Grant Shea

“Working in Kirov was on the whole an interesting but disillusioning experience. I gained a good understanding of how everything works. I learned that no modernization is possible in an authoritarian country, let alone any particular region of such a country. Young, active, ambitious people arrive wanting to fix everything and get things working, but they are sucked into the swamp of the system. It quickly became obvious that in a corrupt environment you yourself are forced to behave corruptly, even if all you want is to help people.

For example, I remember we asked the minister of natural resources for money-not for us, but for our region. The minister said to Belykh, "You know, someone there offended one of my people regarding the timber he wanted. Please help sort this out." Belykh said to me, "Please help sort this out." That is, I was being asked to come up with some dodgy arrangement under which the minister's pal would be given extra timber, and in return the minister would allocate state funds to Kirov Region. I said I wanted nothing to do with it.

This was the only way issues could be resolved. Every time you wanted to do something good, you had to do something bad (maybe not for your own benefit, but for someone else's). Before you know it, you find yourself engaging in corrupt behavior from morning to night. And if you are behaving corruptly for the benefit of someone else, why would it not be okay to do a little bit of the same for yourself? The system soon swallows you.”
― Alexei Navalny, Patriot: A Memoir

“At the time it was de rigueur among Putin's economic operators to represent themselves as 'effective managers.' In practice, however, it was limited to the facts that they dressed in bespoke Brioni suits, bought up the priciest offices in Russia, and modeled themselves on Leonardo DiCaprio in The Wolf of Wall Street, only it was the state's money they managed rather than their own. Beneath the veneer of effective management was the same bunch of crooks who, given the slightest opportunity to steal, would do so. They were effective only in being able to devise fifteen different ways of cooking the books of a government contract in less than a minute, inventing a dozen fake commercial deals to make everything look proper, and briskly spiriting the loot away to their offshore company.

The top dogs in all these state corporations were totally corrupt, and most of the regular staff were even more outraged by that than I was. It was from whistleblowers that I obtained the information that provided the basis of my first high-profile anti-corruption investigation.

In 2007, VTB began purchasing oil drilling rigs in China and then leasing them to Russian oil producers. The cost of a Chinese drilling rig was $10 million. VTB Leasing, however, paid 50 percent more than that through an intermediary offshore company registered in Cyprus. It seemed an entirely pointless arrangement. What did Cyprus have to do with anything, and why was an intermediary needed? Surprisingly, it turned out that this offshore company was controlled by VTB's top executives, and the price difference went straight into their pockets. They purchased not five, note ten, but thirty of these drilling rigs. It would have been impossible to find customers for so many.

This deal was supposed to remain secret, like dozens of others, but on this occasion things worked out differently. I not only wrote about the business but traveled to Yamal, where, in the middle of a field, I found the orphaned rigs still in gigantic containers and covered in snow. In the summer they rusted in a swamp.

This investigation was very straightforward. You didn't need a degree in economics or to be an expert on oil production to work out what was wrong. I wrote hundreds of complaints, went to court, and even won. In those days that was still possible. I urged all the minority shareholders of VTB to file complaints together with me and demand documents. They did. This lasted for years, with statements to the police, rejections, appeals, lawsuits in Russia and Cyprus. It was a particular pleasure to question Kostin personally on the topic of drilling rights at shareholder meetings. He tried to find excuses, but with a marked lack of success.”
― Alexei Navalny, Patriot: A Memoir

“Corruption had always annoyed me, but I recognized that it was because of Putin and his system of governing that it had become so normalized in recent years. The whole country knew that, and I wanted to do something about it. To do so, though, I needed to become a fully qualified party in the battle against corruption. In one corner there would be Putin's corrupt oligarchs and bureaucrats and in the other there would be me.

But what claim did I have to be the opposition? I wasn't a prosecutor, so how could I legally go after them?

I had by then graduated from the Financial Academy with a degree in finance and credit and had a fair idea of how stock markets and exchanges worked. It dawned on me that there were state-owned companies where corruption was particularly blatant, and I could buy shares in them on the stock market. By making even a small investment, I would have the power as a shareholder to request documents from the company, file complaints, go to court, and attend annual meetings.

For $5,000 or so I bought shares in several companies, including Rosneft, Russia's largest oil company; Gazprom, the largest gas company; and Transneft, which transports oil. These were gigantic, wealthy, state-controlled corporations it would be scary to tangle with. If you did you would probably get a visit from some toughs sent to beat you up for asking awkward questions. No one (including the companies) could imagine that some blogger without powerful friends would risk taking them on. If he did, he must surely have powerful forces backing him. Actually, I had no one backing me. I just knew my way around finance, and I also knew my rights.

At that time newspapers regularly published articles about embezzlement in state-owned companies. Thanks to my shareholdings, I was now directly affected by this reporting. I wrote something like this in a letter: Dear Gazprom, I've been reading an article in such and such newspaper and wonder what's going on here. Could you kindly give me, as a shareholder, an explanation? Even though my shareholding was vanishingly small, they were obliged to report back to me. When the answer came, I would read it carefully, and if the company's actions were against the interests of its shareholders, I would take them to court. As soon as I became party to a lawsuit, I could demand to be sent documents and minutes of meetings. When ?I received them, I made them publicly available on my LiveJournal blog.

My battles with state-owned companies eventually attracted tens of thousands of followers. However, I was looking for allies, not just followers. I invited my subscribers to send complaints and sue these companies with me. For instance, in Vedomosti, I read a report that the government had bought a building in Moscow city center from Viktor Veskelberg, an oligarch, for several times its real value. It was obviously a corrupt deal. I prepared templates for complaints, and thousands of people submitted them along with me to the Investigative Committee and President Medvedev, who at the time was pretending to be vigorously fighting corruption. I repeated this technique many times. It was easy enough to disregard one person, but much more difficult to ignore thousands, especially if you knew that all the documents were going to be published on the internet.

I attended shareholder meetings, which were usually held in a theater or somewhere similar. Invariably there was a stage on which representatives of the company sat and read their reports. Those in the audience were mostly ordinary shareholders who were suitably impressed by all the ceremony. The senior management on the stage, security officers everywhere, the presence of journalists-all of it ensured the audience remained reverently silent, in the midst of which I would stand up and say, "I have a question.”
― Alexei Navalny, Patriot: A Memoir

“For any project you need two things: people and money. I had no qualms about people. All my experience suggested I was not going to be left as a lone lawyer working from an office in a basement. Money, though, was a problem, because you can't run an independent organization in an authoritarian state without a budget.

In the past, politicians had asked rich people for money, oligarchs. By 2011, however, the oligarchs wouldn't come within cannonball range of me. And neither did I want to owe them any favors. So I put a post on my blog saying, "I know how to work, I know what to do, I will find and hire the necessary number of staff, but the financing has to come from you. Give me money. You need to donate a modest amount to a good, useful project, and that will save me from having to run around trying to cadge funds from oligarchs and businessmen." These micro-donations were the base that enabled me to become independent. And there was nothing the Kremlin could do about it. It was easy for them to arrest and intimidate one or two big donors, but what could they do against tens of thousands of people?

Nowadays there seems nothing special about that approach; it is standard for a fundraising campaign. But in 2011, everyone thought I was out of my mind. What on earth was a micro-donation? How could you possibly raise money for investigations and legal work online, especially in Russia? In our country no one had ever done anything like it before. There were no models to follow, there was no habit of donating regularly, there was no financial infrastructure. And yet people began transferring money to me, ordinary readers of my LiveJournal blog. At first I collected the donations in my personal account and later published a bank statement and report on my blog. The average donation to RosPil was 400 rubles (at that time about $15), and in one month I collected almost 4 million rubles, more than the annual budget I had originally set.”
― Alexei Navalny, Patriot: A Memoir