“‘Paving the way’ payments” in Russia. Rapprochement geld, smoothing-the-path-between-us money, also translated as “bribes” according to a Süddeutsche.de article about Germany’s third-largest power company, Energie Baden-Württemberg, saying some German prosecutors have thought for some years now the nuclear power provider used unworkable, improbable “fake contracts” [Scheinverträge] to move money into “shadow accounts” [schwarze Kassen] in Switzerland to form a pool of bribe money doled out to powerful Russian decision-makers, such as politicians or high-ranking military officers, for more access to the Russian nuclear energy and natural gas sectors. At the time, about half of EnBW was government-owned: by an association of county governments from the German state of Baden-Württemberg and by the French “energy giant” EdF, which itself was also “government-dominated.”
EnBW is said to have been aided in these endeavors by Moscow lobbyist Andrej Bykow, transferring ~280 million euros to Mr. Bykow’s Swiss companies over the course of several years.
Süddeutsche.de’s anthropological explanation of krysha said auditors from the accounting firm KPMG found that “questionable contracts with Mr. Bykow and his companies were being used to pay ‘initiation costs'” and that the auditing company’s confidential research had found that depending on the sector such expenses could run to 2% to 5% of the total cost of a project in Russia. That would make Russia one of the least corrupt countries in the world according to the experience of Siemens executives prosecuted for paying international bribes at about the same time: Siemens accountant Reinhard Siekaczek testified for example that, when he managed transfers of approx. $65 million dollars in illegal bribe money through offshore accounts from 2002 to 2006, his unit found that in the most corrupt countries bribes could be ~40% of a project’s budget, while 5% to 6% was about normal. A retired Greek official who was Greece’s defense department’s procurement director from 1992 to 2002 and recently spoke to Athens prosecutors about ~14 million euros found in his secret accounts around the world said from Russian arms deals his kickback was a “very generous” 3%, because 0.5% to 1% was his usual fee.
Germany has some rules against companies’ paying bribes in other countries, even where corruption is supposedly endemic, as can be seen from the billion-euro fines imposed on Siemens for bribery in 2008. Reporting on possible investigations into the corruption is confused by the use of tax investigations to obtain convictions or evidence in non-tax crimes and EnBW is apparently under investigation for a completely different type of tax fraud (the “carousel” sales tax scheme for avoiding value-added tax and/or collecting refunds of advance V.A.T. payments that were never made) now suspected to have become widespread in European electricity trading. Shortly after the utility’s “opaque business deals” with Mr. Bykow became known in 2011, several tax offices told S.Z., they quickly began looking for improprieties.
The passage of years since the start of these investigations, which state, federal and European offices of which types of investigators, and what pieces of this apparently large and sprawling puzzle they were examining, remains unclear to me.
Mannheim prosecutors are said to have been investigating six former EnBW managers and one current EnBW manager since 2012 for tax evasion and “breach of trust” [Untreue] though not for corruption. That could change now that the Karlsruhe tax office has started looking into the questionably documented filling and emptying of the company’s clandestine accounts in Switzerland.
Tax-wise, the power company has already offered to file adjusted German returns for the years 2000 to 2007 and has already transferred an additional 60 million euros to German tax authorities (about what the company saved in taxes by incorrectly labeling some payments to Mr. Bykow as “business expenses,” Mannheim prosecutors said). But new threads to pull keep getting teased out of EnBW’s data.
Süddeutsche.de described a strange nonprofit charity Mr. Bykow founded called “St. Nikolaus the Miracleworker”—whose board members included EnBW managers at times—which made donations to Russian churches, young Russian musicians and Russia’s Air Force, Navy, Border Patrol and “landing troops” [Landungstruppen; amphibious assault?].
“Thus, the Russian Pacific fleet’s submarine squadron Wilutschinsk Kamtschatskij Kraj named a boat after the Nikolaus charity. The charity, in its turn, gave the submarine personnel a minibus and donated a car to their commander, a vice-admiral. For the ‘maintenance of the fighter bomber SU 34, “Holy Nikolaus the Miracleworker,”‘ the foundation donated the construction of a heated airplane hanger. And every year the regiment’s top member received an automobile.”
Though it’s unclear how these arrangements were reached, with Mr. Bykow’s help EnBW ended up receiving military uranium taken e.g. from decommissioned Russian submarines. The utility was said to have used similar methods to increase its access to Siberian gas fields.
(Krysha TSOLL oong en.)