Why watch Netflix? The whole world was enthralled this week with a real-life detective movie: “The Panama Papers.”

Putin: Artful dodger?

The plot is breathtaking: It turns out a conga line of famous soccer players, prime ministers, presidents and billionaires had tucked their ample funds into offshore accounts — thus evading taxation in their native jurisdictions. But without doubt, the biggest individual with an alleged connection to this glittering and dodgy collection of VIPs is none other than Russian President Vladimir Putin.

As the first intimations of Putin’s purported participation in the offshore caper surfaced last week, the Kremlin tensed and prepared a defense. Though it never saw the papers in question, it announced its certainty that the documents consisted wholly of lies fabricated by the American special intelligence services to undermine Russia’s stability and the unity of the Russian people.

So now the Panama Papers are out and taking their place alongside Cold War spy Alger Hiss’ Pumpkin Papers and Vietnam whistleblower Daniel Ellsberg’s Pentagon Papers in the pantheon of memorable paper trails. I’m leaving behind in brackets all the stuff about other celebrities to focus on the Russian part of the papers.

Putin’s cello player?

In the essence, the Panama Papers talk a lot about Mr. Roldugin, a prominent Russian cultural activist and cello player. Yes, he is a long-time personal friend of Putin’s since childhood. But does it mean that he’s been fronting for the Russian president in offshore accounts? Some might assume so. But there is no a single proof that this fellow has been doing this. And without proof, as lawyers will tell you, there can be no case.

Furthermore, the papers divulge a lot about the offshore businesses of a group dubbed “Putin’s friends.” OK — yes. The Rotenberg brothers are mentioned and are close to Putin. This can also be said of Yuri Kovalchyk. the president of the sanctioned Bank Rossiya and a reputed personal banker to top Russian officials.

However, I wouldn’t dare describe the relationships between Putin and other mentioned Russian oligarchs like Suleiman Kerimov and Aleksey Mordashev as friendly. They are far from being so. Russian governors like Andrey Turchak and Boris Dubrovsky who are mentioned in the papers have never been Putin’s friends. They are  just “normal” Russian officials.

Who else is in the papers? Some relatives of high-ranking Russian officials – the nephew of Security Council Secretary Aleksey Patrushev and a son of Finance Minister Ulukayev.  I doubt very much if all of them belong to Putin’s circle of personal friends or his inner circle.

Interestingly enough, investigators combing through the papers have so far failed to connect any of the above names to the personal finances of the Russian president.

Step back …

So let’s try to take an objective look at what’s going on. The Panama Papers have, so far, exposed one obvious fact — that Russia is infested with corruption. It is literally a cancerous growth that effectively stops a nation from pursuing economic reforms and gradually becoming a transparent, modern and democratic society.

But this is something that’s been known for a long time. Unfortunately, it is a way of life and of doing business in Russia.

It’s not just oligarchs. Even smaller businessmen must actively use offshore financing activities. Here’s an example: A good friend of mine who several years ago launched medium-sized agricultural business in Russia, registered his company in the Bahamas! When I asked him why he did it, he answered: “If I had to pay taxes here, I would never (leave) the ground.” Quite explicit, isn’t it? Russian oligarchs have even less incentive to pay these enormous and prohibitive taxes.

Russian tax legislation is far from being perfect. Why? If it’s perfect, how will a multi-million strong army of Russian bureaucrats feed themselves and their families?

Talk that Putin’s friends have been fronting for him in different business ventures have been floating around in Russia basically from the time he became president. There also have been different estimates of Putin’s wealth — from $2 to $18 billion. But none of this has ever been proven.

At this juncture, the Panama Papers have proved just one thing – that Russian President Vladimir Putin has several personal friends who were participating in corruption offshore schemes. Period. Nothing more so far.

At the same time, all this raucous speculation about the papers provides the Kremlin propaganda machine with a perfect opportunity for internal use. It can once again show how Russia is surrounded by enemies led by the evil United States. And it can repeat its refrain that the only goal of such foes is to destroy, compromise and humiliate Mother Russia.


Carnival parade in Dusseldorf, Germany
Carnival parade in Dusseldorf, Germany

The Russian president’s press secretary Dmitry Peskov has already dismissed the Panama Papers as another episode in the West’s propaganda war against Russia. He’s also noted that the West is “infested with Putinophobia.” And as there’s no direct evidence against the president, the public reaction to the papers is pretty muted.

However, publicizing the Panama Papers touches on another important internal aspect for Russia. As I’ve already noted, practically every Russian citizen is aware of the flourishing corruption in their country.

Two years ago, in 2014, Putin officially called for a so-called “de-offshorization” of Russia’s economy. Some Russian oligarchs were forced to heed Putin’s call. Just last week, energy baron Arkady Vekselberg officially repatriated his assets to Russia.

It’s now clear to a great majority of the Russian people that there are two types of laws — one for normal businesses and another — for presidential friends and associates who can do whatever they want with their money. There’s also no doubt that this couldn’t happen, at the very least, without the president’s silent approval. This realization will erode the regime one more step with a wide spectrum of the Russian population.

Jim Davis is a political analyst and president of South Shore Consultants.

The opinions expressed in this column are the author’s own and do not necessarily reflect the view of Asia Times.

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