Saturday, July 23, 2016


Russia

Kremlin Whistle-Blower: 'Putin Has No Option But To Stay In Power'

Russian businessman Sergei Kolesnikov fled Russia in 2010 after publishing an open letter to then-President Dmitry Medvedev revealing the construction of a lavish Black Sea palace commissioned by Putin and funded with a billion dollars in illegally diverted funds.
Russian businessman Sergei Kolesnikov fled Russia in 2010 after publishing an open letter to then-President Dmitry Medvedev revealing the construction of a lavish Black Sea palace commissioned by Putin and funded with a billion dollars in illegally diverted funds.
By Anastasia Kirilenko and Daisy Sindelar

A lot of time has passed since Sergei Kolesnikov last saw Vladimir Putin face to face -- six years, to be exact. But even then, he says, Russia's most powerful man was showing signs of fatigue.

"Both then -- and now, as I understand it -- everyone was trying to shift all responsibility for making decisions onto him," says Kolesnikov, a biophysicist-turned-businessman who profited as a Putin crony in 1990s St. Petersburg. "A single person simply can't make an enormous number of decisions during a set period of time."

If Putin's power vertical is a company, he suggests, it's starting to suffer from a case of bad management. "There are people at lower levels who should be taking responsibility for things but aren't," Kolesnikov says. "It's a consequence of the system they created."

Kolesnikov, 66, knows all about the system -- and its consequences. He fled Russia in 2010 after publishing an open letter to then-President Dmitry Medvedev revealing the construction of a lavish Black Sea palace commissioned by Putin and funded with a billion dollars in illegally diverted funds.

Kolesnikov, who granted RFE/RL a face-to-face interview in an undisclosed location, now keeps his whereabouts private. But he continues to track the machinations of Putin's inner circle, a corrupt club that has enriched its leader to the point, he says, where "money doesn't have any meaning anymore."

'Mikhail Ivanovich's' Money

Among his points of interest is Bank Rossia, which the U.S. Treasury has called the "personal bank of senior officials of the Russian Federation." Both the bank and a number of its shareholders have come under U.S. and EU sanctions imposed to punish Moscow's actions in Ukraine.

Kolesnikov himself held accounts in Bank Rossia as a co-owner of Petromed, a medical-procurement company that won numerous government contracts during the years that Putin served as St. Petersburg's external relations chief under then-Mayor Anatoly Sobchak.

Petromed performed legitimate functions -- manufacturing much-needed medical equipment and refurbishing operating rooms in a number of regional hospitals.

But Kolesnikov and his partner, Nikolai Shamalov -- now Bank Rossia's second-largest shareholder and on the sanctions blacklist -- were increasingly called on to help divert funds through a complicated network of friendly companies and offshore accounts on behalf of "Mikhail Ivanovich," as Putin was known among his business partners.

Will Vladimir Putin and his inner circle ever be able to retire and enjoy their allegedly massive wealth?
Will Vladimir Putin and his inner circle ever be able to retire and enjoy their allegedly massive wealth?

Some of that money went toward buying Shamalov's shares in Bank Rossia. And hundreds of millions went toward the construction of the so-called "Putin Palace," a spacious mansion on the Black Sea's exclusive Gelendzhik Bay.

Putin has always denied any connection to the Gelendzhik palace, which was later reportedly purchased by businessman Aleksandr Ponomarenko. Kolesnikov says the property is owned by a Cyprus-based company that in turn is owned by a firm registered in the British Virgin Islands. "No one really knows who the ultimate beneficiary of that palace is," he says.

Survival Strategy

So will Putin ever enjoy a Black Sea retirement palace or other fruits of his alleged corruption? Kolesnikov says that question is of paramount concern to the Kremlin inner circle, who have effectively painted themselves into a corner -- albeit a very wealthy, powerful one -- with no easy way out.

Kolesnikov, who published a 2012 article in "Vedomosti" titled "Putin Forever," says the Russian leader's controversial third-term reelection convinced him that after years of criminal self-enrichment, the only way to stave off prosecution was to remain in power.

"Putin's entire chain of command is built on a foundation of corruption," Kolesnikov says. "To see power go to another party or other people would be to put themselves under enormous threat of criminal investigation and inevitable punishment."

So while Putin recently dismissed the possibility of seeking president-for-life status, Kolesnikov says he and his allies are definitely looking for an exit. They're no longer focused on money or property. "What they're thinking about now is their lives."

Kolesnikov goes so far as to suggest that Russia's campaign in Ukraine may be motivated not by imperialist nostalgia but by Putin's desperation to keep critics distracted from his massive corruption.

If the Russian leader feels truly threatened, he adds, he may even resort to playing the nuclear card. "Two years ago, any suggestion that war would break out in the center of Europe and thousands of people would die seemed like absolute nonsense," Kolesnikov says. "Today it's an objective reality. And we can say the same thing about the possibility of using nuclear weapons. Maybe it's unlikely, but it's no longer nonsense."

Reported by Anastasia Kirilenko; written by Daisy Sindelar

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