Recent reports by two consortia of investigative journalists purport to have exposed the dealings and offshore accounts of some of Russian President Vladimir Putin's closest associates. They don't name him as a beneficiary of any account, suggesting that Putin is as poor as a church mouse -- or would be if he ever lost power.
The investigations were published by the Organized Crime and Corruption Reporting Project and the International Consortium of Investigative Journalists, respectively. The first names St. Petersburg businessman Grigory Bayevskiy as someone who provided valuable real estate to, among others, Katerina Tikhonova, reportedly Putin's daughter. The Kremlin has neither confirmed nor denied that connection when asked about the reports.
The second, potentially more damaging investigation is based on the Panama Papers, a gigantic leak of data belonging to Mossack Fonseca, a Panama law firm that assists clients in setting up offshore companies -- all legally, according to a statement by the law firm. The report names Sergei Roldugin, a St. Petersburg musician and godfather of one of Putin's daughters, as the beneficiary of shell companies that were involved in complex transactions with entities the journalists linked to a number of businessmen also associated with Putin.
The ICIJ report talks of a "Putin network" of companies set up by the managers of Bank Rossiya, a financial institution owned by several long-time Putin associates. The U.S. placed the bank under sanctions following the Russian aggression against Ukraine. Putin responded by opening a personal account with the bank. Transactions carried out by the shell companies Bank Rossiya allegedly created feature easy-term loans from the Cyprus subsidiary of the Russian government-owned bank, VTB. Hundreds of millions of dollars were then allegedly re-loaned to other companies in the "Putin network." According to the ICIJ investigation, the loans were typically unsecured.
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VTB Chief Executive Andrey Kostin denied his bank had made unsecured loans in a Bloomberg Television interview on Monday.
Perhaps the most striking fact about these revelations, though, is that there is no sign of Putin or his family members among the beneficiaries of the businesses involved. Vladimir Vladimirovich Putin, born in Leningrad on Oct. 7, 1952, doesn't appear on any incorporation papers. He doesn't own or control any of the assets involved.
Putin the institution, however, is a tangible presence. Bank Rossiya shareholders, big government contract winners such as Putin's former judo sparring partner Arkady Rotenberg, lesser-known St. Petersburg businessmen who knew Putin when he was a city official in the 1990s or a KGB officer in earlier decades -- all of these people made their fortunes under the Putin regime. There's nothing surprising about their access to cheap state bank funds, or about the "consulting" and "lobbying" contracts they received from less connected businesses. In a dictatorial regime, the dictator's cronies make money; their network is the fabric of power.
Is this an arrangement that should anger Russian citizens? Of course it is. That Putin's cronies are a predatory, parasitical, privileged class of businessmen was known long before the Panama dump. What has always been missing is the final link to Putin the man. And, given the nature of the data used in the ICIJ investigation, perhaps it's time to admit that no such link exists. Putin doesn't own yachts or palaces; he has no $200 billion fortune, as sometimes speculated. He is not "secretly the world's richest man." However, as the former KGB case officer that he is, Putin does surround himself with a network of people who have indeed become rich.
Putin is not stealing Russia's vast wealth; he's handing some of it over to trusted individuals to manage. In the process, they are very likely to profit from that wealth. He maintains good relationships with these people. He also controls the business environment so tightly that they can't risk betraying him.
If Putin is ever overthrown, he will be difficult to convict on charges of corruption. And he has no obvious contingency plan. The financial arrangements described by the ICIJ on the basis of the Panama files would leave him with nothing if he ceased to be Putin the institution, as well as the man.
This system, which rests on Putin's ability to control a network of friends and associates, does not allow for any upheavals. He is gambling his future wellbeing on his ability to maintain a firm grip on power. If that seems foolhardy for one of the world's shrewdest politicians, it may not be. Putin would have nowhere to go if removed, even if he had amassed wealth in his own name. Too many in the West would gleefully hunt him down. He has no option but to remain at the center of the web he has created, its hostage as much as its controller.
Leonid Bershidsky, a Bloomberg View contributor, is a Berlin-based writer.