Hello! This week our top story is the arrest of leading investigative reporter Ivan Golunov on what appears to be fabricated allegations of drug dealing. We also have an analysis of the St. Petersburg Economic Forum where the issue of the criminal charges against investor Michael Calvey dominated the agenda, and two brief pieces: one on a production company that’s suing a prominent movie critic and another on why gas giant Gazprom’s share price is going through the roof.
Journalists protest as top investigative reporter arrested on dubious drug charges
Investigative journalist Ivan Golunov was arrested Thursday in Moscow on the absurd charges of selling narcotics. This is one of the most shocking attacks on independent media in Russia in recent years and, for many, it totally eclipsed the contents of Friday’s speeches by Vladimir Putin and Xi Jinping at the St. Petersburg International Economic Forum. The charges against Golunov appear to have been crudely fabricated and attention has focused on who his reporting may have angered.
Who is he?
Golunov is a journalist with independent media outlet Meduza. He is one of Russia’s best known investigative journalists, specialising in data journalism, and his recent investigations have probed corruption in contracts signed by Moscow’s City Hall, which has an annual budget of over $40 billion.
- After Golunov was arrested Thursday afternoon, police alleged they had found 5 grams of mephedrone on him. Mephedrone is a stimulant banned in Russia and most Western countries.
- The journalist immediately said that the drugs were planted and that he had been beaten up by police officers. The police deny all of this.
- Meduza, where Golunov works, is convinced the arrest is related to his professional activity.
- The most suspicious detail is photographs published by the police in a statement (Rus) announcing Golunov’s arrest. They show a real narcotics lab. Friends and neighbors of Golunov immediately said the room shown in eight of the nine photos bore no resemblance whatsoever to the journalist’s apartment. At first, the police maintained the photos were indeed taken in Golunov’s apartment, only to later admit the photographs were from raids on other premises.
- It seems clear that the police are trying to tie the journalist to a broader drug dealing ring. Just before the arrest, Russian Telegram channels reported that the police raided a narcotics lab outside of Moscow. It is possible they want to link this case to Golunov.
- Even without these suspicious details, the ridiculousness of the charges is obvious. All of Golunov’s acquaintances (almost all of the journalists at The Bell have worked with him at some point) know he is a rare example of a journalist who has never taken drugs.
The news of Golunov’s arrest emerged about midday Friday, just two hours before the beginning of the main session of the St. Petersburg International Economic Forum. As a result, the speeches made by Presidents Vladimir Putin and Xi Jinping were only covered by state media outlets — everyone else was busy reporting on Golunov.
- Journalists from The Bell and other independent media outlets questioned all the top officials they could find at the forum about Golunov’s arrest. Moscow Mayor Sergei Sobyanin, whose reputation was recently damaged by Golunov’s reporting, was confronted at least three times — but each time, he ignored the question and walked away.
- Several hours after the news of the journalist’s arrest, a picket began in front of police headquarters in Moscow. About 15 participants were immediately detained, but released without charge half an hour later. By the evening, over 100 journalists had gathered by the building.
- Russian media have demonstrated unprecedented solidarity over Golunov. All independent outlets have spoken out over the issue and even Margarita Simonyan, head of the state-funded television network RT, has said the authorities have a lot of questions to answer.
Why the world should care
Attacks on journalists happen regularly in Russia’s regions, but this is the first time in many years something so brazen has been used against a famous journalist in Moscow. The obvious worry is that this arrest will set a new precedent. Recent protests in Yekaterinburg sparked hopes that public opinion in Russia can still be a force for change — the Golunov case will show if this is really true.
Will he, won’t he? Calvey’s no-show at St. Petersburg Forum prompts confusion
There has never been a St. Petersburg International Economic Forum quite like this one. On Friday, the headlines were dominated by the arrest of journalist Golunov (instead of President Putin’s speech), and on Thursday all the attendees were waiting to see if Michael Calvey, founder of private equity firm Baring Vostok, currently under house arrest, would be allowed to show up.
- The intrigue about Calvey was sparked by Dmitry Peskov, Putin’s press secretary, who said Monday in answer to a journalist’s question that the Kremlin would be happy to see Calvey in attendance. And then it emerged that the businessman’s lawyers had asked investigators on May 30 if he would be allowed to travel to St. Petersburg. In this context, Peskov’s words, as is normal in Russia, were interpreted as a signal to investigators that Calvey’s request be granted.
- As a result, Calvey’s possible appearance became the most discussed question of the forum. Dozens of attendees, including the top managers of state companies, wore badges with Baring Vostok’s logo in solidarity with the U.S. businessman. Those spotted with the badges included: Arkady Volozh, the founder of Yandex; Oleg Tinkoff, the head of Tinkoff Bank; and Lev Khasis, first deputy CEO of Sberbank and a former manager at Walmart.
- Calvey was discussed at multiple sessions attended by members of the Russian government. Audit Chamber head Aleksei Kudrin and Finance Minister Anton Siluanov were both critical of the arrest, while Minister of Economic Development Maksim Oreshkin and the head of the State Duma’s tax committee Andrei Makarov tried to outdo each other in their outrage over the situation. It all looked as if officials had interpreted the signals from the Kremlin as pointing in Calvey’s favor.
- The most dramatic resolution to the situation would have been Calvey’s sudden appearance at the plenary session with Putin (Calvey had bought a ticket for this before his arrest) — but he never turned up. On Friday afternoon, Calvey’s lawyers said that he had been denied leave to travel to St. Petersburg. When asked about Calvey at the plenary session, Putin promised he would keep a close eye on the case, that law enforcement would get to the bottom of it and said that “If you don’t steal and don’t misbehave, everything will be OK.”
Why the world should care
If there is anything worse for the business climate than the arrest of a well-respected investor, it’s the inability of the state to explain the rules of the game. All this week, Putin and his inner circle have given contradictory signals about Calvey that even experienced officials seem unable to interpret correctly.
A state-funded production company is suing a popular movie critic
The arrest of Golunov is not the only major violation of freedom of speech in Russia this week. Movie production company Kinodanz, which regularly receives grants from the Ministry of Culture (amounting to $4.2 million over the last two years) has filed a lawsuit worth $15,000 against Yevgeny Bazhenov, Russia’s most popular YouTube movie critic. Known as BadComedian, Bazhenov does movie reviews that attract up to 16 million views online. The dispute with Kinodanz apparently arose over the company’s 2018 action-fantasy movie Beyond the Edge starring Antonio Banderas.
Bazhenov said the case is the result of his criticism of Kinodanz. All the company’s movies, he said, flopped at the box office, wasting the state’s money. Beyond the Edge’s budget has not been disclosed, but it made only $2 million at the box office. In order for it to have been a financial success, its budget would have to have been no more than $1 million (half the revenue normally goes to the box office), but it was clearly more than that: Banderas’ fee alone is likely to be higher (he received $12 million for a movie back in 2001). Kinodanz maintained that the case is simply a copyright dispute, arguing that BadComedian exceeded the permissible volume of citations in his video. “The dispute is solely related to property”, a Kinodanz representative told (Rus) The Bell. The Ministry of Culture has said (Rus) that it is “not supporting the lawsuit.”
Movie industry figures have spoken out in defense of Bazhenov, including prominent director Fyodor Bonadarchuk (the son of Oscar-winner Sergei Bondarchuk) and former presidential candidate Ksenia Sobchak. However, as experience has shown, even pleading from famous people isn’t always helpful.
Gazprom’s mysterious share price rise
Since Monday, Gazprom’s shares has risen 9.5% on the Moscow Exchange, making the state-owned gas giant the most expensive company in Russia. There are some obvious reasons for the price move: media outlets and analysts have attributed it to good first quarter results and an unexpectedly generous dividend policy (even though the market has known about both of these since mid-May). But others have sought a more convincing explanation and brokers who spoke (Rus) with The Bell highlighted market rumors about the possible retirement of Gazprom’s CEO, Aleksei Miller. Even the faint prospect of Miller’s departure raises hopes for the more effective management of the company, and is therefore viewed as positive.
There has been speculation over Miller’s future for more than a decade, so these rumors should be taken with a grain of salt. But it is true that, this time, they have been accompanied by a series of resignations at Gazprom and a top management reshuffle (several of Miller’s long-serving deputies have left, including the head of gas distribution subsidiary Gazprom-Mezhregiongas and the group’s head of purchasing). There was also a recent reorganization of departments: some were shut down, others created, and hundreds of employees removed.
A Gazprom representative and other brokers who spoke with The Bell said there is another explanation: the rumors resignation rumors are false, and have been spread maliciously to drive up the stock. “Someone wanted to creatively sell his shares,” said (Rus) the head of Gazprom’s financial-economic department, Alexander Ivannikov.