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Data leak exposes Putin associates' secret fortunes – including a billion-euro arrangement for the president's Finnish friend

A massive data leak reveals secret financial arrangements of Putin's inner circle – including a Finnish friend with a major share in a gas giant.

Finnish-Russian business mogul Gennady Timchenko (left) is a long-time close associate of Russian President Vladimir Putin. Image: Yegor Aleyev / AOP & Sergey Guneev / EPA

The world's largest-ever data leak reveals hidden holdings of dozens of Russian oligarchs. Russia's energy reserves are also used for operations abroad, says Professor Veli-Pekka Tynkkynen.

The massive data leak provides new information about the hidden fortunes of Russian President Vladimir Putin's inner circle.

For instance, investigations by Yle's MOT journalism team reveal how more than a billion euros were channelled to Putin's Finnish friend Gennady Timchenko through anonymous tax haven companies.

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The leak includes a document showing a transfer of about one billion euros to Timchenko through anonymous tax haven companies. Image: Yle MOT

The money was transferred in a covert operation involving several typical hallmarks of corruption and money laundering.

With the money provided to him, Timchenko acquired a significant stake in Novatek, Russia's second largest gas company.

According to Russian investigative journalist Roman Anin, Timchenko in fact serves as a front for Putin.

"In my opinion, Putin is the real owner of all of Timchenko's companies," says Anin.

In August, the Russian Ministry of Justice declared that an investigative journalism online media company set up by Anin, iStories, was a "foreign agent". Anin has written a number of articles on corruption among Russia's ruling class. He is now in exile in Latvia.

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Russian investigative journalist Roman Anin is now in exile in Latvia. Image: Jyrki Ojala / Yle

The United States has also said it considers Timchenko to be a Putin asset manager (siirryt toiseen palveluun) of sorts.

MOT has spent months examining the activities of Putin's inner circle in partnership with members of the International Consortium of Investigative Journalists (ICIJ), the British newspaper The Guardian and others.

Timchenko has "always complied with the law"

Putin did not respond to requests for comment to Yle's MOT desk about the revelations presented in this article. Timchenko declined to be interviewed by MOT, but provided a statement through his lawyer. It did respond to specific questions.

"My client has always complied with the law in his transactions. Any allegations that he was guilty of or involved in money laundering, tax evasion or any criminal activity are completely incorrect," the letter stated.

According to the letter, Timchenko sees the questions from MOT and the ICIJ as showing a "preconceived attitude".

Dozens of Russian billionaires

The Pandora Papers leak includes information on 46 Russian billionaires' holdings in tax havens.

Assets gained through these secret arrangements have been used to buy valuable real estate and yachts, as well as companies of strategic importance to Russia.

The ownership arrangements concealed through tax havens are also linked to European energy policy and the associated power struggles.

Russia energy revenues are used to carry out foreign operations on behalf of the Kremlin, says Professor Veli-Pekka Tynkkynen of the University of Helsinki's Aleksanteri Institute for Russian and East European Studies.

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Professor Veli-Pekka Tynkkynen of the University of Helsinki's Aleksanteri Institute for Russian and East European Studies Image: Mårten Lampén / Yle

"These flows of dark money can be directed to various actors who are seen as advancing the needs of Putin's administration," Tynkkynen says. Tynkkynen's research focus is Russia's energy and environmental policy.

Timchenko's secret billion-euro deal

Timchenko, known in Finland as a former part owner of the Jokerit ice hockey team, has amassed a fortune worth more than 20 billion euros since his friend Putin came to power.

Timchenko has held Finnish citizenship since 1999 along with Russian and Armenian citizenship, according to the US Treasury.

"Timchenko is one of Putin's best friends and the businessman closest to the president. He is an example of an 'untouchable' businessman. The police, the Russian Federal Security Service (FSB) and other authorities do not interfere in his activities," says Anin.

For more than a decade, Timchenko has been a major owner of Russia's second-largest gas company, Novatek. The firm is a major player on the European gas market.

Timchenko became a major owner of Novatek through a secret operation. In the initial phase, about a billion euros' worth of loans were arranged for Timchenko from anonymous tax haven companies. MOT has not found any evidence that the loans were repaid.

The operation involved more than 10 tax haven firms, whose owners and sources of funding were carefully concealed.

Timchenko used the funds to acquire a significant share of Novatek.

The leaked documents indicate that the deals were approved by the Russian state-owned gas giant Gazprom.

In Tynkkynen's view, it is likely that the deal was also approved by Putin.

"Of course. No major strategic changes in Novatek are made without the consent of Putin's inner circle," Tynkkynen says.

Hallmarks of money laundering and corruption

MOT analysed Timchenko's billion-euro deals according to criteria used in investigations of money laundering and corruption.

The editors received assistance in identifying these warning signs from an experienced white-collar crime investigator, who requested anonymity due to the sensitivity of the case. This expert has experience in carrying out complex money laundering investigations.

This fact box lists the hallmarks of money laundering.

The arrangements were also assessed using metrics similar to those used by banks to assess money laundering risks associated with their customers' operations. Banks have a duty to counter money laundering and to report suspicious money transfers to the police. Timchenko's billion-euro business arrangements appear to bear several hallmarks of money laundering and corruption.

"Money laundering and tax avoidance are part of tax haven companies' logic. These two needs are certainly not far removed from this Novatek arrangement," says Tynkkynen.

Novatek is now officially a public company, with shares listed on the London Stock Exchange. Its largest owners are businessman Leonid Mikhelsson andTimchenko.

Novatek representatives did not respond to questions from MOT.

According to Tynkkynen, Novatek is a company of strategic importance for Russia. It specialises in the sale of liquid natural gas (LNG), which is expected to see rising demand.

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Gazprom HQ in Moscow (file photo) Image: Maxim Shipenkov / EPA

"The European Union wants to reduce its use of pipeline gas, in other words basically Gazprom gas. It suits the Putin administration's strategy for there to be other Russian suppliers in this sector, since Gazprom is facing some headwinds," says Tynkkynen.

Energy millions in the 'swimming pool'

Putin's inner circle has amassed huge fortunes, largely with the help of the Russian state. According to Anin, the use of these funds is actually decided by Putin. In Anin's view, western countries lack a deep understanding of the nature of Russian corruption.

"In this regard, we refer to the Russian concept of a 'swimming pool'. All of this money and property is in this pool, which is controlled by Putin. The money in the pool is used for various purposes," he says.

"It could mean buying real estate for employees of the presidential administration, but just as well funding [the Kremlin's] secret foreign operations, such as poisoning Kremlin opponents," Anin adds.

The funds may also be used to support political movements or parties abroad.

"Various flows of dark money can be directed to actors that advance the needs of Putin's regime. For instance, Russia has supported right-wing populist parties in recent decades," explains Tynkkynen.

"Money from the coffers of this corrupt petrostate can be directed to such targets like this," he says.

Dark money even has an impact on measures to combat climate change, Tynkkynen notes. Populist parties that have received money from the Kremlin oppose climate action. According to Tynkkynen, this is not the primary goal of Putin's regime, which is rather spreading instability in Europe.

"But this suits Putin's administration because it is so dependent on oil and gas revenues. It sees the transition away from oil and gas as a significant threat," Tynkkynen says. "If we want to advance Europe's fight against climate change, then getting rid of Russian corruption is extremely important."

From a cleaning lady to a shareholder of "Putin's bank"

The data leak also unveils real estate deals by a Russian woman named Svetlana Krivonogikh.

According to Russian media reports (siirryt toiseen palveluun), she is Putin's former mistress and mother of the president's daughter. A Kremlin spokesperson has denied these allegations.

The data leak indicates that a tax haven company was set up for Krivonogikh in 2003, just a couple of months after she became a mother.

Krivonogikh's tax haven firm bought a home in Monaco for 3.6 million euros, according to the principality's real estate registry. Krivonogikh did not respond to requests for comment to MOT or ICIJ about the information presented in this article.

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Bank Rossiya headquarters in Saint Petersburg (file photo). Image: Anatoly Maltsev / EPA

Russia media has reported that Krivonogikh, a former cleaner, met Putin in the early 2000s. She now has a fortune worth hundreds of millions of euros, including an ownership share in Rossiya, a major Russian bank. It is often referred to as "Putin's bank".

"Not just anybody can become a shareholder in Bank Rossiya; one must be right at the core of Putin's inner circle. This shows how close [Krivonogikh] is to Putin," says Anin.

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