After being exposed recently to public criticism stemming from the Russian government – including President Putin himself – the Skolkovo Foundation is now targeted by an inquiry of the Investigative Committee of Russia’s Prosecutor Office.
The investigation was triggered by a recent report by Russia’s Accounts Chamber revealing several cases of questionable financial practices by the Foundation while implementing the high-profile tech hub project on the outskirts of Moscow.
A $120 million conflict of interest
Of the 31.6 billion rubles (approximately $1 billion) the Skolkovo Foundation received from the state budget from 2010 through October 2012, just 18.9 billion, or less than 60%, was actually spent, while “the absence of concrete performance indicators related to implementation time has created risks of unreliable assessment of the efficiency of said expenses,” the Chamber’s auditors believe.
Moreover, “financial violations and issues” were found amounting to 3.8 billion rubles (almost $130 million) in no fewer than 52 of the Foundation’s programs or actions. Some charges could expose as yet unnamed top Skolkovo executives to criminal indictment, according to the Russian business daily Kommersant.
The main alleged violation concerns a 3.6 billion ruble (approximately $120 million) deposit on the Foundation’s bank account at Metcombank in 2010. Not only are unspent state subsidies supposed to be returned to the state budget instead of remaining in bank accounts, but Metcombank happens to be an affiliate of the Renova group, which is owned by Skolkovo’s president Viktor Vekselberg.
Also criticized is the fact that the Foundation offered a 401 million ruble grant (approximately $13 million) to the Skolkovo Institute of Science and Technology (Skoltech). This financial transfer should not have been allowed since Skoltech was not formally listed among the participants of the tech hub.
The Investigative Committee will also inquire about a 37 million ruble ($1.2 million) payment made in 2011 to an affiliate company of the Foundation. These funds were used to build an innovative underground power station, but the project was not formally included in the agreements between the Foundation and its subcontractors.
Nothing illegal, says the Foundation
In an official statement, the Foundation confirmed the deposit at Metcombank, but denied it implied any illegal activity. Once government budget funds are transferred to the Foundation, they can no longer be considered as budget means and the funds may be used in any legitimate way, the Foundation explained, referring to Russia’s budget code.
“Among the offers made [to the Skolkovo Foundation] by several banks, Metcombank’s terms were just unprecedented,” the Foundation’s Vice President for External Communications Alexander Chernov elaborated in an exchange with Kommersant. The bank provided an 5.65% interest rate – compared to a market average of around 4%, according to Chernov. “And that allowed the Foundation to earn around 80 million rubles ($2.6 million) [in interest], so what violations are we talking about?”
Chernov added that the 401 million ruble transfer to Skoltech was “entirely within the law” and that potential charges stemming from the 37 million ruble payment for the power station remained “beyond [his] understanding.”
A separate criminal investigation, which started in early February, is targeting former Skolkovo executives Kirill Lugovtsev and Vladimir Khokhlov. They are accused of having wired 23.8 million rubles (approximately $800,000) to a company belonging to Lugovstev’s relatives for rental services which were actually never provided.
In early 2011, Vekselberg pledged to “lynch bribers” on the future innovation hub’s territory should any instance of corruption be discovered. “We have no corruption. We are transparent,” he said.
