Head of the Russia’s Investigation Committee department for the Samara Region Valery Samodaikin, who had been under the protection of Governor Nikolai Merkushkin, is the latest to face a high profile corruption case in Russia. The Western world doubted Putin was serious about tackling corruption at a high level, only bringing down the ‘flies’ rather than political ‘tigers’ according to the New York Times last year.
However the Kremlin has insisted that it is highly serious about tackling corruption, and repeated this stance after the September arrest of Dmitry Zakharchenko, the top anti-corruption official at the Russian interior ministry who was caught with over $120 million in cash. The winter then brought the biggest corruption case of the Putin era, with Economy Minister Alexei Ulyukayev detained in November. Ulyukayev was caught in the act and faces charges of receiving a $2 million bribe for his approval of a major privatization sale.
The latest case has seen a great scandal flare up in the Samara Region concerning the head of the local Investigation Division of the Russian Investigation Committee (IC) – Valery Samodaikin. The Public Prosecution Department ascertained that the chief investigator of the region moved into a plush villa on the state-owned residential estate of the Governor, Nikolai Merkushkin. Samodaikin pays rent at a nominal rate of just 5000 rubles (less than $85) a month. Under this arrangement it seems quite clear that Merkushkin and his inner circle benefitted from a protective relationship with Samodaikin, regarding anything that may be ‘dug up’ on them. On top of the housing assistance, individual wealth was also well accounted for thanks to TogliattiAzot, its director Sergey Makhlai, and a trio of Moscow-based lawyers – Denis Simachov, Sergey Koronets and Pavel Zaitsev. They can resolve “any” issue that may arise in relation to law-enforcement authorities, through the Russian IC.
$1 Million Road for the General
Novaya Gazeta newspaper lit the spark that set the scandal alight, potentially sounding the death knell for Samodaikin’s further career prospects. The newspaper published investigation documents regarding the residential area of Governor Nikolai Merkushkin. The residential complex is located in a nature reserve on the banks of the Volga River, right in front of Gorky Central Park of Culture and Leisure. During the era of the former USSR, it functioned as guest accommodation for the Kuybyshev Reception Palace, where party representatives used to stay. It is worth mentioning that on the 12th of April 1961, Yuri Gagarin went there for rehabilitation after his landing in Smelovka Village, Saratov Region.
At the end of the 1990s, local developers replaced the Reception Palace with modern villas and mansions, which initially served as guest residences. In particular, during the 2007 Russia-EU Summit the complex hosted German Chancellor Angela Dorothea Merkel, the Head of the European Commission José Manuel Durão Barroso, the Russian Prime Minister Mikhail Fradkov and other high ranking officials.
After the appointment of Merkushkin as governor, the Samara Region’s SPI Hotel and Representative Complex (the official name of the former Kuybyshev Reception Palace) was turned into the residence of the Regional Governor, who allocated dwellings to his closest associates.
Novaya Gazeta drew attention to the fact that some of the villas in “Merkushkin’s nature reserve had recently been connected by a separate 700 meter long (half-mile road) asphalt road, which cost 60 million rubles ($1 million) from the local budget. In order to conceal this spending, the road construction costs were officially documented as the “repair of pedestrian footpaths”. i.e., there was a direct breach of laws, confirmed by the inspection of regional Public Prosecution Department. The materials were forwarded to the IC of the Samara Region, which found a number of Articles to support initiation of proceedings: theft with fraud (expensive firms were engaged in construction); misuse of public funds; and abuse of power or authority (as was the case with “Serdyukov’s (former Minister of Defence) road”). However, Samodaikin’s office never initiated a criminal case and miraculously the claims were not investigated.
Consequently the local lawmakers decided to find out what mansions the $1 million road leads to. It was discovered that the road leads to mansion No. 6 – a luxurious building with a private sauna, a swimming pool with a hydro-massage feature, a pool hall and a “relaxation” room. However, the contracts drawn up by the SPI Hotel and Representative Complex of the Samara Region revealed that mansion No. 6 is occupied by Valery Samodaikin. Yes, the very same Valery Samodaikin – the Head of the Regional ID of the Russian IC, which dropped the investigation into the construction of the road leading to mansion No. 6. Perhaps the only real surprise is that he is the only representative of the local law enforcement authorities who resides at “the court of Merkushkin”.
When it was questioned whether there might be an element of corruption in a situation in which the chief investigator of the region lives in a mansion on the Governor’s estate, the reply was that Samodaikin pays for the mansion at a “nominal price”.
By reviewing the contract with SPI, we can establish how much the Head of ID of the RF IC pays for this luxurious house, with swimming pool. Believe it or not—5000 rubles a month. At less than 25% of the average Russian income, everybody could lease a mansion at such a price.
It is interesting to note that Merkushkin’s neighbour blatantly ignores all and any documents related to the Governor and his inner circle. For instance, evidence of theft in the construction of the soccer stadium for FIFA World Cup 2018; documents in which local blogger Dmitry Begoun confessed that Merkushkin, personally, and employees of his administration hired the blogger at 300,000 rubles (approx. $5000) a month to write positive articles about the Governor; prohibition of negative references to Mordovia, which has been managed by Merkushkin for the last 17 years; and concealing information on expansion of the Mordovian business, including “Mordovspirtprom” (local alcohol producer) in the Samara Region.
In addition, he wrote a scathing criticism of Merkushkin’s enemies: Igor Sechin, CEO of Rosneft; Vladimir Artyakov, former Governor of the Region; as well as Viacheslav Volodin, Deputy Head of the President’s Administration; Sergey Chemezov, the Head of RosTech; and Vitaliy Mutko, the Minister of Sports. However, Samodaikin personally forbade interrogation of Governor Merkushkin in order to prevent verification of blogger Begoun’s testimony.
At present, the scandal over mansion No. 6 and the road leading to it is in full spate. The situation attracted the attention of the Head Office of the RF Investigative Committee, which repeatedly articulated its intention to get rid of any persons found to be discrediting the esprit of the Investigative Committee.
Fixing Problems for TOAZ
It could be quite interesting to research the warm relationship between Samodaikin and the top managers of TogliattiAzot (TOAZ).
The head of the local division of the RF IC is on friendly terms with Viacheslav Suslov, General Director of TOAZ; Nikolai Neplyuyev, Finance Director, who makes regular runs to his office; and Igor Grishin, Deputy Commercial Director, who has stayed out of prison thanks to Samodaikin. Neither TogliattiAzot nor its in-house lawyers (Denis Simachov, Sergey Koronets and Pavel Zaitsev) keep this a secret – Samodaikin, in fact, is a “family member”, the main protector and supporter. That is why they don’t care a straw about all those investigations of the Head Office of the Russian IC partly related to huge thefts at TogliattiAzot, the channelling of billions of rubles from Russia abroad, and brazen tax dodging.
Moscow is far away, while reliable Samodaikin is apparently by their side. The endeavours of the Chief Investigator of the Region, who is on friendly terms with Governor Merkushkin, resulted in no serious criminal lawsuits being filed against TogliattiAzot. All materials acquired by the Directorate of Internal Affairs (DIA) were consigned to the bin by the Public Prosecution Department or blocked by Samodaikin. One could spend an eternity giving examples.
Thus, due to Samodaikin’s efforts, the evidence collected by RosFinMonitoring (Russian Financial Monitoring service) on theft and money laundering at TOAZ were never disclosed, but were covered up by sham construction contracts with OOO MSA Stroy. The detectives’ evidence was consistently blocked, in spite of the availability of direct documents that testify to the fact that: “Suslov Viacheslav Valeryevich, General Director of ZAO TogliattiAzot Corporation, I.V. Grishin, Deputy General Director, jointly with N.V. Neplyuyev, Deputy General Director, and D.V. Mezheyedov, Audit Director, have entered into collusion with the majority shareholder of OAO TogliattiAzot and Chairman of the Board of Directors, U.S. citizen Sergei Makhlai, for the purpose of tax evasion by a group of individuals on a massive scale and legalization of criminal proceeds”.
Everyone seems to have forgotten the evidence of cash withdrawals by this company on the pretext of construction work in the Port of Taman. Samodaikin goes to great lengths to conceal the investigation of the fact that considerable quantities of marketable TOAZ products are acknowledged as defective in order to sell them at dumping prices to firms controlled by the Company’s top managers, who then resell the same products (carbomide) at market prices.
Furthermore, it was Samodaikin who once helped Grishin escape from prosecution when Grishin was detained by police with an envelope of suspicious contents.
The latest achievement of the Head of Investigation Dept. of the Russian IC relates to his fight against the initiation of an investigation into a cover-up of ammonia leakages at TOAZ. Local police have ascertained that Shop No. 13 of OAO TogliattiAzot, for several years now, has been tolerating leakages of liquefied ammonia. As a result, the employees and communities of Togliatti were exposed to hazardous chemicals, and the environment suffered irreparable harm. The management of TOAZ was aware of the situation, but concealed it due to its enormous greed. Viacheslav Suslov, General Director, was found guilty. But Samodaikin stood up for his friend and did his best to prevent a lawsuit against him.
Friends Among the Investigators and Prosecutors
Communications between Samodaikin and the managers of TogliattiAzot are maintained both directly and through the company’s three lawyers – Denis Simachov, Sergey Koronets and Pavel Zaitsev. Zaitsev is well known. He once served in the DIA of the Tver Region, and subsequently was seconded to the Investigation Committee of the Russian MIA. During his entire police career in Moscow, Zaitsev has initiated only one lawsuit (a record-setting achievement for an IC investigator of the Russian MIA), and that lawsuit was already drawn up with the conclusion to indict.
Zaitsev was in charge of an investigation into the illegal trade of furniture, which was retailed by trading centres of “Three Whales” and “Grand”. Surprise, surprise! Even at the initial stage Zaitsev nearly ruined the case, which subsequently was acknowledged as a “headliner”. Having no authorisation or warrant he performed a search, which resulted in the entire investigation process being discredited. As a result, a criminal case was instituted against him. However, Zaitsev managed to portray himself as a hero in the eyes of the media, alleging that he was being persecuted for “digging up” evidence against the “wrong” suspects and on the “wrong” sites, rather than for an attempt to destroy the case. Zaitsev was eventually fired from the Russian MIA.
TOAZ paid the three lawyers a staggering 25 million rubles a month, each. Clearly their contribution was extremely valuable. In the Moscow Region, they have 28-year-old Alexander Neplyuyev, Deputy Prosecutor of Schelkovo District, who acts as a gatekeeper sniffing out required information and advising directions for them to move next. This of course is a matter of family loyalty – Alexander’s brother Nikolai is the Financial Director of TOAZ. It was Makhlai and Nikolai Neplyuyev who sponsored Alexander’s admission to the law enforcement system.
Neplyuyev and Makhlai provide Alexander with the financial backing to collect information from law enforcement authorities and counteract the investigators’ activities. By doing so, they are quite well off: they’ve got Samodaikin in Samara and Neplyuyev in the Moscow Region. Naturally they are now trying to propel him upwards, first to the Public Prosecution Department of Moscow Region, and then to the General Prosecutor’s Office.
Promoted to General and Fell into a Coma
These are not the only unpleasant situations that occurred with Valery Samodaikin in connection with his work. He started ascending the promotion ladder in Omsk Region, where he was born, and his successful career began in 1999. At that time there was a conflict between Governor Leonid Polezhaev and Sibneft; patronized by Polezhaev, and owned by Roman Abramovich and Boris Berezovskiy, from one side; and Valery Roschupkin, the mayor of Omsk, and Vladimir Fedorenko, the head of the local tax inspectorate, from the other side.
Fedorenko continually accused Sibneft of blatant tax dodging, until it was decided to jail Fedorenko – the young investigator Samodaikin was hired and initiated a criminal case related to the construction of a personal apartment. The case was terminated when no evidence of any offence was found. Samodaikin later called Fedorenko in for ‘extraordinarily urgent’ interrogation at 11pm in relation to a separate criminal case against the head of the construction company. By 1am Fedorenko was arrested, accused of “repeated bribery”, and “misappropriation and embezzlement”. While this initially led to three years of imprisonment and release from the courtroom due to amnesty, the accusation was later completely dismissed by the decision of the Russian Supreme Court.
The scandal was by no means the end for Samodaikin’s career, with Polezhaev and the Sibneft owners impressed by his “diligence” – he proceeded to climb the promotion ladder. Samodaikin became deputy prosecutor of the Sovetsky District of Omsk, then was appointed prosecutor of the Tarsky interregional prosecution department of Omsk Region, and subsequently was named deputy head of the Investigation Division of the Investigation Committee.
In 2012 Samodaikin moved on, and assumed the role of first deputy head of the Central Investigation Division of the Investigation Committee of the Russian Federation in Krasnoyarsk Territory. After promotion to the Major General of Justice in 2013, Samodaikin disappeared for two months – it turns out he was in a coma for that time. The general was a man who enjoyed monumental and extended celebrations of landmark events where ridiculous things could occur due to the participants’ inebriated state, although there was no official announcement made.
When Samodaikin was available for duty, he was consistently well regarded by local governors and connected businessmen. In the Samara Region the bureaucrats were joined by TogliattiAzot on Samodaikin’s list of friends, for whom criminal cases were conveniently avoided.