Putin Blames West for Panama Papers ‘Plant’ But Says US Officials Privately Apologized to Him

April 8, 2016
President Vladimir Putin grinning at the question of a Russian blogger about the "information plant" of the Panama Papers, at a media forum in St. Petersburg, April 8, 2016. Screengrab from video by RT

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.

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How Boris Nemtsov Was Murdered: Investigation by Novaya Gazeta
How Stalin Returned to Russian Contemporary Life – Meduza


First Drill of Putin’s New National Guard Secretly Filmed by Open Russia

Open Russia, the Russian opposition group formed by businessman and former political prisoner Mikhail Khodorkovsky, has obtained a copy of a video purporting to be a training session by the new National Guard created by President Vladimir Putin and announced earlier this week.

Тайные учения нацгвардии в Подмосковье 7 апреля 2016 года

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Apr 08, 2016 23:28 (GMT)

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.

Set as default press image
Screen grab from Open Russia video shows grey and red structures.
2016-04-08 19:30:34

Set as default press image
Photo taken by photographer Zhukovskiy on Yandex photos shows similar grey and red structures.
2016-04-08 19:31:31

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).

— Catherine A. Fitzpatrick
Yet Another Bolotnaya Demonstrator Arrested, 4 Years On
While it seems hard to believe, nearly four years after the Bolotnaya Square demonstration May 12, 2011, Russian authorities are still finding protesters to arrest and charge with offenses related to that fateful day.
Already dozens of demonstrators have been tried and sentenced to length terms up to 4 or more years, but investigators keep finding more people.
Maksim Panfilov was arrested today and is to be held in pre-trial detention until June 7, Slon.ru reported, citing Mediazona. 
Panfilov, 30, of Astrakhan, was charged at the time with assaulting a police officer and trying to rip off their helmets. Back in 2011, was arrested but only fined 1,000 along with others in the march and released.
His relatives says he suffers from Tourette’s Syndrome.
Another man recently arrested was Dmitry Buchenkov, awaiting trial, and still another was Ivan Nepomyyashchikh, sentenced to 2.5 years forced labor in December 2015, becoming the 33rd person to be sentenced in the case. 

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

Putin Blames West for Panama Papers ‘Plant’ But Says US Officials Privately Apologized to Him
Days after the largest document leak in history, the inevitable backlash has begun. The leaks from the Panama law firm Mossack Fonseka, which specializes in offshore corporations, have shaken governments in the West and reinforced suspicions that Russian President Vladimir Putin and his entourage are involved in billions of dollars of fraud and money-laundering. 
Predictably, Moscow began deflecting the allegations even before the Panama Papers were released, saying they were part of an “information war.”
Yesterday, as we reported, at a media forum in St. Petersburg, Putin went further and for the first time in three years, made an explicit statement siding with WikiLeaks and implied that the West was retaliating against him for “refusing to surrender Snowden,” the fugitive former NSA contractor.

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.

When a blogger asked Putin about the Panama Papers yesterday, he didn’t respond immediately and directly, but first indulged in a long-winded propagandistic rant about all the imagined slights against Russia and intrigues of the West, from “sending potatoes” after the collapse of the Soviet Union to NATO’s bombing of Kosovo. 
Today, presidential spokesman Dmitry Peskov cited Putin’s claims during that speech that US officials privately apologized to Putin for the forthcoming Panama allegations, although no such statement has been made by the the US. Peskov said he could not give a name (translation by The Interpreter):

“Since the president himself didn’t name those who did this, then I don’t believe I have the right to do this.”

At the media forum in St. Petersburg, Putin said about the West’s alleged campaign against Russia:

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.

Both Russian propagandists and some Western critics of the Panama Paper have implied that the total amounts involving Russia are only $2 billion and therefore only “tip change” for Russia where enormous frauds are uncovered nearly every day involving millions. But the figure of “$2 billion” isn’t the total amount in all the allegations involving Russia, it’s the amount for only one offshore (Sandalwood International) of one individual, the cellist Sergei Rodulgin.
Last month, US Secretary of State John Kerry visited Moscow to meet with Putin after the declaration of a purported ceasefire in Syria, but there’s no evidence that he knew about the Panama Papers or discussed the topic of Russian corruption with Putin.

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