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Three Whales after 20 years iStories digs up one of the Putin administration’s earliest corruption scandals and finds new links to the Kremlin

Source: iStories

More than 20 years ago, when Russia still had public politics and the Putin administration faced scandals that weren’t only international, customs inspectors tied a contraband scheme involving several furniture companies to senior officials in the Federal Security Service (FSB). Though the Three Whales Case, as it became known, pitted various “clans” within Russia’s national security apparatus against each other, it ended with just a few minor convictions despite evidence of bribery and obstruction of justice. President Putin took direct control of the investigation, but it was State Duma deputy and journalist Yuri Shchekochikhin who pursued the case most aggressively. In July 2003, shortly before he was scheduled to visit the United States to share case materials with the FBI, Shchekochikhin fell ill and soon died. Officially, he succumbed to a rare allergic reaction, but friends and colleagues suspect that Shchekochikhin was poisoned. iStories correspondent Roman Shleinov was one of those longtime coworkers. In a new investigative report, Shleinov says he’s finally pieced together evidence from the Three Whales Case that ties the investigation’s suspects to members of Vladimir Putin’s inner circle. Meduza summarizes these findings.

In October 2000, federal detectives in Russia’s Interior Ministry began investigating tens of millions of dollars in contraband furniture moving through the “Grand” and “Three Whales” shopping complexes outside Moscow, as well as more than $100 million in money allocated from firms in Germany to the construction of these warehouse stores. Officials believed these funds were, in fact, laundered proceeds from the black-market sale of weapons, oil, and counterfeit payment orders. Within just a few months, however, another agency — the Attorney General’s Office — suddenly closed the case and charged the lead investigator with conducting illegal searches.

It took parliamentary intervention to reopen the case (something unimaginable from today’s State Duma), but no suspects were arrested until June 2006. After another four years, several of these men received verdicts: a businessman named Sergey Zuev and a customs broker named Andrey Saenko were sentenced to roughly eight years in prison, but both went free within a few months, thanks to opportune changes made to Russia’s Criminal Code. 

In his report for iStories, journalist Roman Shleinov says the case evidence connects these ostensibly minor figures to some of the most powerful people in Vladimir Putin’s early presidency.

For example, one of the German companies that financed the construction of the Grand and Three Whales emporiums was founded by a Russian woman named Olga Anurova who spent the 1990s working for a Russian firm that served the Kremlin, the FSB, the Central Bank, and the Attorney General’s Office, and even provided consulting support to President Putin’s campaign office. This business, “Bering Consulting,” belonged to someone named Alexander Romanov. Romanov’s identity remained a mystery until 2014 when a fellow KGB veteran strolled a little too loudly down Memory Lane in a recorded birthday party speech. The footage, says Shleinov, strongly suggests that Alexander Romanov served in the KGB in Germany at the same time as Putin. 

Another connection to the president in the Three Whales Case is the convicted customs broker, Andrey Saenko, whose lawyer says his client also served in Germany with Putin alongside Andrey Belyaninov (the one who blabbed about Romanov at the birthday party) and Sergey Chemezov (the future CEO of Rostec). Saenko later worked with Chemezov again at the Presidential Affairs Department’s Foreign Economic Relations Bureau when Putin was in charge. In December 1999, shortly after taking over at Promexport, Chemezov appointed Saenko to serve as the director of a subsidiary company involved in customs clearance for military cargo. “The importance of this position is hard to overstate,” explains Roman Shleinov.

A source told iStories that Saenko “was the victim of a big intrigue,” meaning that rivals in the Interior Ministry allegedly targeted him in order to halt Chemezov’s rise. If this was the investigation’s true goal, it failed. Chemezov became head of Rosoboronexport, an even larger agency, in 2004. 

Shleinov also uncovered links between Andrey Saenko and the wife of then Federal Emergency Management Agency director (now Defense Minister) Sergey Shoigu. Through a British firm, Saenko controlled another customs business with military ties that provided services to a freight terminal that belonged largely to a business tied to Irina Shoigu. 

Additionally, multiple suspects in the Three Whales Case intersected with an entrepreneur named Mikhail Kenin, who in turn did business with the relatives of Sergey Shoigu and the Moscow region’s governor. Kenin also sat on the board of directors at “Stroytransgaz,” a company owned by Gennady Timchenko, one of Putin’s oldest friends.

When the Three Whales Case was under investigation, the Grand furniture store belonged to a parent company called “Grandtitul,” which Putin’s old college classmate Ilgam Ragimov purchased in 2008. Before that sale, a businessman with notorious mob ties named Magomed Khalidov owned the parent company. His name appears in evidence concerning wiretapped conversations related to the Three Whales Case, but the recordings themselves were destroyed under strange circumstances. Before his death in a dispute allegedly over the proceeds from the Grand and Three Whales shopping centers, Khalidov maintained close ties to Russia’s national security elite. His son, for example, lived in a posh gated community near land guarded by the Federal Protective Service within earshot of several top officials’ mansions.

Sources in the FSB told iStories that investigators launched the Three Whales Case on orders from then Interior Minister Vladimir Rushailo and his adviser Alexander Orlov “in order to fight for influence over Russia’s customs and force out the FSB’s generals from the business.” Unfortunately for Rushailo and Orlov, associations with Boris Berezovsky (Vladimir Putin’s number one adversary at the time) incentivized the president to undermine the investigation, given that thorough police work would likely have benefited Berezovsky.

Summary by Kevin Rothrock

Cover photo: Pixabay