosecutors in Russia’s Primorsky Krai, which forms the southeast corner of the country, have begun investigating claims that one of the region’s schools has allowed criminal leaders to give lectures to its students, according to Interfax. The regional branch of Russia’s Investigative Committee has also begun preliminary inquiries into the matter.
A post on the Russian social website Pikabu first brought the lectures to the public eye. It described how one school organized a lecture for its fifth- through seventh-grade boys that was led by four men. The director introduced them as people who “watch over the village” and should be “emulated.” The men used profanity to explain to the boys that they should live “by standards,” a word that sometimes refers to criminal rules, and advised them not to enter into homosexual relationships to avoid being harassed later on “in the zone,” a slang term for prison colonies. “In the end, the kids were told they weren’t allowed to tell [their teachers and parents] where they were and what they were lectured about!” the post exclaimed. It was allegedly written by parents whose children were at the lecture. The post did not name the village or the school.
- Read more about this bizarre story at Meduza here.
The State Duma Council says Senator Andrey Klishas, who heads the Federation Council’s Legislation Committee, should personally present the first readings of legislation he helped draft that would prohibit online insults against state officials and the publication of “fake news.” (Under the former law, offenders would face up to 15 days in jail. Media outlets and individuals who violate the latter law, meanwhile, would be subject to fines.)
The lower house of parliament’s governing body also demands that a representative from Russia’s Communications Ministry attend the initial discussion of these controversial bills. (The government still hasn’t finished reviewing these draft laws, however, and Duma officials say the legislation will be pulled from the plenary session’s agenda on January 24 without feedback from the prime minister’s cabinet.)
One of Klishas’s aides told Dozhd that the senator will be in the Krasnoyarsk region this week and he has no plans to return to Moscow for the plenary session. Sources told the television network that Klishas flatly doesn’t want to participate in the Duma’s discussion of his legislation. Duma First Deputy Speaker Ivan Melnikov later clarified that the senator’s attendance is optional.
Dozhd previously reported that State Duma deputies planned to put Klishas’s bills on hold after the senator told Novaya Gazeta that using the term “Gosdura” (State Idiot) wouldn’t necessarily qualify as illegal under his law.
The peanut gallery
In an op-ed for The Hill, former British diplomat Nigel Gould-Davies offers five “important truths” about Western sanctions against Russia: (1) “the Russian authorities are worried” (figures as different as reform advocate Alexey Kudrin and Security Council Secretary Nikolai Patrushev agree that sanctions are a serious problem), (2) “Russian elites are worried” (oligarchs can no longer use Western systems as easily to protect their assets from the Russian state), (3) “the Russian population is worried” (polls show exhaustion with Moscow’s confrontational foreign policies and Putin’s declining popularity), (4) oligarchs aren’t being “pushed into Putin’s arms” (they’re not repatriating capital and have instead sought relaxations of offshore regulations and sanctions protections), and (5) Russia isn’t being “pushed into China’s arms” (economics remain a weak Sino-Russian link). Gould-Davies claims Western sanctions will be effective in the long run, “helping to shape attitudes, interests, and choices that will one day drive change in Russia.”
In an op-ed for Republic, political scientist Alexander Kynev argues that the Kremlin has radicalized and energized Russia’s political opposition by firing governors across the country in search of short-term “image” gains associated with “cleaning house.” This triggered a domino effect, Kynev says, whereby new governors boot out staff at lower levels, spreading instability, and disrupting the informal connections and mutual obligations that sustained previous administrations, as older regional elites gradually regroup and form alternative centers of power.
Kynev says this “crystallization” effect was already evident in 2018, when ousted politicians and young politicians joined opposition parties or ran as independents in Buryatia, Yakutia, the Trans-Baikal Krai, Ivanovo, Kemerovo, Yaroslavl, and other areas. (Trying to “diversify their political risks,” some regional elite groups even fielded different party lists in the same elections.) In these races, new rhetoric from Kremlin-approved candidates about the need for reforms inadvertently encouraged voters to consider parties other than United Russia, sweeping into office many younger Communist Party members who are relatively more idealistic, driven, and energetic than the older, more pragmatic members of the established political elite.
“The authorities are doing everything possible to radicalize the new generation of systemic oppositionists,” Kynev writes, arguing that the Kremlin has demonstrated its incapacity to cooperate with new regional elites, even when individuals like Andrey Ishchenko in Primorye or Valentin Konovalov in Khakassia signal their willingness to work with Moscow. Meanwhile, Alexey Navalny’s logistical cunning and the socialization effects of police pressure are fueling the mass self-organization of a new non-systemic opposition in regions across the country.
In other words, Kynev says, the renewal of Russia’s regional and local elites is happening parallel to the same process in the systemic and non-systemic opposition. The only question is who will take advantage of the situation.
Read it elsewhere
- 🏦 “One of the biggest money-laundering scandals ever” could be brewing at Deutsche Bank AG, which the U.S. Federal Reserve is now investigating for billions of dollars in transactions from Denmark’s leading lender. Last year, the Danish bank’s Estonian branch was accused of hosting key Russian and Azerbaijani “laundromats” with connections to Vladimir Putin's family and Russia's Federal Security Service. “Fed to Probe Deutsche Bank Over Suspicious Danske Cash” — Bloomberg
- 🧠 In a new interview, Bellingcat founder Eliot Higgins talks about automating open-source intelligence, tracking ISIS social media, sloppy Russian spycraft, and the threat of “deep fakes” (computer-generated false information). “Taking on the Kremlin From His Couch” — Foreign Policy
- 🌍 Moscow has acknowledged that “private Russian companies” (don't call them “mercenaries” are training troops in Sudan, which has been engulfed in protests for the past month against the 30-year rule of its president. The Foreign Ministry's nod confirms what journalists already knew. “Russian Contractors Are Training the Army in Sudan, Says Moscow” — Reuters
- 🎯 “The S-400 antiaircraft system hasn’t been tested in battle, but its growing deployment threatens America’s aerial dominance,” writes Thomas Grove, reporting on how Russia hasn't forgotten about traditional military firepower in an era of election meddling and online disinformation. The S-400 hasn’t been tested in battle, but on paper it outperforms the comparable U.S.-made Patriot system. “The New Iron Curtain” — The Wall Street Journal
- ⌛ “Russia has accused Turkey of failing to live up to a promise to clear Syria’s Idlib of extremist militant groups and admitted that a landmark ceasefire agreement made last September had failed.” (This comes four months after Moscow postponed an assault on the city, following Erdogan's promise to clear out the militants.) “Russia Accuses Turkey of Failing to Live Up to Syria Deal” — The Financial Times
- 📺 Leonid Krivenkov worked for a decade as a camera operator for the Rossiya-24 news channel until his retirement in 2016. Now he's spilling the beans on the network and its parent company,VGTRK, describing the “shocking cynicism” of the reporters and the generally anti-government views that prevail off the air. Management keeps staff in line with a variety of “levels of control,” mainly salaries. The politics that makes it onto Russia's airwaves are staged, Krivenkov says, and even the set design is tailored by psychologists for “subconscious effect.” “Your Turn to Lie” — RFE/RL