ICIJ: Offshore network tied to Putin
The International Consortium of Investigative Journalists (ICIJ) together with other media partners has published an investigation based on secret files that reveal complex multimillion-dollar offshore financial deals that channel wealth and power towards a network of people and companies closely allied to Russian President Vladimir Putin.
The records show Putin's ally Sergey Roldugin who is a behind-the-scenes player in a clandestine network operated by Putin associates that has shuffled at least $2 billion through banks and offshore companies, investigative journalists Jake Bernstein, Petra Blum, Oliver Zihlmann, David Thompson, Frederik Obermaier and Bastian Obermayer wrote in the article titled "All Putin's Men: Secret Records Reveal Money Network Tied to Russian Leader," published on Sunday, April 3.
In the documents, Roldugin is listed as the owner of offshore companies that have obtained payments from other companies worth tens of millions of dollars. A company linked to the cellist also grabbed secret influence over Russia's largest truck maker, another snagged a big slice of Russia's TV advertising industry.
It's possible Roldugin, who has publicly claimed not to be a businessman, is not the true beneficiary of these riches. Instead, the evidence in the files suggests Roldugin is acting as a front man for a network of Putin loyalists – and perhaps for Putin himself.
Roldugin did not respond to detailed questions, the article said. Reporters from the Organized Crime and Corruption Reporting Project, an ICIJ partner, met briefly with the musician after a concert in Moscow last week. Roldugin told them he needed more time to review the questions and determine what he could say.
About 100 financial deals related to the network are described in the leaked documents. They are complex. Payments are disguised in various ways. On paper, shares in companies are swapped back and forth in a day. Documents are backdated. Questionable financial penalties are assessed. The rights to multimillion-dollar loans are sold between offshore companies for $1.
In almost every instance, the result is the same: money and power moves in the direction of the network, to companies and people allied to Putin. The network's covert deals allowed it to receive money in a variety of ways including hundreds of millions of dollars in sweetheart loans from a bank controlled by the Russian government.
"The leaked documents come from the files of Mossack Fonseca, a Panama-based law firm that registered some of the Roldugin companies and helped administer the network's holdings in the British Virgin Islands and other offshore havens," the article reads.
Many of the men linked to the network, including Putin, share something else in common besides history. They are connected to the St. Petersburg-based Bank Rossiya, which the U.S. government has identified as Putin's personal cashbox.
The files make clear that Bank Rossiya built the network. Its employees tended to it, working to create the offshore companies, assigning ownership to Roldugin and others and shepherding the transactions through banks in Russia, Cyprus and Switzerland.
The economic model for how members of Putin's circle have shared the profits from this network was also established back in St. Petersburg. In the 1990s, Putin and the Bank Rossiya owners created a cooperative for a gated community where they all had houses. The cooperative kept a bank account in common. Each could put money in, and anyone could take it out.
Nowhere in the Mossack Fonseca files is the name of the Russian president, a former KGB spymaster, actually mentioned. Audio recordings and witness accounts show that even when Putin's closest confidants privately discuss his financial dealings, they use pseudonyms for him or simply gesture to the heavens rather than utter his name.
It's inconceivable, though, that the network could have existed without the knowledge and support of Putin, said Karen Dawisha, a U.S. political scientist who has written extensively about Putin and his regime.
"He takes what he wants," said Dawisha. "When you are the president of Russia you don't need a written contract. You are the law."
After receiving detailed questions from ICIJ and its media partners, Kremlin spokesman Dmitry Peskov denounced the forthcoming articles in a press conference as "an attack" and "a series of fibs," according to Russian news services. Peskov reportedly said that the questions concerned offshore companies and "a large number of businessmen Putin had never seen in his life."
"Denying something numerous times or commenting on something that has no relation to us is just silly," Peskov told reporters.