Showdown for Governor. Last case against ex-Head of Novosibirsk Region collapses
The defense for Vasily Yurchenko, ex-Governor of the Novosibirsk Region, managed to dismiss one of the criminal cases instituted against him prior to the trial. The examination of the second case regarding the exceeding of official powers is almost finished. The judicial investigation of this case has been completed on July 27. The defense attorneys believe that Yurchenko is to be fully acquitted. The lawyers are concerned, however, that the enforcement structures may frame up new cases.
The trial of Vasily Yurchenko, ex-Governor of the Novosibirsk Region dismissed by the Russian President in 2014 “for loss of trust”, is nearly over. On July 27, the parties finished presenting their evidences, and the judicial investigation has been completed.
Initially, there were two criminal cases against Yurchenko. The first one pertained to the “exceeding of official powers while re-zoning the military lands into agricultural lands”. According to the investigation, in May 2012, the ex-Governor had ordered to change the status of lands used by the Novosibirsk Pilot Plant of Measuring Equipment for ammunition testing. Only the Federal Government has powers to re-zone such lands, so the investigation has interpreted this action as an exceeding of official powers (part 2 of Article 286 of the Criminal Code of the Russian Federation). However, in February 2017, this case has been dismissed “for absence of elements of crime in the act”.
The second criminal case against Vasily Yurchenko has been examined in the Tsentralny District Court of Novosibirsk since November 2015. The ex-Governor has been charged with sale of an asset complex located in the center of Novosibirsk, at 54 Chaplygina street – a building dated the beginning of the 20th century and adjacent land lot – at an artificially low price. Yurchenko has been charged under part 2 of Article 286 of the Criminal Code of the Russian Federation (exceeding official powers committed by a person holding a government post of the Russian Federation or a government post of a subject of the Russian Federation). The court has limited the pretrial restrictions for the ex-Governor to a written undertaking not to leave the city and proper conduct. Should Yurchenko be found guilty, he is facing up to 7 years behind bars.
According to the investigation, in 2010, Yurchenko had instructed the Director of GazTransKom Open Joint Stock Company (then-owner of the complex on Chaplygina street) in writing to annul the tender for the complex put up for sale with the starting price of 40.4 million rubles ($678.6 thousand). Later that year, the land lot and foundation of the former dermatovenerologic clinic were sold at an artificially low price to Taktika (Tactics) Limited Liability Company affiliated with Russkie Oteli (Russian Hotels) belonging to Oleg Deripaska. Taktika had intended to build a hotel in the prestigious location and purchased the asset complex on Chaplygina street for 22.7 million rubles. As a result, GazTransKom Open Joint Stock Company belonging 100% to the Novosibirsk region has sustained damages in the amount of at least 17.7 million rubles ($297.3 thousand). In addition, the investigators have calculated that the budget of the Novosibirsk region had fallen short of taxes and dividends totaling more than 4.3 million rubles ($72.2 thousand).
Vasily Yurchenko denies any guilt. On July 13, the ex-Governor has addressed the court for the first time in a long period and presented his version of the events. According to Yurchenko, neither do his actions constitute a corpus delicti nor an event of crime. In 2005, he became aware of the plans to build a hotel instead of the dilapidated dermatovenerologic clinic. He had heard from his colleagues that, following an initiative from the Governor of the Novosibirsk Region, structures affiliated with Basic Element Group of Companies controlled by Oleg Deripaska were considering a possibility to build a hotel in the center of Novosibirsk. Four years later, when Yurchenko was the First Deputy Governor of the Novosibirsk Region, Governor Viktor Tolokonsky, had personally assigned him to supervise this project and facilitate its implementation. Deputy of the State Duma Valentin Bobyrev was present at their conversation; according to Tolokonsky, he had to supervise the project on behalf of the investor.
In July 2016, Viktor Tolokonsky has confirmed in court that it was his initiative to build a hotel in the center of Novosibirsk. The lot on Chaplygina street has been chosen due to its beneficial location. However, the address sale of the property was never mentioned: “Oleg Gallyamov, Head of the Department (Department of State Assets and Land Affairs of the Administration of the Novosibirsk Region – The CrimeRussia), had reported to me that he considers necessary to sell the lot by an open tender. He had justified this decision by the provisions of law and current situation, and I has supported this decision”.
According to the defendant, in March 2010, Bobyrev told Yurchenko that an unexpected issue has arisen during the preparations to the tender. The second appraisal has doubled the value of the asset complex on Chaplygina street from 19.7 to 40.4 million rubles ($330.7–678.6 thousand). Yurchenko recalls that this, apparently ungrounded, price increase amid the slumping real estate prices and weak housing market was a surprise for him: “I requested the reports and received those. Upon reviewing the report № 175/10 dated March 15, 2010 and inflating the price over 40 million rubles, I have found out that it was a carbon-copy of the report № 277/09-02 of September 9, 2009 estimating the property value at 19.7 million rubles. I was surprised that during the crisis, when all the real estate sales are stalled, when everybody is selling but no one is buying and the prices have dropped by tens of percent or even by times, the value of this piece of land with encumbrances and issues has suddenly doubled”. Yurchenko has provided another argument explaining why he had considered the price artificially high: “I was also surprised by the fact that in the end of 2009, there was no building on the land: its foundation was destroyed and had to be demolished completely prior to a new construction – while the report № 175 included photos of an allegedly operational building. As if there was a building in place, neither very nice nor very modern – but there are plenty of worse buildings in the city that can be leased out. Such photos were in the report”. Therefore, Yurchenko decided that the second appraisal was a “falsification”.
According to the ex-Governor, he had scheduled a work meeting and invited representatives of the Department of State Assets and Land Affairs of the Administration of the Novosibirsk Region, including Head of the Department Oleg Gallyamov (he was in charge of the department since June 2004 and until October 2010) and Pavel Sharapov, Director of GazTransKom Open Joint Stock Company, representing the owner of the real property on Chaplygina street. Yurchenko asked them to explain the drastic price increase – but no intelligible arguments were provided to him. “This looks like a sabotage at the very least or may me something worse. Therefore, go now and rectify the defects,” – Yurchenko had allegedly summarized the outcomes of the work meeting.
After the end of the meeting, the appraiser who had estimated the property value addressed Yurchenko. According to the ex-Governor, the appraiser had admitted the falsification: «The appraiser approached me and said: “Vasily Alekseevich, I am sorry, but Gallyamov, Head of the Department of State Assets and Land Affairs, had forced me to raise the price to 40 million rubles”.
In June 2016, Oleg Gallyamov has refuted the testimony of Yurchenko in court. He provided another version of the events: “Vasily Alekseevich invited me to his office and said that this property must be sold specifically to Taktika and has to be excluded from the tender. In response, I have explained that I won’t trespass the law, and the property must be sold by tender. Then Vasily Alekseevich said that he is going do this without us”.
Defense attorneys for Yurchenko explain the testimony of Gallyamov by his personal animus toward the ex-Governor who had removed him from the post of the Head of the Department of State Assets and Land Affairs. Margarita Maslova, who had worked in the Department of State Assets and Land Affairs in the period of 2009–2011, has also confirmed in court the enmity between Yurchenko and Gallyamov. According to Maslova, the enmity between the two functionaries originated from their differences over the approach to the sales of state assets: “Since the first days, the relations between Gallyamov and Yurchenko were complicated. The main complaint pertained to the establishment of non-market prices and overstatement of assets, thus, making those non-marketable”.
In May 2010, the tender for the asset complex on Chaplygina street with the starting price of 40.4 million rubles ($678.6 thousand) has been annulled. According to Yurchenko, this decision has been made because it was useless to carry it out: “Those who had invented the scheme to delay the implementation of the investment project, including a sham illegal tender, understood very well that no one would participate in this tender”.
Tolokonsky told the court that he was no aware of the directive to annul the tender given by Yurchenko: “I saw these materials during the investigation. After the sale closure. This decision has been presented to me among other case materials during my questioning”.
According to the investigation, after the annulment of the tender, Yurchenko has directly instructed GazTransKom Open Joint Stock Company to sell the asset complex on Chaplygina street specifically to Taktika Limited Liability Company. The investigators believe that Yurchenko had tried to mitigate the anger of Governor Viktor Tolokonsky displeased with the delays in the project implementation (Tolokonsky has admitted in court that he was displeased with the implementation pace – The CrimeRussia). The defendant claims that his order to sell the property to Taktika was not, in fact, an executive order. The official letter № 167 sent to the Director of GazTransKom by Yurchenko and used by the state prosecution as the basis for the charges laid against him had allegedly just outlined the position of the regional leadership – the Governor and his first deputy. “This position was clearly outlined. But this was by no means an executive order... The First Deputy Governor had no powers to issue orders except for the recruitment and termination of civil servants of certain categories. Period,” – Yurchenko claims.
Pavel Sharapov, Director of GazTransKom Open Joint Stock Company, told the court in June 2016 that he had considered the official letter from Yurchenko a direct order. “An assistant of Vasily Alekseevich has delivered to me a letter with a clear order to sell the property to Taktika Limited Liability Company at the price dated 2009 – i.e. within the 20-million-ruble ($335.8 thousand) limit. It was impossible to ignore an instruction from authoritative senior official Yurchenko”. Sharapov explained that rumors were circulating in the regional government about the upcoming resignation of Viktor Tolokonsky, while Yurchenko was considered his successor: “I was between the hammer and the anvil – the opinion of the Department of State Assets and Land Affairs (according to Sharapov, the Head of the Department had insisted on the tender – The CrimeRussia) on one hand and the order from the First Deputy Governor that could result in my dismissal on the other hand”.
An alternative version provided by Yurchenko has been partially confirmed by a testimony given on July 3, 2017 by key defense witness Roman Shilokhvostov who was appointed the Head of the Department of State Assets and Land Affairs of the Novosibirsk Region after the termination of Gallyamov. The official told the court that Yurchenko had never given him any instructions with regards to the approval of the sale of the property on Chaplygina street. Shilokhvostov did not have any doubts in relation to this deal because it was not common for the Novosibirsk region to sell state assets through tenders – to the moment, only one state enterprise had been sold that way. GazTransKom Open Joint Stock Company had been selling its lands earlier at obviously bargain prices – but this never attracted the attention of law enforcement structures. According to Shilokhvostov, the idea to sell the property on Chaplygina street to Taktika Limited Liability Company was indeed suggested back in 2006 – i.e. during the governorship of Viktor Tolokonsky.
Ten years later, Tolokonsky has sharply criticized in court the very idea of address sales: “A direct sale would never convince the public that the price was right. In the market economy environment, the price is always determined by free demand and supply; therefore, both the legislator and common sense require that any assets put up for sale by the state must be sold through open tenders to ensure that the price is determined by the market mechanisms, not by decisions of some organizations”. Tolokonsky claims that he was not aware of “the stance of Yurchenko with regards to the direct sale” of the property on Chaplygina street. Allegedly, he has learned about that deal from mass media: “When I became aware that the property was sold without a public tender and at an underestimated price – 23 million rubles ($386.1 thousand) instead of 41 million rubles ($688.4 thousand), – I decided that this compromises the authorities and requires a special inquiry”. Therefore, Tolokonsky has initiated a prosecutor's investigation of the deal signed by his successor and former deputy because he had considered it “wrong” and requiring an “additional assessment”.&
After the completion of the judicial investigation, the parties started preparations to the debates. Apparently, the defense for Yurchenko decided to oppose the prosecution not only legally but also through mass media. In the end of June, a documentary produced by the Fund “We are Against Corruption” has been posted on YouTube. In this video, Viktor Sorokin, Head of the Fund, tells about a “small public investigation” and offers an “alternative vision of the events” to the audience. The public activists provide their “own version” of the reasons behind the criminal prosecution of Yurchenko and the progress of the investigation. To the moment, the documentary has over 3.5 thousand views.
Video: Vasily Yurchenko, who are you?
Not only the defendant and his lawyers, but also a number of third parties state that Yurchenko is innocent in the documentary “Unfinished play for the Governor”. All of them accuse, either directly or indirectly, Viktor Tolokonsky, ex-Governor of the Novosibirsk Region, of the dismissal and criminal prosecution of Yurchenko – at the time of the events, Tolokonsky was the Presidential Plenipotentiary Envoy to the Siberian Federal District. Lawyer Igor Shurpik suggests that the now-famous letter from some Mikhail Galokov entitled “Growth of wealth of the family of Vasily Alekseevich Yurchenko, Governor of the Novosibirsk Region” and criminal cases against the ex-Governor are links in one and the same chain. Commentaries presented in the documentary imply that the downfall of Yurchenko was a result of his struggle with Tolokonsky.
It is unlikely that the movie has been solely produced by public activists without involvement of the defense attorneys for Yurchenko. Some characters have repeated in court their monologues from the documentary nearly word-for-word. For example, on July 26, Sergei Savchenkov, ex-Head of the Directorate for the Novosibirsk Region of the Federal Security Service (FSB) of the Russian Federation who was in charge of it for 10 years – since 1999 and until 2009, appeared in the court. He said that he is not aware of any unlawful actions of Yurchenko. According to Savchenkov, the ex-Governor had never lobbied interests of commercial structures. Similarly with his speech in the documentary, the retired general has commended the personal qualities of the defendant. Savchenkov told about the check successfully passed by Yurchenko prior to his enlistment in the Presidential Reserve of Managerial Human Resources. The FSB general told the court that his agency had performed an “in-depth check” of the candidate and no issues were identified with regards to his moral, business, and personal qualities.
Another participant in the documentary “Unfinished play for the Governor” – Ivan Indinok, the first Governor of the Novosibirsk Region who was in charge of it in 1993–1995, has delivered in court a more emotional speech on July 26: “I wish there were more such governors. I can characterize Yurchenko as a man of his word and execution. We had met on many occasions, I had criticized him for some mistakes pretty sharply. He had endured and objected. At the same time, I saw the huge work preformed in the region. Head of administrations, districts, and cities felt that the region has a head – sharp, tough, able to give his word and keep it,” – Indinok said. Earlier the former Governor told the journalists that “nothing can be understood” in the case against Yurchenko and he believes that his colleague was “framed up”.
Not only is the defense for Yurchenko preparing to the upcoming debates, but the law enforcement structures as well. Aleksander Balyan, an attorney for the ex-Governor, said that the state prosecution uses original methods in its work. As The CrimeRussia wrote earlier, on July 14, operatives of the Investigative Committee of the Russian Federation (ICR) have performed searches in the apartment and country home of the ex-Governor in Novosibirsk and in the Moscow apartment of his son Dmitry. Officially, the new searches were related to the criminal case against Natalia, the spouse of Yurchenko. She is suspected of a migration-related offence. According to the investigation, in November 2014, Natalia Yurchenko has received a Red-White-Red Card plus – a residence permit valid until November 2017 – in an Austrian city of Klagenfurt. However, she failed to notify the Federal Migration Service of the Russian Federation of this. The criminal case has been instituted under Article 330.2 of the Criminal Code of the Russian Federation (breach of duty to submit notification of citizenship (nationality) of a foreign state of the citizen of the Russian Federation or permanent residence in a foreign country). For more than a year, Natalia Yurchenko has been a suspect remaining under a written pledge not to leave the city. The spouse of the ex-Governor of Novosibirsk is facing a fine in the amount up to 200 thousand rubles ($3.4 thousand) or compulsory works for a period of up to 400 hours.
Vasily Yurchenko and his spouse
According to the defense for Yurchenko, the new searches had pursued three goals at once. The first goal was to imitate a frenzied activity. It is unacceptable for Natalia Yurchenko to stay permanently in Novosibirsk (she needs to visit her children in Moscow), and she has submitted a complaint on the purposive procrastination of her case and absence of any investigative actions to the Deputy Prosecutor General. The searches became a response to her complaint in order to demonstrate that the investigators are actively working.
But the main purpose of the new searches, according to lawyer Aleksander Balyan, was the preparation to the debates in the trial of Vasily Yurchenko. The ICR operatives have seized all the notepads, notebooks, and electronic data storage devices – i.e. all the materials essential for the defense party during the judicial debates.
Balyan has provided one more possible explanation for the new searches. The case against Natalia Yurchenko provided a formal possibility to check a new version suggested by the investigation and claiming that the wife of the ex-Governor has allegedly forged documents confirming that she had notified the respective authorities of her Austrian residence permit. The attorneys for Yurchenko had supposedly given a bribe to operatives of the General Administration for the City of Moscow of the Ministry of Internal Affairs (MIA) of the Russian Federation for forging these documents. Balyan claims that the searches were performed in the police offices as well: «During the search, a grenade and box of rounds have been found in the office of the Head of the MIA General Administration. The items have been sent to the explosive and technical expert assessment. Now they can say: “We can free you if you testify that Yurchenko had given a bribe to you”. And the investigation could be continued further». The defense attorneys believe that this is the only chance for those standing behind this – obviously politically motivated – trial to convict the former Governor. The last case against Yurchenko is collapsing...
The prosecutors want the former Russian Federation Council member to go to prison for 14 years instead of 9 and pay a 500-million-ruble ($8.8 million) fine instead of 70 million rubles ($1.2 million).