The inevitable backlash against the Panama Papers’ revelations have begun, as Kremlin propagandists claim it is a Western plot and a respect scholar questions whether in fact the exposure of offshores was engineered by the Kremlin itself.
Welcome to our column, Russia Update, where we will be closely following day-to-day developments in Russia, including the Russian government’s foreign and domestic policies.
The previous issue is here.
Recent Analysis and Translations:
– Getting The News From Chechnya – The Crackdown On Free Press You May Have Missed
– Aurangzeb, Putin, Realism and a Lesson from History
– Why the World Should Care About the Assassination of Boris Nemtsov
– How Boris Nemtsov Was Murdered: Investigation by Novaya Gazeta
– How Stalin Returned to Russian Contemporary Life – Meduza
UPDATES BELOW
Soon barrels are set on fire and riot-shield wielding OMON come running, and water cannon begin spraying into the crowd. A helicopter with a fire bucket sprays foam over the crowd. And quickly shots begin to ring out as the troops handle weapons with blanks for the exercise.
According to Putin’s decree on the National Guard, soldiers will be permitted to shoot at will.
The video is marked with a Google map location showing the Myachkovo Airfield here. The image of a Google map inserted into the video with other explanations doesn’t constitute proof that it was taken there — it is not a geotag – but the terrain and scene seem consistent with the Myachkovo Airfield.
The National Guard will have 170,000 soldiers drawn from the existing Internal Troops; 200,000 from the Extra-Agency Guard and 30,000 from the OMON (riot troops) and SOBR (rapid-reaction forces).
The opposition had obtained a permit to march on Bolotnaya Square May 12 and at first proceed normally. But at a certain point, police kettled marchers by blocking off access to a park they believed they had a permit to use. Some protesters clashed with police and there were injuries on both sides. Most injured were protesters, however, as police tried to squeeze the crowd of people aside, then charged a number with resistance of arrest and even assault of officers.
— Catherine A. Fitzpatrick
Before that, Putin had made only minimal remarks about Snowden, famously claiming the use of him for Russia’s interest was “like skinning a hairless pig,” i.e. not useful, as Moscow ostensibly wanted to keep at least working partnership relations with the US.
Of course, many of Snowden’s revelations have been beneficial to Russia’s interests, either by disrupting relations of allies or by directing the ire of the world’s privacy activists at the threat of mass government surveillance in the US, where such a threat remains mainly potential as opposed to Russia where incidents like the clandestine taping and broadcasting by state TV of the private lives of opposition politicians is all too routine.
“Since the president himself didn’t name those who did this, then I don’t believe I have the right to do this.”
There are more petty things. Like the non-surrender of Mr. Snowden. These are all irritants, as some of our partners consider, in our relations. They had got used to a monopoly in the international arena and they don’t want to be accountable to anyone. The recent events in Syria directly indicated…hmm…not only the capacity of Russia to resolve problems somewhere nearby but far from our borders.
But that’s not the main thing for them. Even the fact that our economy — despite all the problems we suffer today — has become more independent, more capable, more self-sufficient — although we still have dependency on oil and gas — nevertheless, today’s economy is twice as large than it was in the early 1990s…er in the start of the 2000s, we have almost doubled the size our economy. The capacity of the armed forces has grown many times over. And actually we see this with Syria. But most of all our opponents are bothered not even by that, but by the unity and cohesion of the Russian [Rossiyskaya] nation, the multi-national Russian [Rossiyskiy] people.
And in that connection, there are attempts to rock us from within, to make us more tame and to groom us as they wish. The most simple way to do this is to sow some distrust within society, toward government bodies, management bodies, to set one against another. This was done brilliantly in the first years of World War I, when they drove the country to collapse.
Today, it involves attempts with unscrupulous methods. You here are specialists, you’re all journalists, correct? You know what an “information product” is. So that’s why they went with those offshores. Your humble servant isn’t there. What can you say?! But there was an assignment [laughs].
They had to do their job. So what did they do? They made an information product. They found some among my acquaintances and friends.
So they dug around and slapped something together. I saw those pictures. There’s a lot, a lot of people, it’s not clear who they are, in the background. But a picture, a photograph of your humble servant is in the foreground, blown up. So there’s some sort of friend of Mr. President of Russia, he did some sort of thing. Likely, that has some corrupt component. But what? Oh, there isn’t any there.
That the same officials and official agencies of the United States are behind this has been shown to us by WikiLeaks.
Western officials allow themselves to be crude publicly sometimes. Some administration officials apologized to us not because they became embarrassed but because they are more intelligent than those who did this.
When officials of the State Department of the US Administration announce some crude things, then this means that they have marked themselves as self-interested persons.
But for us this is good because we know who the contractor is.
The identity of the Panama Papers leaker has not been revealed and if Suddeutsche Zeitung, the German newspaper that first received the documents, knows anything, they are not telling. They are also not releasing the documents so as not to reveal sources or harm those not involved. This method contrasts from the hacks by Chelsea (Bradley) Manning in WikiLeaks Cablegate and Edward Snowden’s hack, where the documents were put online.
Russian propaganda has also predictably seized on the fact that the philanthropies of billionaire George Soros and USAID, the development agency of the US government, are among the funders of the International Consortium of Investigative Journalists, and have implied this discredits the work.
Because inevitably the revelations of the Panama Papers will motivate Western governments to fix what they can (offshore law) and leave aside what they can’t (criminal Russian offshore practice), the leak will come to be seen as “about” the West’s financial system, not the abusers of it.
And inevitably there is talk of “false-flag operations,” only because of the magnitude of the revelations, not just on Reddit sub-forums but in a respectable think-tank.
Clifford Gaddy of Brookings Institution has advanced the theory that the Panama Papers may have been a sophisticated “active measure” that ultimately would only discredit the West.
Some (geo)political context is important here. In recent years, the media has become a key battleground in which Russia and the West have attempted to discredit each other. Early last year, circles in the West sought to use the media to respond to what they described as Russia’s “hybrid warfare,” especially information war, in the wake of the Russian annexation of Crimea and related activities. They identified corruption as an issue where Putin was quite vulnerable. It’s worth looking at the Panama Papers in that context: Journalists are targeting Putin far out of proportion to the evidence they present.
As soon as one delves below the headlines, it’s a non-story. A “friend of Putin” is linked to companies that channel a couple of billion dollars through the offshore companies. Why? To evade Russian taxes? Really? To conceal ownership? From whom? You don’t need an offshore registration to do that. To evade sanctions? That’s a credible reason, but it makes sense only if the companies were registered after mid-2014. Were they?
This information will not harm Putin at all—instead, it gives Putin cover, so he can shrug and say: “Look, everybody does it.” A more serious possibility is that the leaked data will lead to scandals throughout the West, where corruption does matter—a point I’ll discuss. On net, the Russians win.
The evidence that the journalists have come up with, however, isn’t trivial and Russian investigative journalists have taken it further; in fact some of the Panama Papers’ findings corroborate what opposition and independent media have been publishing for years about Putin.
Naturally, Putin has put to work his intelligence training and the vast network of oligarchs, politicians and law-enforcers within Russia he can count on for their loyalty because he has kompromat, or compromising materials on them as well. That’s why Russians use the expression krugovaya poruka, or a mutual hand-holding implying enforced trust and conspiracy.
The lengths that Putin and other officials went to remove Alexander Litvinenko appear to be related to his cooperation with Spanish prosecutors who were putting together a case against organized crime bosses associated with Putin himself since his days in the Leningrad/St. Petersburg city council. Mikhail Khodorkovsky has also said that his publication of the Spanish prosecutors’ revelations are what motivate Putin to start a fabricated murder case against him.
The connections to the underworld investigated by Spain are through Leonid Usvyatov, Putin’s old judo coach and sparring partners, including the Rotenberg brothers as Alexei Sobchenko has explained on EurasiaNet:
In 1992, when Usvyatsov was released after serving his second jail term, Putin had already retired from the KGB, and was serving as a top official in St. Petersburg’s city government. At this point, the article states that Usvyatsov was a prominent member of the so-called Tambov Gang, a group that had become notorious in St. Petersburg for engaging in a wide variety of criminal activity. Two years later, Usvyatsov was killed in an apparently organized crime-related dispute.
The article goes on to illustrate some tangential connections tying Putin associates to the Tambov Gang. The article also suggests the Tambov Gang’s links to people in power may have been a factor in the murder of Alexander Litvinenko, a former KGB officer who was poisoned with a radioactive element in London in 2006. Before his poisoning, Litvinenko tried to uncover possible links between Putin and the Tambov Gang, and had contacted a gang member who had moved to Spain.
An almost 500-page criminal complaint filed in a Spanish court last May alleged that some Putin political allies assisted members of the Tambov Gang, operating in Spain, in laundering money, according to Western news reports. Among the individuals identified in the Spanish court documents is Vladislav Reznik, who is a deputy chair of the Duma’s Finance Committee and serves as a top official in Putin’s ruling United Russia party. The Spanish criminal complaint was reportedly based on a decade-long investigation that included thousands of wiretaps and detailed examinations of property records and wire transaction
Spanish prosecutors have not been able to indict everyone they believe implicated in these schemes, least of all Putin.
And now that Spain’s government and prominent figures have been rocked by the revelations, that may become the focus, not a complicated and long-standing probe of Russian organized crime — lending more credence to Gaddy’s theory.
— Catherine A. Fitzpatrick