Future of Aman Tuleev: honorable retirement or prosecution? 

Future of Aman Tuleev: honorable retirement or prosecution?
Aman Tuleev is still actively involved into the redistribution of wealth in the Kuznetsk Basin

The epoch of Aman Tuleev’s rule in the Kuznetsk Basin is almost over. The resignation of Maksim Makin, the First Deputy Governor of the Kemerovo Region, initiated by law enforcement authorities, is considered the start of a new gubernatorial elections campaign in the region. Who will succeed Tuleev at this post? Would the Kuzbass-bashi be allowed to choose a successor himself? Or shall he finally pay for protection racket of oligarchs and decline of the Kuznetsk Basin (Kuzbass) economy?

According to the CrimeRussia sources, Aman Tuleev, the perpetual leader of the Kuznetsk Basin (Kuzbass), will not be able to complete his fifth term as the Governor. Rumors have been circulating for a number of years already that the 72-year-old politician, whose health is deteriorating, would have no choice but to accept an honorary retirement. This time, there are indications that such rumors might be justified. The dissatisfaction of the Kremlin with the situation in the uncontrolled Kemerovo region has exceeded all the limits – so, the years of stagnation may come to an end pretty soon for Kuzbass. The only thing that might save the almighty Governor – nicknamed Khan and Kuzbass-bashi by Kemerovo residents – are pre-term presidential elections extensively discussed recently. Should the pre-term elections be conducted, Tuleev can be allowed to keep the Governor’s chair to ensure again the required number of votes. Otherwise, the Kuzbass Khan would have to leave his post.

Our
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Aman Tuleev was born in 1944. He is the official Head of Kuzbass since 1997; however, he used to hold various superior posts in the region since 1990. Tuleev is one of the last remaining political heavyweights of the Yeltsin era with a federal background: he had been running for presidential elections three times and in 1996–1997 was the Minister for Cooperation with CIS Countries of the Russian Federation. After being elected the Governor of the Kemerovo Region, he enacted a manual control regime and created an original socialist model, including numerous social support programs. In 2015, he was elected the Governor for the fifth term by gaining an overwhelming majority – almost 97% of votes with the election turnout over 80%.

For a couple of years, Sergey Neverov, the Secretary of the General Council of Edinaya Rossia (the United Russia) Party and Vice Speaker of the State Duma, has been considered the main gubernatorial candidate for the Kemerovo region. So far, the politician has been refuting all media speculations about his plans to become the Governor of the Kemerovo Region, stating that he “does not have such ambitions.” Still, Neverov is too ideal candidate for the Head of the Kuzbass to consider his formal statements a final decision. He is a native of the Kemerovo region, a former miner, was elected to the State Duma twice in a single mandate electoral district – in 1999 and 2003. But his main merit is that he is the second person in Edinaya Rossia – who will not run independent policies and can return the region under full control of the federal center. An indirect indication that Neverov, in fact, is OK to rule the Kuzbass is his intervention into a conflict between worker Vyacheslav Kantemirov and local oligarch Aleksander Aristov, owner of Kuznetskie Ferrosplavy (Kuznetsk Ferroalloys) plant in the Kemerovo region. By defending the worker, Neverov made it clear that he has already started playing on the Tuleev’s field and Kuzbass businessman shall work in accordance with his standards.

Неверов

Photo: Sergey Neverov, the Vice Speaker of the State Duma

Earlier it was thought that Aman Tuleev is so influential, that the Kremlin will not risk to conflict with him and allows the Kuzbass-bashi to choose a successor himself in order to retain the control over the region even after the retirement. Maksim Makin, the First Deputy Governor of the Kemerovo Region, – who has already started laying his hands on Kuzbass coal mines – was considered the main candidate for this role. But recently Makin had to resign due to an accusation of unreasonable hikes of utility rates in the period when he was the Head of Teploenergo Joint Stock Company. A prosecutor’s audit has been initiated against him, and Tuleev had to accept the resignation of the Vice Governor. On September 18, 2016, Kuzbass-bashi made a public statement that he intends to reinstate Makin in the office in 15–20 days, after the end of the prosecutor’s audit that will not bring any results. But the time has passed, and there is still no word about Makin’s return. In the past, all the tariff hikes, raiding takeovers of enterprises, offshore machinations, and other offences committed by the Vice Governor had never attracted attention of law enforcement authorities – but not this time. Therefore, there are more and more speculations that it is not about Makin, but about the intention of the Kremlin to eliminate a potential successor to Tuleev in case of his early retirement. The permanently-sick Governor of the Kemerovo Region appears in his office for 2–3 hours a day; in fact, he does not manage the Kuzbass anymore and allowed Makin and his team to seize the real power.

Макин

Photo: Maksim Makin, the former First Deputy Governor of the Kemerovo Region

It is the first time for all the years of Tuleev’s rule when security forces have shown some activity. For instance, in June 2016, the law enforcement authorities of Novokuznetsk have found machinations with signs of embezzlement of budget funds in NGTRO Novo-TV Municipal Enterprise. In the same month, Ivan Arefiev, the ex-Head of the Administration of Krapivinsky District, has been sentenced to 7 years behind bars under Article 290 of the Criminal Code of the Russian Federation: he was found guilty of bribe-taking and extortion on a large scale. In the end of May 2016, a criminal case has been initiated following a collapse in the lobby of a five-storey apartment building. At that time, law enforcement agencies had criticized “public housing officials who failed to prevent the tragedy.” The increased activity of investigators at all levels may indicate that it was decided to bring Kuzbass to order prior to the change of leadership in the region.

It cannot be ruled out that instead of enjoying the honorary pension, Tuleev himself might have to deal with prosecution authorities. Recently media have published enough information about corrupt practices of the Governor. Many publications are based on testimonies of Dzhalol Khaidarov, former owner of the Kachkanar Mining and Processing Enterprise. These testimonies, obtained by the German and Israeli police, have become the basis for several criminal cases in various European countries. The police of Liechtenstein performed searches in the office of Mikhail Cherny, the king of aluminum, and found that Aman Tuleev has access to accounts of his companies.

Хайдаров

Photo: Dzhalol Khaidarov told about raiding takeovers and corruption in Kuzbass

Khaidarov testified that Tuleev used to get a cut from profits of Mikhail Cherny and late Anton Malevsky, leader of the Izmailovskaya organized crime group. He also told in detail how and for what Tuleev had been receiving millions of dollars from Oleg Deripaska (the main shareholder in UC Rusal), Aleksander Abramov (a major shareholder in Evraz), and Iskander Makhmudov (owner of the Ural Mining and Smelting Company linked with the Izmailovskaya’organized crime group).

“The story began when we had no our own coal, and Iskander Makhmudov attempted to acquire shares of Kuznetskugol and encountered Zhivilo brothers and Alisher Usmanov. In that situation, Zhivilo brothers took the side of Misha Cherny. Problems started when Misha Cherny attempted to expand his coal mining business and encountered resistance of Zhivilo brothers because Kislyuk, the former Governor of the Kemerovo Region, was supporting Zhivilo brothers. At that time, Misha Cherny, Iskander, and his people started buying shares of other coal plants and enterprises. At that time, Mr. Abramov appeared and supported Tuleev; Zhivilo brothers also supported Tuleev (indistinct). He was waiting who comes closer to power. It turned out that Mr. Abramov was closer to power. And by the time of Tuleev’s election as the Governor, a change in politics has occurred. At that time, Abramov introduced Tuleev to Iskander. Iskander wanted me to meet Tuleev because I had to manage the work on site. I already had experience from contacts with Rossel, the Governor of the Sverdlovsk region. Iskander introduced him to Tuleev. Then Abramov said that we must transfer $3 million to Tuleev for his election campaign. This conversation was in my presence in an office on the quay, near Park Kultury subway station. Then Abramov told Iskander that now we are partners and must share the costs: “$1.5 million from you; $1.5 million from us”.

The investigator: What happened next?

Khaidarov: During the meeting in our office near Park Kultury subway station, Abramov said that this would enable the group of Abramov and Cherny to operate. Overall, it can be said that Aleksander Abramov was the initiator of actions against Zhivilo brothers. This meeting was in the beginning of 1999; I can’t remember the month. By that time, relations of Zhivilo brothers with Tuleev and with Cherny started deteriorating. It was an opportune time, when Tuleev needed money. It was possible to make arrangements with him regarding redistribution of assets in Kuzbass.

The investigator: What did you mean when said “redistribution of assets”?

Khaidarov: In my opinion, the following was meant: three groups operated in Kuzbass. One of those, led by Abramov, was linked by partnership relations with Cherny on the Urals and was close to Governor Tuleev. The second – Solntsevskaya – group was represented by Usmanov. Zhivilo brothers were the third group, they did not belong to anyone. Because Zhivilo brothers owned enterprises that were of business interest for Misha Cherny, especially NKAZ aluminum plant and Kuznetsk Metallurgical Complex, as well as several coal mining enterprises, and because they did not want to work with Misha Cherny, obviously, under such circumstances, prerequisites for redistribution of assets of Zhivilo brothers had been created. This is how the redistribution of assets of Zhivilo brothers has started. Everything began from the Novokuznetsk Metallurgical Complex in 1999. Tuleev announced that Mikom management company headed by Mikhail Zhivilo is unable to perform its functions and a new management company is required to meet the current challenges. The reason was simple: Abramov had established contacts with Tuleev. Because he had already transferred some money to Kuzbass, he told Tuleev that Evrazholding company shall act instead of Mikom company. Ultimately, it happened so. First, the court announced that the management company has failed to fulfill its duties, and then Tuleev arrived to the plant accompanied by his bodyguards and police and ordered to detain the general director for 10 days, as far as I remember.

Below is another interesting excerpt from the interrogation:

“In my presence, Iskander Makhmudov and Aleksander Abramov, Chairman of the Board of Directors of Evrasmetall company, discussed the amount to be transferred to Tuleev. Abramov said that he had agreed everything with Tuleev and that the first installment must be $3 million. And in exchange for that amount, Tuleev will provide support in the takeover of all plants of Zhivilo brothers in the Kemerovo region. I.e. coal enterprises, plus the Novokuznetsk Aluminum Plant and Novokuznetsk Metallurgical Complex. This conversation, where, in addition to myself, Abramov and Iskander were present, took place in our with Iskander office near Park Kultury subway station in Moscow. In 1999, I don’t remember the month, I, following an order from Iskander, had personally instructed Nikita Atalulaev to transfer $1.5 million to a bank account whose number was provided personally by Abramov. Oleg Deripaska had to provide the second half, and, as far as I know, this sum was transferred. The idea …was as follows: organize, with support of the Governor Tuleev, a fake bankruptcy of the Novokuznetsk Aluminum Plant; on the Novokuznetsk Metallurgical Complex, recognize, with support of the regional court controlled by Tuleev, Mikom company of Zhivilo brothers unable to manage the enterprise. Even though these enterprises were among the best in Russia in that industry.

The investigator: What did you mean by “fake bankruptcy”?

Khaidarov: Fake bankruptcy is a deliberate bankruptcy of an enterprise achieved through a fake credit loan recovery claim against it. The technology of this process is as follows. An enterprise, in this particular case, the plant of Zhivilo brothers, the Novokuznetsk Aluminum Plant, receives electric energy from the regional electric grid and, of course, pays for it every month. The administration of Tuleev raises the hydro tariff retrospectively for the energy already consumed and paid for by the plant. For example, if it is 2001 now, the regional administration submits an invoice to the factory management for the year of 2000 – already paid in accordance with the preexisting tariff. And the regional authorities say to the factory management: “You either pay the bill or we initiate a bankruptcy procedure against you”. The head of the enterprise states that he has already paid electric bills for the year of 2000, but the management of the electrical grid says: “We made an error, you have to pay the balance,” – while the invoice submitted to the plant exceeds the amount already paid by several times. The factory management can not pay that amount immediately; they state that this is illegal and go to court. And the court is under Tuleev’s control, and it rules that everything is legal. Then the regional electrical grid files a lawsuit to recognize the plant bankrupt – and the enterprise is declared bankrupt as soon as possible. The bankruptcy of the Novokuznetsk Aluminum Plant of Zhivilo brothers had been performed in 1999 according to this scheme.

Another clarification in the testimony by Khaidarov:

The investigator: You started telling the story how Abramov and Iskander Makhmudov had transferred $3 million to Governor Tuleev. Can you provide more details, how everything had started? Did Misha Cherny know that the money are being transferred to Tuleev? Did he agree with this?

Khaidarov: Misha learned about this after a conversation with Abramov; in my presence, Iskander called Misha and told that Abramov has reached an agreement with Tuleev, and the money must be transferred to the account provided by Abramov. This sum was for Tuleev. Because this was the money from our business, and I was responsible for the financial aspect of our business, this issue had to be agreed with me, and therefore, I was present at the negotiations.

The investigator: Who specifically instructed you to transfer the money to the Tuleev’s account?

Khaidarov: Iskander gave me this instruction immediately after the conversation with Misha. He told me: “Transfer!” – and I told Nikita to obtain the account details from Abramov. Abramov told Nikita: “Take the account details from Andrei (last name indistinct)”. I do not remember Andrei, but he performed for Abramov roughly same functions that Nikita for Iskander. I clearly remember that Nikita Atalulaev has transferred money from the account of Pan American in (indistinct) bank to Riga. Pan American is an American company.

The investigator: Do you have a document to prove the transfer of money to Tuleev?

Khaidarov: The standard procedure was as follows: I showed the transfer document to the recipient of the money. In that case, it was Abramov, and then such documents were destroyed; therefore, I don’t have it with me.

A testimony provided by businessman Mikhail Zhivilo after his departure to the US indirectly confirms the trueness of the testimony by Khaidarov. As the CrimeRussia wrote earlier, according to this businessman, Tuleev received $3 million in bribes from owners of the Ural Mining and Smelting Company. The money had been transferred via Blonde Investments company affiliated with Makhmudov. Both Khaidarov and Zhivilo have independently provided the same amount of the bribes, which, most probably, indicates that this information is correct.

Тулеев

Photo: Aman Tuleev, the Governor of the Kemerovo Region

The Governor, whose results at the last elections could serve a model even for the North Korea, is still actively involved into the redistribution of assets in the Kuzbass. A recent example is the story with the Gramoteinskaya mine seized by a personal order of Tuleev from a foreign investor and transferred to local oligarch Aleksander Shukin. The Governor of the Kemerovo Region is always ready to defend interests of large corporations, especially those having long-term friendly relations with him. He had also provided a valuable assistance to Kuzbassrazrezugol company, controlled by the Ural Mining and Smelting Company and Evrazholding – i.e. by the same Iskander Makhmudov and Aleksander Abramov, in its war for the Kiselevsky coal pit. In 2002, contrary to the legislation, Tuleev supported Kuzbassrazrezugol and denied access to the mines for structures controlled by notorious businessman and politician Sergey Pugachev.

What are the reasons behind such a loyalty to old friends? The answer can be found in testimonies by Khaidarov and Zhivilo. Apparently, the talent to be a good friend allowed Tuleev to become the owner of 46% of shares in the Yubileinaya mine. According to unofficial information, relatives of the Kuzbass Governor control Cyprus-based offshore companies accumulating profits from sales of the Kuzbass coal. Monies generated by the coal mining industry have been siphoned to Cypriot companies for almost 15 years – which results in annual losses over 1 billion rubles for the regional budget. Combined with protection racketeering of oligarchs and populist social projects, this destroys the economy of the Kemerovo region. The budget of the region so rich with natural resources has become deficit-ridden a long time ago. In 2014, the budget shortfall was 10.9 billion rubles, in 2015 – 9.2 billion rubles, and in 2016 – 3.9 billion rubles. The state debt of the Kemerovo region is continuously growing. In 2014 it was 50.8 billion rubles, in 2015 – 54.3 billion rubles, currently it is 81.3 billion rubles, on January 1, 2017 it is projected at 55.9 billion rubles, while on January 1, 2018 – at 66.7 billion rubles. This means that even during the ‘fat 2000s’, the region was surviving largely due to federal subsidies. In fact, the Kemerovo region has been bankrupt for a while. In the new economic situation, the Kremlin is not going to tolerate the ineffectiveness of the Tuleev’s management anymore.

Issues continue to accumulate in the region – that could easily have a surplus budget only through the coal mining. Most urgent issues are related to the public housing and utilities sphere. Two thirds of residential buildings in the Kuzbass have deterioration degree over 30%. 34 thousand people need resettlement from dilapidated and unsafe housing. Salary arrears are growing; wages remain unpaid for months. The populist system of social benefits demonstrates its glitches. It became known that the social bread for low-income people is being produced from forage grain of the 2nd category shipped to the Kemerovo region from France as humanitarian aid. Then bug larvae and worms had been found in social loafs. The popular support has always been the main source of power for Tuleev. Now his popularity is declining, and the positions of the Governor of the Kemerovo Region are not that solid anymore from the Kremlin point of view. Optimal time to put an end to the rule of the Kuzbass-bashi.    

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