Putin controls the Russian state institutions, its secret police and its big state companies. Together with a few old friends from St. Petersburg, the president is tapping the big state companies through overpriced no-bid procurement, transfer pricing, asset stripping and stock manipulation. They are also making money by extorting old oligarchs and taking loans from state banks, not to be returned.
Boris Nemtsov, who was murdered outside of the Kremlin, and still-active opposition politician Vladimir Milov exposed this kleptocracy in their booklet “Putin and Gazprom” in 2008. A more extensive account in English is Karen Dawisha’s book “Putin’s Kleptocracy: Who Owns Russia?” The Panama Papers, a series of leaked documents on offshore accounts released in April 2016, offered plenty of evidence of Putin’s secret wealth.
Overall assessments indicate a personal enrichment of Putin and his closest cronies of some $20 billion to $25 billion a year since 2006. Nemtsov and Milov documented pilfering from Gazprom of $60 billion from 2004 to 2007, and this was probably just over half of their enrichment, which has only increased. By now, this group would have accumulated $240 billion to $300 billion. Businessman Bill Browder estimates that Putin is the richest man in the world, with a personal wealth of $200 billion. Total private Russian holdings abroad are assessed in the range of $800 billion to $1.3 trillion, according to Global Financial Integrity and a National Bureau of Economic Research study. [Continue reading…]