Date: 14 January 2019

Putin-Connected Oligarch Wins State Anticorruption Tender

A recent decision to award a state grant to a company held by Russian oligarch Arkady Rotenberg revealed corruption and insolence of Putin’s Russia, not to mention its dramatic lack of self-preservation instinct. Rotenberg, who is Putin’s childhood friend, was offered lucrative contracts, including those to build gas pipelines to China and Germany, construct a bridge to Crimea and to prepare infrastructure for Winter Olympic Games in Sochi.


His firm won a state grant to conduct training on developing civil society and fighting against corruption; it was given 46 million roubles (688,000 dollars) to hold roundtables, public discussions, and conferences devoted to such issues as civil society and combatting corruption. Interestingly, such a decision dramatically hit his reputation while not at all being profitable. The aforementioned training is to be carried out by a firm that belongs to a billionaire who made billions off bid-rigged contracts including those to deliver pipes to the Nord Stream 2 construction site.

Arkady Rotenberg is Putin’s childhood friend and his former judo partner. After Putin became president in 2000, he was made head of Russia’s state-run vodka distillery Rosspirtprom. He could later increase his fortune by taking control over firms that sold pipes to Russia’s gas giant Gazprom. Further, the billionaire has controlled lucrative contracts to build federal highways and to print school textbooks. The Rotenberg brothers have long participated in various sports associations while providing their support to small consulting companies. In 2008, they unexpectedly became owners of an engineering company, Gazprom’s large subcontractor whose revenue was estimated at 54 billion roubles. The explanation for that seems simple. The gas company sold at the auction five construction and maintenance companies as “non-profit assets”, an initial price of which amounted to 8.4 billion roubles. They were later purchased by Rotenberg’s small bank, which turned out to be worth less and the companies bought. He merged them into Stroygazmontazh construction group whose reported value is estimated at 1 billion dollars. As subcontractors, they participated in the construction of the Sakhalin-Khabarovsk-Vladivostok pipeline of a total value of 210 billion roubles. Moreover, they were hired to construct an Olympic gas pipeline, worth a total of 22 billion roubles, and to build a bridge to Crimea. Arkady Rotenberg was targeted by the U.S. sanctions list after his alleged participation in Russia’s annexation of Crimea. His personal fortune is estimated at 3.1 billion dollars. His brother, Boris, and his son, Igor, are also billionaires.

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