Mikhalkov: RAO case smells gunpowder 

Mikhalkov: RAO case smells gunpowder
Photo: © The CrimeRussia

The CrimeRussia continues its inquiry into the Russian Authors’ Society (RAO) case and has found new links between characters handling copyright-related affairs in Russia and organizations affiliated with Mikhalkov and Fedotov.

Almost a month has passed since the arrest of Sergey Fedotov, the General Director of the Russian Authors’ Society (RAO), accused of swindling for 297 million rubles. After the high-profile arrest, Nikita Mikhalkov, the Chairman of the Board of the Russian Union of Right-holders (RUR) and the perpetual Chairman of the Filmmakers Union of the Russian Federation, said that he has ‘nothing to do’ with the RAO. The CrimeRussia has earlier published a material about long-term and close connections between Nikita Mikhalkov and detained Sergey Fedotov, the General Director of the RAO. On July 15, 2016 Roman Abramov, the President of the Federation of Intellectual Property (FIP) Regional Civic Organization for Protection of Authors’ and Associated Rights, said that the RAO was threatening Nikita Mikhalkov: Mikhalkov was required to assist in the release of Fedotov from detention, or otherwise blackmail materials against him and copyright organization affiliated with the RUR would be published. The CrimeRussia has continued its inquiry and found new links between characters handling copyright-related affairs in Russia and organizations affiliated with Mikhalkov and Fedotov.

Best frenemies?

It is not a secret that the Russian copyright protection system, that had been built for many years jointly by detained Sergey Fedotov, the General Director of the RAO, and Nikita Mikhalkov, raises a lot of questions – at least, among people related to this system. The non-transparent money collection and distribution system, complaints from producers, behind-the-scenes struggle for redistribution of spheres of influence and the power to manage royalties – all these aspects are well-known to authors, right-holders, and producers.

Сын Никиты Михалкова, Артём Михалков и Сергей Федотов на церемонии награждения Почётной премией РАО

Artem Mikhalkov, son of Nikita Mikhalkov, and Sergey Fedotov at the RAO Awards Ceremony 

It is also known that collection of royalties from all TV channels, theaters, cafe, radio stations, restaurants, and public places where music plays is a very demanding – and equally profitable – job. According to the RAO, the organization has collected some 4.6 billion rubles in 2015. 

Not all Russian citizens are aware that they pay deductions to the RAO from their pockets – for instance, for the song that plays in a cafe. The general public first heard about RAO issues just recently – after the arrest of Sergey Fedotov, the General Director of the RAO, in June 2016. 

The reaction of Fedotov’s colleagues and players on the intellectual property market to this event has confirmed again that the situation with the Russian copyright protection system and relations between its members are even more complicated than it seemed at the first glance. 

On July 15, 2016 Roman Abramov, the President of the Federation of Intellectual Property (FIP) Regional Civic Organization, has published an urgent information statement on the Federation web-site. In this statement, Roman Abramov officially announced that there were threats to Mikhalkov in connection with the RAO case. The President of FIP said that Philip Rossa had addressed him asking for a personal meeting. Philip Rossa is a well-known producer and representative for many big and famous right-holders – members of the RAO who receive royalties via this structure (including Gazmanov senior and Gazmanov junior, Turetsky choir, etc.). 

“Acting, based on his own words, on behalf of V.V. Fedotova, the First Deputy for the General Director of the RAO (Vera Vladimirovna Fedotova is also the mother of Sergey Fedotov – the CrimeRussia), mister Rossa asked me to notify Nikita Sergeevich Mikhalkov of the following requirement: N.S. Mikhalkov must promptly ensure the release of S.S. Fedotov from detention and relief from criminal liability,” – the Abramov’s statement says. Abramov also noted that the RAO management was blackmailing Mikhalkov: if he does not take efforts to release Fedotov, compromising materials would be published against the management of the RUR and the Russian Organization for Intellectual Property (VOIS) (both organizations are managed by people close to Mikhalkov – the CrimeRussia), including Andrey Krichevsky, the Principal General of RUR and VOIS. The statement says that Roman Abramov refused to hold the dialogue and provided the conversation record to law enforcement authorities. 

On the same day, Philip Rossa made a statement via Argumenti Nedeli newspaper saying that the context of his words was totally misrepresented – although he did not deny the meeting with Abramov. “This meeting was my personal initiative to explain that mutual accusations and media attacks put to risk the whole sphere uniting tens of thousands of creative people”. Rossa refuted the information that he was acting on behalf of the RAO and stated that his attempts to meet with Mikhalkov were his personal initiative. The producer also assured that personally he has the greatest respect for Nikita Sergeevich. 

However, many questions still remain open. Why did Philip Rossa choose the President of the Federation of Intellectual Property as a representative for Mikhalkov? Why did he act on his own, almost secretly, trying to meet with Mikhalkov tete-à-tete, instead of announcing his position openly and calling for a dialogue with the colleagues? And the most important question is: why in the world did he want to explain his idea that “mutual accusations and media attacks put to risk the whole sphere” specifically to Mikhalkov? 

To refresh background: earlier Mikhalkov has shrugged of the RAO, saying that he ‘has nothing to do’ with this organization, but still signed a petition to ease pretrial restrictions for Fedotov, stating that he compassionates the detained colleague humanely. 

Apparently, Philip Rossa thought that Mikhalkov was able to affect the investigation and release Fedotov?

To clarify the situation, the CrimeRussia contacted Philip Rossa. Филипп РоссаThe producer declined to provide detailed comments stating that he “has already told Argumenti Nedeli everything he wanted to say”. However, he answered some CrimeRussia questions.

“Why did you address Nikita Sergeevich Mikhalkov? What was the need for this meeting?”

“I thought that it was necessary to meet. Currently, there is a media war in relation to the copyright protection; it is destroying the existing system. This is not right. Actually, this was in my interview to Argumenti Nedeli”.

“In the interview to Argumenti Nedeli you say that you expected Mikhalkov “to settle the informational conflict using his ‘seniority power’”. But Nikita Mikhalkov has already advocated for easing pretrial restrictions for Fedotov and signed a petition. So, do you believe that he could contribute to the release of Fedotov in some other ways?”

Pause. “I am not ready to comment on this. Any other questions?” 

“Yes. What steps, in your opinion, could be taken to mitigate the situation?”

“Right now I don’t know what other steps could be taken. I think that the situation will resolve by itself”. 

“Why were you thinking that Mikhalkov can release Fedotov and mitigate the situation?”

“It was my internal reasoning. I am not ready to share it”.

“What were you expecting from Mikhalkov, when asked for this dialogue?”

Philip Rossa declined to answer this question and concluded the conversation hastily. 

However, in his interview to the CrimeRussia, the producer provided an interesting fact: Rossa explained why he had addressed Roman Abramov. According to him, he was seeking a personal meeting with Mikhalkov and contacted his press service. “The press service of Nikita Sergeevich told me that Roman is ready to meet with me. So, it was not my choice, but the choice of Mikhalkov”. 

Mikhalkov confirmed to media that Rossa was seeking a meeting with him: “Mister Rossa attempted to reach me via my subordinates to discuss some important topic tete-à-tete <…> and implied that it was in my interests to meet with him rather sooner than later. He positioned himself as the executive producer for Turetsky choir”. 

However, Mikhalkov – similarly with Philip Rossa – provides to media only half-truth convenient for him – while keeping silence about things he would like to conceal from the public. 

For instance, he does not comment why Philip Rossa held negotiations specifically with Roman Abramov, neither does he mention that it was him who ‘appointed’ Roman Abramov as the mediator for these negotiations. However, many things would become clear if we remember who stands behind the Federation of Intellectual Property (FIP). According to the Consolidated State Register of Legal Entities, the Federation of Intellectual Property Regional Civic Organization for Protection of Authors’ and Associated Rights was registered in June 2011. This is another organization protecting authors’ rights in Russia and closely related to Mikhalkov. Nikita Sergeevich is nothing less than the Chairman of Presidium of the Federation. Interestingly, the list of Federation founders (Marianna Volodina, Gazimirza Gaziteev, and Sergey Tinkov) exactly matches the list of founders of another non-commercial organization – the Savate Federation Moscow Regional Public Organization – also founded in June 2011. Gazimirza Gaziteev, the champion of Russia in hand-to-hand fighting, is the head of the Savate Federation.

Газимирза Газитеев (справа)

One might ask: what common affairs could have the Savate Federation and Nikita Mikhalkov? Bun in fact, this organization is directly related to the Russian Union of Right-holders (RUR) chaired by Mikhalkov. The Savate Federation was the only competitor of the RUR at a tender conducted by the Ministry of Culture in 2015. Of course, the Ministry of Culture declined the application submitted by a sports organization – and the RUR gained the power to collect for 10 years the tax lobbied by Mikhalkov despite objections from the Ministry of Telecom and Mass Communications of the Russian Federation and major industry players – so called, blank disc tax – 1% levy on electronics and data storage media importers. According to experts, this is not the first time when accredited agencies use their affiliated organizations as fake competitors at tenders, but Mikhalkov acted especially blatantly at that tender.

Apparently, the arrest of the RAO General Director and further actions and statements of the major market players are only faint echoes of hidden processes that concern so much all those involved into the complicated copyright protection system.

After the statement made by Roman Abramov, we attempted to sort out the confusing mutual relations and interdependencies between characters involved into the RAO case.

Smoke of the fatherland or gunpowder from the turbulent 1990s

Nikita Mikhalkov has commented the statement made by Abramov in his usual manner: “This statement smells the gunpowder from the turbulent 1990s that supposedly have passed to oblivion. At that time, all issues used to be resolved by the rules of the underworld – and anything could be achieved through blackmailing, threats, and violence”. Perhaps, Nikita Sergeevich knows the methods used in the turbulent 1990’ not only in theory. Anyways, the methods currently used by Mikhalkov, his colleagues, associates, and competitors in their struggle for royalties control and distribution are reminiscent of those from the 1990s. 

Let’s take, for instance, inconsistent actions of Nikita Mikhalkov after the arrest of Sergey Fedotov. The master of the Russian cinema surprised journalists and colleagues by saying that he “has nothing to do” with the RAO, but noted that he compassionates Fedotov humanely and is ready to petition for easing his pretrial restrictions and his release from detention. Media suggested that Mikhalkov’s care about Fedotov is caused not only by his kindness of heart but also by mutual arrangements with Fedotov. Mikhalkov could have no choice, but to make a public statement in support of Fedotov – otherwise the RAO General Director could share with the investigators some details of the non-transparent royalty collection mechanism that allowed to leave a considerable part of collected funds in the coffers of copyright protection organizations controlled by Mikhalkov. 

Following a request from Fedotov’s defense attorney, Nikita Mikhalkov has signed the surety. Prior to this, 16 out of the 23 members of the Authors’ Council of RAO (including singer Yuri Antonov, poet Andrey Dementiev, Dmitry Malikov, Valery Syutkin, etc.) have sent a letter to Yuri Chaika, the Prosecutor General, and Vladimir Kolokoltsev, the Minister of Internal Affairs of the Russian Federation, asking to release Fedotov from detention. However, on July 12, 2016 it became known that the efforts by Mikhalkov and other people of art have not brought the desired result. The Moscow City Court has not taken into consideration the surety and declined to change the pretrial restrictions for Fedotov. In other words, the RAO General Director will remain in the pretrial detention facility. After this court decision, it would be logical to suppose that the RAO management, in the person of Vera Fedotova, starts looking for other ways to release Sergey Fedotov. 

It is known that Roman Abramov and Philip Rossa had a meeting on July 14, 2016. Is this a coincidence of dates, or this meeting was a part of efforts made by the RAO management to release Fedotov from detention? 

In any event, a producer representing many famous pop singers – RAO members – had attempted to meet Mikhalkov. The master refused to meet in person but referred the messenger to Roman Abramov. And on the next day Abramov has disclosed the details of the meeting and announced that he had provided the audio record of the conversation to law enforcement authorities. 

Obviously, the purpose of the statement by Roman Abramov, the President of the Federation of Intellectual Property controlled by Mikhalkov, was to accuse colleagues from the RAO. However, regardless of Abramov’s intentions, his statement supports the version published earlier in media that the colleagues in the copyright control industry have some common secrets. 

For instance, Abramov mentioned Argumenti Nedeli in his statement. According to Abramov, this periodical was named by Philip Rossa: “According to Mr. Rossa, biased articles with this information are already written and their publication in certain media is prepaid. Mr. Rossa referred to the “Theft without damages” article published in Argumenti Nedeli newspaper (Issue #27 (518) of July 14, 2016) as an example”. 

The author of this article states that Fedotov is innocent – allegedly, he was not involved into the creation of the Service-Exploitation Company (SEC) Closed Joint Stock Company which, according to the investigation, had been used to withdraw RAO assets.

The article implies that Fedotov is a victim of his over-trust to Andrey Krichevsky, the Deputy Chairman of the RAO Board of Directors. According to the newspaper, Krichevsky had an instruction to supervise SEC operations; it was planned to introduce new IT technologies on the basis of SEC to make RAO activities more transparent and open. 

Андрей Кричевский и Сергей Федотов с супругой

Andrey Krichevsky and Sergey Fedotov with his wife 

To refresh background: Andrey Krichevsky is a prominent figure in the profitable copyright protection business in Russia; he is also the Chairman of VOIS, the Principal General of Melodia Federal State Unitary Enterprise (the largest national royalty beneficiary), since 2015 he has become the Principal General of RUR instead of Fedotov and also was appointed the first Deputy of Fedotov in the Russian Authors’ Society – a professional union of people of art that unites RAO, RUR, and VOIS. The article notes that the former allies Krichevsky and Fedotov became secret competitors. In 2015 there were comments in media that Krichevsky attempted to consolidate management of the RAO and RUR in his hands; many sources confirmed this. Sovershenno Secretno periodical has published a material, if fact, accusing Andrey Krichevsky of an attempted raiding takeover of the RAO and RUR and hinting at his links with the organized crime. 

By the way, a year before his arrest, Fedotov was also comparing the copyright protection industry with the turbulent 1990s. In his interview to Izvestia newspaper, he called the audit conducted by the Ministry of Internal Affairs (the MIA) a part of the campaign to remove him from his post: “This is a part of a large-scale campaign. It started in October of the last year, when a grave-stone with my portrait was delivered to the RAO office. I was concerned. This was a warning a la the 1990s. There was also a call to the RAO stating that there is a bomb planted in our office”. 

There is a version that the MIA audit and other problems for Fedotov started after his decision to make the RAO system more transparent and provide access to information for all authors. Apparently, some of Fedotov’s colleagues were not very happy with this initiative. 

We would like to remind that since the publication of Roman Abramov’s statement, Philip Rossa, in fact, refuses to communicate with media and refers the journalists to his interview in Argumenti Nedeli. Is it a coincidence that the producer decided to give his only interview to the same newspaper that he – according to Abramov – had named among other participants of the informational war between rival groups in the copyright protection system? 

The statement by Roman Abramov says that Philip Rossa acted on behalf of Vera Fedotova, the First Deputy for the General Director of the RAO and also his mother. RAO representatives told us that it is difficult to reach Vera Fedotova because she does not come to the office every day. In addition, Ivan Kim, a counselor for Sergey Fedotov, told us that the RAO has no relation to these events. 

We were unable to reach Roman Abramov. Federation of Intellectual Property (FIP) representatives initially told us that their boss communicates with journalists only in writing and suggested to send questions that will be personally answered by Abramov in writing. However, Roman Abramov hasn’t responded to our questions yet. FIP explained us that he suddenly left for a business trip and nobody knows when he returns back. 

Hostages of the monopoly

To find out what those, whose rights are supposedly protected by the RAO and RUR, think of the current situation, we addressed authors. 

The RAO issued an official statement saying that operations of the Russian Authors’ Society after the arrest of its General Director are performed as usually; there are no delays with payment of royalties to authors. However, according to a CrimeRussia source, the organization is effectively paralyzed due to the arrest of Fedotov: “We can not attend every day, some RAO staff members are questioned”. 

Valery Syutkin, a member of the RAO Authors’ Council, confirmed this to the CrimeRussia: “They are now trying to completely demoralize the RAO, but we don’t need this. I know one thing: if RAO operations are disrupted, this would affect, first of all, authors; authors won’t get their money. We are striving to ensure that authors’ interests are not affected. They should take into consideration interests of those, whom the society was created for, – not those who are trying to seize it and then make big money on it”. 

The pop singer also emphasized in his conversation with the CrimeRussia that not everything is perfect in the RAO, indeed – but this criminal case won’t resolve the existing issues in the organization. “This is big money; when money arrive – people willing to distribute them appear immediately. This is kind of a ravelment. The most annoying is that the investigation is not reviewing how the royalties are being distributed and what could be improved here – but instead they are focused on how the managers, including Fedotov, were distributing some financial flows that we have nothing to do with,” – Syutkin noted. – “I don’t understand why RAO operations have to be hindered. Everything is on hold now. It is easier to find the truth with Fedotov rather than without Fedotov, who is kept in isolation, nobody knows why. He might do something wrong – but let’s find out what. Everything will ultimately result in the arrival of new people who will manage these funds. And the author, as usually, will be the victim. To ensure justice, maximal transparency is required”. 

Yuri Antonov, composer, singer and also a member of the RAO Authors’ Council, said that the Authors’ Council basically plays a formal rule in the RAO, while the RAO management makes decisions by its own. Yuri Antonov confirmed that he has learned of his removal from the RAO Vice President position post factum. 

According to Yuri Antonov, he, in fact, did not participate in the decision to send a collective RAO letter in support of Fedotov.

“You used to express your grievance with RAO activities, but still you have signed a letter in support of Fedotov. 

“What in support of Fedotov?”

After the explanation: “It’s not me, it’s probably us… There is my signature there, correct? You know what… I don’t know how this decision was made. I am not aware – this is now the general trend in the council. This was a simple humanity, he (Fedotov – the CrimeRussia) could be left under a written pledge not to leave the city and home arrest. He is not a bandit, nor a killer. This is up to the law enforcement authorities”. 

When asked why he is still a member of the RAO instead of collecting his royalties by his own, Antonov said: “It is impossible to stand upon your rights in our country by your own. There is no other such organization; people earn at least something here”.

However, not all RAO members believe that the Principal General of RAO does not deserve detention. In July 2016, producer Maksim Fadeev made a statement about machinations in the RAO:  Убитый в 2008 году Вадим Ботнарюк “I was enduring and keeping silence for a long time, like thousands of authors in Russia, watching the corruption among RAO managers who were blatantly showing us their superiority and pointing out our place to us! While we were bowing and begging for our money, the RAO managers were deciding how much they pay to whom. Personal relations were also important and determined the amount of remuneration,” – the producer said. Maksim Fadeev also reminded of the criminal aspect of copyright protectors’ operations: “In 2008, Monolith Company, where myself and several famous composers, led by Vladimir Botnaryuk, were the partners, decided to manage all our catalogues by ourselves and leave the RAO. Threats and phone calls started. Finally, Vadim was killed at the doors of his own home. <…> royalties and their management in our country are a lucrative piece of pie for many people”.

In his interview to the CrimeRussia, Maksim Fadeev explained how the authors were receiving royalties from the RAO:

“They were just sending us some formal replies with regards to our earnings, and it was obvious that everything does not work right. How can it be that a song, which was never popular, earns a certain amount of money – while another song that was super-popular, furthermore, popular worldwide, earns three times less in comparison with the song that nobody listened to? Can you explain this to me? Neither do I. Therefore, it seems that they were distributing royalties at their will – “Just write this amount for him”. These are my feelings. If somebody in the RAO explains me how it works – I would believe them. But nobody bothered to explain this to me so far, and I don’t understand how, for instance, royalties of Serebro pop group could be distributed by some obscure companies. This is a question for the investigation. Let them dig this as deep as possible; I am certain that they will find lots of interesting stuff”. 

“Are you currently a member of the RAO?” 

“Being an obedient composer, I have been a member of the RAO for 25 years already. And I was not receiving anything for many-many years. And I began receiving something only in the last eight years. And my father, who was a RAO member, never received a single ruble. Who can explain me where are my father’s money? He died recently, three months ago. And if he were not my father, he would die in poverty, like many composers, poets, scriptwriters, etc. die – in poverty, without getting a single cent from this ‘wonderful’ establishment. I am a member of three copyright protection organizations – in Japan, Germany, and Russia. Foreign organizations work in a completely different way – everything is understandable, clear, and absolutely transparent there”. 

Another aspect raises questions among the show business community: why Nikita Mikhalkov, being the Chairman of the Filmmakers Union of the Russian Federation, has built such a strong copyright protection monopoly, bud did not care to incorporate Soviet and Russian actors into this royalty distribution system? We asked this question to Stanislav Sadalsky, a theater and movie actor and member of the Filmmakers Union of the Russian Federation.

“Royalties are paid to actors everywhere in the world, except for Russia. Mikhalkov is busy with everything – products, fast food – instead of helping actors, which is his direct duty. I understand that that this person wants to remain the Chairman of the Filmmakers Union for life without doing anything”. 

“Does the Filmmakers Union currently support the actors in any way?”

“The Filmmakers Union is a useless organization. It has outlived its usefulness. These are not my words, but words of Andrey Konchalovsky, a brother of Mikhalkov. I am sorry that actors and filmmakers are abandoned. They are afraid to speak openly. Why in Russia actors, who are filmed, who are shown on TV, have to work as taxi drivers or apartment cleaners, like Sveta Svetlichnaya? In the Soviet period, this Union was very useful, this public organization was, in fact, essential”.

“But now there is a fund to assist cinema veterans: Urga – the Territory of Love, headed by Mikhalkov”.

“Yes, it pays 100 thousand rubles a month to actors having the People’s Artist title. It is good, but this must be official. It must be not a private fund, but on the governmental level. The state must do this as opposed to a private charity for individual actors”. 

“Does the Filmmakers Union currently protect the rights of artists in any way?

“There was a period when the Union was really protecting filmmakers. It was a strong organization with its own voice. But now it is being destroyed under Mikhalkov. The St. Petersburg Filmmakers Union has been destroyed. Currently the Filmmakers Union protects interests of only one person”.

“I can’t say what a friend I am – but I am a remarkable enemy”

A criminal case against the RAO under Article 159 of the Criminal Code of the Russian Federation (Swindling committed on a large scale) is currently under investigation. 

Now one can say what happens with Sergey Fedotov in the nearest future – and how the investigation results and court decision would affect the Russian copyright protection system. 

It is evident, however, that in the current situation, the ‘participants of the intellectual property market’ are trying to act swiftly – because big money are at stake as well as who will be in charge of the royalty collection industry.

An informational war is going on. According to the CrimeRussia, representatives for Nikita Mikhalkov contacted newspapers publishing materials about connections between Mikhalkov and the RAO and offered pretty generous rewards for removal of such publications. Wouldn’t it be better to give this money to Russian actors, People’s Artists who have contributed to the Russian culture not less than Mikhalkov, but now live on the verge of poverty? 

The role of Nikita Mikhalkov in the arrest of Sergey Fedotov might be more substantial than it appears at the first glance.

Слева направо: Сергей Федотов, Никита Михалков

Sergey Fedotov and Nikita Mikhalkov 

After the statement by Roman Abramov, Mikhalkov made his own statement, apparently, addressed to the RAO management and Philip Rossa: 

“I can say for sure that Mr. Rossa has mixed up the time of events, the location of events, and the characters,” – Mikhalkov said. – “Those who know me personally can, hopefully, confirm that the venue taken by this person is the shortest and fastest way to be told to get lost. And it does not matter for me whom such a messenger represents. I would like to warn everybody, who expects to get something from me using blackmailing: whoever they are, my response and my actions will be always straightforward. And trust me: I can’t say what a friend I am – but I am a remarkable enemy.” 

In this difficult time, former comrades in the copyright protection monopoly may turn into enemies. However, due to the complexity of the intellectual property protection system (as well as any other system), it is now the system that controls, to a large extent, actions of those who had earlier created it. And all the current major players of the copyright protection industry are linked with each other so closely and for so long, that it is virtually impossible to set up a trap for a former friend or enemy without a risk to caught in it yourself.

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