Private Bank Fuels Fortunes of Putin’s Inner Circle

Once known for investigating government corruption and airing opposition views that were never allowed on state television, Ren TV over time became noticeably less critical.

“The first goal was political control of the media,” said Roman Pivovarov, a leading analyst of the Russian media landscape. “But that was achieved relatively early on. So this was as much about money. The picture today is clear, in that the big media belongs to the small circle of people who control not only the politics but the economics of Russia.”

.. Cyprus is one of the world’s busiest offshore financial-service centers, with one of Europe’s lowest corporate tax rates and laws that enable foreigners to incorporate companies within days. Nearly 270,000 companies are registered there, and many are shells created to shelter income while obscuring the real owners.

.. A partner there, Makis Chrysomilas, said his firm typically uses its own address or those of employees when establishing residence for shell companies. “We are lawyers for 4,000 or 5,000 corporations,” he said. Coming up with names for them can be a challenge, he explained. So he has taken names from a book listing the thoroughbred horses auctioned in the United States. He also has named companies after streets in London and other European cities.

.. As for Bank Rossiya, he went on: “As far as I recall, this is a medium-sized bank. Personally, I did not have an account there, but I will definitely open one on Monday.” He later directed the presidential administration to begin depositing his official salary — roughly $7,500 a month — into a Bank Rossiya account.

The Dying Russians

“This is what civil war actually looks like. “It’s not when everybody starts running around with guns. It’s when everybody starts dying.”

.. three important things made life not only less harsh, relative to earlier years, but even worth living. One was the general perception of social and economic stability. Jobs were unquestionably secure and, starting in the 1960s, followed by a retirement guaranteed by the state. A second was the general sense of progress, both of the sort Soviet propaganda promised (the country was going to build the first communist society, in which money would be abolished and everyone would share in the plenty); and the personal material improvement this generation experienced itself moving toward. A third source of comfort of Soviet life was its apparent equality. A good number of people with connections enjoyed extraordinary perquisites compared to the vast majority of the population, but the wealth-and-privilege gap was concealed by the tall fences around the nomenklatura summer houses

.. One woman says that the difference between current poverty and poverty in the postwar era is that “now there are rich folks.”

.. Boris Yeltsin and his team of young, inexperienced reformers instituted economic shock therapy. As far as we know today, this series of radical measures jerked Russia back from the edge of famine but also plunged millions of people into poverty.

..Parsons devotes an entire chapter to comparisons between the collapse and chaos of the 1990s and the devastation that followed World War II. “Margarita told me with some disgust, ‘It is just like after the war.’ And then she would add—half angry, half baffled—’But there was no war.’ …The fifty-seven-year-old taxi driver I interviewed said, of those older than himself, ‘They will never understand what happened. No war, nothing. And everything fell apart.’”

.. For those over forty, the message of the new era was that no one—not even the builders of an imaginary future—needed them anymore. Above all, the veil that had hidden the wealth of the few from the incredulous and envious gaze of the many had been ruthlessly removed: for the 1990s and much of the 2000s, Moscow would become the world capital of conspicuous consumption.

.. Then, from 1941 to 1946, the Soviet Union lost an estimated 27 million people in the war and suffered a two-thirds drop in birth rate. But the two-and-a-half decades since the collapse of the Soviet Union are the longest period of depopulation, and also the first to occur, on such a scale, in peacetime, anywhere in the world.

.. Male life expectancy at age fifteen in Russia compares unfavorably to that in Ethiopia, Gambia, and Somalia.

.. Another major clue to the psychological nature of the Russian disease is the fact that the two brief breaks in the downward spiral coincided not with periods of greater prosperity but with periods, for lack of a more data-driven description, of greater hope. The Khrushchev era, with its post-Stalin political liberalization and intensive housing construction, inspired Russians to go on living. The Gorbachev period of glasnost and revival inspired them to have babies as well.

Russia and the Menace of Unreality

At the NATO summit in Wales last week, General Philip Breedlove, the military alliance’s top commander, made a bold declaration. Russia, he said, is waging “the most amazing information warfare blitzkrieg we have ever seen in the history of information warfare.”

It was something of an underestimation. The new Russia doesn’t just deal in the petty disinformation, forgeries, lies, leaks, and cyber-sabotage usually associated with information warfare. It reinvents reality, creating mass hallucinations that then translate into political action. Take Novorossiya, the name Vladimir Putin has given to the huge wedge of southeastern Ukraine he might, or might not, consider annexing. The term is plucked from tsarist history, when it represented a different geographical space. Nobody who lives in that part of the world today ever thought of themselves as living in Novorossiya and bearing allegiance to it—at least until several months ago. Now, Novorossiya is being imagined into being: Russian media are showing maps of its ‘geography,’ while Kremlin-backed politicians are writing its ‘history’ into school textbooks. There’s a flag and even a news agency (inEnglish and Russian). There are several Twitter feeds. It’s like something out of a Borges story—except for the very real casualties of the war conducted in its name.

.. When the Kremlin and its affiliated media outlets spat out outlandish stories about the downing of Malaysia Airlines Flight 17 over eastern Ukraine in July—reports that characterized the crash as everything from an assault by Ukrainian fighter jets following U.S. instructions, to an attempted NATO attack on Putin’s private jet—they were trying not so much to convince viewers of any one version of events, but rather to leave them confused, paranoid, and passive—living in a Kremlin-controlled virtual reality that can no longer be mediated or debated by any appeal to ‘truth.’

.. In his research on how Bulgarian media covered the conflict in Ukraine, Christo Grozev, of the Bulgaria-based Risk Management Lab, found that the majority of the country’s newspapers followed Russian rather than Ukrainian narratives about events such as the downing of Flight MH17. “It’s not merely a case of sympathy or language,” Grozev says. “The Russian media just tell more and better stories, and that’s what gets reprinted.”