Investigation Charts Massive Haul For State Deals By Companies Linked To 'Putin's Chef'
By Mikhail Maglov, Timur Olevsky, Dmitry Treshchanin February 27, 2019
Companies that can be tied to oligarch Yevgeny Prigozhin have won at least 5,393 Russian-government contracts since 2011 worth more than 209 billion rubles ($3.2 billion), according to an investigation by Current Time and the Municipal Scanner anticorruption website.
Most of the contracts were concluded to provide food and other services to military units, but Prigozhin's companies also cater for schools and health-care facilities.
The actual number of contracts could be much larger, in part because Prigozhin has created an opaque ownership network that makes it difficult to track all his activities and in part because, in 2017, Prime Minister Dmitry Medvedev issued a government decision that allowed the Voentorg military-supply agency and its subsidiaries to conceal information about its tenders on national-security grounds.
There is evidence, in the form of court and other records, that some of Prigozhin's companies have been providing services to military units although they do not have a publicly recorded tender. Several companies tied to Prigozhin, including MTTs, Pishchevik, Obshchepit, Merkurii, and ASP, are listed on the Voentorg website as "partner" organizations.
More complete information about the complex connections of these companies to Prigozhin's business empire can be found in the report by Current Time, which is a Russian-language media project led by RFE/RL in cooperation with VOA.
Many of the companies are owned or managed by known associates of Prigozhin, while others share a legal address or contact information with companies within Prigozhin's empire. Several of them have used the same lawyer, Irina Medved, to represent them in disputes with the Defense Ministry or other government agencies.
In 2017, the Defense Ministry sued Voentorg for allegedly violating a contract. The firms Pishchevik, Kollektiv-Servis, Obshchepit, MTTs, and Merkurii were involved in the case as third parties and all of them were represented, according to court documents, by a lawyer identified as K.V. Shkodkina.
St. Petersburg Financial University Professor Sergei Chyornykh told Current Time that such ties could be a coincidence, but could also indicate affiliations among companies that should attract the attention of financial-monitoring agencies.
Current Time asked two financial specialists to examine the complex web of interconnections among the Prigozhin firms. Neither of them agreed to speak on the record, with one saying: "Given the toxic nature of the gentleman we are discussing, I agree to be identified only as a business source."
"It is a classic system," one of the experts said. "Two or three structures compete in one tender. You own them all. You win the contract with minimal effort.... Although sometimes you can see companies competing that have one address, one director, one e-mail address. This is an old system -- it has been used 1,000 times and will be used 1,000 more."
Currrent Time sent a list of questions to Prigozhin's main company, Konkord Management, with a request for comment on its investigation. The company responded by saying it had no obligation to answer Current Time and that the questions were "not publicly significant."
The company's statement also quoted Prigozhin as saying that Current Time journalist Timur Olevsky was "a petty, dirty bastard...and we aren't going to answer his questions."
Prigozhin, 58, has close personal ties to President Vladimir Putin and has been dubbed "Putin's chef" because his businesses provide catering services to Kremlin events.
He and three related companies have been indicted in the United States on suspicion of executing a Kremlin-directed effort to influence the 2016 U.S. presidential election to benefit Donald Trump. He is thought to control the Internet Research Agency, which is better known as the "Petersburg troll factory" and which has been linked to numerous social-media disinformation campaigns against the United States and European companies. He also is thought to control the Vagner private military contractor, which has provided mercenary and other services in eastern Ukraine, Syria, Africa, and elsewhere.
He is under targeted U.S. sanctions for his alleged role in supporting Russia's 2014 annexation of the Ukrainian region of Crimea and Moscow's military support for separatist formations in parts of eastern Ukraine.
Born in Leningrad in 1961, Prigozhin was convicted of robbery and given a suspended sentence in 1979. In 1981, he was given a 12-year sentence for robbery, fraud, and organizing prostitution. He served the rest of the decade in prison. After his release, he began a career in the food-services business by opening a network of hot-dog stands in St. Petersburg.
Copyright (c) 2019. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
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