The Daily Beast
What is Putin’s Endgame With Americans Detained in Russia?
One of the first challenges Joe Biden will face as president is how to deal with Vladimir Putin, leader of the country that Biden has labelled the biggest threat to the United States. In contrast to the impetuous and inconsistent Donald Trump, Putin is generally seen as a resolute leader, who unflaggingly pursues his country’s foreign policy goals, however malign. But the cases of three Americans who are currently detained in Russia belie this image of Putin, portraying instead a leader who is dysfunctionally beholden to the interests of his security services and the corrupt clans who form his power base.The case of American investor Michael Calvey, which should be decided by a Moscow court within the next few weeks, offers a particularly striking example of how Putin has allowed a corrupted legal and financial system to undermine Russia’s broader interests. Calvey, arrested along with five others in February 2019 on bogus fraud charges, founded the highly successful private equity firm Baring Vostok, which since 1994 has brought over $3.7 billion of capital into Russia. A fluent Russian-speaker with a Russian wife, Calvey always played by the rules, never criticizing Putin, and was highly respected in the Russian business community. As Leonid Bershidsky of Bloomberg News noted after the arrests: “Calvey became a legend in the Russian market, in part because of his reputed aversion to any kind of foul play and focus on industries and companies unlikely to attract the attention of Russia’s authorities.” Russian billionaire Leonid Boguslavsky said in an interview last week that Calvey had been his inspiration and teacher when he, Boguslavsky, was advancing his investment career in the 1990s.Americans Paul Whelan and Michael Calvey Are Not the Only ‘Hostages’ Held By The KremlinCalvey’s downfall came as a result of a 2017 merger between Vostochny Bank, in which Baring Vostok had a majority stake, and a bank called Uniastrum, owned by an avaricious 44-year-old businessman named Artem Avetisyan, who is a Putin favorite. When Avetisyan and his partners attempted to exercise an option on 9.9 percent of Vostochny Bank’s shares in 2018, Baring Vostok refused, because of evidence that assets worth billions of rubles had been withdrawn from Uniastrum Bank before the merger. Baring Vostok then filed claims of fraud against Avetisyan for 17.5 billion rubles (around $276 million) in the London International Arbitration Court.In apparent retaliation for the London lawsuit, Avetisyan’s partner Sherzod Yusupov went to the FSB in February 2019 with a claim that Calvey and five associates from Baring Vostok had defrauded Vostochny Bank of 2.5 billion rubles ($38 million at the time). According to the claim, Calvey and his colleagues had repaid a bank loan for that amount with shares from a Luxembourg company called IFTG that were worth only 600,000 rubles. In fact the transaction was approved by all the bank’s shareholders, including Avetisyan and Yusupov, and a September 2019 re-evaluation of the IFTG shares established their worth, with restrictions on them lifted, at more than 3 billion rubles. Significantly, officials from the Economic Security Department of the MVD (regular police) had earlier conducted an audit of the bank transactions that later formed the basis for the criminal case, but found no illegalities.After his arrest, which sent shockwaves throughout the Russian investment community, Calvey spent several weeks in Moscow’s notorious Matrosskaya Tishina Prison (where Sergei Magnitsky died) before being transferred to house arrest in April 2019. Two months later, a Russian arbitration court in the Far Eastern region of Amur forced Baring Vostok to sell 10 percent of Vostochny Bank stock to Finvision, a holding company owned by Avetisyan, thus awarding him and his partner Yusupov control of the bank, which has continued to…
Read More: With millions expected to lose jobless benefits soon, Congress deadlocked on new aid package
