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The latest case against Mr. Navalny Meduza breaks down the evidence, or lack thereof, presented by federal investigators against Russia’s top oppositionist

Source: Meduza
Oleg Nikishin / Epsilon / Getty Images

In the late evening hours of Tuesday, December 29, Russia’s Federal Investigative Committee announced felony fraud charges against Anti-Corruption Foundation founder Alexey Navalny and “other individuals.” The opposition figure and his colleagues are suspected of embezzling hundreds of millions of rubles in donations to their organizations “to buy property and valuables” for themselves. Pro-Kremlin bloggers have circulated these same allegations for years without ever presenting convincing evidence. Meduza examines the biggest questions about the Russian authorities’ new case against Navalny, which comes just weeks after he accused President Putin of personally ordering his assassination. 

What do they say Navalny actually did?

Officials say that Alexey Navalny, “acting jointly with other individuals” as the de facto director of the Anti-Corruption Foundation and several other organizations, embezzled more than 356 million rubles ($4.8 million) of 588 million rubles ($7.9 million) in donations, spending the money on personal purchases including property, material assets, and expenses like vacations abroad.

“Thus, the funds collected from the public were stolen,” the Federal Investigative Committee declared in its press release. The agency has not specified, however, which property, assets, or expenses Navalny and his allies supposedly financed with this money.

What are the legal grounds for this felony investigation?

Russian law allows the authorities to prosecute Navalny for embezzlement even without a formal complaint. Information filed by any police operations unit that indicates signs of criminal activity is sufficient grounds to open a case, Moscow Bar Association vice president Vadim Klyuvgant told Meduza. “To bring charges, however, the law says investigators have to identify the person(s) or legal entity(ies) that suffered the damage,” he explained.

The “reasons and grounds for initiating a criminal case,” according to Article 140 of Russia’s Criminal Code, include a full confession, “a report from other sources that a crime has been committed or is imminent,” and a state prosecutor’s order to send an inquiry to the Investigative Committee, which then renders a decision. The law says that “the presence of sufficient data indicating signs of a crime” is enough to open a case.

This is precisely the language federal investigators used when announcing the case against Navalny and his colleagues: “The agency’s Central Investigations Directorate has collected sufficient data to serve as the basis for a criminal case against Alexey Navalny and other individuals.” What “sufficient data” means, however, is still anybody’s guess.

What do Navalny and his colleagues say about these “stolen” donations?

The day after the authorities’ announcement, Navalny issued the following response: “The Anti-Corruption Foundation’s accounting records make it perfectly clear how much money came in and where it went. And it’s very clear that I never got a single kopeck from the foundation or any other offices. My personal finances are just as transparent. You can see how much I get, where I earn it, and how much I spend.”

Leonid Volkov, who oversees Navalny’s network of regional offices, says the Investigative Committee’s new fraud case is no less invented than the last one, referring to allegations announced in August 2019 that roughly half a billion rubles in donations to the Anti-Corruption Foundation were illegally laundered. Volkov says the officials working that case have yet to find “a single victim, a single suspicious ruble, or anything at all.” (The investigation is still ongoing.)

Since 2012, Navalny has said consistently that he doesn’t collect a salary from the Anti-Corruption Foundation and doesn’t spend any of the donations it receives on himself. He repeated this in July 2020, when he published his self-employment tax returns, which show an annual income of 5.4 million rubles (nearly $73,000). In October 2020, Navalny told YouTuber Yury Dud that he owes most of his earnings to legal-service fees paid by the philanthropist Boris Zimin. “And the money I earn is perfectly consistent with the lifestyle I lead,” Navalny said.

In 2017, Navalny also published detailed records of his income, going back to 2011, showing annual earnings that ranged between 2 and 9 million rubles, drawing on legal and business activities, dividends, and payments awarded by the European Court of Human Rights. He also disclosed his property holdings and his wife’s income. 

Has Navalny been accused of similar crimes before? What is Ilya Remeslo’s role in all this?

Shortly after federal officials announced their case against Navalny, Russian Civic Chamber member and pro-Kremlin blogger Ilya Resemlo claimed on his Facebook page that the investigation was launched in response to his formal complaint. Remeslo told Meduza that he filed police reports more than six months ago with Russia’s Investigative Committee, Attorney General’s Office, and Federal Tax Service, alleging the theft of donations to Navalny’s organizations.

“The case was opened clearly using my materials, which I published yesterday and cited as the basis of my request to launch an investigation. [...] All these years, I’ve been collecting materials and now they’ve been put to use,” Remeslo declared on Facebook. “In the Investigative Committee’s press release, it’s clear that they’re using my report — it’s the same foundations and the same figures,” he told Meduza. Remeslo is not a victim in the case, however, having never donated money to any of Navalny’s organizations. 

For many years, Ilya Remeslo has accused Navalny and his team of “stealing donors’ money,” and Russia’s pro-Kremlin blogosphere has actively recirculated the allegations. In the fall of 2019, citing leaked correspondence, the investigative news outlet The Insider reported that Konstantin Kostin (a former senior Kremlin official) had spent the previous few years “developing a plan with the presidential administration to pressure Navalny and his associates.” Part of this plan allegedly involved “staging something with donations.” Ilya Remeslo, according to the documents, was one of the individuals designated to help execute this scheme.

In the summer of 2020, Remeslo compared the public reports issued by Navalny’s regional offices to the records filed with Russia’s Justice Ministry by the foundations financing these offices. He also reviewed information about donations received in bitcoin wallets. Based on these data, Remeslo claims that Navalny’s various foundations sent 100 million rubles ($1.4 million) less in 2019 to support his regional offices than the offices themselves spent during the year. Remeslo believes that Navalny and his colleagues stole the difference.

In his calculations, Remeslo focuses on three of Navalny’s nonprofits: the Citizens’ Rights Protection Foundation Headquarters, the Citizens’ Rights Protection Foundation, and the Citizens’ Rights Organization and Coordination Foundation. Leonid Volkov maintains, however, that there were other foundations financing Navalny’s regional offices, which explains the discrepancy between Remeslo’s numbers. Additionally, Volkov accuses Remeslo of “double-counting” certain receipts.

“Ilya Remeslo has been after us for many years. Every time [the police] seize our documents, everything ends up in the hands of Ilya Remeslo,” Volkov told Meduza, agreeing that the Investigative Committee’s new case appears to be based on Remeslo’s report. “But there are no documents [to support the charges],” he says.

How did investigators arrive at a figure of precisely 356 million rubles ($4.8 million) in supposedly stolen donations?

We don’t know. The Investigative Committee cites this sum of money, but officials have offered no details.

BBC Russia studied the financial reports filed by the foundations identified in the Investigative Committee’s press release and calculated that the organizations’ targeted expenditures since 2015 were 340.4 million rubles ($4.6 million) — roughly the same amount of money that Navalny and his associates allegedly stole. In other words, Navalny’s organizations planned to spend roughly this same sum of money on operations over the last five years.

Meanwhile, Leonid Volkov has argued on Facebook that the Investigative Committee’s numbers are simply fabricated. He insists that neither he nor Navalny has ever received a salary from the Anti-Corruption Foundation, and he says it’s ridiculous to claim, as the authorities do, that a large sum of the organization’s funding was embezzled. It would have been impossible to withdraw so much money from the foundation’s bank accounts, Volkov says, while the organization was under the Kremlin’s close scrutiny for so many years, submitting to annual audits and filing “tons of paperwork.” If hundreds of millions of rubles were withdrawn, he asks, where are the records showing the transfers and payments?

Could Navalny’s foundations be hiding how they spend donations? Is it theoretically possible that something was stolen from these organizations?

The foundations identified by federal investigators are nonprofit organizations that report regularly to Russia’s Justice Ministry, which publishes these records on its website. The Anti-Corruption Foundation’s activities are transparent, with most funding coming from individuals who signed up for recurring contributions and from a handful of legal entities, says Pavel Gamolsky, the head of the Accountants and Auditors of Noncommercial Organizations Association.

Additionally, the Anti-Corruption Foundation and Navalny’s regional offices all publish detailed annual reports about their work, including financial records, explaining the investigations and campaigns they mount using public support.

“All its paperwork is prepared just flawlessly. The foundation adheres to its statutory objectives, it has programs and projects, and it spends its money only on these things,” Gamolsky told Meduza.

Theoretically, Navalny’s foundations could embezzle money through salaries paid to top management, material assistance allocated to persons who didn’t earn it, or cash withdrawals to buy goods and services from shell companies, explains Gamolsky. But that kind of activity needs to be proved, he says, adding that he’s aware of no evidence suggesting that the Anti-Corruption Foundation engaged in such behavior. The organization employs few senior staff members, all of whom earn average salaries, and it regularly replaces its computer hardware because the police have seized its property five times already.

What could happen to Navalny if he’s convicted in this case?

If convicted, he faces between four and 10 years in prison and a fine as high as 1 million rubles ($13,525). The case concerns more than just Navalny, however. In its press release, the Investigative Committee also accused “other individuals” of embezzling money. Officials say they are in the process of identifying these people.

A former investigator for the state prosecutor’s office, Alkhas Ablgzhava told Meduza that those most in danger of criminal charges are the people working for Navalny’s foundations who are involved in the organizations’ administrative and financial activities. Now a lawyer assisting the human rights group “Russia Behind Bars,” Ablgzhava warns that the authorities could also target anyone cooperating with Navalny who’s particularly active or public. “It’s important to understand here that the Investigative Committee operates as a tool of political repression, not as a police agency,” the lawyer says.

“Any persons tied to property that could be linked through their formal job titles or actual access to [alleged] embezzlement should fear criminal prosecution,” says attorney Vadim Klyuvgant.

So far, Navalny’s colleagues can only guess which of them might be named in the Investigative Committee’s next press release. Anti-Corruption Foundation spokeswoman Kira Yarmysh told Meduza that the organization doesn’t know any more than what federal officials have said publicly. Leonid Volkov says no one on his team is aware of any investigative actions directed at them. “Really, it’s an idiotic waste of time to try to analyze and rationalize what these nutjobs keep cooking up,” he complained to Meduza.

Spokespeople for Russia’s Investigative Committee did not respond to Meduza’s questions about other suspects in the case. The agency also declined to say if it has identified any victims in its investigation.

What about the threat of other felony charges from Russia’s Federal Penitentiary Service? 

This case could become a major problem for Navalny.

His probation period in the so-called Yves Rocher case was supposed to expire on December 30. Two days earlier, however, the Federal Penitentiary Service declared that Navalny had violated the terms of his probation and was deliberately “evading corrective services’ oversight” by remaining abroad in Germany (where he was rushed in August for life-saving medical treatment, following an attempt on his life). 

Citing an article published on December 22 in the medical journal The Lancet about Navalny’s battle with Novichok poisoning, the prison service announced that he’d “made a full recovery from his illness” as early as October 12. The agency also ordered Navalny to appear at its Moscow office within 24 hours, on December 29, vowing to ask a court to revoke his probation and incarcerate him, if he failed to return home.

According to Valeriya Vetoshkina, a lawyer at the “Team 29” human rights group, the Federal Penitentiary Service has to appeal to a judge within three business days of such an infraction, which means it could still file its lawsuit after Russia’s New Year’s Holidays. A court could then suspend Navalny’s probation and incarcerate him even after his probation expires, she adds, if a judge agrees that he “evaded oversight.”

To make matters even worse, Navalny’s original probation could be overturned and he could face a new cumulative sentence, if he is convicted of committing another felony (for instance, large-scale embezzlement) during his probation period.

Story by Anastasia Yakoreva, Maxim Solopov, and Denis Dmitriev, with additional reporting by Svetlana Reiter

Translation by Kevin Rothrock

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