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CORRUPTION

The Party's gold. How United Russia misappropriates Russian Railways’ money under the guise of «donations»

Last year United Russia collected a record amount of donations from legal entities, 4.8 billion rubles. The Insider learned that the party received about half of this money from major Russian Railways contractors, and that the railway companies often donated their entire profits to United Russia (UR). Moreover, the list of donors includes a number of companies which, according to their own accounting records, simply could not afford to «donate» the sums indicated in the payment orders to UR. The ruling party did not spend the money it received on charity or fighting the Coronavirus, as promised, but on the maintenance of its party apparatus and election campaigning.

Russian Railways money


In 2020, United Russia received 2.7 billion rubles in donations from business companies. Most of that amount was contributed by firms that had received hundreds of millions of rubles in contracts from Russian Railways.

For example, as many as five contracting companies owned by the businessman Ashot Chovushyan and his brother Ashri transferred a total of nearly 200 million rubles to UR. In another example, in 2019 Orlovskaya Metalabaza (Oryol Metal Depot) supplied nearly 400 million rubles worth of rolled steel to Russian Railways, and the next year donated 43.3 million rubles to a United Russia foundation, an amount greater than its official profit. Another company owned by one of the brothers, Metizkomplekt Central Wholesale Deport, which supplies fasteners to Russian Railways, generously donated almost all its profit, 26.5 million rubles, to the party. However, Chovushyan's holding company receives hundreds of contracts worth billions of rubles from Russian Railways every year. Thus, according to Novaya Gazeta calculations, in 2017 the businessman's companies received 15.7 billion rubles in contracts.

Another 30 donors received orders worth hundreds of millions of rubles from Russian Railways. And not only for the supply of special equipment, but also, for example, for making work clothes for the needs of railway workers. The Bashkir Workwear Factory, together with its trading house, transferred 86.6 million rubles to UR. And the turnstile manufacturing firm MFM-Partnership donated 20.4 million rubles.

All in all, the list of donors includes more than 300 companies, and among them there are firms with small incomes that have nothing to do with Russian Railways contracts and yet were able to donate to United Russia amounts commensurate with their annual income. Some of the legal entities were subsequently liquidated. The Insider found at least five firms that handed over more than half of their proceeds to United Russia.

For example, StroyExpertProekt, a company near Moscow, which develops alarm systems, earned 52.7 million rubles in 2020 and gave 43.3 million rubles to UR. Yakutia's Green Street donated to the party an amount in excess of what it had earned over four years. And the Moscow-based R&D firm RailTransService, despite a loss of 20.5 million rubles in 2019, was able to donate 15 million rubles to United Russia in 2020.

The micro-enterprise Pantograph from the town of Zhukovsky near Moscow, which traded in electrical appliances, was able to donate 43.3 million rubles to the ruling party, while its profit was only 4 million rubles in 2020. The firm closed down in 2021.


Hidden donors

Sometimes United Russia uses a hidden system of financing to obtain money - money is deposited into the party's account through foundations «supporting regional cooperation and development». In 2020, the party received almost 2 billion rubles through the foundations. At the same time, the reports detailing what the party receives and how much it transfers, published by the party itself, often do not match.

Foundations «to support regional cooperation and development» emerged back in the early 2000s and became a platform for the establishment of the party and its regional branches. At various times, more than 150 foundation offices were registered across the country. They are managed by trusted parliamentarians, such as ex-Senator Franz Klintsevich and Senator Viktor Abramov.

At the time of this writing, not all the support foundations have sent their reports to the Ministry of Justice, but The Insider was able to find discrepancies in the available reports. For example, the Ivanovo Support Foundation transferred to United Russia as much as 53.3 million rubles, an amount exceeding the maximum donation of 43 million rubles. The Nizhny Novgorod Foundation, in turn, received 96.5 million rubles from the budget and transferred half of it (44.9 million rubles) to the ruling party. However, the foundation's reporting documentation does not specify to whom the rest of the donations went or why the budget paid the money to the foundation in the first place.


The Murmansk Foundation for the Support of Regional Cooperation and Development transferred 43.3 million rubles to United Russia and indicated in its report that it had spent the money on «supporting the activities of non-profit organizations established with the purpose of achieving socially important goals».

As follows from the foundations' reports, the foundations essentially collect money from regional businesses as donations and transfer a significant proportion of it to the United Russia party. While the Russian political parties indicate money received from business companies and NGOs as their source of income, the United Russia party reports significant amounts of donations received from the foundations. Thus, the published reports of the parties indicate the money received from business companies and NGOs as their source of income, while United Russia shows significant amounts of donations received from the foundations in its financial report.

Party expenditure

In 2019, United Russia Chairman Dmitry Medvedev urged his fellow party members to transfer at least one of their salaries to the party. The party itself, in its fundraising effort, tried to convince its donors that the money would go to charity and the fight against Coronavirus, among other things. Taking into account budget money, party dues and personal donations from individuals, United Russia received 9.6 billion rubles in 2020. However, a mere 7 million rubles, or less than 0.1%, was spent on charity.

In fact, more than half of all funds were used to maintain the party leadership and regional branches. 3.1 billion was spent on campaigning and propaganda and another 1.6 billion on election funds. United Russia paid 208 million rubles for campaign materials purchased from the Future Generations Support Foundation alone.

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