Earlier this week the International Consortium of Investigative Journalists (ICIJ) released the ‘Pandora Papers,’ a deep dive into “offshore havens and hidden riches of world leaders and billionaires.”
Millions of leaked documents unveil financial secrets of current and former world leaders, politicians and public officials in 91 countries and territories, alongside “a global lineup of fugitives, con artists and murderers.”
The Russian ramifications of the Pandora documents were analyzed by iStories, an investigative media that the Russian authorities have labelled as a “foreign agent.” In total, some 4,500 Russian beneficiaries are mentioned in these files. Among them are high-profile Russian officials, their relatives and allies whose secret offshore dealings and suspect assets are now exposed.
Two of these high profile Russians, Sergey Chemezov and Herman Gref, are at the helm of major technology groups.
Sergey Chemezov is the CEO of Rostec, a state corporation that comprises more than 700 enterprises in the fields of defense and technology. Touting its mission as “to improve people’s lives by creating high tech, smart products,” Rostec sells all sorts of weapons, aircrafts, satellites, advanced materials, electronic products, IT solutions, biotech products and much more.
Chemezov has been close to Vladimir Putin since they were both on secret missions in Eastern Germany in the 1980s. Rostec and Chemezov personally were both targeted by Western sanctions following the Ukrainian crisis of 2014.
Trident Trust, an offshore company controlled by Chemezov’s stepdaughter Anastasia Ignatova, owns a luxury yacht worth about $140 million, according to the Pandora Papers. The investigation also ties Chemezov’s relatives and associates to several luxury villas in Spain. In total, the foreign property tied to Chemezov as exposed by the Pandora leak would be worth about $300 million.
Suspect assets of Chemezov’s relatives and close associates were already exposed by several international reports in recent years, from the ICIJ’s Panama Papers to the Organized Crime and Corruption Reporting Project.
In a 2019 media interview, reacting to a report of Alexei Navalny’s Anti-Corruption Foundation, Chemezov said: “I do not accumulate wealth. I don’t stuff money in the corners. I don’t have yachts or airplanes. I just have a good big house for me and my family [and] this is well enough.”
Former Russian Economy minister Herman Gref has been heading Sber (ex-Sberbank) since 2007, leading thorough changes to modernize this huge state-controlled financial group.
Exemplifying the high-tech ambitions of Russian institutions, Sber has been building, for the past years, a digital ecosystem providing citizens and businesses with virtually any services from banking and payments, to express deliveries, to healthcare, to entertainment and more. In a flashy show last year, Gref unveiled a suite of new products — a new smart screen, speakers, TV box and a family of virtual assistants — designed to rival those of the best global companies.
The ICIJ journalists found that Gref established an offshore trust in Singapore, in 2011, to manage family assets amounting to more than $55 million. He allegedly also used accounts in Panama and Samoa. According to an audit report by the Monetary Authority of Singapore included in the Pandora files and cited by the Washington Post, Singapore authorities flagged transactions involving Gref and two of his Russian colleagues.
The trust handling Gref’s assets had to pay a $1.1 million fine for failing to comply with anti-money-laundering rules. The firm “took remedial actions to address the failures,” a spokeswoman for Singapore’s monetary authority told the investigative journalists.
Putting aside this non-compliance issue, nothing seems illegal in Gref’s trust and accounts in three offshore juridictions. However, his personal financial strategies may be questioned form an ethical standpoint. At that time, while Gref was already heading the country’s most prominent state bank, “Vladimir Putin was publicly talking about the dangers of offshore companies, the need to deoffshorize the economy and return money to the country,” notes iStories.
In the ‘Paradise Papers:’ Venture investments or Kremlin plot?
In 2017 the ‘Paradise Papers,’ a previous ICIJ investigation, highlighted the connections of Yuri Milner, a top Russian-born international tech investor, with VTB, a major Russian state-controlled financial institution. The investigative journalists saw in these connections “a long Kremlin arm,” casting suspicion on the motivations of Milner’s investments in such US companies as Facebook and Twitter in 2009-2011.
While highlighting many other cases of Russian private or state money fuelling powerful tech companies in the US and elsewhere, and not ruling out hidden motivations East-West Digital News did not share the ICIJ’s interpretation of these connections in the precise case of Facebook and Twitter. In 2009-2011, explained EWDN chief editor Adrien Henni, the rise of Russian, or Russia-connected investors on the international tech scene had more to do with the globalization of the venture market than with Kremlin plots.
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