$330 Million—The Cost of Replacing a Political Rival in Russia?

By Alden Wahlstrom

How much does it cost to replace a political rival in Russia? Can such a thing be bought? Journalist Yulia Latynina of Echo Moskvi seems to think so. On her weekly radio program “Kod Dostupa” (“Access Code”), Latynina uncovered information supporting this idea while delving into the financial information of Sergei Roldugin, details of which were released with the so-called “Panama Papers.”  Perhaps the most interesting Russia-related story to come out of this massive leak involves Roldugin, a Russian cellist and long-time friend of Putin who apparently has $2 billion stashed away in an offshore account. Excluding a select few elite musicians—Andrew Lloyd Webber, Paul McCartney and the like—whose extreme wealth can be directly linked to the success of their careers, a musician possessing such sizeable assets raises legitimate questions about the origin of their riches.

While investigating the transactions tied to Roldugin’s offshore account, Latynina found one transfer of funds that is of particular interest. The transfer was from Dagestani billionaire Suleiman Kerimov and his associated businesses to Roldugin. Twice in 2010, Roldugin’s offshore account received money from Kerimov—once for a sum of 4 billion rubles (about $132 million at the 2010 exchange rate), and a second time for $200 million. As Latynina asked rhetorically on her show, why would Kerimov, a businessman, be willing to just hand over upwards of $300 million to Roldugin at the expense of his personal wealth and his business? One possible explanation for all of this is that it was a business deal. However, when Latynina contextualized these transfers with the events of Kerimov’s life at the time, this seems less likely (Echo Moskvi, April 9).

Apparently, in 2010, Suleiman Kerimov was engaged in infighting with Mukhu Aliyev, the then-president of Dagestan. Aliyev, who initiated the dispute, sought to subjugate or destroy Kerimov, putting Kerimov in an incredibly vulnerable position. However, the tables turned rather quickly. Kerimov began saying publicly that he would replace the president of Dagestan, and he lobbied for Magomedsalam Magomedov to accede to the post. Shortly thereafter, Magomedov was made head of the republic. Both these events and the transfers of money from Kerimov to Roldugin all took place within a period of a few months (Echo Moskvi, April 9).

But why Roldugin? Roldugin has been a long-time friend of Putin. And Kerimov only transferred money to Roldugin during the period when he was politically in need. Not before. Not after. So how does a transfer of money to Roldugin buy Kerimov a favor in a time of need? Latynina notes that the relationship between power and money in Russia is at once inseparable and indirect. Therefore, she speculates, no one should believe that the $2 billion that Roldugin is in control of is entirely at his disposal. Of course, being close to Putin has financial benefits. But this money, naturally, is a supply of funds that would be available to Putin should he wish to access it.

Many Kremlin watchers have been waiting for information to come from these “Panama Papers” that directly ties Putin to cash stashed offshore. This sort of revelation is unlikely to come from the information released last week. But the information released therein has shed light on how corruption works in Russia. As Dr. Karen Dawisha, author of Putin’s Kleptocracy: Who Owns Russia?, said in a recent interview on RFE/RL, the Panama Papers have helped show exactly how the Putin regime moves state funds and other money into offshore accounts for private use (Rferl.org, April 8). The story pertaining to Kerimov’s political rivalry in Dagestan takes this one step further, possibly providing further insight into the confused, intertwined relationship of power and money in today’s Russia.