Wilbur Ross Firm Defends Its Kremlin Ties: Everybody Has ’Em

Russians are underwhelmed by the headlines about this huge trove of tax haven records. They think they pale in comparison to the Kremlin kleptocracy they’re used to.

Russian President Vladimir Putin attends a joint news conference with German President Frank Walter Steinmeier following their meeting at the Kremlin in Moscow, Russia October 25, 2017.


MOSCOW—The latest installment of the Trump-Russia saga might take a title inspired by the Peter Greenaway film The Cook, the Thief, His Wife and Her Lover. In this case it would be more like, “The Son-in-Law, His Wife, the Shippers and the Secretary [of Commerce].” Throw in a hockey player and a couple of presidents, one of the United States and the other one of Russia, and the action begins.

The scenario comes from the recently leaked trove of documents called “The Paradise Papers” pulled together by the same Consortium of Investigative Journalists that brought us “The Panama Papers” last year. In this case, they’ve been tracking the tax havens and “fiscal paradises” where the rich like to stash their money far from prying eyes. Among the big international names exposed: the queen of England.

Here in Moscow, however, while some American businessmen may have learned a lesson, the Paradise Papers have not caused much of a stir in Russian public opinion. The main players in this show denied their involvement almost immediately, and the public here is so jaded that the consortium’s revelations were soon eclipsed by bigger news about Putin’s daughter, which we will get to shortly.

The investigation published by the consortium in The Guardian, among other papers, shed some interesting light on a member of Donald Trump’s cabinet doing business with Russian President Vladimir Putin’s friends and family. Commerce Secretary Wilbur Ross owned a stake in a shipping company, Navigator, which had a long history of deals with a Russian gas and petrochemicals company, Sibur.

Sibur, in turn, has very colorful part-owners: Putin’s close friend, the billionaire and hockey player Gennady Timchenko, and Putin’s alleged son-in-law, Kirill Shamalov, Russia’s youngest billionaire. The subplots of the story also feature Shamalov’s brother Yuriy and a $1.75 billion state loan that Russian company Sibur got at one third of the rate paid by everybody else in the country.

Putin cannot keep money in his own bank accounts, so he keeps it in his many friends’ and relatives’ accounts all over.

There is a punchline recognized by many Russians in a famous Russian comedy about a theft: “Detochkin has lots of sick relatives in many towns of the Soviet Union.” Stanislav Belkovsky, a prominent Kremlinologist and TV presenter, said that the Sibur scandal reminded him of that bittersweet comedy. “Putin cannot keep money in his own bank accounts, so he keeps it in his many friends’ and relatives’ accounts all over the market, so even if you’re not looking you step on his wallet.”

That part of Russian reality did not matter much to David Butters, who built and ran Navigator Gas Transport company and began to cooperate with the Russian company Sibur in 2011.

“Probably every Russian company that one deals with has some of Putin’s influential friends!” Butters told The Daily Beast on Monday. He said that he saw no reason for blowing up and politicizing the scandal, and he insisted that there was no story: “Sibur approached us through a broker, as usual. They needed first-class vessels and we were the only ones around; so we entered into a 10-year charter with our two first vessels. Ross, the secretary of commerce, had no involvement with our company at the time, zero.”

Navigator CEO Butters said that he loved dealing with Russia’s Sibur and that he had never met the company’s part owner and close friend of President Putin, Gennady Timchenko.

Today Timchenko’s worth $16 billion, according to Forbes. Timchenko is also on the U.S. sanctions list, and lives in the former luxury residence of the late Russian leader Nikita Khrushchev in Moscow’s outskirts.

“I have never met with Putin’s son-in-law, either,” said Butters. “They had zero influence on our business;  I was not even aware that the son-in-law was involved—not that I care!

“We deal with a wonderful team of professional Russian managers. We are glad to continue dealing with Sibur, they are a first class company,” said Butters.

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Navigator has made at least $68 million in revenue thanks to its good partnership with Sibur, according to The Guardian.

Independent experts in Russia insisted that if the time comes to put Sibur on the list of sanctions, Trump’s Secretary of Commerce Ross, who had shares in Navigator, might have a conflict of interest. In Washington the story raised a big discussion on all levels, but in Moscow it was hardly noticed.

Putin’s supporters enjoyed the information leaked from so-called Paradise Papers about prominent Western businessmen and public figures keeping money in offshore accounts to avoid paying taxes.

Ross’s share in Navigator is nothing comparing to the billions stolen by Putin’s cronies.
Dmitry Oreshkin

“It is a pleasure to ordinary Russians to see that some famous Western leaders, including the British queen, keep money in offshore companies, avoid paying taxes, or steal just as much as Putin’s cronies or more,” Dmitry Oreshkin, an independent political analyst told The Daily Beast.

“For Russians it is not a big discovery that Putin’s relatives and close friends own and control leading business companies; Ross’s share in Navigator is nothing comparing to the billions stolen by Putin’s cronies,” Oreshkin added.

Before April this year 21.3 percent of Sibur, Russia’s largest petrochemical producer, belonged to Putin’s alleged son-in-law Kirill Shamalov. Today the youngest Russian billionaire owns 3.9 percent of the company.

Why do we keep saying “alleged son-in-law”? Because personal details of those close to Putin are forever murky.

“At least for a some time Putin’s daughter Katerina was married with Kirill Shamalov, but it is unclear if they are still married,” Belkovsky told The Daily Beast. According to Reuters, Putin’s younger daughter Katerina married Shamalov, a son of Putin’s friend and banker Nikolai Shamalov, in February, 2013. And in December, 2015 Sibur received $1.75 billion state loan at a third of the market rate.

In the past the Kremlin repeatedly denied that Katerina, who reportedly uses an assumed name, Katerina Tikhonova, was Putin’s daughter. At a press conference in 2015, a reporter asked Putin whether Tikhonova was his daughter and what Putin thought of her project at Moscow State University, the National Intellectual Development Foundation.

President Putin answered: “I never discuss my family: my daughters are not involved in business or politics.”

On Tuesday Putin’s alleged daughter, Tikhonova, and her foundation was all over the news here. Apparently Russia’s major oil company Rosneft became the main client of Tikhonova’s National Intellectual Development Foundation—the deal was estimated at more than $10 million.

“Comparing to potential corruption involving Ross,” said Oreshkin. “To Russians, Putin’s daughter dealing with Rosneft might sound more disturbing.”