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Chechnya's Best-Kept Secret: The Workings of the Akhmad Kadyrov Fund

Chechen leader Ramzan Kadyrov in front of a portrait of his father Akhmad Kadyrov, who was assassinated in 2004.
Chechen leader Ramzan Kadyrov in front of a portrait of his father Akhmad Kadyrov, who was assassinated in 2004.

Among the damaging allegations against Chechen Republic head Ramzan Kadyrov and his entourage contained in The Family, a documentary recently released by former oil tycoon Mikhail Khodorkovsky's NGO Open Russia, is the claim that all Chechens are required to contribute a percentage of their salary to the Akhmad Kadyrov Regional Public Fund, named after Kadyrov's late father.

Chechen officials have rejected that claim as untrue. But the news portal Caucasian Knot has spoken to Chechen teachers, medical personnel, and police officers who confirm that a percentage of their monthly salary is routinely deducted.

The Russian Kommersant daily has also researched links between the Akhmad Kadyrov fund and various commercial entities owned by Ramzan Kadyrov's mother, Aymani, or his trusted associates.

According to The Family, budget-sector employees in Chechnya are required to forfeit at least 10 percent of their monthly salary, employees of private companies up to one-third, and business owners up to 50 percent of their profits to the fund.

The total sum contributed in this way, which is not taxed or audited, is estimated at between 3 billion and 4 billion rubles ($55 million-$73 million) per month. By contrast, Chechnya's official budget revenues for 2015 are declared to be more than 57 billion rubles, including over 20 billion rubles in subsidies from the federal government.

In addition to the routine deductions, employees are reportedly required to make additional "donations" occasionally.

One schoolteacher said that last year all teaching personnel were required to contribute 500 rubles toward the cost of buying a new player for the Terek soccer team.

Another teacher said she and her colleagues are regularly pressured to buy tickets for various high-profile events and, as of 2014, to pay 250 rubles per quarter to subscribe to various official newspapers, which they do not always receive. Complaints or any refusal to pay the amount required may be penalized by dismissal.

Caucasian Knot quotes unnamed Chechen government and prosecutor's office employees as denying that any such system of deductions exist. They claim that any donations employees make are purely voluntary.

A third drain on the salaries of budget sector employees, including hospital workers and police, are kickbacks reportedly demanded by their superiors, who are themselves required to pay a specific monthly sum to the ministry that employs them. A portion of those funds is then said to be paid to Kadyrov personally.

Vast Range Of Activities

The eponymous fund was established in June 2004, some seven weeks after Akhmad Kadyrov's death.

Kommersant describes it as "one of the least transparent NGOs" in the Russian Federation. The fund has never been audited and does not comply with the legal requirement that all NGOs receiving over 3 million rubles per year must submit accounts to the federal Justice Ministry. (A Justice Ministry official told Kommersant that the Akhmad Kadyrov fund is exempt from doing so because its accounts are published in the Chechen media -- but they are not.)

The balance of the fund was reportedly 916 million rubles in 2012 and 1.45 billion in 2013.

The stated purpose of the fund, as outlined on its website, is "to provide charitable assistance to citizens in need and to create jobs for the republic's population."

It has, for example, financed the construction of hundreds of homes for families left destitute after the war of 1999-2000, as well as provided medical assistance and the purchase of equipment for the republic's hospitals.

In practice, however, the fund's activities are infinitely more diverse and are not geographically confined to Chechnya, or even the North Caucasus.

Religion is a primary focus: It was the Akhmad Kadyrov fund that financed the construction of the grandiose Heart of Chechnya mosque in central Grozny as well as four schools for hafizes (scholars who can recite the entire Koran from memory) and a center for Islamic medicine. It also funded the restoration, at a cost of 65 million rubles, of a mosque in Tomsk.

The fund has even subsidized the cost of the hajj for thousands of pilgrims from the North Caucasus.

It has also sent humanitarian aid to Somalia and, over the past year, to the war-torn Donbas region in eastern Ukraine.

But some expenditure cannot by any stretch of the imagination be described as charity.

The Family claims that the fund paid millions of dollars to Western celebrities to attend Ramzan Kadyrov's birthday party in 2011.

Its most recent act of generosity was to present 16 Harley Davidson motorcycles to the Chechen branch of the Night Wolves, a Russian nationalist bikers club, in acknowledgement of their "services to Russia." Ramzan Kadyrov took personal credit for, and basked in the publicity generated by, that gift.

Although it amounts to a substantial sum, the money reportedly withheld from Chechens' salaries is clearly inadequate to finance the vast range of activities in which the fund engages. The balance apparently comes from a mind-bogglingly intricate network of companies owned either by the fund or individuals closely affiliated with it, and which control virtually the entire Chechen real-estate sector.

Kommersant has established, for example, that the Akhmed Kadyrov fund owns a major construction company, Megastroyinvest. This firm, in turn, owns a 50 percent stake in the company Kolizey, through which, according to Kommersant, much of the cash "donations" to the fund are channeled. Kolizey owns a major Grozny sports complex and is one of very few organizations in Chechnya licensed to sell alcohol.

The Russian daily quotes Ivan Pavlov, head of the public organization Komanda-29, which campaigns for freedom of information, as saying that, although it is legal for charitable organizations to establish commercial structures, he has never before seen it done on such a scale.

-- Liz Fuller

About This Blog

This blog presents analyst Liz Fuller's personal take on events in the region, following on from her work in the "RFE/RL Caucasus Report." It also aims, to borrow a metaphor from Tom de Waal, to act as a smoke detector, focusing attention on potential conflict situations and crises throughout the region. The views are the author's own and do not represent those of RFE/RL.


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