Putin's Palace

In 2010, Russian businessman Sergei Kolesnikov wrote an open letter to Dmitry Medvedev, at that time the Russian President, stating that a dentist named Nikolai Shamalov was building a grand Black Sea estate for Putin[18] or Medvedev.[8] Kolesnikov said the construction of the estate was draining funds available for his work, which included the state-commissioned renovations of hospitals in collaboration with Shamalov and businessman Dmitry Gorelov.[18] Kolesnikov further said that he had worked on the estate project until he was removed because he voiced concerns about corruption, that the estate was still under construction, and the cost was one billion dollars, funded by bribery and theft.[8]

In 2011, the Novaya Gazeta wrote that it had obtained a contract for the palace signed by the presidential property manager in 2005, when Putin was the Russian president.[18] A website called the "Russian Wikileaks," RuLeaks.Ru, posted photographs of the estate, but could not confirm its ownership.[19] Medvedev replied that neither he nor Putin had any relationship to the property.[20]

Speaking to the BBC in 2012, Kolesnikov said that the estate was still under construction, and that the project was being organized sometimes by Shamalov, or sometimes by a deputy of the president, Igor Sechin.[7] Kolesnikov said that Shamalov never questioned his role, adding, "There was a tsar - and there were slaves, who didn't have their own opinion."[7] According to the BBC, the estate was owned by a company Shamalov partly owned, and it was unclear if Putin had any relationship to the property.[7]

In Kolesnikov's initial letter and in subsequent media interviews, including to Novaya Gazeta, David Ignatius of The Washington Post and Masha Gessen of Snob.ru, he provided an account of how the construction of the estate was financed by corruption.[21][22] Kolesnikov said that in early 2000, Nikolai Terentievich Shamalov, a representative of the multinational company Siemens AG in North West Russia and somebody thought close to Russia's new President Vladimir Putin, approached Kolesnikov with a business proposition. The two men had known each other through business since 1993–1994, when Kolesnikov was deputy director general of Petromed, a St. Petersburg-based firm that specialised in the procurement of medical supplies. It was also through Petromed that Kolesnikov had got to know Putin, on whose behalf Shamalov said he made the approach. Putin had been head of the St. Petersburg Council on External Economic affairs which when Petromed became a private company in 1992 held a 51% stake.[22]

Kolesnikov told Masha Gessen that Putin held 94% of shares in Rosinvest, with Kolesnikov, Shamalov and Dmitry Vladimirovich Gorelov (director of Petromed and another friend of Putin from his time in Saint Petersburg) taking 2% each. Rosinvest's interests included shipbuilding, construction, and lumber/timber processing.[22] Kolesnikov is reported as saying that Abramovich and the other donors to health projects acted 'nobly', implying they were unaware that a significant proportion of their donations was being diverted into an investment vehicle allegedly run for the benefit of the President and his partners in Rosinvest. This is despite the huge sums involved and disputed claims that the relationship between Putin and Abramovich has been very close.[23]

The chart below shows the scheme of interaction between companies and cash flows involved in financing of the construction, according to Kolesnikov.[24]

Scheme of interaction between companies and cash flows involved in financing of the construction of "Putin's Palace"

On 19 January 2021, two days after Alexei Navalny was detained by Russian authorities upon his return to Russia, an investigation by him and his Anti-Corruption Foundation (FBK) was published accusing President Vladimir Putin of using fraudulently obtained funds to build the estate for himself in what he called "the world's biggest bribe." Navalny said that the estate is 39 times the size of Monaco and cost over 100 billion rubles ($1.35 billion) to construct. His video showed aerial footage of the estate via a drone and a detailed floorplan of the palace that Navalny said was given by a contractor, which he compared to photographs from inside the palace that were leaked onto the Internet in 2011. He also detailed an elaborate corruption scheme allegedly involving Putin's inner circle that allowed Putin to hide billions of dollars to build the estate.[28][29][30]

External video
"Дворец для Путина. История самой большой взятки" (A Palace for Putin: The Story of the Biggest Bribe) with English subtitles

After Navalny's arrest and the release of his video, protests in support of Navalny began on 23 January 2021. In response to the claims, Putin said that the palace had never belonged either to him or his family.[31][32]

Journalists from the online newspaper Meduza interviewed people who were involved in the construction of the residence.[4] According to Meduza, many interviewees said the residence is connected with Putin and is guarded by the FSO, who also supervise construction. Meduza wrote that they had documents with the names and signatures of the FSO employees, including Colonel Oleg Kuznetsov. The article described vast and extravagant luxuries in the estate.[33]