The Times of London‘s ace Russia reporter Mark Franchetti reports on the second high-profile refugee from the Sochi disaster in as many months (remember Sergei Volkov back in April?). Those cracks in the foundation are getting pretty nasty, and it’s early yet. How soon before this edifice comes crashing down?
A wealthy businessman involved in preparations for the 2014 Winter Olympics has blown the whistle on corruption at the heart of the Kremlin.
Valery Morozov, 56, a Russian construction entrepreneur, says he paid £4m in bribes to a senior official to secure a lucrative state contract for the games. His claims raise questions about Russia’s efforts to compete with England to host the football World Cup in 2018. Critics say that awarding the tournament to Russia would expose it to the country’s endemic corruption.
Morozov revealed that he had taken part in a police sting operation to expose the official. He later arranged for one of his employees personally to hand a letter of complaint to Dmitry Medvedev, the Russian president. Documents show that prosecutors in Moscow are now examining his claims. However, the Kremlin bureaucrat remains in place, raising concerns about a cover-up.
To protect his evidence, Morozov came to Britain earlier this year to lodge documents with his British lawyers and make a statement to this newspaper. “I turned to The Sunday Times because I understand that if the information I have stays only in Russia I am running a serious risk,” he said this weekend.
Russia is spending an estimated £9 billion on the Winter Games in Sochi — more than six times the cost of this year’s event in Vancouver.
The games are the pet project of Vladimir Putin, the prime minister. He and Medvedev see them as an opportunity to showcase modern Russia to the world.
Their bid for the 2018 World Cup, competing against England, Spain and Portugal among other western nations, aims to build on that ambition.
Morozov’s decision to go public with his allegations will embarrass the Kremlin. It was stung recently by claims from Lord Triesman, then chairman of the Football Association, that Russia was planning to bribe referees at next month’s World Cup to help its bid.
Morozov, a former Communist Party apparatchik whose business career included running a firm in Essex, owns 74% of Moskonversprom, a construction company that is part owned by the city of Moscow.
Four years ago the firm won a state contract to build a 700-room luxury residential complex on the shores of the Black Sea. It will house state officials during the 2014 Games.
The award of the contract upset the senior official, who had been on holiday when the tender was given to Morozov.
According to a statement Morozov made to Moscow prosecutors, the official summoned Morozov and allegedly demanded a 12% cut of the £33m state contract. It was to be paid directly to the bureaucrat in cash split into several instalments.
“Twelve per cent was way above the norm but I had no choice. I either paid or waved goodbye to the contract,” Morozov said last week.
“Between mid-2007 and June 2009 I paid him nearly 20 times. Usually I’d hand over the cash in a shopping bag or a small briefcase at his office close to the Kremlin. A couple of times the handover took place in a car. In all, I paid him around 180m roubles [£4m].”
In desperation he turned to the police, reporting the official to the powerful economic crimes department of the interior ministry.
Corruption in Russia is rampant. The country ranks 146th out of 180 countries on a corruption index compiled by Transparency International, the respected auditing body.
Most Russians would expect influential state bureaucrats to take bribes. What is rare is for an insider such as Morozov to speak out.
To secure evidence, police arranged for Morozov to carry out a series of stings. In one, the businessman says that he paid the official some £60,000 in cash at his office.
In a second meeting, detectives provided him with a bright purple tie fitted with a hidden camera and strapped a recording pack on his back.
However, the equipment set off security alarms at the building where the meeting was to take place and Morozov had to ditch it.
Then the businessman met the official at a Moscow restaurant, the Slivovitsa. Morozov had a camera in his belt; as a back-up, a microphone was hidden in a bowl of flowers on the table between the men.
Interior ministry agents sat at tables nearby. One had a camera concealed in a book.
He filmed the official being handed a shopping bag containing roubles and euros worth £90,000. At the end of the meeting the bureaucrat left with the cash.
To Morozov’s anger the evidence was buried. The day after the sting an interior ministry officer told him his bosses had decided not to open a case against such a senior figure.
Morozov went on the offensive. He arranged for a letter denouncing the bureaucrat and the police officers to be handed on a ski slope to Medvedev to avoid it being intercepted by the official’s people. He also wrote to the prosecutor’s office, accusing the bureaucrat of large-scale corruption.
He has already paid a price for speaking out. Morozov said that his company had been kicked off the Olympics hotel building site and had its machinery confiscated. He claims he is owed large sums of money by the state.
A letter from the prosecutor’s office to Morozov last month confirmed that the sting against the official took place. It said the police had broken the law by failing to pass on the evidence to prosecutors.
The Olympics bribes case is now with the powerful prosecutor’s investigative committee which is assessing whether to bring charges against the official and the officers.
The official said this weekend of the allegations: “It’s all rubbish, that’s all I can say, total rubbish.”
Against the background of Russia’s 2018 World Cup bid, Medvedev has vowed to wage war against rampant corruption, seen as one of the country’s greatest problems. Morozov’s case presents Medvedev with the chance to show the world he is serious.