Searches At TASS Director’s Offices As State Turns On Yakunin

February 5, 2016
Sergei Mikhailov, general director of TASS. Photo: Maksim Blinov / RIA Novosti

LIVE UPDATES: Searches are under way at the state-owned TASS news agency and offices belonging to the agency’s general director, Sergei Mikhailov. The searches are reportedly connected to his previous work at Russian Railways, the ousted chief of which, Vladimir Yakunin, is now the subject of a hitherto-unexpected investigation by the Interior Ministry.

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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Searches at TASS Office Linked to Russian Railways Corruption Case

Yod, the Moscow city publication, has a round-up of further developments in the search of TASS director’s office this morning.
The investigation of TASS general director Sergei Mikhailov may be related to his past job as head of the department for corporate communications at Russia Railways. In 2015, investigators conducted a pre-investigation check of possible inflated expenditures on PR campaigns and PR support for various projects, as Rosbalt reported, citing an “informed source.”
In addition to his post at Russian Railways, Mikhailov was also co-owner of the PR agency Mikhailov and Partners.
In 2015, Russia’s Accounts Chamber conducted an inspection of Russian Railways’ PR expenses after receiving an inquiry from a source it would not name, says Rosbalt.
Rosbalt also reported  that law-enforcers were interested in Dmitry Korotkov who had been the general director of Mikhailov and Partners since 2005 and then became the head of public liaison at TASS.
Aside from Mikhailov’s office, investigators also searched his department of strategic initiatives, TASS reported.
TV Rain reported that they had confirmed at TASS that the searches were related to the department of communications and was related to “the previous work place” of one of its employees.

In a blog post today, opposition leader Alexey Navalny recounted his surprise that the Interior Ministry unexpectedly contacted him and asked for copies of the various investigations his Anti-Corruption Fund had run on Yakunin and Russian Railways in recent years.

He said he was just on the point of complaining about their inaction on past appeals when this request came. One of the best known concerned a fancy fur storage facility at his lavish dacha which seemed to indicate he lived beyond his official salary.

Navalny cited a Russian News Service report, based on the testimony of a former employee of Yakunin, that 300 Vietnamese workers had constructed the enormous compound, and a river was even blocked off in the process.
Roskomnadzor, the state censor, removed pictures of Yakunin’s compound, surrounded by a barbed wire fence, from Yaplakal, a Russian Internet news portal, but this only caused the “Streisand effect,” said Navalny.
Navalny also exposed a corrupt scheme related to the sale of tickets over the Internet.
Igor Bunin, a political analyst, told TV Rain that Yakunin may have come under fire because he had become involved in politics. 

“It means that he is behaving inappropriately somehow, otherwise this wouldn’t be happening. Well, he was creating his own fund, and is intending to get involved in politics. Perhaps someone doesn’t like him there. If the Interior Ministry has become interested in this, then it is only in response to some of his statements, and then the hand of God could report that something has to be investigated.”

So far, Yakunin himself has not been named, and the search seems related to Mikhailov — although with the request to Navalany, the Interior Ministry has cast a wider net. TV Rain said that Mikhailov’s long-time partner, Viatly Krivenko, had signed a 15-year contract with Russian Railways for placing ads at its facilities.

As with other criminal investigations, it is worth asking why the Interior Ministry (the police), as distinct from the Investigative Committee or the Prosecutor’s Office is conducting the investigation, and who it was that complained to the Interior Ministry.

— Catherine A. Fitzpatrick 

Russia to Lose $600 Billion from Sanctions, Oil Price Drop, Say Experts; 41% Loss in Oil Revenue This Year
In a piece in Vedomosti today reported by, experts Yevsey Gurvich and Ilya Prilepsky from the Economic Experts School have estimated that losses to Russia from sanctions and the drop in oil prices will be nearly $600 billion.
They said Russia would suffer $170 billion in losses due to financial sanctions and $400 billion due to the drop in oil prices. They used the figure of $100/barrel, which the Russian government was still using six months ago to calculate the sanctions’ effects, and $50/barrel to calculate the loss of future revenue.
They said about $280 billion would be lost in 3.5 years from gross capital revenue, then $85 billion from direct investments.

While these figures might seem hard to prove for some, the Russian government itself has reported a startling loss: Russia’s income from exporting oil fell by 41.8%, TASS reported today, citing the Federal Customs Service, and is currently $89.5 billion. Russia increased its shipments by 9.4% in 2015 to try to compensate for the losses.

Estimates of what Russia has lost or will lose from sanctions have varied widely, and some media have reported that the West has lost, too. 
In November 2014, CNN Money said Russia was losing $140 billion from sanctions and lower oil prices.

CNN Money, citing the International Monetary Fund (IMF), said Russia’s economy could shrink by as much as 9% over time, and had already shrunk by 3.4% in 2015.
Last June, Newsweek cited an estimate from Die Welt of 100 billion euros due to sanctions costing Europe jobs.
In December 2014, Bloomberg estimated that Russian billionaires had lost $54.1 billion of their wealth; of the 15 billionaires profiled by Bloomberg, only one, Oleg Deripaska, grew wealthier in 2014.
But regardless of the true amount of the financial impact, the political impact has also been “stunning,” according to Lilia Shevtsova, a Russian foreign policy expert now at the Brookings Institution, Russkiy Yevrey reported.
She said first, the sanctions demonstrated Russia’s dependence on developed countries, even the lack of its independence in its service role as a raw materials “appendage” to the West. In a recent Facebook post, she bluntly called Russia “a gas station.”
Second, the collapse of the Kremlin’s foreign policy and lobbying efforts aimed at undermining the West’s unity. “Liberal democracies have demonstrated their capacity to preserve unity on the sanctions regimen,” she said.

Third, sanctions may become an instrument of undermining Russia as it reaches the state of self-exhaustion as significant part of the ruling class is “integrated with the West personally.”

— Catherine A. Fitzpatrick 

Searches At TASS Director’s Offices As State Turns On Yakunin

Russian investigators are conducting a search at the offices of the state-owned news agency TASS.

The independent TV Rain channel reports that the search may be linked to the general director of TASS, Sergei Mikhailov.

Later this morning, searches were conducted at offices belonging to the general director’s Mikhailov and Partners firm at the Monarch business centre.

One source at the communications agency told TV Rain by telephone that:

“Investigative operations have been under way since the morning. They’ve seized phones from the employees who were in the office at the time.” 

Mikhailov himself is, TV Rain reports, currently at a meeting in the Kremlin.

Mikhailov’s “previous occupation” referred to in the reports may well be his posts at Russian Railways, where he worked from 2004 until 2006.

According to his TASS biography, Mikhailov served first as an adviser to the president of the state-owned company, and then then became a board member, heading first the public relations department, and then  the department of corporate communications.

Vladimir Yakunin, who headed Russian Railways while Mikhailov worked there, was dismissed by President Vladimir Putin last year and has since publicly warned other members of Putin’s inner circle that they were not safe in their positions, despite his long running close association with the President.

Russia's elite remain vulnerable to President Putin's whim, warns ousted ally

A former Soviet diplomat – and, it is widely believed, spy – Mr Yakunin left government service to go into business in the early 1990s. At the same time he acquired a lakeside dacha in the countryside north of St. Petersburg, where his neighbours included an official in the St Petersburg mayor's office called Vladimir Putin.

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Feb 05, 2016 12:41 (GMT)

Further supporting suggestions of links between the searches at TASS and Mikhailov and Partners is the surprising news that the Interior Ministry has responded to long-standing calls by Alexey Navalny’s Anti-Corruption Foundation (FBK) for investigations into Yakunin’s assets and fraudulent activities.

TV Rain reports that, according to Navalny, the FBK received an unexpected notice from the MVD of the start of the investigation, even inviting representatives from the Foundation to supply documentation.

— Pierre Vaux