On Sunday, 3 October, the International Consortium of Investigative Journalists (ICIJ) published The Pandora Papers, nearly 12mn leaked files exposing dealings between some of the world’s wealthiest individuals and offshore companies. The documents make no direct mention of Russian President Vladimir Putin, but they do reveal how high net worth Russians, many of whom are alleged to be in Putin’s inner circle, have hundreds of millions of dollars tied up in offshore holdings.
These include oil magnate Gennady Timchenko, media executive Konstantin Ernst, energy mogul Victor Fedotov, Putin’s chief of staff Anton Vaino, and multi-millionaire Svetlana Krivonogikh, alleged by investigative group Proekt to be the mother of Putin’s third daughter.
The leak shows how a Cyprus-based firm registered to Gennady Timchenko, described by Forbes as ‘one of the most powerful people in Russia’, received hundreds of millions of dollars in loans from anonymous offshore companies. The Moscow Times has reported that the firm which received the loans was instrumental in Timchenko’s efforts to secure a large stake in Novatek, one of Russia’s biggest natural gas producers. In a book published last year, journalist Catherine Belton alleged that Timchenko acted as a ‘custodian’ for Putin’s wealth. Timchenko denies the allegation.
Konstantin Ernst, the long-time CEO of Russia’s leading TV channel, is revealed by the Pandora Papers to have owned a company registered in the British Virgin Islands (BVI) which came into possession of a painting by Jacques-Louis David worth $6.2mn. The papers also show how Ernst’s stake in a billion-dollar property deal was secured with the help of a loan from a bank with connections to the Russian government. According to the ICIJ, Ernst has responded to the allegations by saying that he never made a secret of his involvement in the property deal and by accusing the ICIJ of being ‘commissioned by the US secret services.’
The allegations arising from the Pandora Papers against Russian businessman and former oil executive Victor Fedotov are among the most serious. The documents link him to a network of international companies which the BBC alleges enabled him to embezzle up to $4bn from government-owned oil and gas pipeline company Transneft. The connection between Fedotov’s company VNIIST and corruption at Transneft had already been suggested by a 2008 audit report. What the audit did not reveal, however, according to the BBC, was that ‘one of Mr Fedotov's secret business partners in VNIIST was the president of Transneft, Semyon Vainshtok. The documents in the Pandora Papers show he was secretly benefitting from contracts Transneft had awarded.’ Most of the alleged dealings, however, took place before Timchenko was targeted by US sanctions.
Also among those named by the papers were Alexander Vinokurov, the son-in-law of Russian Foreign Minister Sergei Lavrov, and Svetlana Krivonogikh, alleged to have been romantically involved with President Putin. Both were shown to have significant wealth concealed in offshore companies. The leak revealed that Vinokurov owns at least seven offshore companies. Svetlana Krivonogikh, meanwhile, was shown to be the owner of an offshore company that bought a Monaco apartment worth $4mn in 2003, the same year she gave birth to a daughter which investigative group Proekt claims to have been fathered by the President. The Russian government considers Proekt a ‘foreign agent’.
The ICIJ says that Russia is ‘disproportionately represented’ in the leak, with 19 Russians deemed ‘politically exposed’ cropping up in the Pandora Papers. This constitutes less than 1% of the total list of Russians named in the 2.9 terabyte cache, however, and most of the politically sensitive cases date back more than a decade – before the time when President Putin started calling for Russian business to pull out of offshores. Dmitry Peskov, President Putin’s spokesperson, commented: ‘frankly speaking, we didn't see any hidden wealth of Putin's inner circle there.’ He added that Russia would not join the eight countries which have announced investigations in the wake of the Pandora Papers.