Alexey Navalny On Panama Papers: Proof That Putin "Owns" Russia

Alexei Navalny participating in a February march in memory of Boris Nemtsov in Moscow
Alexei Navalny participating in a February march in memory of Boris Nemtsov in Moscow
Julian Hans

MOSCOW â€" Alexey Navalny is one of most prominent opponents of the Russian government of Vladimir Putin. The 39-year old lawyer and head of the Moscow-based NGO Anti-Corruption Foundation first came to prominence through a blog that takes direct aim at alleged malfeasance by Putin and his associates. We spoke with him in his Moscow office following the revelations of the Panama Papers.

SÜDDEUTSCHE ZEITUNG: More than 30 men and women work for you, trying to disclose illicit financial practices. Did you learn anything new from the revelations of the Panama Papers?

ALEXEY NAVALNY: We knew more or less how Putin’s corruption works: He has friends who win billions by obtaining public tenderings. This is something like a common pot that he can use. What we know now is that, on top of that, Putin has some of his own (accounts) as well â€" and we see how they are filled. There is no doubt, for instance, that everything that belongs to the cellist Sergei Roldugin, is just another one of Putin’s accounts.

But Putin’s name didn’t appear in any of the documents.

The evidence is strong. First of all, Roldugin is one of Putin’s closest friends. Secondly, there is no explanation as to why he would have access to that amount of money. He would be the richest musician on the planet. Thirdly, the way those accounts have been filled â€" state companies committing crimes through insider trading, why would they do that?

Putin’s spokesmen claim that the publications are an attack on the president, meticulously planned by Western intelligence services.

The Kremlin’s nervous reaction is just another indicator. Taken together, it shows clearly that the publications are direct proofs of Putin’s corruption.

Why did nobody ever think of Roldugin before?

He’s been mentioned several times in a Putin biography published during the campaign for his first term as president. That nobody ever thought of him as the administer of Putin’s money shows that Putin had chosen the right guy: a humble man who plays the cello and doesn’t drive a Ferrari. Nobody would suspect someone like him. But the moment his offshore companies were revealed to the public, things got complicated. Money like this is not easily explained.

Do you think one day we might discover properties, accounts or shares registered in Putin’s name?

Of course not. Grand corruption â€" the kind carried out at the highest levels of government â€" does not work like that. If authoritarian rulers are involved, they usually hide behind family members, friends, hockey or judo coaches.

What if Putin’s friends abandon him?

The situation is pretty simple: Either you’re president and nobody can touch you. Or you’re not president, and you’re doomed. That’s why he would do pretty much anything â€" even fight a war â€" in order to hold on to his position.

Is there anything illegal among the things that have come up so far?

A number of politicians have been named in the papers, who have not declared their shares in various companies as they are obliged to in Russia. There are also many indicators of other criminal acts: suspected insider trading at the Sberbank and the VTB bank, both listed on the European stock market. If true, that would be an infringement on Russian and European law. Then, there's Roldugin’s tax evasion. And fraud at the Russian Commercial Bank, a subsidiary of the VTB on Cyprus, that apparently granted the Sandalwood Continental a credit line of $650 million without requesting the necessary provision of banking collateral. And so on.

Over the last couple of years, you have published data about countless high officials in Russia, suggesting corruption. What good has come of your work?

That’s the real tragedy: It just strengthens those officials’ position! Because if it goes public that they are being corrupt, they are considered particularly loyal. And Putin is the ultimate source of their legitimacy. They know that the public would prefer to see them behind bars. That they are not convicts, but rich government ministers, is thanks to Putin. And Putin only.

The Russia expert Mark Galeotti from the New York University says that what’s special about Russia is that you can’t buy power with money. But if you have power, you don’t have to worry about money anymore.

Or as Russian poet Alexander Pushkin put it once: "I buy everything, says the gold. I’ll take everything from you, says the blade." Meaning, you can buy whatever you want, but if someone with more power comes your way, he can take it all away from you. Does Putin fear being betrayed by his friends? No, because he has the power. And it makes no sense to wonder how much money he really has: At this point, he owns pretty much everything.

What role does the West play for the rich, hiding their money abroad?

The West plays along. Countries like Switzerland or Britain offer a safe haven. Although all these countries have laid down rules to fight international corruption, the reality looks slightly different. For years now I’ve been trying to make them cooperate: the FBI, public prosecutors in Germany and Switzerland, the Serious Fraud Office in the UK ... All in vain. The European media complains a lot about the Russian mafia and corruption. I keep telling them "open up a case â€" at least one!" But nothing ever happens.

What do people in Russia think about corruption?

Many say that, yes, the officials are corrupt, but at least they’re our people, we know them: If others were in power, they’d steal even more. Others say that at least they give us something back â€" the Sochi Olympics, the 2018 World Cup. Or they tell me, "if you were president, Navalny, you’d do the same."

People have gotten over it?

Actually they’re pretty fed up with corruption. Putin boasts 86% support, according to polls. But our campaign concerning Article 20 of the United Nations convention was supported by 90% of the population. That’s how many people believe that public officials who can’t explain where their wealth comes from must be called to account. But the Kremlin wants corruption to be the only considerable option. In that regard, for Putin it’s crucial for Ukraine to fail. In Ukraine, there was a revolution against the corrupt elite â€" but after two years no remarkable success has come out of it. If we campaign against corruption now, people will ask: Do you want to fail, like in Ukraine? With blood and war? Ukraine must fail, so that there is no positive example for the fight against corruption. And for the Russian opposition, Ukraine’s success is vital.

That you and your organization still exist is for many proof that Russia is not that repressive after all, or that you at least have some powerful friends yourself.

First of all, I’ve been convicted three times. Although the European Court of Justice was on my side, I’m still not allowed to run for office. A new law even bars me from participating in debates. My brother Oleg is in prison for a made-up story. There are several criminal cases against staff members and our office has been searched. Putin is not Stalin, we haven't been harmed physically â€" not yet. But who would have thought two years ago that they would kill Boris Nemtsov?

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Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.

Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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