Kremlin Bites Back at Anti-Graft Leader Who Taunted Putin Allies

(Bloomberg) -- For years, opposition leader Alexey Navalny embarrassed Russia‘s leadership with YouTube videos exposing their lavish lifestyles and dubious wealth, and the Kremlin put up with it. Now President Vladimir Putin’s patience appears to have run out.

With Navalny in prison and riot police brutally detaining protesters in the largest numbers for years, Russian authorities are targeting his Anti-Corruption Foundation as part of efforts to crush a revived opposition movement. Investigative Committee allegations that unnamed fund employees laundered about 1 billion rubles ($15 million) came as at least 10 people arrested at the peaceful rallies face mass unrest charges that could see them jailed for up to 15 years.

The dark irony of authorities seeking to brand Russia’s most high-profile anti-graft campaigners as corrupt is lost on no one. It comes amid the harshest crackdown on dissent since Putin suppressed months of opposition protests against his return to the Kremlin in 2012 after four years as prime minister.

“Navalny wasn’t dangerous until signs of mass social upheaval appeared,” said Valery Solovei, a Moscow-based political scientist. “The authorities felt that by keeping an eye on him, they could successfully control the opposition,” though he’s seen as a threat now “because of the new-found appetite for street actions and the availability of protest infrastructure,” Solovei said.

Navalny and his foundation, employing a team of researchers and a drone, have gained millions of followers online for their video reports detailing the luxurious homes and lifestyles enjoyed by top officials and their families, extending far beyond what their modest state salaries could support. It’s become a potent tool as ordinary Russians endure five years of declining living standards with no relief in sight.

Duck House

The exposes reached as high as Prime Minister Dmitry Medvedev, who was widely ridiculed after the foundation released videos showing a floating duck house in the grounds of one of his residences. Rubber ducks became symbols of protests against official corruption in dozens of cities that followed one 2017 report, seen 31 million times on YouTube. Medvedev denied Navalny’s allegations that he spent money from a charitable fund to build palaces in Russia and abroad.

Navalny, 43, was barred from running for president against Putin in the 2018 elections by what he has denounced as a politically-motivated fraud conviction. Shortly after being handed a five-year suspended sentence in the July 2013 embezzlement case relating to a timber company, Navalny was allowed to run for Moscow mayor against incumbent Sergei Sobyanin, a Putin loyalist, and received 27% of the vote. When the European Court of Human Rights ruled that Navalny hadn’t got a fair hearing and ordered a new trial, a Russian judge simply re-convicted him.

Navalny also received a suspended sentence in 2014 while his younger brother, Oleg, was jailed for three and a half years after they were convicted in a separate fraud trial involving the Russian branch of French cosmetics company Yves Rocher. Both men denied wrongdoing, and Navalny accused the Kremlin of effectively taking his brother hostage as punishment for his political activism.

The money-laundering charges against the Anti-Corruption Foundation dwarf its yearly budget. It raised 58 million rubles ($891,000) from over 16,000 donors in 2018, according to its annual report. The non-profit avoids donations from abroad that would force it to register under Russia’s strict “foreign agent” law.

‘Political Center’

Navalny was jailed for 30 days last month for urging followers to join an unauthorized protest on July 27 against the exclusion of dozens of opposition candidates for Moscow city council elections in September. Many of those kept off the ballot have cut their political teeth at his foundation, including Lyubov Sobol and Ivan Zhdanov.

“The Anti-Corruption Foundation is, of course, not just a center for the fight against corruption, but also a political center,” said Executive Director Vladimir Ashurkov, who fled to London in 2014 and received political asylum after Russia accused him of embezzling funds raised for Navalny’s mayoral campaign. “Navalny, Sobol, Zhdanov and others are actively engaged in politics.”

With Putin’s approval rating at the lowest since 2013, more than 20,000 people had attended an authorized protest a week earlier. This time, riot police detained about 1,400 people, the largest number since the 2012 protests.

The next day, Navalny was briefly hospitalized after what his doctor called “a toxic reaction to an unknown chemical substance” that led the opposition leader to suggest he may have been poisoned. He suffered eye damage in 2017 when an assailant who was later linked to a radical pro-Putin group threw chemical dye in his face.

Hunger Strikes

Meanwhile, police cracked down on many of Navalny’s allies, raiding homes, opening criminal cases and summoning them for interrogation. Prominent figures such as Ilya Yashin and Dmitry Gudkov, a former member of parliament, were jailed.

By the time the opposition held fresh protests last week, the only high-profile opposition leader not in prison was Sobol, a prominent lawyer who’s more than three weeks into a hunger strike in protest at the rejection of her candidacy. Zhdanov, who was jailed for 15 days on July 29, announced on Aug. 2 that he, too, was on hunger strike.

When Sobol tried to attend Saturday’s rally, police dragged her from a taxi and bundled her into a van that sped away to a police station. Hundreds more were detained during the day as riot police again flooded the streets of central Moscow in a show of force.

The Moscow Prosecutor’s office intensified the pressure on Tuesday, saying officials would seek to strip a couple of their parental rights for bringing their one-year-old son to the July 27 rally. Checks will also be made against others who brought children to unsanctioned protests, it said in a statement.

While the authorities have repeatedly resorted to criminal charges against the opposition, Kremlin-linked figures have occasionally attempted to engage Navalny on his favored territory of social media, where he uses biting humor and pop-culture fluency to cast Russia’s ruling elite as hopelessly out of touch.

General Viktor Zolotov, who heads the 300,000-strong National Guard that reports directly to Putin, challenged Navalny to a duel in a video last year and threatened to beat him into “burger meat.” Billionaire metals tycoon Alisher Usmanov hit back at the opposition leader in a response recorded on a staffer’s iPhone aboard his 156-meter yacht.

While many of those who took part in the unauthorized protests were young, an officially sanctioned demonstration called for this weekend will test how the broader Moscow public has interpreted the authorities’ crackdown.

“They are simply using the same methods and approaches against Navalny that helped dim the protests’ brightness previously,” said Alexei Makarkin of the Moscow-based Center for Political Technologies. “But there’s now a new generation that didn’t live in the Soviet times who are less reverent to power and less afraid. Furthermore, there wasn’t five years of stagnation in 2012.”

To contact the reporters on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net;Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net;Stepan Kravchenko in Moscow at skravchenko@bloomberg.net

To contact the editors responsible for this story: Torrey Clark at tclark8@bloomberg.net, Tony Halpin, Gregory L. White

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