RIA Novosti: Russian Railways CEO Denies Navalny’s Allegations of Corruption

File Photo of Alexei Navalny Being Grabbed by Police at Protest

(RIA Novosti – MOSCOW, July 19, 2013) The head of one of the world’s largest transport companies, state-owned Russian Railways, this week dismissed as unfounded corruption allegations made against him by opposition protest leader Alexei Navalny, Prime news agency reported.

In a blog post earlier in the week, Navalny published details of property and offshore companies that he claims are connected to Russian Railways CEO Vladimir Yakunin via family members.

The fact that a figure like Yakunin, reportedly a close ally of Russian President Vladimir Putin, can be linked to a web of offshore companies, Navalny says, runs directly counter to Putin’s recent calls for the “de-offshore-ization” of Russian-owned assets.

Yakunin said Navalny’s allegations “directly damage the company’s image, undermine its authority abroad and cause definite harm to the Russian economy.”

He also said his company was examining the allegations in detail and would consider taking legal action against Navalny. On July 16, Yakunin won a legal case against a journalist over mismanagement claims.

One of Navalny’s allegations relates to a palatial countryside residence, with an Olympic-size swimming pool and a refrigerated closet for fur coats, that Navalny claims Yakunin’s family owns via a Cyprus-registered firm.

Pictures of this villa in the village of Akulinino, south of Moscow, reportedly taken by people who had worked there, have been circulating online since 2012, along with accusations of corruption, misappropriation, and even a land-grab.

Navalny’s blog post was published two days before he was sentenced to five years in prison on embezzlement charges in what his supporters believe is politically motivated retribution for his opposition activism and online exposes of high-level corruption. Yakunin spoke to Prime before Navalny was sentenced.

The fundamental allegation that Navalny makes, but does not prove, is that Yakunin used his position, both as Russian Railways CEO and as a figure close to Putin, to improperly enrich himself and his family.

Navalny sets out a complex “family tree” of companies, many registered offshore, as well as documents that he says show that these companies are connected to members of Yakunin’s family, and urges the Russian authorities to investigate.

The ownership structure of the web of offshore companies Navalny described is difficult to independently verify.

Navalny noted that “the scheme began to change right before our eyes, just after we uncovered it,” adding that, over the months that the investigation took, some of Yakunin’s family members had started to sever their ties with these offshore companies.

However, rather than linking this with the “de-offshore-ization” policy, he said it was because his office was bugged, and information leaked back to key interested parties.

While Yakunin’s family was not mentioned in the Prime interview, he responded directly to allegations of impropriety at Russian Railways: “Of everything he spilled out, there is nothing that testifies to the use of company funds,” he said.

At this year’s international economic forum in St Petersburg, President Putin announced that the government planned to invest up to 450 billion rubles ($13.7 billion) from the National Welfare Fund in upgrading infrastructure. The “lion’s share” of this will go to Russian Railways, Yakunin said.

Yakunin suggested that the allegations against him were motivated by envy and in “somebody’s” interests. Those making these claims were, he said, “being used.”

This explanation echoes that he gave last month, after a hoax press release announced he had been dismissed and replaced as CEO of Russian Railways.

Speaking to Russia’s Rossiya 24 TV network on the day of hoax, Yakunin said that rumors about him could have been planted by people in Russia, envious of the considerable state funds his company can access, or even by foreigners who have a vested interest in “portraying Russia in a certain light.”