Under fire, Mishustin seeks to save reputation through media manipulation

Prime Minister Mikhail Mishustin has been in the job for 1.5 months, but discussions of his income and expensive real estate holdings refuse to die. In part, it is Mishustin and those close to him who have kept the conversation going — this week, they made a fourth attempt to use the media to answer some of the accusations. A preoccupation with his public image is one of the prime minister’s weaknesses, according to The Bell’s sources.

Mishustin has worked for the government since 1998 with only a short break in the private sector (2008-2010) when he was a partner at investment firm UFG (founded by former government minister Boris Fyodorov and U.S. banker Charles Ryan). And his relatives have never been involved in serious commercial ventures. But real estate that opposition leader Navalny found among the prime minister’s family’s holdings is valued at up to 3 billion roubles ($50 million). Some of this property was given to Mishustin’s sister by businessman Alexander Udodov, a shadowy figure who media reports identified (Rus) in 2011 as party to a tax fraud case. Mishustin was then head of the Federal Tax Service.

Mishustin has not commented on Navalny’s investigation. This is standard practice for Russian officials, and they take their lead from Putin who avoids using Navalny’s name. But Mishustin has deemed it necessary to try and exonerate himself: in just 6 weeks there have been four articles in the media that could not have appeared without his personal approval.

• January 19. Three days after Mishustin became prime minister, journalist Dmitry Butrin, who has known Mishustin for a long time, wrote an article (Rus) in Kommersant newspaper explaining Mishustin’s earnings and describing how the Mishutin family invested its money (Butrin did not cite any sources).
• February 7. A UFG managing partner published an open letter (Rus) in media outlet RBC detailing Mishustin’s work at the fund and suggesting he earned a total of $33.5 million while at UFG. But the letter led to new questions: why did a former official, Mishustin, receive a 25 percent stake in a fund managing $2 billion without making an investment? How did he earn such a commission for work that took place during the financial crash of 2008 and 2009?
• February 20. Vedomosti newspaper published an article (Rus) quoting sources from UFG and people close to Mishustin who explained that his stake in UFG was given to him by Fyodorov who “thought all partners should be equally motivated”. The size of his earnings, they said, was because Mishustin was able to attract major clients to the fund (these clients were not identified).
• February 27. In an interview (Rus) with Izvestiya newspaper, businessman Udodov said he gifted expensive apartments to Mishustin’s sister because she’s his wife. It’s unclear why this has taken almost 6 weeks to emerge.

In all likelihood, this is not the end of Mishustin deploying intermediaries to explain his wealth. Firstly, many questions remain about Mishustin and his family’s income — Udodov’s family ties don’t make his gift any less corrupt. Secondly, on the day he was appointed prime minister, Mishustin’s acquaintances told The Bell that the new prime minister is unusual for a Russian official because he cares about his public image.

Why the world should care

No one in Russia is really surprised that the family of the new prime minister owns such expensive property (everyone in the Russian elite has significant real estate holdings). But the fact that Mishustin is trying to explain himself actually speaks in his favor — a prime minister who worries about his personal PR is better than a prime minister who isn’t interested in what people in Russia and abroad think about him.