Despite his modest income Valdimir Putin is coming under increasing scrutiny for his lavish lifestyle and ties to the oil and gas industry. Incredibly, Putin could be worth as much as $70bn, a figure that would make him the richest man in the world.
By Maeve McClenaghan for the Bureau of Investigative Journalism: Back in 2011, surrounded by press, Vladimir Putin emerged from the murky waters of the Black Sea clutching the discovered remnants of ancient buried treasures. The discovery later turned out to be nothing more than a PR stunt. He hadn’t found the artefacts after all. But the stunt had achieved its purpose. Putin was once again seen as the bare-chested, judo-master, tiger-pacifying, untouchable leader of Russia.
But it was another apparent PR stunt – the spontaneous gifting of a £5,500 watch to a peasant boy – which led some to question whether Putin did not have buried treasure of his own.
How could a politician with a declared annual salary of around $140,000 (£88,000) afford to live a life seemingly full of luxury watches, as well as yachts and palaces?
The Bureau of Investigative Journalism decided to investigate and has produced a documentary for Al Jazeera’s People & Power. We travelled from Moscow to St Petersburg looking into the origins and scale of Putin’s wealth.
On March 6, Putin was once again elected president of Russia. He regained the role he had relinquished in 2008, when he had stepped down because of rules preventing more than two consecutive terms, becoming prime minister instead.
As part of his latest election bid, Putin was required to declare his worth. His declaration seems modest for a world leader.
According to the Russian Central Electoral Commission, Putin has $179,612 in the bank and has earned around half a million dollars in the past four years. His wife Lyudmila has $261,541 in four bank accounts.
Putin’s declared assets are also rather spartan. He has claimed to have a share in a public garage, apartments in Moscow and St Petersburg and a 1,500-square metre plot of land outside Moscow.
But there is increasing concern that Putin has not declared all of his worldly goods.
One of the reasons for such concern is that, despite his modest income, Putin has shown something of a flair for the finer things in life. He is rarely seen without a luxurious watch and has been photographed several times wearing expensive brands, including a £70,000 Patek Philippe Perpetual Calendar, and a £15,000 Breguet Marine.
Not that the Russian leader is uncharitable: he has also been spotted giving away £11,000 worth of Blancpain watches. The first was gifted to the shepherd boy and the second, rather more reluctantly, to a metal worker who brazenly asked the Russian leader for a keepsake. Both instances were captured by the media.
In total Putin has been photographed wearing around £160,000 of wrist wear. A remarkable feat for a man who earns, before tax, £80,000.
It is something that other journalists have been alert to. Luke Harding has reported for the Guardian newspaper on Putin’s wealth for years, and has been banned from Russia in the process. He said, ‘it is unlikely that [Putin] – or any of the presidential administration – would have items of this value without any kind of supplementary income.’
We asked the Kremlin about the watches. Were they his personal property or owned by the state? They declined to tell us.
But high-end watches are positively discreet compared to luxury yachts and palaces.
As president, Putin will have access to the presidential yacht, Chakya. Bought under Medvedev’s rule, the luxury yacht came with a £26m price tag. It has six luxury cabins, wine cellar, jacuzzi, barbecue and other luxuries.
The yacht was bought with presidential funds. However, another extravagant purchase, which some have linked to Putin’s personal wealth, is a mansion overlooking the Black Sea.
The palace, sold recently for £350m, is rumoured to have been built as a holiday home for the Russian president-elect.
Leaked photographs of the Palace show richly decorated interiors, ornate grounds, gates topped by a two-headed eagle and a lift down to the beach.
Security around the palace is high, barbed wire and guard dogs kept our reporters at a distance. Putin denies any connection to the palace and current, official owner Alexander Ponomarenko says the palace is a ‘holiday home.’
However, local resident admit seeing Putin frequenting the area and when environmental activists broke into the compound in 2011 protesting the building’s construction on protected land, they were met by Federal Protection Service guards.
Sergei Kolesnikov, a Russian businessman and former associate of Putin, claims the palace was built for Putin through a web of transactions with its ownership being held in anonymous bearer shares.
The Bureau has also obtained building contract documents for work on the palace which bear the signature of Vladimir Kozhin, the head of the Presidential Administration Property Development.
But it is not just watches, yachts and palaces. There are others who believe that Putin’s declaration of modest wealth simply does not add up.
Stanislav Belkovsky, a political analyst and critic of Putin, is one of the most outspoken. He claims Putin could be worth as much as $70bn, a figure that would make him the richest man in the world.
This extraordinary sum is based on claims that Putin owns shares in three major oil and gas companies: 4.5% of national gas giant Gazprom, 37% of oil supplier Surgutneftegas and a major shareholder of a company that cannot be named for legal reasons. That company strenuously denies any links to Putin.
‘The figure of $40bn emerged in 2007. That figure could now have changed, I believe at the level of $60-70bn,’ Belkovsky says.
His estimate is based on information gained from confidential sources around the corporations, Belkovsky claims. But he is reluctant to reveal more.
All three companies have opaque ownership structures, and it is impossible to identify the shareholdings claimed by Belkovsky.
Gas and oil producer Surgutneftegas is secretive – an attitude that has not always played in its favour. In 2009 the company bought a 21.2% stake in Hungarian company MOL. However, when Surgutneftegas came to register as a voting shareholder, it was refused. MOL said the company’s lack of transparency around its ownership structure did not comply with Hungarian law. Gazprom is the biggest gas extractor in the world; the Russian government controls it with a 50.002% stake. But while Gazprom is more transparent over share ownership, Belkovsky claims Putin’s share is hidden through ‘a non-transparent scheme of successive ownership of off-shore companies and funds’.
Gazprom and Surgutneftegas did not respond to the Bureau’s questions.
Despite repeating the claims several times and it being reported widely, Belkovsky has never faced legal action disputing them.
As Bureau reporters travelled across Russia we came across others that had tried to investigate Putin in the past.
Deep in the countryside, outside St Petersburg, we met with Marina Salyle.
In 1992 Salye investigated a deal made in the St Petersburgh City office deal which involved the export of $100m worth of raw materials in exchange for food. According to Salye Putin oversaw the deal but while the raw materials were shipped from the city, the promised food never arrived. Her accusation, made up until her recent death, was that Putin benefited from this incomplete deal.
The Kremlin argue that Putin never signed the paper authorising it, though Salye has papers that she claims do contain the President-elect’s authorising signature.
Back in St Petersburg, Lt. Col. Andrei Zykov, a former senior investigator at the Russian Interior Ministry, described his own work looking into Putin’s past.
In June 1999, when Putin was serving his first term as president, Zykov was put in charge of criminal case, number 144 128.
The case involved a construction company called Twentieth Trust, which officials suspected had been used to siphon money from St Petersburg’s city budget in the early 1990s. Zykov claims that Putin benefited from a Spanish villa from the deal.
The investigation was shut down on the grounds of ‘insufficient proof’ and according to Zykov he was fired a year and a half later.
We asked the Kremlin to respond to Mr Zykov’s claims. It has declined to do so.
In the early days of his first term as president, Putin had promised to rid Russia of its corrupt oligarchs.
However, as he now prepares to enter a third term as leader of Russia, it is the luxury lifestyle of a tsar that awaits him.
This article was originally published on the Bureau of Investigative Journalism.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.