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The Morning Vertical, April 5, 2016


ON MY MIND

One thing really jumps out at you when you look at the Panama Papers. The Western officials exposed in the leak, like Iceland's Prime Minister Sigmundur Gunnlaugsson, were essentially caught hiding legitimate earnings offshore, apparently to avoid taxes. The same appears to be the case with Ukrainian President Petro Poroshenko. These cases are serious and should be thoroughly investigated. But what was exposed regarding Russia is something of another order of magnitude entirely. While Putin's name doesn't figure in the Panama Papers, they document an elaborate scheme involving a web of offshore corporations and shell companies, tied to Putin's closest cronies, and designed to pilfer and launder state assets. This is the difference between corruption in Russia and the West. In the West, corruption is a bug in the software. In Russia, it is the software.

IN THE NEWS

Ukrainian military pilot Nadia Savchenko's 22-year sentence formally begins today.

Savchenko's lawyers say she will begin a dry hunger strike on April 6.

Russia will reportedly begin deliveries of S-300 missiles to Iran in the coming days.

Pyotr Pavlensky has filed an appeal against his arrest to the European Court of Human Rights. Pavlensky has been charged with vandalism of a cultural monument for setting fire to the door of the Federal Security Service's headquarters in Moscow.

Saudi Arabia has replaced Russia as the world's third-largest military spender.

And now Russian judo has been hit with a doping scandal.

WHAT I'M READING

Panama Papers Reax

Vladimir Putin's name doesn't explicitly appear in the the Panama Papers. In a column in Bloomberg, Leonid Bershidsky notes that "Putin's a pauper. His friends are rich."

Along the same lines, Kremlin-watcher Mark Galeotti notes in Vox that the Panama Papers show us how corruption actually works in Russia.

"The real currency in Russia is not money but power -- and the latter can buy the former, but not necessarily the other way around," Galeotti writes.

"You can be rich today, but the state can impoverish you tomorrow. Conversely, if you have power, you can always get money, as we are likely seeing with the Panama Papers, or else simply don't even need it."

Michael Weiss also unpacks the Panama Papers revelations in The Daily Beast

Yelena Panfilova, vice president of Transparency International's Russia branch, gave her take.

"The 'Panama Papers' aren't fundamentally about Russia," she says. "The leaked documents are important primarily for countries that observe the rule of law and can take appropriate legal measures, accordingly. For countries without the rule of law, it's important from the perspective simply of knowing. But there's no reason to assume they're going to run off to investigate everything."

And inevitably, Aleksei Navalny has his say.

And then there is the reaction -- as it were -- in the Russian media.

The Kim Philby Files

The BBC has unearthed a previously unseen video of one of Britain's most infamous spies, Kim Philby, briefing East Germany's Stasi in 1981

Meanwhile, In South Ossetia

"Vladimir Putin's Mysterious Moving Border" is a look at how Russia keeps moving the boundary separating Georgia proper from the pro-Moscow separatist region of South Ossetia.

Religious Tension

So what does it take to provoke an angry mob of Buddhists? Kevin Rothrock at Global Voices takes a look.

Dutch Referendum

The Netherlands will vote in a referendum on the European Union's Association Agreement and free -trade pact with Ukraine on April 6.

Activist Yulia Marushevska, who made the viral "I Am A Ukrainian" video in 2014, has a new video appealing to Dutch voters to back the agreement.

UNIAN has a piece linking Kremlin-backed propagandists to the campaign to convince Dutch voters to reject the agreement.

And in a column in the EU Observer, Sijbren de Jong explains, "Why the Dutch referendum on Ukraine is a joke."

About This Blog

The Power Vertical
The Power Vertical

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It offers Brian's personal take on emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or

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