In Russia, the findings of a young whistleblower lawyer concerning the rampant corruption of major state-affiliated companies have made much bigger waves than the recent tsunami of Wikileaks revelations.
34-year-old Moscow lawyer Alexey Navalny could be nicknamed the “one-man Wikileaks”. His website is dedicated to uncovering and publishing incidents of high-level corporate corruption, with revelations concerning Russian natural gas monopoly Gazprom, leading Russian oil company Rosneft and Russian bank VTP, among others.
Navalny’s latest findings concern Russian pipeline-construction giant Transneft. The website published what he describes as internal Transneft documents proving that company directors embezzled four billion dollars [2.9 billion euros] of public funds intended for the building of a massive pipeline from Siberia to the Pacific Ocean, using fake subcontractor companies to transfer the money onto offshore accounts.
Navalny says that Russian authorities were fully aware of the corruption, but failed to bring top Transneft managers to justice. Asked about the findings, Kremlin spokesman Dmitry Peskov said he could se “no necessity to comment on this blog". On November 17, Prime Minister Vladimir Putin publicly thanked the company for its completion of the pipeline.
The documents (in Russian) can be downloaded from Navalny’s Web site or here.
Navalny made a video explaining his findings with the help of anonymous video professionals who support his cause. It has been viewed nearly 250,000 times on YouTube. For English subtitles, click the cc button on the bottom right corner of the video on the YouTube page.
Post written with freelance journalist Ostap Karmodi.
“Transneft managers were using fake companies to steal money”
Alexey Navalny, 34, is a lawyer in Moscow and founder of the Whistleblower website navalny.ru.
Transneft is Russia's oil transportation monopoly. It is controlled by the government, but there’s private-owned preferred stock that can be bought by small shareholders (I personally own a small share). The company built a 4,000 km long pipeline from East Siberia to the Pacific Ocean, using both state and investors' money. So far, the project has cost 17 billion dollars [12.7 billion euros], and the pipeline isn’t even finished yet. That’s very expensive, even for such a big project.
Other Transneft minority shareholders and I were trying to find out what made the construction so expensive when we discovered a truly astonishing document. I’d like to stress that the document was issued by Transneft itself. It’s not an outside analysis or my own guesswork; it’s an official report that was ordered by the Russian Accounts Chamber, signed by Transneft’s first vice-president. We obtained it from an inside source: both Transneft and the Russian Account Chamber have hundreds of employees, and not all of them are corrupt, of course.
The 150-page document describes in detail how huge amounts of money were embezzled during the pipeline construction. It explains that all the subcontractors were actually fake companies, paid exclusively so they would transfer 25-30% of what they received onto offshore bank accounts in faraway fiscal paradises. Basically Transneft managers were using these companies to steal money.
What do you think happened after we made these documents public? Instead of being prosecuted, the then-CEO of Transneft, Semion Vainshtok, was transferred to another company, Olimpstroy, the state corporation that is building infrastructure for the 2014 Olympics. There were no investigations opened, neither by the police nor the Russian accounts chamber.
My main principle is to publish only the information I can verify. If an anonymous source were to send me secret military documents I most likely wouldn’t publish them because I have no way to check them, and they could very well be a set up. 95% of the time, however, the information we “uncover” is actually not classified. You can find very interesting details by analysing open information sources.”
Video posted on YouTube by aarpo.This video was sent to Navalny by readers of his blog. It shows a dramatic accident that occurred during the construction of a pipeline in Russia. In the comment section, people presenting themselves as industry insiders explain that according to construction rules, short pipe segments should be laid down in a trench one by one, and only when inside should they be welded together. People working in this video apparently decided to save time and money by welding the segments on the surface – with catastrophic consequences. Another comment notes the strikingly inadequate number of cranes for such a long pipe segment.