Panama Papers Prove Money Isn’t Putin’s Currency, And The Truth Is Eating Russia Alive

REUTERS/Maxim Zmeyev/Files

Daily Caller News Foundation logo
Russ Read Pentagon/Foreign Policy Reporter
Font Size:

The Panama Papers have revealed power serves as Russian President Vladimir Putin’s currency, but with an increasingly shrinking economy, the system that has kept him in power may be eroding.

Documents show several close Putin friends have been involved in “clandestine” financial practices on behalf of the Russian president for years. Among those implicated are cellist Sergei Roldugin, and Arkady and Boris Rotenberg, all childhood friends of Putin. The documents received by the International Consortium of Investigative Journalists (ICIJ) and German newspaper Süddeutsche Zeitung (SZ) do not name Putin directly, but after thorough review, ICIJ and SZ believe the connections exist.

“I don’t consider it possible to go into the details,” said Putin spokesman Dmitry Peskov. “Mainly because there is nothing concrete and nothing new about Putin, and a lack of details.” He claimed Putin was an intentional target for the investigation due to what he called “Putinphobia.”

The Panama Papers alleged Putin’s associates have transferred as much as $2 billion through various shadowy channels and institutions, some of which were registered and managed by the Panama-based Mossack Fonseca law firm in tax havens like the British Virgin Islands. The Panama Papers are comprised of around 11.5 million documents received by the ICIJ and SZ via an anonymous whistle-blower with intimate knowledge of Mossack Fonseca.

Though Roldugin has never claimed to be a businessman, he is listed as the owner of several off-shore companies which have received immense payments from Russian government-linked companies, some of which number in the tens of millions. Roldugin did not respond to ICIJ’s questions.

The Rotenberg brothers’ history with Putin goes back several decades to when the three were children. They bonded over judo and Russian sambo martial arts and maintained a relationship with Putin throughout his political career. As Putin’s influence grew, so too did the fortune of the Rotenbergs, both of whom became billionaires during Putin’s tenure as president and prime minister of Russia.

While Putin’s corruption is not of any particular surprise, the Panama Papers show it is power, not money, which is used as the currency in Russia, said Mark Galeotti Monday.

“Whereas in many countries corruption is the means by which elites turn their power into money, in Russia it is the other way around — corruption is a way to get and keep the political power that is so much more important than mere wealth,” wrote Galeotti.

Putin keeps his cronies rich by delegating them power, and in turn, they do his bidding when called upon. Galeotti notes this mirrors the Soviet system Putin cut his political teeth in during the Cold War as a young KGB officer: it is the system of power that maintains one’s lifestyle, not riches. As an example, he explains how many Soviet officials died in office because they were aware that everything they had, from summer homes to fancy cars, would be taken from them once they were no longer in power. The same situation holds true in Putin’s Russia. Putin can give and take away as he sees fit, making his cronies rich or poor overnight by allocating or withdrawing power.

Implications from the massive leak are equally unsurprising for the Russian people as they are for foreign analysts. “In itself this is not going to have any particular impact on Putin’s position,” Galeotti told The Daily Caller News Foundation.

What may be of consequence to Putin is not the revelation, but how long he can keep up the game. As Galeotti noted, the Russian economy that put many of Putin’s friends in power is now suffering. With as much as a third of Russia’s economy lost to corruption, the status quo is unlikely to be sustainable.

“The real question is how sustainable these levels of embezzlement are; already the squabbles within the elite and between the regions is becoming noticeable,” Galeotti told TheDCNF, “and that is likely to prove one of the most powerful challenges to the Putin system: how a structure that relied on buying everyone off when the money was plentiful copes when the funds are running low.”

Putin has never really desired wealth, according to Galeotti, it is power he seeks. As a “clannish” thinker, he utilizes people like the Rotenbergs and Roldugin in order to get that power, and rewards them in kind. Though his ability to keep up the charade may be hinged on choosing between “personal loyalties and political pragmatism.”

Follow Russ Read on Twitter

Send tips to

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact