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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Zaslavsky Brothers' Case

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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
An FSB Fishing Expedition: the Case of the Zaslavskiy Brothers Charged with 'Industrial Espionage' at TNK-BP

Last week, the Russian Ministry of Justice made an unexpected inspection of Renova, a company owned by Viktor Vekselberg, Russia's seventh wealthiest oligarch, after arresting two officers on fraud charges the previous week. Mikhail Slobodin, head of the telecommunications company Vympelkom since 2013 and also a member of the board of directors of T-Plus, resigned from his position; it's not clear if he will return to Russia and has now been put on Russia's international wanted list.

The moves prompted bloggers to wonder if President Vladimir Putin was "sweeping out the oligarchs' club" before parliamentary and gubernatorial elections, less than two weeks away. We noted that this scrutiny of Vekselberg, while it could well be related to actual crimes within his companies, could have a political dimension, given the way the Skolkovo Foundation, which he headed, was harassed and subjected to criminal probes some years ago.

While the original Skolkovo team had the support of then-president Dmitry Medvedev, when Vladimir Putin became president the foundation came under intense scrutiny, suspected of aiding the opposition. Ilya Ponomarev, then a member of parliament - the only one to vote against the annexation of Crimea - was accused of being overpaid for lectures and seminars and ultimately fled abroad when he abandoned hope of obtaining justice within Russia. Vekselberg himself was probed, but after he made a large payment to the government, the case was eventually dropped.

As with other high-profile cases in Russia, there are connections here to other events and cases that help us see the bigger picture about the regime of President Vladimir Putin and his control of the Russian economy, and lucrative relations with foreign companies in the oil and gas sector.

Russian journalist Kseniya Kirillova interviewed Ilya Zaslavskiy, an energy specialist and outspoken critic of the Putin regime and oligarchs who support it, for Radio Liberty's Russian-language service for Russian-occupied Crimea, Krym Realiy [Crimean Realities] at Zaslavskiy, a former researcher for TNK-BP, and his brother, an independent energy consultant, were ultimately forced to leave Russia. Zaslavskiy is a graduate of Oxford University and is currently a fellow at the Legatum Institute and Chatham House.

Eight years ago, there was a highly-publicized case involving two brothers, Ilya and Alexander Zaslavskiy, both experts on the gas and oil industry in Russia. Ilya was at that time an employee of the company TNK-BP, and his brother, Alexander, an independent consultant, was not an employee of TNK-BP but was caught up in the case likely because he, too, an Oxford graduate and had been elected head of the alumni club at the British Council. The brothers were suspected by Russian investigators of passing confidential industry information to British and Ukrainian intelligence in 2008-2009.

Ilya Zaslavskiy states that he was only performing his job duties and was gathering open-sourced information on oil and gas issues in Russia. Some of that information indeed ended up with the Western managers of the company for the simple fact that at that time, British Petroleum (BP) had owned a 50% stake in TNK-BP Management since 2003, and thus was a lawful co-owner of the company.

"I worked in the gas sector of TNK-BP and formally Victor Vekselberg was my boss who was simultaneously a Russian shareholder in the company. In practice, Vekselberg's British deputies ran the main projects in the gas sector. Initially, I was followed and bugged under the pretext of having committed state treason, then FSB downplayed that accusation to a very rarely-used criminal article on industrial espionage," Zaslavskiy clarified in the interview with Crimean Reality.

"By 2005, German Khan, a shareholder and also executive director of the company started a war with the British. He and his security guys publicly complained about the fact that the Brits were allowed access to what they called strategic maps on oil and gas reserves. However, that scandal subsided. The accusation against me was absurd and poorly-fabricated, as there was no injured party, no motive, nor any master-mind in the case.

On top of that, despite claims in a press-release in early March 2008, not a single foreign intelligence service was cited by FSB at any stage of the subsequent investigation. Formally, the investigators claimed that I tried to obtain documents from Gazprom, the state monopoly. But Gazprom was not then a party to the investigation and show trial, and did not claim any damages at any point.

In the end, the FSB downplayed the accusation to a 'failed attempt at espionage' as if we planned to do it but never actually did. At the same time, as an employee in the gas sector, I was a member of an inter-ministerial commission on gas taxation at the Ministry of Economic Development and Trade and had a legal right to have access to Gazprom's long term strategies," Zaslavskiy explains.

Ilya confirms that despite the FSB's allegations that he failed to get access to any documents, he actually had them and still has them in full. The documents were not a commercial secret, as major newspapers had published main excerpts from them in 2007, long before the alleged "crime" in 2008.

"Effectively, it was a pretext to search the TNK-BP offices - an action aimed at intimidating the British. But there was something else really interesting. Under the pretext of my case, the FSB carried out massive searches and found out that seven months before my alleged crime, in mid-2007, the Ministry of Industry and Energy formally passed the General Scheme for the Development of Gas Industry, Gazprom's key strategy document, to the TNK-BP offices. It came with an accompanying official letter, even though the original strategy in Gazprom had a 'commercial secret' stamp on it. After finding this, the FSB concluded a separate criminal investigation had to be opened against the Ministry and its addressees in TNK-BP.

In the spring of 2007, Vekselberg personally distributed a copy of the strategy for TNK-BP's gas sector, after he informally got it from the Ministry. A few months later, the Ministry sent a formal copy but no criminal investigation was opened due to either incident, despite the FSB's initial intent to do so. The media only covered the accusations against myself and my brother, while the real transgressions by Vekselberg and the Ministry never faced any legal consequences. This fact clearly shows close cooperation between the Russian security services and the oligarchs," says Ilya Zaslavskiy.

This was not the only fact that surprised Zaslavskiy and his lawyers, however. In early 2009, the FSB finished the investigation and passed the case to the court while at the same time it started to return the personal belongings and pieces of unimportant evidence to the employees of TNK-BP. Along with this stuff, the FSB passed copies of all records of searches of the TNK-BP offices to security personnel controlled by the oligarchs. The oligarchs didn't take these documents out from the rest of those sent, and by mistake sent all of them to the employees of the company's gas sector That was how Zaslavskiy got the copies of the documents, which contained a full list of the items seized from TNK-BP offices under the pretext of his case.

"First, these search records show that a whole array of documents were seized under the framework of my case, thus from a legal standpoint FSB was supposed to include them in our case. But these records were missing from the criminal case sent to the court, and they have never surfaced publicly. These facts indicate that our legal rights were violated.

Second, we know from the list of documents listed in the missing records that Jonathan Muir, one top manager of TNK-BP, already close to the Russian oligarchs then, was summoned for an interrogation in February 2008, a month before our detention, and that he had some secret talks with Russian law enforcement.

Third, a lot of documents related to TNK-BP's activity in Ukraine were taken under the pretext of my case without informing us about this. These even included the charter of a veterans' organization in Ukraine. Why they collected a whole array of Ukraine-related documents is totally unclear," said Zaslavskiy, surprised.

He added: "TNK-BP had many assets in Ukraine but I have never worked with them." It was this connection, however, that enabled Russian propagandists to call the Zaslavskiy brothers not only British but Ukrainian spies, suggesting that "in Russia, a whole ring of over ten Ukrainian spies are operating, collecting industrial and other sensitive information on energy issues." But according to Ilya, the documents seized through secret searches have nothing to do with his work or the alleged crime.

We can add that Yakov Osmolovsky, a Soviet-era dissident who used to reside in Ukraine, previously alerted the media, suggesting that the FSB had been gathering compromising materials against Ukrainian politicians and secret service employees. This has allowed Russian FSB to build an unprecedented network of agents in Ukraine.

One can only guess how Russian intelligence used the massive amount of information grabbed from TNK-BP offices.

Said Zaslavskiy: "Many of the documents that they took clandestinely are confidential or even secret, and the FSB and Government Relations Departments of the oligarchs' [companies] were probably not supposed to have any legal access. These included government and parliament correspondence, regional and federal draft laws on subsoil use, documents on the templates of Rosneft and Gazprom, an internal exchange between Nikolay Patrushev, then head of FSB, and Victor Zubkov, then prime minister."

Zaslavskiy emphasizes that the whole story with his fabricated spy case is clear evidence of a close partnership between the FSB and the Alfa-Access-Renova (AAR) oligarchs, owners of the 50% stake in TNK-BP at the time. Both parties made aggressive public statements against the presence of Brits and other Westerners in the company, and the former Interior Ministry General Sergei Novosyolov, responsible for economic security at TNK-BP, directly cooperated with FSB.

"[Novosyolov] is well known now for his activity in early the 2000s when he personally shielded Putin from a criminal investigation of Putin's activity in St. Petersburg in the 1990's. In my case, Novosyolov made libelous statements about my work during the investigation and right at the court hearings. Given that all the security issues in TNK-BP were under the direct and full control of the oligarchs, there is no way that Novosyolov could have acted independently from AAR. Novosyolov's department was under direct subordination to German Khan" - says Ilya.

As a result of the show trial in 2009, Ilya Zaslavskiy and his brother were sentenced to two years of probation and travel restrictions for their alleged "failed attempt of industrial espionage". Now Zaslavskiy is in the US, and recently decided to publicize copies of the records that he received by accident because of the mistake made by the FSB and the oligarchs' security teams. Ilya recently contributed these records to the International Spy Museum in Washington, D.C. At the very least, those who are interested in the history of the Russian intelligence services will be able to assess how significant these documents are and how representative they are of the very controversial "work" of the Russian secret police, and whether these illegally-collected documents can pose any danger to the United Kingdom and Ukraine.