If you steal a
billion, you are a successful business-man…
At this moment, Russia is the real land of the unlimited
possibilities… for some people.
- People that have a ‘healthy’ disliking for the concepts ‘fair and honest’;
- People that don’t know the difference between private and public property;
- People that don’t give one bit about other Russians, but instead look at them with disdain;
- People also, who have a good position for arranging their opaque deals, in other words, people that reside in the top of the Russian foodchain.
People like this can be found among:
- governors, mayors, local politicians, members of the Duma (Russian parliament);
- directors of large museums, palaces and other touristical attractions;
- executives of current and former state companies;
- executives of private companies that have close relations to government officials;
- the well-known billionaires, who acquired large shares of Soviet property for a token price in the 'wild' years after Gorbachev's retreat;
One of the things that many of these people have in common, is
being a close acquaintance of Vladimir Vladimirovich Putin or Dmitriy
Anatolyevich Medvedev. The president and prime minister of the mighty Russian
empire, sometimes jokingly called 'Batman and Robin'.
Some were close friends of Putin during his student years at
the State University of St-Petersburg, other people know him from his time as
FSB-agent (the successor of the KGB intelligence service). Yet others owed him their
job during his first two stints as president.
Vladimir Putin is a very loyal friend, once you have gained
his trust. He helps his friends and lets them profit from his access to the wealth and vast resources of the Russian Federation. If his friends stay under the radar of public opinion
and the press, don’t betray or attack Putin personally and don’t rob the state too
openly, they can virtually do what they want with the state possessions they
are entrusted with.
One person that didn’t seem to learn this lesson well is the
former Russian Finance Minister and Defense Minister Anatoli Serdyukov.
As a defense minister, he was entrusted with the
restructuring of the large Russian army, in order to adjust it to modern
warfare and make it more cost-efficient. During this restructuring process,
many obsolete army buildings, baracks and terrains became superfluous and ready
for sale to public and private parties.
Instead of selling these buildings and terrains for a fair
price at the highest bidder, Serdyukov reportedly sold these buildings at very low prices to personal acquaintances and 'straw men' via a business
vehicle, called Oboronservis.
During this sales process, he probably used a method that is well-known in The Netherlands from the massive 'Klimop' (i.e. Ivy) real estate fraud scheme, involving executives from the Philips Pension fund and Bouwfonds:
During this sales process, he probably used a method that is well-known in The Netherlands from the massive 'Klimop' (i.e. Ivy) real estate fraud scheme, involving executives from the Philips Pension fund and Bouwfonds:
A real estate object (building or terrain) is sold for a
price far below the ‘marked-to-market’ value to a straw man (straw company),
who works for the seller. Days or even hours later, the object is again sold,
but now to the eventual buyer at fair value. The profit
of (sometimes) many millions is for the original seller and his straw men; the
loss is for the company or organization that owned the real estate before the
sales operation.
In some cases in The Netherlands, there had been one extra
sale of the object at an intermediate price between the ‘token’ first sales
price and the final sales price. The sellers did this to make the price
difference between the first and the last sales price not too conspicuous for
outsiders. This pattern of sequential sales of the same real estate objects, has been used over and over
again for dozens of office buildings. There have been yields to the tune of
hundreds of millions of Euro’s for the fraudulent sellers, while Philips
workers and Bouwfonds investors have been robbed from their hard-earned
investments.
It was a world of Ferrari’s, luxury yachts, expensive
callgirls and €100,000 wrist watches for the people who were part of this fraud.
In The Netherlands, the small country that it is, this kind of fraud demanded a
‘reliable’ network of corrupted notaries, attorneys and realtors, who kept
their mouths shut about these suspected transactions, in exchange for a slice
of the pie. The only way to let this fraud continue for years and years was
keeping everybody happy, with lots of money and presents.
This is a problem that the Russian defense minister Anatoli Serdyukov
hardly could have had in the years that his fraud continued. He has probably used the largeness of Russia to his advantage, as it is less visible that the same
people and companies are constantly making their opaque deals with military real estate objects.
Besides that, the power and influence that Serdyukov’s ministerial
position brought, his close friendship to ‘Vladimir Vladimirovich’ Putin and
the respect that he commanded against subordinates in the very hierarchic
country Russia, was guarantee enough that people would keep their mouth shut,
or else….
The Dutch financial newspaper Het Financieele Dagblad wrote the
backgrounds on this explosive story:
Anatoli Serdyukov
could have been warned in advance. Already for months, rumours were spread that
Serdyukov, who has been sacked yesterday [November 6, 2012 – EL] by president
Vladimir Putin, had been involved in a fraud case. About two weeks ago, Serdyukov
skipped a personal meeting with PM Dmitriy Medvedev, in order to be around when
the Russian secret police held a raid at the Russian sales agency for the Ministry
of Defense ‘Oboronservis’.
Serdyukov wasn’t
arrested, but three subordinates were. Speculations that the agents had been targeting
Serdyukov were soaring when the amounts were disclosed: Oboronservis would have
sold military objects and real estate, owned by the Russian Ministry of Defense,
for a token price to acquaintances of Serdyukov. This fraud had cost the
Russian state more than 3 bln ruble (€75
mln). Now the moment has come: Serdyukov is dismissed from his function, in
order to ‘shape the conditions’ to investigate this massive fraud at
Oboronservis.
Serdyukov, who studied
economy in Leningrad (i.e. St-Petersburg) in the eighties, became in February,
2007, the first Russian Defense Minister without a military background. The
most important task of the former entrepreneur: fighting the corruption in the
military organization and restructuring the army, to make it more efficient.
The defense minister
started a large restructuring operation. Not only did he fire hundreds of
military officers, he also targeted the possessions of the ministry. The establishment
of Oboronservis, in September 2008, fitted in his plan to outsource maintenance
and logistics. Privatizing these activities would increase efficiency,
according to Serdyukov, who was chairman of this agency until last year. However,
Oboronservis waisted millions of Euro’s by selling government property below
the market price.
According to
unofficial sources, it is not so much the fraud that cost Serdyukov his job: Serdyukov
is married with the daughter of former Russian Prime Minister and current CEO of
Gazprom Viktor Zubkov. Had the family relation between (at the time) Finance
Minister Serdyukov and his father-in-law PM Zubkov not been a problem for
Putin, this time it was different.
During the raid of the
police, Serdyukov had been found in the house of Yevgeniya Vasilyeva, an
official of Oboronservis and suspect in the corruption case. This had been
shocking for Zubkov, who is still a very close friend of Putin’s. ‘Even as a
defense minister, it is not wise to mess with your father-in-law. Especially
when he is Viktor Zubkov’, according to the human rights’ activist Vladimir
Pribylovski, who was quoted in the Washington Post.
Everybody, who thinks of a conspiracy of Vladimir Putin
against a dissident minister, should wake up. The fairly critical and
independent Russian newspaper Komsomolskaya Pravda (www.kp.ru)
printed some juicy details on this massive fraud case. The following snips have
been translated from Russian by Google Translate and have been finetuned by me:
This Thursday, October
26, the Investigative Committee of the Russian Federation has conducted searches
in an independent commercial organization "Oboronservis". This was on
the same day followed by the following statement of Defense Minister Anatoly
Serdyukov:
"The Defense
Ministry has an interest in conducting a detailed investigation of all charges
leveled against officers of the sales agency ‘Oboronservis’. At this moment all
public statements, concerning the damage and the involvement of Oboronservis
officials, are nothing more than speculation”.
After this statement, Anatoly
Serdyukov was summoned to the president at Novo-Ogarevo. Then an official
statement was made by the Kremlin: "The president has asked the Minister
of Defence to provide full cooperation with the investigation, which is
ongoing."
The same day an
official statement had been put on the website of the Investigative Committee:
"Investigators from
Chief Military Investigative Directorate of the Investigative Committee of
Russia have found five possible criminal cases ... of fraud in the sale of real
estate, land and shares owned by JSC "Oboronservis". An investigation
has been executed at the CEO’s offices of the public corporations' Voentorg
"," Agroprom "and" Red Star ", which are part of the
holding company" Oboronservis ".
In addition, there has
been an investigation at the apartment, occupied by the former head of the
Department of Property Relations for the Ministry of Defense, Evgenia
Vasilyeva. Besides documents relevant to the case, the investigators seized
more than 3 million rubles, antiques, dozens of pictures and a lot of jewelry.
The investigation will be continued. "
A few days later, the
Russian Audit Office presented an official report concerning the investigation
of fraud cases with property under management of "Oboronservis". The
following cases were printed:
Krasnodar, Temryuk
district
On an area of 30,000
sqr meter, a complex has been built for 300 million rubles (€7.5 mln) at the expense
of the Defense Ministry. Afterwards, this area had been sold for only 92 mln
rubles.
Moscow
A complex of
buildings, belonging to the 31st State Planning Institute for Special
Construction, had been sold for a price of 282 million rubles below market
value. (The real sales price is unknown).
An 11-storey hotel has
been sold for 600 million rubles, which is less than 50% of fair value.
Three other buildings
in the center of Moscow have been sold for 700 mln rubles, at least 200 million
below fair value, according to the Special Construction institute.
On November 13, the Russian online magazine ‘Argumentiy y
factiy’ (i.e. Discussions and Facts) prints the following details:
A complex of 70
permanent buildings and 20 hectares of land were sold at 30% of market value. The
whole property was sold for 320 million rubles, while it had a market value of more
than 1 billion rubles, according to experts.
Two other articles in Komsomolskaya Pravda (article one and article two) contain further
details on this evergrowing fraud case, that also includes Serdyukov’s sister and
personnel.
One especially juicy detail is the fact that 54 valuable paintings
of Russian masters, like Ilja Repin and others, moved from the official
property of the Ministry of Defense to the personal belongings of Serdiukov. No
questions asked…
Unfortunately, this form of art theft is reportedly common practice
among directors and officials of Russian museums, palaces and other touristical
hotspots. As I said in the beginning of this article: the line between public
and private property is very fine in Russia.
Of course, everybody is innocent, until proven guilty in the
court of law. Also this former Russian minister is… However, appearances seem
to be strongly against him, if you read the mounting list of articles that have
been printed on this subject in especially the Russian newspapers.
While it remains unclear what exact motive made Putin fire
Serdyukov, a fact is that Putin is loyal to his friends. Very loyal…
According to anonymous sources of the Russian press agency
Interfax, quoted in Komsomolskaya Pravda, Serdyukov
has been offered a job at ‘Rostechnologiy’, a state engineering agency, where he
has worked before. This news message has not been confirmed yet, however.
Has dismissed defense
minister Anatoli Serdyukov found a new job?
On Wednesday evening,
"Interfax" (referring to an anonymous source) reported that the
ex-minister of defense became an adviser to the general director of the state
corporation "Rostechnologiy".
In this case, the
informant allegedly told the agency: "The appointment of Anatoly Serdyukov
has already taken place. Soon he will assume the duties of Advisor for CEO Chemezov
at Rostechnologiy.
Officially, however,
this information to the correspondent of "KP" in the corporation has
not yet been confirmed.
If Serdyukov indeed gets this job, it proves once again that
Putin is not really serious about fighting corruption. That makes sense, as his
future pension might depend on this.
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