Donations for the regime
How the cuts work
In 2016, the UR championed in contributions among the other Russian parties with 4.3 bln rubles, while the Just Russia receive 1.2 bln rubles in donations, the Communists got 667 mln rubles, LDPR raised 367 mln rubles.
The lion’s share of the donations (3.9 bln rub) have been made by the judicial entities, foundations and companies. Many of them participate in the state auctions and win them, signing whooping contracts.
Human rights activists points out at the connections between the donations for the ruling party and winning the state contracts. The Golos movement informed that the hidden financing had been used on the runup of 2016 elections. In their report, the experts noticed that the parties’ financing could employ the schemes of “cuts”: a company only receives the contracts if it takes an obligation to channel a share of the funds with the party.
The analysis of the parties’ 2016 financial reports published by the Central election commission shows that scheme could be implemented in the year of the parliamentary elections. The Russiangate calculated that 61% of the UR’s donor companies in 2016 have been the state contractors.
In reality, the percentage of the state donors has been even larger. The report does not include the situations when the state contracts are won not buy the donor companies themselves but by their affiliated structures. For example, in Crimea the Sharkhinsky Karier JSV donated to the party 18 mln rub in 2016 but had never taken part in the state contracts. Still the JSV’s sister company Konsol-Stroi Ltd signed several contracts in 2017 with the Crimean capital construction service over erecting childcare facilities and schools in the region.
Welcome to the world of state contracts
In the list of the ruling party’s donors in 2016 there are the companies which have obtained the contracts the first time only in 2016-2017, that is, immediately after making a donation. The record-high contribution was made by the Okeanrybflot PJSV (44.9 mln rub).
The Okeanrybflot’s CEO has been Eugeny Novoselov. During the 2016 elections, he was elected a member of Kamchatka regional legislative assembly. That year, Novoselov’s company donated to the UR 44.9 mln rubles, which exceeds the sum permitted by the law (43.3 mln rub) and started to receive the state contracts.
The Solkom LLC (Ulyanovsk) donated 400,000 rub in 2016. Despite the company was created in 2009 yet, it had started to receive the state contracts in 2016 only. The Solkom received 218-mln-ruble worth of contracts for construction of a childcare facility from the Ulyanovsk city and regional state organizations subordinated to the city and region’s authorities. Both the mayor of Ulyanovsk and the governor of the region have been the UR members.
The “cuts” means the money a contractor returns to its client in exchange for signing a contracts with that client. Normally, the cuts amount to 10% of the contract’s sum. Two companies which recently stroke the deals with the Bashneft’s sister companies fall within that parameter.
The Chelyab Neft Oil LLC contributed to the UR coffers 4 mln rub and won its first state contract that year from the Bashneft-Roznitsa LLC worth 325 mln rub.
The other Bashneft-Roznitsa’s supplyer, the AZS Oil, donated 3 mln rub and won the 210-mln-ruble contract. Both companies have been registered in Chelyabinsk and both contracts deals with the sale of gas filling stations.
Russian railways tracks
According to the Russiangate’s calculations, the sixth part of the UR sponsor companies (104) improved their business following making donations. In 2016-2017, they started receiving more state contracts that in all previous years.
Most of such contracts and budget money have been received by the RZD JSV contractors. Twenty companies which contributed from one of 43 mln rub to the UR, started signing lucrative contracts with the RZD structures exclusively.
Some of those companies made the largest donations possible (up to 43 mln rub). The richest of them belong to a Russian businessman Alexei Krapivin. His name appears in the investigations of the Panama Dossier, Laundromat and corruption within the RZD itself.
Vladimir Yakunin, ex-head of the RZD, photо – Gazeta.ru
Krapivin’s father Andrei used to be an advisor of the RZD former head Vladimir Yakunin. Krapivin-Junior became known thanks to building his empire of the RZD’s largest contractors.
Yet in 2014, the Reuters published an investigative report which had revealed that the money received by Krapivin from the RZD were spent not for construction works and goods supplies but channeled to the offshores through the shell companies or converted into cash. In March 2017, the Novaya Gazeta newspaper described Alexei Krapivin one of three largest beneficiaries of the so-called Moldavian scheme of money outflow.
Whirlpool of billions
After Vladimir Yakunin left his post in August 2015, he was replaced with Oleg Belozerov. But the companies belonged to Krapivin-Junior have still been the RZD’s largest contractors.
Moreover, in 2016, the number of the contracts won by Yakunin’s firm, increased. That happened to four companies which had donated to the UR the largest legally permitted sum of 43 mln rub in 2016.
Say, the BamStroiMakhanizatsiya LLC signed the contacts only with the RZD and RZDstroi. Only two contracts have been dated to 2014 and 2015. The remaining 17 contracts worth 4.6 bln rub were inked in 2016 and 2017. That company has been the richest sponsor of the UR in 2016 in terms of earnings from the state contracts.
The Svyaztech LLC owned by Maxim Solomko (co-founder of Krapivin’s other companies) earned on the RZD contracts 205 mln rub in 2016-2017. Prior to that, the company had struck only one deal.
The RailTach LLC also owned by Solomko kept winning the contract from the RZD, which earned it 1.4 bln rub in 2016-2017. The Setstroienergo (also belonging to Krapivin, as the Republic has learned) earned 6.8 bln rub on the state contracts in 2016-2017. After making a donation, the number of the company’s contracts has more than doubled.
There are other companies connected to Krapivin which won in 2016 more contracts from the RZD than earlier.
Those are the TransServicAvtomatica LLC (in 2016-2017 it earned 1.4 blb rub), the Vostoknefteprodukt LLC (7 bln rub), Transbarier M LLC (3.4 bln rub), ZhelDorMikroTrans LLC (821 mln rub), TransSignalStroi LLC (6.5 bln rub).
There could be even more Krapivin’s companies in the list of the UR sponsors which started winning more contracts following making a donation. It is difficult to trace as that business empire runs many firms founded exclusively to serve the RZD orders and they are registered on phony owners.
Remarkably, none of the above mentioned companies has sponsored the UR before. The party’s financial reports in 2012-2015 lack any mentioning of them. But after Yakunin was replaced by Belozerov, the Krapivin’s firms have started to invest into the ruling party and win the state contracts.