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Analytical Report.Campaign Finance of the Elections of Russian Federal Subjects Heads 

As the single voting day, scheduled for 13 September 2015, is approaching, the movement advocacing for the rights of voters 'Golos’ (hereinafter ‘Golos’) carried out a study of campaign finance of the Elections of Russian Federal Subjects Heads.

The general aim of the study was to estimate the extent to which the current funding of election campaign and political activities corresponds with the International and Russian standards of free and fair democratic elections. In the study, we tried to identify the ultimate owners of the funds donated for candidates’ political and campaign activities.

We have used official data on legal entities that had transferred financial assests to the election funds of candidates in the Gubernatorial Elections shared by the election commissions of Russian Federal Subjects. Considering the fact that the main contributors to the election funds were political parties that nominated the candidates in the Gubernatorial Elections, we have looked into 2013-2014 financial statements of four parliamentary parties, posted on the website of the Central Election Commission [1]. It also contains information on donations of natural persons.

In order to identify the owners of companies, we have exposed data of the State Register of Legal Entities, as well as officially published lists of affiliated persons of joint-stock companies. As a rule, we have used the data as of early July of the year, when the funds were transferred to the account of a party or a candidate. In some cases, the owner is set for the period preceding the election campaign or until the end of it. Sometimes we had to trace the long chain of owners. In cases when the owners of some companies constitute a unitary subject, we have studied the data depicting their finacial activities during the same period of time, the duration of which is usually not longer than 2–3 months.

In order to identify the natural persons who have made donations to political parties, we have used open source information. Respectively some mistakes can be made when identifying a particular donor, so the report will reflect only those facts which are confirmed by our regional experts.

Conclusions and recommendations

The outcomes of study are obviously revealing that the funding of candidates running for Gubernatorial Elections is so non-transparent. The funding mechanisms embraced by parties and candidates prevent voters from receiving the full information about the real sponsors of persons running for power.

Firstly, candidates enjoying administrative resources invoke budgetary and public funds for their election campaign that violates the principle of political neutrality of the state, the principle of equality of candidates and, as a result, distorts competition in the elections.

Second, the identified issues related with financial transparency leaves an opportunity for many candidates and parties to receive funding from abroad. In fact, even in the last year in some regions ‘foreign agents’ became governors. Considering the remaining trend of this year, after the single voting day, scheduled for September 13, the number of re-elected governors, whose campaign is funded by foreign donors, will only increase. The candidates nominated by the ‘United Russia’ and the ruling party itself receive the largest sums of money from abroad.

Unfortunately, it was impossible to identify the actual origin of large part of donations. In particular, the real owners of closed joint stock companies could not be identified. Moreover, political parties that establish funds, accumulating significant part of financial assets, do not disclose information to the voters about the real donors.

Donations made by natural persons often serve as means to conceal the actual sponsors: the election commissions do not reveal the names of natural persons who have made donations and the available financial statements of the parties show that the funding is allegedly transferred by some persons, who are not financially equipped enough to donate such sums of money.

The study findings suggest the following recommendations:

  • The Russian Electoral Law should be amended by preventing contributions to the elections funds made by companies owned by foreign subjects or Russian Federation, Federal Subjects or municipalities of Russia.
  • When publishing data on legal entities – donors, the information on company ultimate owners should be disclosed. The same applies to the closed joint-stock companies.
  • When publishing information on the sources contributing to election funds, the VAT identification number of a legal entity should be diclosed. Otherwise, the identification of actual donor might be hindered by coincidence of companies under the same name.

Legislation on Election Campaign Financing

On 24 November 2014, the Federal Law No. 355-FZ was adopted introducing the paragraph 13 to the Article 58 of the Federal Law No. 67-FZ of 12 June 2002 ‘On Basic Guarantees of Electoral Rights and the Right to participate in a referendum of citizens of the Russian Federation’ provisioning the rules on information of donors who contribute to candidates’ election funds. Under the new provision, in the federal elections the data on legal entities that donated to an election fund more than 25 000 rubles shall be published, as well as the number of citizens who donated more than 20 000 rubles, with reference to the total amount of such donations. The election commisions of Federal Subjects are entitled to establish rules for running regional elections, the regional election commissions almost with no modifications referred to this provision in the corresponding decisions and in some regions it was even introduced into the regional laws. However, in some regions the election commissions, obliged to publish the extensive election data on official websites, stated that only the information on overall amount of donations would be published, or they established another threshold for the amounts of donations to be published.

In Chuvashia, Omsk, Rostov and Smolensk regions only the data on the total amount of financial contributions to the respective election fund and the total amount of fund expenditure falls under the irformation that must be published. In the Kemerov region, only the information on those legal entities who have donated at least 110 000 rubles and the total number of citizens who donated more than 25 thousand rubles will be published. In the Jewish Autonomous Region the information on legal entities that donated no less than 500 000 rubles and individuals who donated at least 100 000 rubles are subject to mandatory publication. The maximum amount of contributions to the election fund is 5 000 000 rubles. Actually, in the Jewish Autonomous Region the funding of election campaigns of candidates running for Gubernatorial Elections is non-transparent.

However, it should be acknowledged that the amendments made to the federal and regional legislation could significantly improve the transparency of campaign financing.

For comparison, we would like to present some information on officially published similar data in 2014 Gubernatorial Election in some regions. Thus, in the Republic of Altai only the data on legal entities that donated more than 150 000 rubles and the number of individuals who donated more than 15 000 rubles were subject to mandatory publication. We could not find such information on the website and moreover the regional election commission did not respond to our official inquiry. In the Altai region the data on legal entities that contributed to the election fund with more than 200 000 rubles and the total number of citizens who donated at least 20 000 rubles is published. The Stavropol region established the amounts of 400 000 and 40 000 rubles respectively. Volgograd, Kurgan and Lipetsk regions published data on legal entities that donated no less than 500 000 rubles. In Orel, 1 000 000 - in case of legal entities and 100 000 rubles – for natural persons. Yakutia, the Udmurt Republic, Krasnoyarsk krai, Ivanov, Kirovo, Murmansk, Nizhny Novgorod, Novosibirsk and Tyumen regions published only the total amounts of donations.

The Paragraph 6 of Article 58 of the Federal Law ‘On Basic Guarantees of Electoral Rights and the Right to participate in the referendum citizens of the Russian Federation’ prohibits financial contributions to candidates’ election campaigns from any foreign subjects or any public budgets. In particular, if 30% of the share capital of a company is owned by foreign entities or Russian authorities, it is forbidden to contribute to election funds. Similar restrictions are set in respect to funding of political parties, except for cases provisioned by law, when it is the state support.

The aim of these prohibitions is not only to protect a Russian voter from foreign interference in the political processes of Russia, but also to safeguard the respect for the principle of political neutrality of the state.

Campaing Funding Limits in 2015 Gubernatorial Elections

The funding limits applied to the candidates running for Gubernatorial Elections were extremely different in various regions. Taking into account the number of voters, the biggest contributions can be made to election funds in Kamchatka, where 102.1 rubles could be spent per one voter, while in Krasnodar region candidates can spend only 2.5 ruble per voter. Thus, the difference between the regions could be greater than 40 times. Of course, the severe funding restrictions introduced in the Kuban region are pushing many candidates to resort to covert funding. Otherwise it becomes almost impossible to run the election campaign, except the case of the incumbent governor who can cover his campaign expenses from the regional budget.

Table 1. The funding limits applied to the candidates running for 2015 Elections of Heads of Russian Federal Subjects

Region Funding Limits, rubles Number of voters Funding Limits per voter, rubles
Mari El Republic 30 million 551 361 54,4
Republic of Tatarstan 60 million 2 932 742 20,5
Republic of Chuvashia 30 million 967 117 31
Kamchatka region 25 million 244 781 102,1
Krasnodar region 10 million 3 991 482 2,5
Amur region 25 million 637 110 39,2
Arkhangelsk region 50 million 947 125 52,8
Bryansk region 50 million 1 021 107 49
Irkutsk region 60 million 1 875 174 32
Kaliningrad region 20 million 774 242 25,8
Kaluga region 40 million 800 740 50
Kemerovo region 121 million 2 057 707 58,8
Kostroma region 30 million 545 447 55
Leningrad region 70 million 1 313 431 53,3
Omsk region 30 million 1 563 857 19,2
Penza region 50 million 1 099 797 45,5
Rostov region 200 million 3 272 161 61,1
Sakhalin region 20 million 384 332 52
Smolensk region 50 million 791 940 63,1
Tambov region 25 million 856 387 29,2
Jewish Autonomous region 5 million 131 876 37,9

Considering the 2014 Gubernatorial Election campaign, the significant part of candidates’ expenditure was not reflected in any official records. The extent of contributions made to the election funds of parliamentary party candidates raise particular concerns. Respectively in Altai region, the candidate nominated by ‘Just Russia’ O. Boronin, who was actively engaged in 2014 Elections campaign declared only 300 000 rubles expenditure and the candidate nominated by the ‘Greens’ Vladimir Kirillov, who as well passed through the campaign, stated that his expenditure did not exceed 119 000 rubles. Considering the fact that in Altai krai the municipal threshold was 549 signatures, these amounts are barely enough to get through the registration. Alexandr Andreichenko nominated by the Liberal Democratic Party and running for Gubernatorial Elections in Primorsky Krai has spent for his campaign in total 330 500 rubles whereas the limit was 100 000 000 rubles. However, the most economical of the candidates was Alexander Bocharov representing ‘United Russia’ who won 2014 Gubernatorial Elections in the Volgograd region, who spent on his victorious campaign only 250 000 rubles whereas the limit was 77,542,500 rubles.

It should also be noted that in 2014 the representatives of ‘United Russia’ disclosed rather substantive data on the contributions to the election funds.

Table 2. Official data on the current contributions to candidates’ election funds in 2015 Gubernatorial Elections

Region Candidate Contributions made to election fund, rubles
Mari El Republic (data as of 07.08.2015) Leonid Markelov Igorevich (‘United Russia’) 4 020 400
Mamaev Sergey Pavlinovich (CPRF) 450 000
Cherkasov Kirill Igorevich (LDPR) 1 110 000
Kondakov Yuri Alexandrovich (‘Party of Pensioners’) 17 400
Zabolotskikh Andrey Vladimirovich (‘Just Russia’) 226 000
Popov Vasily Ivanovich (‘Labor Party of Russia’) 15 000
The Republic of Tatarstan (data as of 12.08.2015) Bilgildeeva Rushaniya Gabdulahatovna (‘Just Russia’) 1 057 000
Minnikhanov Rustam Nurgaliyevich (‘United Russia’) 20 800 000
Mirgalimov Hafiz Gayazovich (CPRF) 240 000
Yusupov Ruslan Rafailevich (LDPR) 1 050 000
Chuvash Republic (data as of 21.07.2015) Ignatiev Mikhail Vasilyevich (‘United Russia’) 3 100 000
Nikolaev Oleg Aleseyevich (‘Just Russia’) 40 000
Sapozhnikov Valery Vasiljevich (‘Russian Party of Pensioners’) 36 000
Subbotin Konstatin Sergeyevich (LDPR) 51 000
Shurchanov Valentin Sergeyevich (CPRF) 104 010
Kamchatka region (data as of 23.07.2015) Ilyukhin Vladimir Ivabovich (‘United Russia’) 10 402 000
Kalashnikov Valery Yurevich (LDPR) 1 350 000
Nikolaev Alexei Valeryevich (‘Communists of Russia’) 15 000
Ostrikov Alexander Valentinovich (‘Patriots of Russia’) 1 143 000
Puchkovsky Mikhail Leonidovich (‘Just Russia’) 10 000
Smagin Mikhail Viktorovich (CPRF) 215 000
Krasnodar region (data as of 28.07.2015) Kondratiev Veniamin Ivanovich (‘United Russia’) 5 200 000
Osadchiy Nikolai Ivanovich (CPRF) 1 050 000
Ponomarev Viktor Ivanovich (‘Party of Social Protection’) 100 000
Rudenko Andrey Viktorovich (‘Just Russia’) 141 500
Fisyuk Sergey Dmitriyevich (LDPR) 103 800
Amur Region (data as of 31.07.2015) Abramov Ivan Nikolayevich (LDPR) 1 325 000
Kozlov Alexandr Aleksandrovich (‘United Russia’) 12 560 000
Kobyzov Roman Aleksandrovich (CPRF) 800 000
Dragunov Mikhail Valentinovich (LDPR) 50 000
Arkhangelsk region Ositsyna Olga Sergeyevna (LDPR) 4 208 291
Kraeva Nadezhda Yakovlevna (‘Just Russia’) 660 000
Orlov Igor Anatolyevich (‘United Russia’) 28 700 000
Pavlov Vasily Nesterovich (CPRF) 465 000
Kertsev Vladimir Yurevich (‘Communists of Russia’) 50 000
Bryansk region (data as of 05.08.2015) Bogomaz Alexandr Vasilyevich (‘United Russia’) 5 150 000
Iveko Mikhail Ivanovich (‘Patriots of Russia’) 100 000
Kurdenko Sergey Nikolayevich (‘Just Russia’) 35 000
Irkutsk Region (data as of 04.08.2015) Egorova Larisa Igorevna (‘Just Russia’) 860 000
Eroschenko Sergey Vladimirovich (‘United Russia’) 10 000 000
Karnaukhov Leonid Nikolayevich (‘Party of Pensioners’) 23 000
Kuznetsov Oleg Nikolayevich (LDPR) 1 812 000
Levchenko Sergey Georgiyevich (CPRF) 3 058 000
Pronichev Vasily ivanovich (‘Patriots of Russia’) 224 000
Kaliningrad Region (data as of 07.08.2015) Vukolov Vladimir Aleksandrovich (‘Russian Party of Pensioners for Justice’) 20 000
Revin Igor Alekseyevich (CPRF) 333 000
Starovoytov Alexandr Sergeyevich (LDPR) 10 000
Trushko Mikhail Stanislavovich (‘Right Cause’) 10 000
Fedorov Pavel Nikolayevich (‘Just Russia’) 1 200 000
Tsukanov Nikolai Nikolayevich (‘United Russia’) 10 300 000
Kaluga region (data as of 06.08.2015) Artamonov Anatoly Dmitriyevich (‘United Russia’) 301 000
Dengin Vadim Yevgenevich (LDPR) 1 024 240
Nevezhin Evgeny Nikolayevich (‘Patriots of Russia’) 50 000
Yashkin Nikolai Ivanovich (CPRF) 30 000
Kemerovo Region No Information
Kostroma region (data as of 11.08.2015) Sitnikov Sergey Konstantinovich (‘United Russia’) 1 370 000
Kudryavtsev Yuri Petrovich (LDPR) 1 320 000
Izhitsky Valery Petrovich (CPRF) 2 310 000
Petukhov Sergey Anatolyevich (‘Just Russia’) 50 000
Tatsiyev Georgy Georgiyevich (‘Cities of Russia’) 20 000
Tarabrin Alexandr Vladimirovich (‘Cossack Party of the Russian Federation’) 20 000
Leningrad Region (data as of 13.08.2015) Gabitov Alexandr Firovich (‘Civic Platform’) 89 500
Drozdenko Alexander Yurevich (‘United Russia’) 3 350 000
Kuzmin Nikolai Alekseyevich (CPRF) 972 000
Lebedev Andrei Yaroslavovich (LDPR) 1 340 000
Perminov Alexandr Aleksandrovich (‘Just Russia’) 2 106 900
Omsk region (data as of 09.08.2015) Dvoretckiy Andrei Konstantinovich (‘Rodina’) 400 000
Denisenko Oleg Ivanovich (CPRF) 3 470 000
Drobotenko Yuzif Yusifovich (‘Just Russia’) 127 000
Zelinsky Ian Viktorovich (LDPR) 1 879 000
Nazarov Viktor Ivanovich (‘United Russia’) 19 525 000
Podzorov Alexandr Georgeyevich (‘Communists of Russia’) 43 000
Strelnikov Alexandr Nikolayevich (‘Russian Party of Pensioners for Justice') 1 156 000
Fedorchenko Mikhail Aleksandrovich (‘Dignity’) 10 000
Penza region (data as of 27.07.2015) Belozertsev Ivan Aleksandrovich (‘United Russia’) 4 600 000
Tuktarov Zhigansha Zeynyatullovich (LDPR) 886 880
Simagin Vladimir Aleksandrovich (CPRF) 40 000
Eroshin Gennady Leonidovich (‘Just Russia’) 30 000
Popkov Vladimir Anatolyevich (‘Rodina’) 32 000
Frolenkov Alexandr Aleksandrovich (‘Chestno’) 8000
Rostov Region (data as of 10.08.2015) Kolomeytsev Nikolai Vasilyevich (CPRF) 2 500 000
Emelyanov Mikhail Vasilyevich (‘Just Russia’) 4 350 000
Novikov Ivan Aleksandrovich (LDPR) 2 296 900
Kolesnikov Ivan Nikolayevich (‘Russian Party of Pensioners’) 60 000
Golubev Vasily Yurevich (‘United Russia’) 100 114 490
Sakhalin Region (data as of 10.08.2015) Goppe Vladimir Gugovich (‘Yabloko’) 2 540 000
Ivanova Svetlana Vasilyevna (CPRF) 109 000
Kozhemyako Oleg Nikolayevich (‘United Russia’) 5000
Nechunaev Sergey Anatolyevich (LDPR) 1 305 000
Taran Edueard Olegovich (‘Just Russia’) 5000
Smolensk region (data as of 06.08.2015) Bichayev Alexandr Ivanovich (‘Russian Party of Pensioners’) 23 000
Zaitsev Vladimir Viktorovich (‘Party for Justice’) 47 000
Kuznetsov Nikolai Mikhailovich (CPRF) 300 000
Lebedev Sergey Aleksandrovich (‘Just Russia’) 476 100
Lobanov Elena Yevgevyevna (‘Civic Platform’) 50 000
Nenashev Yevgeniy Sergeyevich (‘Cossack Party of the Russian Federation’) 25 000
Ostrovsky Alexey Vladimirovich (LDPR) 34 650 000
Petrikov Oleg Sergeyevich (‘Rodina’) 0
Fyodorov Gennady Nikolayevich (‘Russian Party of Pensioners for Justice’) 22 000
Tambov region (data as of 30.07.2015) Zhidkov Andrei Igorevich (CPRF) 515 000
Kupriyanov Alexandr Viktorovich (‘Patriots of Russia’) 26 000
Nikitin Alexandr Valeryevich (‘United Russia’) 26 000
Safonov Anatoly Mikhailovich (‘Just Russia’) 25 200
Khudyakov Roman Ivanovich (LDPR) 1 025 000
Jewish Autonomous region (data as of 03.08.2015) Lazarev Konstantin Aleksandrovich (CPRF) 385 000
Levintal Alexandr Borisovich (‘United Russia’) 1 120 000
Malyshev Pavel Sergeyevich (LDPR) 1 221 000
Dudin Vladimir Nikolayevich (‘Just Russia’) 210 000
Odyry Tatyana Vladimirovna (‘Russian Party of Pensioners') 17 000

In 2015, as in the previous year, the obvious financial dominance of one political party draws attention. According to the official data, currently the total amount of contributions to the elections funds of the candidates nominated by ‘United Russia’ are 2.5 times bigger than the total funds of all the other candidates put together.

The election funds of candidates nominated by leading parties have already been contributed with 240 643 890 rubles, while the candidates from all the other parties - 92 974 421 rubles, of which 34 650 000 were contributed to the election fund of incumbent Governor Alexei Ostrovsky who is nominated by the Liberal Democratic Party and runs for the Gubernatorial Elections in Smolensk Region.

We have to admit that by now the parliamentary parties, with the exception of ‘United Russia’, do not dispose sufficient financial assets for investing it in the elections, only nominally denoting their engagement in the Elections of Federal Subjects Heads.

In addition, it becomes obvious that a significant portion of funds is transferred through shadow channels, as to legally run the election campaign one needs significantly higher numbers of staff members and funds for maintenance of headquarters.

As for the 2015 Election campaign, it is all the same, a significant part of candidates’ funds is channeled from shadow sources. The most representative in this regard is the Sakhalin region, where two candidates nominated by the parliamentary parties (Oleg Kozhemyako nominated by ‘United Russia’ and Eduard Taran, representing ‘Just Russia’ disclosed that by 10 August 2015 they had spent only 5 000 rubles each.

The new provision of the Federal law stipulating an abligation to disclose information on the donations bigger than 25 000 rubles made by legal entities had to partly solve the issue related with mandatory publication of candidates’ funding sources. However, despite the fact that this provision has been duplicated in the regional legislation, at the time of the study such information could be found not in all the regions. On the websites of election commissions we could not find any information on the contributions to and expenditure of election funds of candidates running for Gubernatorial Eolections in Chuvashia, Krasnodar krai and the Kemerovo region.

Means of Concealing the Actual Funding Sources of Election Campaigns

The candidates invoke several means of concealing the actual election financing sources. Therefore additional element emerges in the chain relationship - recipient-actual donor. Thus, electoral alliances play a major role in supporting the election funds of nominated candidates. In 2013-2014, ‘United Russia’ transferred to different election funds and referendum funds 641 210 722 rubles, the Communist Party - 159 706 937 rubles, the Liberal Democratic Party - 430 346 554.38 rubles, ‘Just Russia’ - 234 460 48.08 rubles. These amounts did not cover the costs of conferences and other events initiated by the party that were often also related with election campaign.

It should be noted that the financial scheme of ‘United Russia’ is the least transparent: the party has established a network of regional public funds to support APP ‘United Russia’ that in 2013-2014 accumulated 68% of all contributions made by legal entities to the party in respect to the law. As a result, citizens who want to get acquainted with a list of actual donors are in fact deprived of such a possibility.

The above described scheme of political activities financing is not new and was invoked in Russia in the 1990s. Then, Sergei Popov was a head of organization ‘People's House’ [2] which was engaged in funding the movement ‘Our Home – Russia’. Today Popov is a State Duma MP representing the party ‘United Russia’, the chairman of Duma Committee on Duma Organization and Regulation, as well as the head of the inter-regional Coordination Council of ‘United Russia’ in Omsk region, Altai krai and the Republic of Altai, and, apparently, he is actively engaged in sharing his 90s financial experience.

Moreover, the donations transferred to the party accounts made by natural persons also raise some questions. For example, in 2013, 3 000 000 rubles were transferred to the accounts of ‘United Russia’, as a donation made by a resident of Irkutsk Yankovskaya Maria Eduardovna, the chief specialist in social work at Students Union of Irkutsk State Technical University. 600 000 rubles were donated by each, a senior lecturer in Translation and Intercultural Communication Department of Irkutsk State Linguistic University (that is currently a branch of Moscow State Linguistic University) Belyaev Julia Sergeyevna and a journalist of the newspaper ‘Irkutyanka’ Olefir Aksana Vasilyevna. Of course, the official salaries of employees of higher educational institutions and the media staff hardly implicate such large amounts of donations to ne transferred to political parties.

Other parties exercise similar schemes. Therefore in 2013, Sergei Klyukin from St. Petersburg, who, according to media reports, at that time was unemployed, donated 2 708 830 rubles to ‘Just Russia’. [3] In the same year, Yudina Yunona Yurevna who is closely related to the regional branch of ‘Just Russia’ in the Leningrad region donated 2.26 million rubles. It should be noted that according to the SAS ‘Elections’ data, in 2012, as an idependent candidate she ran for the Municipal Elections in Kuzmolovsky urban settlement of Vsevolozhsk municipal district in Leningrad region while being unemployed.

Commonly, in the year the elections are held, the staffs of regional offices and campaign headquarters donate large amounts of money to the parties that have employed them. In two years the accountant of ‘United Russia’ executive committee in Irkutsk region Vladimir Anatolyevich Konovalov donated 3 695 000 rubles, Andrei Pezhemskiy Lirievich, the chief specialist of campaigning department of Irkutsk regional branch of the party ‘United Russia’, - 2 000 000 rubles. In 2013, the accountant O. A. Matveeva of Ryazan regional branch of LDPR donated to the party she works for 123 500 000 rubles and a year later - another 473 000 rubles.

In Tatarstan, in 2014, the staff of ‘Real estate agency Passage’, as a group of natural persons, contributed to the election fund of the party ‘Just Russia’. Respectively, the donors were: Valeyeva Laysan Nailevna – legal counsel (donation - 998 490 rubles), Galiullin Arthur Nailevich - sales manager (donation – 929 814 rubles), Kuralov Eric Rudolfovich - deputy director (donation – 668 500 rubles), Midubaev Nail Ildarovich – sales manager (donation – 662 000 rubles), Ahmetshina Lilya Rustamovna - sales manager (donation – 498 500 rubles), Bulatova Zulfiya Gashikovna - chief accountant (donation – 45 000 rubles). All they were engaged in professional relationship with the chairman of regional branch of the party ‘Just Russia’ Rushana Bilgildeeva, who is the founder of the company.

In fact, the contributions made by natural persons to the funds of political parties and candidates could be often perceived as means to conceal a real donor of candidate’s election campaign.

Foreign Funding of Candidates Running for Gubernatorial Elections and Political Parties

Although a ban on foreign funding of election campaigns is provisioned by law, candidates running for Gubernatorial Elections and political parties receive financial support from abroad. It is well enough to identify a Russian company that made a donation to the election fund and its foreign owners who represent another ‘Russian’ legal entity. In 2014, according to media reports, using this model, the incumbent Governor of Lipetsk region, Oleg Korolev, received 7 000 000 rubles from abroad for his election campaign. [4]

We also managed to find out that, in 2014, the ‘Shipyard ‘Red Barricades’’ donated 500 000 rubles to the election fund of Astrakhan region Governor Alexandr Zhilkin (‘United Russia’). As of 30 September 2014, CLASSIDE HOLDINGS LIMITED - a legal entity registered in Cyprus - owns 30.79% of the company shares. Mr. Zhilkin also received 1 million rubles from ‘Holding Company Elinar’. The company ‘Elinar Group S.a.r.l’, registered in Luxembourg, is in the list of affiliated share owners of the previously mentioned company, as of 30 September 2014, disposing more than 20% of the total number of votes attached to the shares (contributions, stakes), comprising the authorized (share) capital of this legal entity. There are other foreign companies among affiliates: COGEBI SA, registered in Belgium, and Elcim Group BV from the Netherlands.

In the 2015 Elections, LLC ‘Krasnodar Vodokanal' has already donated 3 million to support the campaign of the candidate Viktor Nazarov running for Gubernatorial Elections in Omsk region. The company is 100% owned by LLC ‘RVK-Invest’ and, according to USRLE, its founders are the companies BRIEVA INVEST LIMITED, registered in Cyprus, and Ventrelt Holdings Ltd from the British Virgin Islands. The LLC 'RVK-Invest' is controlled by the company 'Rosvodokanal', which is also 100% owned by offshore company Ventrelt Holdings Ltd.

The candidate running for Gubernatorial Elections in Rostov Region Vasily Golubev received 1 million rubles from LLC 'Trading House 'RIF''. According to the Unified State Register of Legal Entities, the company is owned only by two shareholders: 'LAPARKAN INVESTMENTS LIMITED' (Cyprus) and 'GRAIN INTERNATIONAL HOLDINGS INC.' (British Virgin Islands). Another donation of 1 500 000 rubles the candidate received from LLC 'Plant Tehnikol - Siberia', owned by LLC 'Miara', founded by LLC 'TN-Invest'. 'TN-Invest is owned by 'Invest-krovlia’, founded by 'GIB GENERAL IDEA BROTHERS HOLDINGS LIMITED' registered in Cyprus.

Ltd. 'Regent' contributed to the election fund of the candidate running for Gubernatorial Elections in Smolensk region Alexei Ostrovsky (LDPR) with 500 000 rubles, more than 99% of which, according to the Unified State Register of Legal Entities, as of 9 August 2015, is owned by a limited liability company 'Smolensk Diamonds (Middle East)', registered in the United Arab Emirates. LLC 'Sanatorium 'Crystal'' donated additional 500 000 rubles; 24.88% of the company nominal capital is owned by LLC 'Sheratan', owned by the Swiss company 'Iesa Establishment'.

We have already noted that a significant part of the contributions to the candidates' election funds are made by the electoral alliances that nominated them. 2013-2014 financial reports issued by parliamentary parties contain some indications of foreign funding.

In 2014, OJSC 'Irkutskenergo' donated 6 425 000 rubles to 'United Russia'. As of early July 2014, 50.19% of the company was owned by 'EvroSibEnergo', 99.99% of which is controlled by EUROSIBENERGO PLC, registered in Cyprus. OJSC 'Inter RAO UES' owns the remaining 40% of 'Irkutskenergo' shares. 26.3661% of its shares is owned OJSC 'Rosneftegaz' that is 100% state-controlled, 13.9263% - 'INTER RAO Capital'. Moreover in 2013, 'Bureyagesstroy' (TIN 2813005249) as well donated 600 thousand rubles to the above mentioned party. In 2014, the same company donated to the party additional 370 thousand rubles. As of 1 July 2014, OJSC 'E4 Group' owns 76% of shares; 100% of 'E4 Group' shares belong to the offshore company EFORG ASSET MANAGEMENT LIMITED registered in Cyprus. Moreover, in 2014, 'United Russia' received 500 000 rubles from the LLC 'IRWIN 2' (TIN 5027083476). At that time, the company was owned by LLC 'FARMEKO', 49% of which was owned by a Cyprian company 'TREYDLAIN SERVICES LTD'. In 2013, OJSC 'Kaliningrad Sea Commercial Port' donated 450 000 rubles to 'United Russia'. As of 1 July, 24% of its shares are owned by the company 'Newcrest Trade Inc.', registered in the British Virgin Islands.

In 2013-2014, 'Just Russia' as well received foreing funding. In 2013, LLC 'Mechanical Plant of Kirovo-Chepetsk Chemical Combine' donated 4.095 million rubles. The company is owned by OJSC 'Mineral Fertilizer Plant of Kirovo-Chepetsk Chemical Combine', 100% of which at that time was owned by the OJSC 'United Chemical Company 'URALCHEM'', in turn owned by URALCHEM HOLDING PLC, registered in offshore Cyprus. In 2014, the party received from the company additional 6.38 million rubles the same way. In 2013, LLC 'Guarantee' once again donated 2 000 000 to 'Just Russia'; it is founded by the 'Kolectorskiy Center 'Zeus', in turn, owned by LLC 'Titan', 99% of which is owned by the company  'TIARA INVEST CORPORATION', registered in Belize, as of beginning of 2015.

Covert Government Funding

The covert government funding invoked for supporting election campaigns is quite common in Russia, neglecting the political neutrality of the State stipulated by the International documents and the Russian laws.

In 2014, Samara regional civic organization 'Heroes of the Fatherland' donated 956 861 rubles to the party 'United Russia'. It should be noted that the same year the project 'From the Knights of St. George to the Heroes of Russia' run by the organization won the regional government grant, moreover it the received a grant to carry out its statutory activities and implement the project 'Parade of Remembrance', the stimated value of grants is equal to donation amount. In the same year, the Veterinary Association of Kursk region donated 500 000 rubles to 'United Russia'; among the founders of the association are numerous federal government agencies. Moreover, in 2014 Elections to the State Council of Tatarstan OJSC 'Plant Elecon' donated 1 million rubles to the party 'United Russia'. As of 30 September 2014, 25% of the Plant shares are owned by OJSC 'Radio-electronic technology', 100% owned by the state corporation 'Rostec'. A year earlier, OJSC 'Izhevsk Electromechanical Plant 'Cupol' transferred 500 000 rubles to the account of 'United Russia'. 93.65% of the OJSC is owned by the PVO 'Almaz-Antey', that is state-owned.

Similar contributions were made to the CPRF election funds. In 2013, LLC 'Ak Bars – Aktiv' donated 1 500 000 to CPRF; the company is one of 4 companies owning 'Tatselhozprodukt', 'Agro-Aktiv', LLC 'APK 'Visokaya Gora' and OJSC 'Holding company 'Ak Bars'. The latter company is one of the founders of the other three owners of 'Ak Bars - Aktiv'. Moreover, 28.42% of the Holding Company 'Ak Bars' shares, as of 1 July 2013, is owned by the Republic of Tatarstan, under the name of the Republican Ministry of Land and Property Affairs. In 2014, CPRF received 1 million rubles from the non-profit organization 'Football club 'Irtysh'', co-founded by the Department of Physical Education and Sports Administration of Omsk. Additional 500 000 the party received from the State Unitary Enterprise 'Agency of the Strategic Programs'.

In 2015, OJSC 'Rosvertol' donated 1 300 000 rubles to the election fund of the candidate running for Gubernatorial Elections in Rostov Region Vasily Golubev Yurevich. JS 'Russian Helicopters' owns 81.13% of its shares and JS 'United Industrial Corporation 'Oboronprom' - another 14.01%. 'Oboronprom' owns 98.5% of 'Helicopters of Russia' shares; the State Corporation 'Rostec' owns 50.43% of 'Oboronprom' shares and the Russian Federation under the name of State Corporation 'Rostec' - 37.59%. Thus, OJSC 'Rosvertol' is almost state-controlled company and, despite this, it supports the candidate running for Gubernatorial Elections. OJSC 'Taganrog Aviation Scientific-Technical G.M. Beriev Corporation' donated additional 1 500 000 rubles to Vasily Golubev. 82.2462% of company shares are owned by the United Aviation Industry Corporation (UAIC), whereas 85.4074% of the latter company shares are owned by the Government of Russian Federation under the name of Federal Agency for State Property Management. 7.9783% of the 'Beriev TANTK' shares are owned by corporations 'Suxoi' and 'Irkut', also owned by the UAIC.

In addition, during the election campaign one could notice an overall increase in budgetary expenses,  addressing the most pressing social issues, funding of mass cultural events carried out for campaigning purposes. For example, in Kaliningrad, according to media reports, in an election year, the financial assets allocated for the repair of roads increased almost twice [5]. In June 2015, the first mass event was held in the 'Amber Hall', the expenses of which amounted to 2.5 billion rubles. The local government of Kaliningrad region organized a jazz festival, which, according to eyewitnesses, was exploited for campaigning purposes by the acting governor Tsukanov.

In Chuvashia, enterprises rushed to pay outstanding wages, before the Head of the Republic, who was nominated by the 'United Russia', took the office. The expenditures on information stands of the party 'United Russia' exposed in the public and cultural facilities (schools, kindergartens, sports halls, playgrounds, hospitals etc.) were covered from the state budget.

Candidates enjoying administrative resources, during their working hours took advantage of the premises owned by authorities or budgetary institutions for their campaigning purposes. The acting governor of Kaliningrad region Tsukanov held a meeting with his campaign activists during its working hours. Marina Orhei, who attended the meeting, shared this in social media [6].

The exploitation of administrative resources and budget funds for the election campaign is as well quite common in other type of elections. For example during the election campaign Ryazan branch of the 'Maladaya Gvardiya of United Russia' received a grant of 8.107 million rubles for the project 'MediaGvardiya' [7]. At the same time, the leader of 'Maladaya Gvardiya' Daria Kiseleva turned to take No. 2 position on the party list of 'United Russia' in the intra-regional group No. 13 for the Elections to Regional Duma.

Stanislaw Andreychuk, the report author (8-903-995-17-98, [email protected])

Footnotes:

[1] www.cikrf.ru/politparty/finance/svodn_otchet_14.html.html

[2] Popov, Sergey (politician), 'Wikipedia' https://goo.gl/dpr8gC

[3] www.fontanka.ru/2013/06/06/181/

[4] www.novayagazeta.ru/politics/68222.html

[5] http://infrastruktura39.ru/news/952/

[6] https://www.facebook.com/permalink.php?story_fbid=118397995170416&id=100010006470245

[7] https://grants.oprf.ru/grants2015-1/winners/rec4663/

Previous 'Golos' analytical reports on long-term observation of preparations for the single day of voting: