MEDICAL KIT: A new hospital in Perm, some 1,150 km (720 miles) east of Moscow, pictured in January. The facility, opened in February 2012, was part of Moscow’s push to spend more on areas such as health and education. REUTERS/Maxim Kimerling
Comrade Capitalism series, part 2: The president’s allies won contracts to build new medical centres across Russia. They failed, and the project hit $700 million in cost overruns

Русский язык (Russian translation)

PERM, Russia – At the foot of the Ural Mountains stands a symbol of how even the best intentions in Russia can enable well-connected individuals to bleed money from the state. It’s a modern hospital built in this industrial city of a million people, and intended to be a flagship of a grand project to improve the country’s healthcare.

The hospital’s chain-smoking director, Sergei Sukhanov, loves his new facility, the Federal Centre for Cardiovascular Surgery, which has beds for 167 patients. He also admires Russian President Vladimir Putin, who championed the hospital and whose letter of thanks to the surgeon adorns his office.

“It’s a huge gift to the Perm region,” said Sukhanov in his new white office. “It’s like we’ve moved from a one-bedroom apartment to a five-bedroom apartment.”

But a Reuters investigation shows the hospital, and a $1 billion construction project of which it was part, were also business opportunities for Putin’s allies. While it isn’t clear whether they managed to turn a profit, their involvement cost Russian taxpayers dearly.

A previous article detailed how two associates of Putin profited from selling high-tech medical equipment to the Russian state and sent money to Swiss bank accounts linked to the building of a lavish estate near the Black Sea.

Those two men, Nikolai Shamalov and Dmitry Gorelov, also had stakes in two companies that received contracts to build a series of hospitals around Russia. The undertaking later led to accusations of “unjust enrichment” against one of the companies. That company ended up going bust, owing around 860 million roubles ($26 million) to the state. Hundreds of people lost their jobs.

Corporate records show there was another major investor in the two building companies: Rosinvest, a Russian investment firm owned by offshore entities.

In 2010 Sergei Kolesnikov, a businessman who used to work with the two Putin associates, went public with a claim that Rosinvest was ultimately controlled by the Russian leader himself. The role of Rosinvest in Putin’s $1 billion health project, however, hasn’t been previously reported.

Kolesnikov says that Putin owned an offshore entity called Lirus Investment Holding, which had ultimate control of Rosinvest. He told Reuters that he knew this because he “participated in the creation” of Lirus. Lirus was a Liechtenstein company that, he said, was owned through bearer shares – securities that don’t record the name of the owner.


2 thoughts on “When Putin ordered up new hospitals, his associates botched the operation

  1. Dear Sir,
    The special report you published under various headings on your website “In shielding its hospitals from COVID-19, Britain left many of the weakest exposed” by Stephen Grey and Andrew MacAskill would seem to suggest that the death toll from Covid in UK residential care is exceptionally high. Current UK estimates put the figure for residential care deaths at app., 20% of total Covid deaths, this is obviously a tragedy however, surely for balanced reporting any suggestion that this figure is exceptionally high should be balanced by valid comparisons. The Irish Times website 5th May in an article titled “Deaths in residential care facilities and nursing homes reach 819”, states –
    “Deaths from coronavirus in nursing homes and other residential care facilities have risen to 819, or 61 per cent of all 1,339 Covid-19 deaths, the Department of Health has said.” – “Included in this figure are 706 deaths associated with nursing homes residents, or almost 53 per cent of total deaths.”
    Under the circumstances the question must be put, was your special report a clear example of deliberate bias, or a total failure to research and present a balanced report in a professional manner?
    Many Thanks
    Mr H.S.Williamson

  2. Thanks for your comment. we don’t know the extent of UK care home deaths -but regardless of international comparisons, excess deaths of at least 12,700 deaths since the start of the pandemic care homes IS exceptionally high. In the last week from which data is available (up to April 24), 7,911 people died in care homes – 36% of the total. That does not include people who went from care homes to hospital and died there.

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