Issue #10/91, May 25 - June 8, 2000   

 Corruption Porn 
 Corruption Porn 

CAMPAIGN DONATIONS, FLATHEAD STYLE

Now that President Putin has appointed his regional pit bulls to crack down on wayward, corrupt governors, we can pretty much bet that one corrupt local baron whose balls he won’t squeeze is Yekaterinburg’s Governor Eduard Rossel. Why’s that? Simple: according to this week’s Novaya Gazeta, Rossel has just been busted accepting an $850,000 cash “campaign donation” from Andrei Kozitsyn, the not-too-bright president of the Kachkanarsky Mine.

“All I know is that I went to Burger Kveen, ate some burgers, and a few minutes later, my stomach tore open and they oozed on out!”

The Urals region that Rossel runs is known as one of the bloodiest, and control of the mining sector, in particular Kachkanarsky, has made headlines even in the jaded Russian press. But this whole bribe thing is another matter indeed. According to Novaya journalist Oleg Sultanov—incidentally, Sultanov’s the journalist that most people believe was the intended target two weeks ago when Novaya Gazeta colleague and building mate Igor Domnikov was beaten unconscious by suspected Putin/LukOIL thugs—one of Kozitsyn’s subordinates handed him a signed receipt which reads: “I, Kozitsyn Andrei Anatolievich, confirm that I received from the company ‘Blond’ from Iskander Makhmudov the sum of $850,000 in cash for the election campaign of Rossel, the advancement of trustworthy deputies in the regional Duma and work with the local administration. [...] Transferred. Sincerely Yours.”

In case you’re wondering, “Blond” refers to the firm “Blond Javestment,” the nominal owner (60%) of Uralelektromed; Blond itself is 50% owned by Mikhail Cherny of the infamous Cherny Brothers, and 25% each by Kozitsyn and Makhmudov. The trio also own, according to the same 50-25-25 ratio, other local revenue-busting firms such as the Gaisky Mining Plant, Bogoslavsky (another mining outfit) and Sibkabel.

Rossel’s reelection campaign fund for the gubernatorial race last September was said to be stuffed by a number of such shady firms. Moreover, while only one-fourth of all federal tax police indictments are prosecuted, in Rossel’s Sverdlovsk region, that figure is a mere 7 percent.

What does all of this mean? Yep, you guessed it: if Sultanov wasn’t asking for it before, then this time, he can definitely expect a few bonks on the head outside of his apartment. Hey, this is the new Russia, folks! Isn’t it a wonderful place?

DIAMONDS ARE THE KREMLIN'S BEST FRIEND

You might think that the whole Mabatex-Kremlin scandal got its murky start in the mid-90s—when Misha “Two-Percent” Kasyanov was running the foreign credits department in the Ministry of Finance, and Pavel Borodin was just paving the way for Vladimir Putin to become his deputy running the Kremlin property holdings—but you’d be wrong. Like just about everything else that Mr. Clean’s regime is renowned for, the Putin-Kasyanov team were Vanya-come-latelys to Russia’s most explosive scandal of the Yeltsin era.

“Jeepers Mr. Putin, now that you put it that way, yeah, my article on you is full of errors. Let me just cut and paste a little bit here, and a little bit there…. Okay! See? It says you’re taking on corruption, and you’re tall!”

Let’s all close our eyes and let ourselves be taken back to the early 1990s, to the Big Bang of free-market reforms as it took place in the diamond-rich far eastern Russian Republic of Sakha. In 1992-93, Pavel Borodin was the Mayor of Sakha’s capital, Yakutsk, home of the famed Russian diamond trade. It was here that Mabatex got its start in the mega-corruption-jackpot that literally led to the Kremlin and beyond. It gets a little complicated, so bear with the Corruption Porn experts as they try to lead you through the fabled beginnings.

The President of the Sakha Republic was one Mikhail Nikolaev. His daughter, Olga Androsova, headed up a shady fund called the Special Fund for the Future Generations of the Republic of Sakha, into which large sums were poured from the Almazy Rossiya-Sakha diamond firm. The fund co-founded a bank, AKA-Bank, along with the Karich brothers (these guys are sort of the Berezovsky/Mogiloviches of Yugoslavia and are said to personally service Milosevic’s family fortune). Another figure close to Milosevic (and the KLA) is one Bedjet Pacolli, the owner of Mabatex.

Stick with us here…

Mabatex and the Karich Brothers are known to have worked hand-in-hand in Yakutia. They received huge local contracts for massive construction projects from a local government firm called Sakhavneshtroi, sometimes even completing the same project twice, such as cement factories and the like. The head of Sakhavneshstroi, Yuri Buslaev, also happened to be the republic’s deputy minister for foreign affairs. Thus, massive budget outlays for their unneeded construction projects were implemented, at a time when residential construction came to a near standstill.

Mabatex was named by President Nikolaev as the firm that arranged for “Swiss credits” to back up an investment fund headed by his daughter’s “Special Fund For the Future….” So-called investments were made, and the money was “paid back” to Mabatex by selling diamonds and gold for hard currency.

In 1994, when Borodin was already on his way to the Kremlin, a company called Sakha Investments was founded in Lugano. The president of the company? Pacolli. Address? Same as Mabatex. Vice President? Bingo!: Yuri Buslaev, who now had become the Minister for Construction and Architecture in Sakha.

You can guess what happened next: diamonds and gold mined in Yakutia and Sakha were sold on the market to pay for “projects” built by Mabatex and credits arranged by another insider, with the profits winding up in Switzerland. According to official documents, the total bill for Mabatex’s projects came to $200 million, although that figure is thought to be grossly understated.

“Could someone hit the snooze button on my alarm? I think I’m going to sleep in today. And tomorrow. And, well, forever!”

Interestingly, the bank they used, Gottardo, was also the bank implicated in issuing credit cards to the Yeltsin family. One of the bank’s directors, Franco Fenini, was also the director of two Pacolli firms, and he oversaw the accounts for Sakhavneshstroi and Buslaev’s ministry, which handed out the contracts to Mabatex and the Karich brothers.

Pacolli moved his business from Bern to Lugano in 1994 after prosecutors there started getting too snoopy. Looks like it was a good move. On his payroll are the local canton’s ex-head of the department for foreign affairs, while the burgermeister of Lugano, Giorgio Giudicci, has also served as a vice president in one of Pacolli’s companies.

Which all goes to show you how good ’n clean those Swiss folks are, and how naughty and uncivilized those savage Russians are. And how, in the end, it just doesn’t matter, because millions of Russians will live the rest of their lives in freezing shit and squalor thanks to these international assholes.

As you can imagine, the fallout from the uncovering of this scandal has been enormous. Borodin hired Putin to be his deputy to run the Kremlin property, in which Mabatex figured heavily; when Putin became president, he named Borodin head of the fledgling Russia-Belarus union.