At the local court in Yegorevsk, a town outside Moscow, the case of local farmer Mikhail Shlyapnikov is being heard. Shlyapnikov is accused of creating his own alternative currency, which he calls “kolions,” in honor of the village of Kolionovo, where his farm is located. Shlyapnikov maintains that kolions are simply a game played by him and his friends. He doesn’t pay his workers in them, use them in stores, or force anyone to use them. The prosecutor has nevertheless begun proceedings against him, and the Central Bank and tax inspectorate both claim that Shlyapnikov has violated the constitution, several tax and civic legal codes, and a host of federal laws. Meduza’s special correspondent, Andrei Kozenko, was present at a rather unusual court hearing.
“I don’t understand what’s going on here,” Shlyapnikov complains to the circle of TV journalists assembled, “Where is this all heading? This is my first time in court in my whole life. Clearly something’s gotten the prosecutor worked up and he’s brought this case.”
“Misha, you’re a thorn in their sides. You’re a bunion for the local authorities,” his friend Yury Bozhenov answers. “I think they ordered this case brought against you.”
“Then they would have more likely planted drugs,” Shlyapnikov answers nervously, “I can’t even imagine what the judge is going to say now. ”
“You’ll see, they’re going to send you down under the old Soviet Article 58 [counterrevolutionary activity],” the farmer’s friend jokes. The spellbound journalists keep moving their microphones from one speaker to another.
The case against Shlyapnikov is not so much political as economic. He’s put an alternative currency into circulation which he calls kolions, after the village of Kolionovo, where he runs his farm, east of the Moscow Region town of Yegorevsk. Kolions are printed on photographic paper. They’re one-sided. They come in 1, 3, 5, 10, 25, and 50 kolion notes. The money is multicolored, with some sort of tree printed on them, next to which is written, “This note is the property of the Kolionovo exchequer. It does not undergo inflation, deflation, stagnation or other falsifications. It is not a means of enrichment or speculation. It is supported by the resources of Kolionovo. Or maybe it’s a fake…”
This is not Shlyapnikov’s first extravagant gesture. Back in 2010, he became famous for fighting turf fires without government assistance. Then Shlyapnikov boasted in an interview with Esquire that the authorities had wanted to press charges against him for going against the local town council in his village, accusing him practically of subverting the constitutional order. But then everything quieted down. Shlyapnikov also introduced what were essentially entrance visas for officials who wanted to visit his farm. Among the documents needed for a “visa” was a note from a psychiatrist. Now the farmer was printing his own currency. The local authorities hate Shlyapnikov.
“How many of these things have you made?” I ask the farmer.
“Seven or eight thousand,” Shlyapnikov answers uncertainly. In some media reports, the figure given is 20,000 kolions. “And how much is that in rubles?” I ask. “In rubles, I don’t know,” says the farmer. “I can tell you in potatoes exactly though. One-and-a-half tonnes.” “50 kolions is a goose!” the farmer’s friend Bozhenov unexpectedly pipes up. Shlyapnikov begins to explain that he thought up kolions not as an additional form of money, but as an aide to bartering, which he’s always doing with his neighbors (a group of about a hundred people). Some of these people are fellow farmers, but others are Muscovites who have houses in the countryside. For example, someone lends someone a tank of fuel and in return receives not rubles but 20 kolions. They then take this surrogate currency back to the debtor and get, for example, a chicken or something similar. Shlyapnikov pays his own workers in rubles.
Shlyapnikov doesn’t hide the fact that he wanted to spread kolions wider but he’s afraid. “The state doesn’t give money, just frenzied credit,” he laments. “And so I decided to become my own creditor. I don’t understand what I’m being accused of.”
Deputy District Attorney Nikolai Khrebet, who is prosecuting the case, explains to the farmer what he’s being accused of. In his words, according to the constitution, the ruble is the only legal currency in Russia. Financial policy in the country is set by the Central Bank. Kolions do not operate in accordance with any laws and therefore need to be banned, taken out of circulation, and destroyed. A five-kolion note was visibly paper-clipped to the prosecutor's documents. The Central Bank is testifying as a third party in this case. Nevertheless the DA says a representative of the Central Bank is heading straight to the court and needs to be given the opportunity to testify, not as a third party, as is noted in the court’s documents, but as an independent expert. In any other court, having one person testify in two different capacities would be taken as a gross procedural violation. But not here. The judge allows the DA’s request. Shlyapnikov, who has come to court without a lawyer, is obviously not aware of this issue and doesn’t object.
“There’s only one thing I don’t understand. Whom have my actions harmed?” he says to the DA. “The Central Bank? Russia? A group of citizens? I don’t understand how my personal notes have been turned into a monetary surrogate?” Shlyapnikov claims that he is a simple honest farmer who’s fond of a joke. For him, kolions are just a game. They’re not used as a payment system, they are not liquid and have no security features. “You don’t pay salaries or taxes or bribes in them. You can’t buy a box of matches with them at the local shop or the service station. A peasant can’t break up a banking system!” he maintains. Then the farmer begins to cast blame. He accuses the prosecutor's office of protecting not the interests or Russia, but of commercial banks, which have ignored the countryside and give “suffocating” loans.
The DA is visibly annoyed and asks for the opportunity to respond. From a procedural point of view, this also seems unusual but as the court more and more resembles a circus, Nikolai Khrebet is allowed to speak, all the same. “If someone [using kolions] wants to get back what you owe them and you decide not to give it to them, then legally no one can get anything out of you. It’s all dependent on your reputation and good name. From the point of view of the law this isn’t enough,” he fires back. “Those kolions of yours present a threat to the unity of the payment system and Central Bank policy. And this when we find ourselves in an economic crisis. You’re making things worse!”
The first witness is called to the stand. Yury Titov is a professional mechanic. He lives in Moscow but has a house in Yegorevsk. He says that once he leant Shlyapnikov some diesel and got 50 kolions in return. The witness maintains that this was not an agreement between two businessmen but simply a private exchange between two people and what difference does it make to anyone what they traded. The DA is interested in how much the amount of diesel would cost. The witness says about 2,000 rubles. In this way he explains to the court that a kolion is worth about 40 rubles. The DA asks what the witness would want for his 50 kolions. “A goose,” answers Titov after thinking for a while. “Or a chicken and eggs.” The DA wonders if the witness wouldn’t be overpaying, given the cost of diesel. “A goose is a goose in spring. He’s a goose in autumn. This isn’t the same with your ruble. It’s one thing at the start of the year and another at the end,” coldly replies the witness. The DA is undeterred and asks to compare 50 kolions with the price of a goose in the shop. “Is the quality the same as a country goose? No!” the witness shouts back.
“I like to grow peppers and tomatoes. I make pepperoni, for example. Do you know how much this costs in shops? I have my own. I buy the seeds off eBay from Israel. I plant them in pots,” Bozhenov is now bragging as he gives testimony. The hall, filled primarily with Muscovites is rapt with attention. Bozhenov says that his bartering is his own personal business. He gives his neighbor plants he’s grown, and they give him chicken eggs or a new type of potato to plant. Shlyapnikov has given the witness two 25 kolion notes. Bozhenov, like the mechanic Titov, plans to use them to get a goose in return.
“Why didn’t you just take an ordinary receipt” asks the DA.
“I trust Misha completely.”
“And you never happened to transfer kolions to another person?” the DA asks an unexpected question.
“What? It’s my bloody goose. Who am I going to give it to?” Bozhenov is increasingly enjoying himself.
“Now I have a few questions for the DA,” Bozhenov says without appealing to the judge. “When do we start getting to the point? When do we start answering letters from the village of Larinskoye?”
Unfortunately we never get a chance to learn what happened in the village of Larinskoye, as the judge says that according to procedure, a witness may only answer questions and not ask them.
No one mentions procedure when it emerges that the next witness to be called to the stand has been sitting in the court hall the whole time, listening to the previous testimony. In general, questioning someone after this is not generally accepted, but Tatyana Fomina, a tax specialist from Yegorevsk, takes the stand, anyway. She says the exchange of goods is subject to the tax code, and taxes must be paid in rubles. Kolions prevent the proper payment of taxes.
“How is this a subject of the tax code?” interrupts the creator of kolions. “You don’t collect any taxes from criminal gangs. You don’t take them from the piggy banks of ordinary citizens, either? Am I guilty of these things, as well?”
The witness shoots a sympathetic look but doesn’t give in to the point.
“We consider and tax what you’re doing as farming activities,” she says.
She’s interrupted by two women who’ve burst into the hall. They begin handing out leaflets to everyone present, including the judge and journalists.
“Are you from the Central Bank? We’ve been waiting for you,” asks the judge cautiously. “We represent the Union of Indigenous Peoples of Holy Russia!” answers one of the women. “We wish to bring a case.”
Even the DA bursts out laughing.
“I thought you wanted to enter this trial as a third party,” says the judge, showing herself to be incapable of embarrassment. “So lets see your passports.”
“I’m not a Russian citizen,” says one of the women.
The judge plants her face in her hands.
“Well, let's include them in the trial. They don’t understand what’s happening and neither do I!” Shlyapnikov jokes. However even a cursory examination of their “suit” shows this is unlikely. Fifteen lines of it are concerned with listing various countries of which the women are allegedly either rulers or princesses. And in the document itself they propose clearing Shlyapnikov of his responsibility “on the grounds of his status as a ‘human being.’” For all that, the women are not removed from the courtroom, but simply asked to sit and behave themselves.
The Central Bank’s representative fails to appear in court and is not answering any calls. An affidavit from the Central Bank has to be read aloud in court. All the same points from the DA’s statement are there: kolions violate the constitution and a host of federal laws. The document from the Central Bank’s specialist deems it necessary to focus the court’s attention on the fact that the “monetary unit of Russia is the ruble, composed of 100 kopecks.” The DA doesn’t want to continue without the Central Bank’s specialist and asks for a recess. “I’m fed up with these prosecutors! I have journalists practically living at my house because of all this. Let’s finish this quicker.” Shlyapnikov is literally begging now. Also, he's telling the truth about the journalists. A reporter from Komsomolskaya Pravda covering the case noted in his reportage that Shlyapnikov even taught him how to plant an apple tree.
“Maybe you can admit to the charges? We’ll finish quickly,” the judge says, trying to catch him off guard. Shlyapnikov seems to consider it seriously.
“Hey, hey, what? Why? No!” shout his friends from various sides.
“No, I’ll continue,” he says, recovering.
“I bet you’re regretting your kolions now,” the judge laughs and adjourns the court until June 18.
Shlyapnikov is far from the first person in Russia to launch an alternative currency. In the early 1990s, hundreds of Russian citizens printed their own currency due to inflation and a lack of real money. Vouchers for the infamous MMM pyramid scheme were used as money and Ural francs were in circulation far beyond the borders of the region where they were invented, the still-born Ural Republic. These cases rarely made it to court, but it did happen from time to time.
In 2013, a local court in the region of Bashkortostan banned “Shaimuratovkas,” a currency printed by a local businessman also named after a local village. The defendant appealed his conviction in Bashkortostan’s high court, which ruled in his favor.