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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russia Update: April 2, 2015

Publication: Russia Update
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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Former Head of Federal Corrections Service Arrested for Stealing $47.8 Million

Aleksandr Reymar, former head of the Federal Corrections Service has been arrested for embezzlement of 3 billion rubles ($47.8 million) that had been allocated for purchasing electronic bracelets for house arrests, reported March 30. Two other prison officials and a businessman are also indicted in the same case.

Aleksandr Reymar. Photo by RIA Novosti.

This doesn't surprise most Russians, who are familiar with the pattern throughout their history where yesterday's executioners become tomorrow's victims, and where corruption is rampant in the government.

Mikhail Senkevich of the Public Observers Commission, a prison monitoring group, has already visited Reymar and said he was alone in a cell meant for two although someone has been moved in, reported.

The cell is "standard" and "ideally clean," he said, and Reymar had been given a television set.

This is the same monitoring group whose members visited five Chechens suspected as the murderers of Boris Nemtsov. Some of the group's members later said the prisoners had withdrawn their confessions and complained of torture, and were themselves then threatened with criminal prosecution for disclosing the secret information of the investigation. Then the head of the commission denied there were any reports of torture at all.

Reymar's case hasn't sparked that kind of disagreement so far in the group.

Some of Russia's political prisoners can't help feeling a bit of schadenfreude, however, over the reversal of Reymar's fortunes, even as they wonder if he will get better treatment.

Prisoners don't always get a TV in their cells in Russia; one commenter on Ekho Moskvy quipped, "What's the TV in for?"

Marina Tolokonnikova, a member of the Pussy Riot punk band who served more than two years in prison for staging a protest in a Russian Orthodox Church against Putin, had this to say on her Facebook page (translated by The Interpreter):

Reymar, the former head of the prison system of the Russian Federation, is  now behind bars at the Presnensky Court in Moscow, in a dark sweater, covering his face with his hands. Why, Aleksandr Aleksandrovich? We know what you look like anyway. You're a famous person.

We waited for your arrival with a Moscow commission in the pre-trial detention centers and the colonies; we painted the rotting walls and within in a day, paved the entire zone with asphalt so that you would like it. We wrote you complaints that we weren't receiving medical treatment and we were being beaten, and you didn't answer us. You're a famous person.

And now you cover your face with your hands, you have been detained and jailed, and they are accusing you of stealing electronic bracelets worth 3 billion rubles.

Well, it happens. When we asked you why they feed us such shit, you answered: "You shouldn't have committed a crime." Yes, Aleksandr Aleksandrovich. You shouldn't have.

Her comment attracted 11,752 likes.


-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russian Foreign Ministry Issues Subdued Reaction To Iran Nuclear Deal

The Russian Ministry of Foreign Affairs has released this statement (translated by The Interpreter) after the news that a framework agreement has been met between the members of the P5+1 on the future of Iran's nuclear program:

In this political agreement is laid the principle formulated by Russian Federation President V. V. Putin, namely, the recognition for Iran of the unconditional right to implement a peaceful nuclear program including activity to enrich uranium, with the placement of this program under international oversight and the removal of all existing sanctions against the IRI. All subsequent steps within the framework of the final agreement will be undertaken by the sides proceeding from the principles of staging and mutuality which at one time were also advanced by the Russian government.

Thus the negotiations marathon regarding the Iranian Nuclear Program lasting many years is completed. The main political conclusions are found, now ahead is the meticulous expert work in documentation of the technical measures for implement each one of the concrete decisions  which in aggregate make up the subject of a future agreement.

The framework. the details of which can be read in full here, is designed to ensure that Iran does not acquire a nuclear weapon, but is still allowed to move forward with a peaceful, civilian nuclear power program.

The statement by the Russian MFA is subdued -- perhaps  in order to avoid adding fuel to the fire which has already been started by the deal's critics and skeptics. 

The MFA did appear eager, however, to make sure that the framework for the nuclear deal agreed upon today are codified by the UN Security Council:

Part of the framework reads as follows:

- Iran will receive sanctions relief, if it verifiably abides by its commitments.

- U.S. and E.U. nuclear-related sanctions will be suspended after the IAEA has verified that Iran has taken all of its key nuclear-related steps. If at any time Iran fails to fulfill its commitments, these sanctions will snap back into place.

- The architecture of U.S. nuclear-related sanctions on Iran will be retained for much of the duration of the deal and allow for snap-back of sanctions in the event of significant non-performance.

- All past UN Security Council resolutions on the Iran nuclear issue will be lifted simultaneous with the completion, by Iran, of nuclear-related actions addressing all key concerns (enrichment, Fordow, Arak, PMD, and transparency).

- However, core provisions in the UN Security Council resolutions – those that deal with transfers of sensitive technologies and activities – will be re-established by a new UN Security Council resolution that will endorse the JCPOA [Joint Comprehensive Plan of Action] and urge its full implementation. It will also create the procurement channel mentioned above, which will serve as a key transparency measure. Important restrictions on conventional arms and ballistic missiles, as well as provisions that allow for related cargo inspections and asset freezes, will also be incorporated by this new resolution.

Therefore, the Sputnik article is somewhat confusing, as there will be no immediate UNSC action which will codify this framework. In fact, it's likely that the exact wording of the proposed UNSC resolution, as well as the language of the entire P5+1 deal, has yet to be written and will be agreed upon in June.

Russia has previously expressed concern about one aspect of the nuclear deal often referred to as the "snap back." Under the language released today, sanctions on Iran which relate to its nuclear program will be lifted as soon as the International Atomic Energy Agency (IAEA) has been able to verify that Iran has complied with their end of the deal. However, at any point that Iran then stops complying with the deal, those sanctions could automatically "snap back" into place.  This automatic action, however, potentially undermines Russia's ability to veto any new sanctions. Reuters reports:

"Russia has never been ready to give up its veto power and the status that gives it," said Mark Fitzpatrick, of the International Institute for Strategic Studies in London.

"It doesn't want to forgo any future decision to play a role in either impeding American diplomacy or possibly playing a card positively in the future," he added. "They don't want to give up leverage now that could be useful in the future."

It is a central issue in the case of Iran. If Tehran fails to comply with a nuclear agreement and Western powers decide that U.N. sanctions should be reimposed, if there is no trigger, a new Security Council resolution would be required. And sanctions resolutions can be a tough sell for Russia and China.

In such a case, Western diplomats say, Russia could, and most likely would, veto any attempt to restore U.N. sanctions on Iran. As a result, any so-called temporary relief involving U.N. nuclear sanctions or other U.N. measures would be permanent.

Now that the framework has been agreed upon, however, it's not clear how this particular issue has been resolved.

If Russia is still reluctantly going along with this deal, it isn't the only country which has its doubts:

For all of the significant details released today, the actual language of the deal has not been agreed upon, and there are many unanswered questions about the specifics of the deal and whether it will be agreed upon in June and successfully implemented after that.

-- James Miller, Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russia's Oligarchs Will No Longer Have to Publish Salaries; Kremlin Softens Terms for Sochi Loans
The managers of top state companies in Russia will no longer have to publish their salaries, reported on March 30, in what is being seen as a victory for hardliners in the Kremlin.

A notice was sent by the Kremlin to the managers to clarify an issue that has vexed them as well as anti-corruption activists for more than a year.

The further explication given to inquiring journalists by Natalya Timakova, press secretary for Prime Minister Dmitry Medvedev, actually says more about the muddle that is state capitalism in Russia, which has provided exceptions for some oligarchs close to President Vladimir Putin even as others are over-scrutinized:

"There was an additional explanation to the decree passed earlier by the government, the point of which came down to the fact that heads of commercial organizations, including those with part state ownership, if the are an OAO [open stock company], that is, if there is some government shares, in the strict sense they are not civil servants but are representatives of commercial business.

They still remain commercial, hiring employees; therefore according to this paper, the heads of such companies are obliged to provide tax declarations to the government, essentially as it was before. This obligation remains for them but they are released from the necessity of publicly declaring their incomes. Above all because they are participants of the commercial market, and therefore this constitutes in particular a commercial secret"
As for those organizations which are established by the government and exist on state budgets where the heads are appointed directly by the government, for them the rule remains the same -- they will go on submitting declarations to the government and they will be published on the Internet."

As RBC explains, back in 2013, Putin passed a law requiring officials of state corporations to publish their incomes. This caused a backlash from Vladimir Yakunin, head of Russian Railways, and others who said it was an invasion of privacy but then reluctantly complied. Igor Sechin, head of Rosneft refused to reveal his income and even sued Forbes magazine for making an estimate of his wealth. Rosneft did publish a disclosure of the aggregate of all the incomes of all their top officers including Sechin, then finally published a figure just for Sechin's compensation for serving on the board at Inter RAO EES, which was 2.97 million rubles ($51,183), "sent to charity," said Rosneft.

In April 2014, Sechin was personally included on the list of US sanctions against Russia for the war in Ukraine and then in September 2014, Rosneft as a company was included.

Putin last received Sechin publicly at the Kremlin on February 5, 2015.

Newsweek's Damien Sharkov has published a piece titled "'Victory' for Russia's Top State Executives as They Keep Salaries Secret."

He links to the Russian original of a piece titled "Three Victories for the State Managers: What Sechin and Yakunin Win From the Right Not to Publish Data About Their Incomes" although there's an English translation published the same day.

Sharkov cites this paragraph, which is from the English translation:

Sechin, Yakunin, Miller, and others have shown basically that they don’t have to obey the government’s orders, and not only that but they can get meddlesome decisions reversed. “Special” individuals can get “special” treatment from the country’s leaders—that’s precisely the message Russia’s top managers send with this turn of events.

Sharkov doesn't mention how this issue became so public -- the work of opposition leader Alexey Navalny and his Anti-Corruption Fund and other opposition leaders such Boris Nemtsov, who was assassinated on February 27.

Meduza mentions Navalny in the context of explaining that the new law is a psychological victory for the oligarchs, given that Sechin had already disclosed his salary as a deputy prime minister.

Even these scandals, however, pose no great threat to top managers. Anti-corruption activist Alexei Navalny’s many investigations of politicians’ undeclared property have produced just one resignation (Duma deputy Vladimir Pekhtin’s in 2013) and not a single reprimand from the Kremlin.

There's no question that Russia's opposition leaders have put the issue of oligarch compensation and lucrative state contracts such as for the Sochi Olympics on the map (See Nemtsov's Winter Olympics in the Sub-Tropics translated by The Interpreter.)

Georgy Alburov, the former head of Navalny's Anti-Corruption Fund, tweeted this humorous meme last year to illustrate the issue of Sechin, whom he depicted as a little orphan boy named Igoryok, continuing to get loans from the government even as the government raided the pension funds to bail out Russian corporations targeted by Western sanctions:

Translation: At the Ministry of Finance, they say they are sending the pension funds in particular to support major corporations.

Attached meme:


    This nice bright boy is named Igoryok, he is only 53  years old. Igoryok needs help. He has a severe, possibly hereditary disease -- he has is totally f**ked.

    If every one of us gives Igoryosha his salary, perhaps we can save him.

Today, Alburov is on trial in the city of Vladimir on charges of "art theft," facing years in prison, for taking the sketch of a street artist off a public fence and giving it later to Navalny. The work has been valued at less than 100 rubles by the artist, and even under pressure from state investigators, was characterized in court documents as worth no more than 5,000 rubles, i.e. $1.75 to $88.

The news about the new secrecy law for top officials' salary comes out as the VEB Bank is softening the terms for paying back the loans for Olympic buildings, reports.

At a meeting of the board, it was decided to give the companies with loans the right to spend up to 20 percent of their operational profits on development, such as capital construction of parks and bus stops that are "necessary to raise investor attractiveness for these projects and the related increase in the flow of tourists."

So in other words, instead of paying back their loans, they can keep building.

In January, reported that at a board meeting chaired by Vice Premier Dmitry Kozak, it was decided that Vladimir Potanin of Interros and Oleg Deripaska of Basic Element -- two oligarchs with access to Putin -- could increase their costs for financing development of their Sochi resorts. The move was explained as "part of the program of further cooperation between the government and investors in the Olympic facilities."

Interros spent 81.8 billion rubles on the Olympics, 80% of which were borrowed from VEB Bank. Earlier Interros representatives said that if the government subsidies the rates on their loans and gives the Roza Khutor housing development at the Sochi site tax breaks, then it may pay back investors in 15-20 years.

Basic Element built the airport, the Imeret port and the Olympic Village. The Olympic Village cost Basic Element 24.2 billion rubles ($427 million), with a loan of 15.5 billion rubles ($273 million) and the Imeret Port caused 6 billion rubles ($105 million) (for which they had a VEB loan of 3.7 billion rubles or $65 million). These loans were all received when the ruble was worth much more than it is today (57/$1).

Putin received Potanin at the Kremlin on March 23.

-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russian Ship Disaster in Sea of Okhotsk Occurs Amid Massive Sakhalin Government Shake-Up

The tragedy of the Dal'ny Vostok, a Russian fishing trawler which sank in the Sea of Okhotsk killing at least 56 crew members, with 13 still missing, occurs amid a massive government shakeup in Sakhalin Region.

The ship was owned by Magellan, Ltd. and registered at the port of Nevelsk on Sakhalin Island.

Sakhalin is Russia's largest island in the North Pacific Ocean which was seized from the Japanese near the end of World War II and remains a subject of bitter dispute between the countries.

On March 4, long-time Sakhalin governor Aleksandr Khoroshavin was fired and arrested along with his associate Andrei Ikramov on charges of corruption, including acceptance of a $5.6 million bribe for the construction of a thermal power station. This has led to a government shakeup in which other officials associated with the discredited governor have been fired or resigned under pressure including Yekaterina Kotovo, head of the governor's office and former minister of finance, dubbed by as "the government's chief blonde."

Her patron, deputy governor Sergei Khotochkin may be next in line for dismissal. The scandals in Sakhalin have not been complete without charges that another former regional development official, Timur Solovyov, was "an informer for the USA," says Solovyov was arrested last year at Sheremeytovo airport with synthetic drugs as he returned from the US, then sentenced to 14 years of prison.

"After this incident, the head of the regional budget department naturally had to be changed," says

Oleg Kozhemyakov was appointed acting governor and the Kremlin has installed its own person today Aleksandr Dernovoy, who previous served as an aide to Prime Minister Dmitry Medvedev, to keep an eye on the domestic policy of this troubled remote province.

-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Death Toll Rises to 56 in Russian Trawler Disaster; 13 Missing As Officials Say Overload Likely Reason for Capsize

The death toll has risen to 56 from the capsizing of the Dal'ny Vostok, a Russian freezer trawler, 300 kilometers off the coast of Magadan. More than 1,600 people have been deployed to help with the rescue, RIA Novosti reports. Sixty-three people have been rescued, with at least 9 in critical condition from hypothermia. But after a day of searching, there is no hope that any more fishermen would be found alive in the freezing waters; 13 are still missing. Those that did survive credit the fact that all crew members were in wet suits and 30 other fishing boats were nearby to start the rescue immediately.

Both the captain and his first mate died in the accident.

Stock photo of the Dal'ny Vostok, which was previously named the Stende. said the search was continuing in the dark, with a designated search area of 8,500 square miles; earlier an administrator of the Petropavlovsk-Kamchakta sea port said the search was called off until morning.

On board were 76 Russian citizens, most from Sakhalin and Primorsky Territory and 54 were citizens of Ukraine, Latvia, Azerbaijan, Myanmar and Vanuatu.

Vasily Sokolov, deputy head of Rosrybolovstvo, the Russian government fishing agency said the Russian citizens and two  specialists from Latvia, where the ship was purchased, were the trained crew. The rest of the foreign citizens were "cheap labor," said Kommersant.

A criminal case has been opened on violation of water transportation safety regulations, and the crew and owners are being interrogated.

Very few pictures of the disaster of been supplied by authorities -- just a few close-ups of emergency workers and one rescue ship.



Kommersant said that authorities were researching "10 different versions" of the accident.

But said that acting governor Oleg Kozhemyako and the Emergencies Ministry have said a failure to observe safety procedures led to the sinking (translation by The Interpreter):

"They had empty tanks, the ballast had not been pumped in. A trawl of about 80 tons was taken on board which prompted the disruption of the ship's balance - it was at zero, negative. The ship capsized and sank within half an hour."

According to Kommersant, an official from Russia's Emergencies Ministry said:

"According to preliminary data, the crew of the trawler violated industry rules. The ship in which there were little reserves of fuel hauled a trawl of 80 tons on board and lowered a second net. With the choppy waves, the ship 'caught the roll' and sank."

Some Russian social media commentary has focused on the heavily competitive world of commercial fishing in over-fished waters as the backdrop of the tragedy.

But Vasily Sokolov, deputy head of Rosrbybolovstvo, the Russian fishing agency, said that there was no overload on the Dal'ny Vostok. He said his agency had their theory about what happened but only the investigation would establish what happened.

Investigative Committee sources said investigators are also looking at "the most likely" reason for the accident which was that the ship struck an obstacle such as an ice floe which damaged the hull.

The sinking of the Dal'ny Vostok is far from the worst sea disaster in Russia's history, as there have been many more over the last decades with many hundreds lost in each incident. The last accident near Sakhalin was in 2011, when 53 died after an oil-drilling rig sank, AP reported.

-- Catherine A. Fitzpatrick