The Cabbies Left While the Cossacks Stayed: Rostov-on-Don on the Eve of the World Cup

rostov arena-2Rostov Arena. Photo courtesy of ftbl.ru

The Cabbies Left, The Cossacks Stayed
Gleb Golod
Takie Dela
June 8, 2018

The banks of the Don River in Rostov were always quite different. The right bank was landscaped, featuring bars and restaurants suited to every taste, singing fountains, and amusements. The left bank featured a wild beach chockablock with sand and trees. It was a favorite spot for picnickers and outdoor shish kebab cookouts. People used to swim there until the Don was completely polluted.

The new Rostov Arena has been built on the the left bank. Nine months and 913 million rubles [approx. 123 million euros] turned the wild beach into a landscaped park and river embankment. All that is left of the levberdon, as Rostovians call it, is a pier that extends nearly to the middle of the mighty river.  Over the long years it has been there, it has rusted, and there are holes in its covering here and there. The locals loved it, however. In the evenings, you would always find a couple in love, a photographer and his model, a small group of friends, and an old fisherman who had good luck catching herring in the middle of the Don.

Since May 1, when the park on the left bank officially opened, it has been standing room only on the pier. Locals stroll there with their children, joined by the foreigners who have arrived earlier in Rostov-on-Don. Someone worried about safety decided to limit the number of people on the pier and welded an iron grille to the entrance, but this has not stopped the flood of visitors. Cyclists toss their bikes over it, men help their female companions climb over it, and parents ferry their children from one side of the grille to the other.

Every half hour, an improvised river taxi docks alongside the pier. It charges adults 500 rubles for a ride. Children sail for free.

“Business? What business? The main thing we sell are emotions. River cruises are soothing. Adults can relax while the kids doze,” a man in a sailor’s hat and striped shirt advertises a short cruise on the Don while docking at the pier.

“Business has been good, of course, since so many people started coming here,” he admits. “I would give the embankment a ‘C’ for now. There is not much in the way of infrastructure or development. We’ll see how it looks a year from now.”

The boat pilot does not waste any time. He has struck up a conversation with a young boy, whom he has given a tennis ball. The boy persuades his parents to go for a ride on the boat. They quickly give in. The vessel weighs anchor and speeds off toward the other shore.

The Stadium and the Park
The boat pilot gave the new park a “C,” but the locals like the new sports facilities and playgrounds, and the fact the park is well maintained. But it lacks trees, many of which were cut down during the beautification.

“There is a lot of exercise equipment, and the air is fresh, but I probably won’t be coming here in the summer. There are few trees and little shade. But you know what the heat is like here in July. You could kick the bucket,” says a young woman in workout gear.

The local are not imagining things. There really are many fewer trees. The park was built without consideration of the place’s specific features. Consequently, the “city’s green shield” was left with huge gaps in it, says Alexander Vodyanik, environmentalist and assistant secretary of the Russian Public Chamber.

The “wild” green area on the left bank, which stretched all the way to Bataysk, a suburb of Rostov-on-Don, moistened the winds sweeping in from the Kalmyk steppes, winds that are especially palpable in the spring. It was the primary source of fresh air, supplying it just as ably as a forest, says Vodyanik. The place had to be beautified, but a completely different park should have been built, a wetlands park.

“Historically, this place functioned as a city beach, and it should have been turned into a city beach. People swim at a beach, but the Don has been so badly polluted for so long that swimming was definitely off limits in this part. In that case, swimming pools could have been set up while simultaneously purifying the water. This has been done in Germany on the Rhine, which is much dirtier than the Don, and the project has been a success,” says Vodyankik. “But a park was built here instead. An instant lawn, which has already gone bad, was rolled out. Eighty percent of the poplars were cut down. We had problems with our woodlands as it was, but they were damaged even further.”

The so-called Tourist Police are identified as such on the armbands they wear. A female student from Namibia leads a tour for her friends, who have arrived to enroll at the Don State Technical University. A young man named Aman hopes to get a ticket to the match between Brazil and Switzerland. If it does not work out, however, he will just go for a stroll around the city.

“I really like it here. The city is pretty and has an interesting history. Things are good, the park is good. Everything is terrific and cozy,” he says in English. “By the way, could you tell me where the stadium is? All the signs are in Russian, which I don’t actually understand.”

Rostov Arena was built at a distance from residential areas, so loud fans will not bother locals even on match days. The stadium is accessible by bus and taxi. True, fans will have to walk the last 500 meters to the turnstiles. This decision was made for security reasons.

Cabbies Leave the Fan Zone
Specially accredited taxi drivers will ferry fans from the left bank to the right bank and the fan zone on Theater Square. The most popular taxi services in Rostov-on-Don, Uber and Leader, accessible on the Rutaxi app, will not be working during the World Cup because they are not officially registered as commercial transport services.

Among the major cab companies, Yandex Taxi and Taxi 306 have been accredited to work during the World Cup. Roman Glushchenko, executive director of Taxi 306, told us  a total of 500 cars had been accredited in Rostov-on-Don, but he refused to discuss whether that would be enough cars to handle all comers.

According to gypsy cab driver Leonid, around 150 drivers of the ten thousand drivers affiliated with the company 2-306-306 have been accredited. Cabbies like Leonid mainly work for themselves rather than licensed carriers, which are practically nonexistent in the city, he explains. The gypsy cabbies use Yandex, Uber, Gett, and Leader as dispatchers, either directly or through small intermediary firms. So, when the issue of accreditation for the World Cup arose, it was a problem for drivers, who had to obtain permits, sign a contract with a licensed carrier, and paint their cars yellow or white. The Rostov Regional Transport Ministry issued the full list of requirements for accreditation.

“I’m not going to lift a finger to get accreditation,” Leonid admits. “Why should I give myself a headache by getting permits that would mean I would start making a loss? Licensed cars must be stickered with the taxi company’s ID tag. I don’t want to have this for a number of reasons. I would also have to register as an independent entrepreneur, get a license from the Transport Ministry, which was free until this year, and insure my cab, although premiums are higher than usual. And that’s over and above the 25% cut I give to Yandex. I know lots of gypsy cabbies. Not a single one of them has bothered to get accreditation. It’s just bad business for them.”

To prevent the few accredited taxis from jacking up rates for Rostovians and fans, the Transport Ministry has established a single rate for the entire World Cup.

Leonid plans to spend the World Cup in Sochi. He says the transport system there is better, applying for a license is easier, and the city is generally better prepared after hosting the 2014 Winter Olympics.

“Who wants to sit in traffic jams driving back and forth to the stadium?” he grumbles.

Although the World Cup lasts only four weeks, Theater Square, which will house a fan zone that can accommodate 22,000 fans, was closed to car traffic and public transport on May 13 and will remain closed until July 21. In the mornings and evenings, buses are already stuck in traffic on Sholokhov Avenue. When the World Cup kicks off, share taxis (marshrutki) will be removed from Red Army Street. Officials have promised they will be replaced with new buses.

There are plans to show all the matches on giant screens, organize entertainment for fans, and open food courts on Theater Square. The fan zone is a few hundred meters from the ruins of an entire residential neighborhood, destroyed by fire last year.

The square itself is home of the Gorky Drama Theater, hence the square’s name. It is one of two Russian buildings whose models are exhibited in the Museum of Architecture in London. (The other is St. Basil’s Cathedral.) The late constructivist landmark resembles a stylized caterpillar tractor. Corbusier called it a “gem of Soviet architecture.” Unfortunately, the fan will not be able to see it. The theater could not be cleaned up in time for the World Cup and has been draped with several banners.

Rostov-on-Don-Maxim-Gorky-Drama-TheatreThe Maxim Gorky Drama Theater in Rostov-on-Don. Postcard image courtesy of Colnect

Painted Residents Greet Cossacks
The authorities promised to repair and reconstruct many historic buildings and entire streets in preparation for the 2018 World Cup, but with a few weeks left before the championship, it was clear they would run out time.

Residents of Stanislavsky Street, in the downtown, recount how workers have been laboring outside their houses round the clock, trying to finish their work not by June 1, as city officials had promised, but at least by June 14, when the World Cup kicks off. When you are in a hurry, mistakes are inevitable: a female pensioner was unable to exit her building because the door was blocked by paving slabs. Other houses wound up a meter lower than the newly beautified street, and residents have had to jury-rig stairways to the pavements.

Around fifty buildings in Rostov-on-Don’s historic center have been hung with giant photographs of the buildings or World Cup banners because they could not be repaired in time. Among them is the famous house of Baron Wrangel, where the leader of the Whites during the Russian Civil War spent his childhood and youth. The house is a neoclassical architectural landmark. The mansion was nationalized during the Soviet period and turned into a kindergarten. The kindergarten shut down in the nineties, and the building was abandoned. Over the years, it has become quite dilapidated and has been repeatedly vandalized, so it looks hideous.

But when only a few months remained until the World Cup, no one had any brighter idea than to drape the landmark with a picture.

2010_04_24_domvrangelyaThe Wrangel House in Rostov-on-Don. Photo courtesy of RostovNews.Net

The Rostov branch of the Russian Society for the Protection of Historical and Cultural Landmarks (VOOPIK) tried to persuade city officials a dilapidated Wrangel House would look better than a picture emblazoned on a tarp. They circulated a petition and sent a letter to Governor Vasily Golubev, all to no avail.

“We got a reply less than half a page long. It acknowledged receipt of our letter, but there had been an onsite meeting of a commission chaired by Deputy Governor Sergei Sidash. On the basis of arguments made by commission members, they had decided to drape it in banners,” says Alexander Kozhin, head of VOOPIK’s Rostov branch.

800px-Гостиница__Московская_The Moscow Hotel, in downtown Rostov-on-Don, before the 2007 fire. Photo courtesy of Wikimedia Commons

The same plight befell the Moscow Hotel, a nineteenth-century eclecticist building. In 2007, it was badly damaged in a fire and has been awaiting reconstruction ever since. The dilapidated Gorky Library (originally the Sagiyev Family Tenement House, an Art Nouveau landmark) is covered in scaffolding. It has been decided to demolish the Pavlenkova Tenement House, on long-suffering Stanislavsky Street, altogether.

sar-htosThe Sagiyev Family Tenement House aka the Gorky Library, in downtown Rostov-on-Don. Photo courtesy of voopiik-don.ru

 

1526621588_pavlenkovoyThe ruins of the Pavlenkova Tenement House, in downtown Rostov-on-Don. Photo courtesy of Rostov.ru

A few weeks before the start of the World Cup, images of a building on Sholokhov Avenue appeared in the news and social media. Happy residents peered from the windows: a fiddler holding his instrument, an artist at an easel, a girl blowing soap bubbles, a football fan wearing a Spartak FC scarf, and patriots with the Russian tricolor draped on their backs. The balconies are adorned with balloons and potted plants.

All of them were painted images on yet another banner covering up unfinished repairs.

The upcoming championship has not changed the life of Rostov-on-Don’s real residents all that much. Schoolchildren and university students started and finished their final exams earlier, so schools and universities would be closed when the World Cup kicked off. The old airport was shut down, replaced by the new Platov Airport outside the city. All political rallies and marches have been prohibited during the World Cup.

The police will not be alone in enforcing this and other prohibitions. In early May, Don Cossacks in Rostov announced that three hundred Cossacks, included mounted Cossacks, would be keeping the peace on the streets as “volunteers.” They have assured the public that, at their own behest, they would not engage in violence and would leave their whips at home. If the police, however, are breaking up a fight, the Cossacks will back them up. The volunteers in papakha hats will pay particular attention to LGBT fans.

TASS_1044980_673“Cossacks.” Photo courtesy of Russia Beyond

“If two men kiss at the World Cup, we will tell the police to check them out,” they said.

The first World Cup match in Rostov-on-Don kicks off on June 17. A total of five matches will be played on the left bank of the Don: four matches in the group stage and one match in the round of sixteen.

Translated by the Russian Reader

Overtaking America

Despicable but predictable. My heartfelt thanks to Mr. Shuvalov for finally having the guts to admit what has been obvious for years: that the Russian elites and mostly nonexistent Russian middle class are sick off their asses on catching up with and overtaking the specter of “America.” So, which side never stopped fighting the Cold War? The greedy mid-level KGB officers who have been running Russia for the last eighteen years. If you didn’t know that already, it means you’ve been looking in the wrong direction all this time. And to think this is what the “struggle against imperialism” has come to. Oh, and the VTsIOM “polling data” about “happiness,” cited at the end of this article, is total bullshit, yet another smelly burp from the well-funded belly of Russia’s rampant pollocracyTRR

slogan
Screenshot of the alleged slogan of the 19th World Festival of Youth and Students, currently underway in Sochi. Courtesy of the festival

Shuvalov: Russia’s Goal Is For Russians to Be Happier than Americans 
Fontanka.ru
October 18, 2017

By 2024, industrious Russians with higher educations will be able to catch up with and overtake abstract [sic] Americans in terms of happiness. Such were the horizons painted by First Deputy Prime Minister Igor Shuvalov at the 19th World Festival of Youth and Students on October 18 in Sochi.

“Goal number one is that, when the next political cycle [sic] is completed, in 2024, anyone who has a basic [sic] higher education and the ability to work would feel happier than in the United States,” said Shuvalov, according to Lenta.ru, as cited by RIA Novosti.

A presidential election is scheduled for 2024.

According to the Monitoring Center at RANEPA’s Institute of Social Sciences, nearly 45% of working Russians do not understand the purpose and meaning of the government’s economic policies. Only 47% of Russians have a sense of the government’s actions vis-à–vis the economy.

In August, the All-Russian Center for the Study of Public Opinion (VTsIOM) published the results of a poll, according to which approximately 84% of Russians consider themselves happy.

Earlier, in April, according to VTsIOM, the percentage of Russians who felt happy reached its highest level since 1990, amounting to 85%.

Translated by the Russian Reader. Thanks to Comrade Koganzon for the heads-up

Screenshot of the homepage of the 19th World Festival of Youth and Students, currently underway in Sochi, Russia.

If Harassing Jehovah’s Witnesses Were an Olympic Sport, Russia Would Win a Gold Medal

Cupolas of the Cossack Exaltation of the Holy Cross Cathedral, St. Petersburg, November 18, 2016. Photo by the Russian Reader
Cossack Exaltation of the Holy Cross Cathedral, St. Petersburg, November 18, 2016. Billboard in foreground reads, “The Pink Bunny, A Store for Fortifying the Family, Ligov Shopping Center.” Photo by the Russian Reader

Everyone shall be guaranteed the freedom of conscience, the freedom of religion, including the right to profess individually or together with other any religion or to profess no religion at all, to freely choose, possess and disseminate religious and other views and act according to them.
Constitution of the Russian Federation, Chapter 2, Article 28

Police Search Jehovah’s Witness Kingdom Halls in Smolensk and Sochi, Disrupting Services in Both Cases
SOVA Center
December 19, 2016

On December 17 in Sochi, police officers and Cossacks came to the Jehovah’s Witness Kingdom Hall, blocked all the doors, drove all the worshippers from the auditorium except two people, and conducted a search. During the search, a publication included in the Federal List of Extremist Literature was confiscated.

According to the worshippers, one of the official witnesses accompanying the police helped them knock down the gate.

On December 18 in Smolensk, police and prosecutors, accompanied by armed riot police, arrived at the Jehovah’s Witness Kingdom Hall, where about sixty people were assembled. A search was also conducted. During the search, an extremist pamphlet was discovered in the toilet.

According to the Jehovah’s Witnesses, the extremist literature was planted by those conducting the searches in both cases. In both cases, the worship services were disrupted.

In addition, on December 18, a search was carried out in a private home in Smolensk where Jehovah’s Witnesses live. According to them, the police officers were rude and used force against women. When one of the Jehovah’s Witnesses felt sick, the law enforcement officers kept them from summoning medics for a long time.

Translated by the Russian Reader

Nice Work If You Can Get It

Oleg Derispaska
Oleg Deripaska. Photo courtesy of deripaska.com

“I believe that it takes just 100 people to change a country for the better provided that these people are driven professionals capable of creating something new. I am sure that in Russia there are far more than 100 such people, so let’s join forces and work together.”
Oleg Deripaska

_________

Deripaska’s Company Releases Sales Figures for “Olympic” Apartments
Natalya Derbysheva
RBC
May 27, 2016

sochi-olympic village marina
Mockup of the Sochi Olympic Village’s Coastal Cluster. Photo: Andrei Golovanov and Sergei Kivrin/TASS

Oleg Deripaska’s company RogSibAl has sold 20% of the luxury apartments it built on the Black Sea coast in Sochi for the Winter Olympics. The company believes this is a good result. 

RogSibAl, a subsidiary of Oleg Deripaska’s Basic Element, built 2,700 luxury  apartments on the Black Sea coast for the 2014 Winter Olympics in Sochi. Athletes lived in the apartments during the competition. According to Vnesheconombank, the project’s budget was 25.3 billion rubles, 22.3 billion rubles of which RogSibAl borrowed from Vnesheconombank.

The coastal Olympic Village is now known as the Imereti Resort District. It consists of four quarters, the Coastal Quarter, the Maritime Quarter, the Park Quarter, and the Reserve Quarter. Apartments are available for purchase in all four quarters. The price per square meter ranges from 152,000 rubles to 195,00 rubles [approx. 2,070 euro to 2,650 euros per square meter—TRR].

Since the apartments went on sale in 2013, 20% of them have been sold, a Basic Element spokesman told RBC, meaning that over 500 apartments in all have been sold. Basic Element’s spokesman added that the company had sold 118 apartments from January to May 2016.  The company plans to have sold 350 apartments for a total area of 25,000 square meters on the year.

Basic Element has been renting out the unsold apartments. According to the company’s spokesperson, the rental demand for the 2016 summer season is 97–100%.

The sales figures are worse than what Basic Element had planned in 2011. Igor Yevtushevsky, RogSibAl’s general director, had then told Vedomosti that the company was planning to sell 50% of the apartments before the start of the Olympics, and the other half in 2014–2015.

Basic Element’s spokesman said it would be unfair to compare current sales figures with projections made in 2011.

“The project has undergone big changes,” he explained.

The company cites data from the MACON Realty Group, according to which 387 business- and luxury-class real estate transactions were concluded in Sochi from January to May 2016, meaning that the Imereti District’s share of this business was 23%.

The government has discussed the conditions of restructuring the loans issued by Vnesheconombank for building Olympic sites, RBC’s sources told it earlier this week. A federal official explained that Deripaska’s companies were in the most complicated circumstances in terms of loans, since the demand for apartments was not great.

Sochi Olympic Village. Photo courtesy of Nikita Kulachenkov
Sochi Olympic Village. Photo courtesy of Nikita Kulachenkov

Basic Element has not disclosed the figures of the income from its sales of the properties. Its spokesman did say, however, that all the proceeds were being wholly turned over to Vnesheconombank in repayment of the loan and that RogSibAl had been fulfilling all its obligations to the bank.

Given that sales usually begin at the design and construction stage of a property, 20% sales in the second year after a property has been operation is hardly satisfactory, argues Marina Udachina, director of the Institute for Innovations, Infrastructure and Investments. According to her, the situation is partly due to a slowdown in economic growth and a reduction in the demand for luxury properties.

__________

Nikita Kulachenkov
Facebook
May 27, 2016

Only 20% of the apartments in the Olympic Village have been sold in two years.

Here is what we wrote about this a month before the Games:

“The site is being built by oligarch Oleg Deripaska, one of the few private investors in the Olympics. Only he is building with public money. Twenty-two of the twenty-five billion rubles in the project’s budget has been secured with a loan from state-owned Vnesheconombank. Derispaska’s company is planning to pay back this money by selling the village as a residential complex after the Games. It will be hard for them to find buyers. A single bed in the village costs as much as a two-room flat in Moscow.”

Of course, the crisis, sanctions, and being “surrounded by enemies” have inevitably led to a drop in demand for fairly pricey holiday apartments. On the other hand, this was offset by the fact that demand was supposed to shift to the domestic market from Greece, Cyprus, Turkey, and other countries where housing had become almost twice as expensive for Russians.

As a result, sales did not take off, which is a pity. I know that after the Games a good person, familiar to a lot of my people on my wall, worked on the project.

We can also add to this news the latest about Sberbank, which after agonizing for a long time has today finally sold the Mountain Carousel ski resort on the installment plan to the former governor and current minister Tkachyov* and his young but quite talented son-in-law. The joke there is that Sberbank invested 25 billion rubles into Mountain Carousel, while Vnesheconombank loaned it 55 billion rubles. Vnesheconombank fiercely resisted the sale, because it is one thing when Sberbank is in hock to you to the tune of 55 billion rubles, and quite another when it is Tkachyov and family. Apparently, Gref is tougher and stronger than the moribund Vnesheconombank, although it does not make our lives any easier.

Since for some reason business has not been booming at nearly all the former Olympic sites, the government has authorized the repayment of Olympic loans over a period of 25 years at a reduced 5% interest rate. And to keep Vnesheconombank from kicking the bucket altogether, the Finance Ministry will give it another 150 billion rubles straight from our pockets.

I probably do not need to remind you of the total amount that we, the taxpayers of the Russian Federation, paid for the construction of all these “great power” bells and whistles.

P.S. I’m going to do a little populism practice. Anyone in Russia want a twenty-five-year mortgage at five-percent interest? Ask Tkachyov, Potanin, Deripaska, and Vekselberg “how.” )))

Translated by the Russian Reader. Thanks to Alexei Navalny for the heads-up. This post should be read in tandem with my post for May 25, 2016, “The Decline Has Gone Uphill.”

* On August 2, 2012, Tkachyov announced plans to deploy a paramilitary force of Cossacks in Krasnodar Krai, beginning September 2012, as vigilantes to discourage internal immigration by Muslim Russians. In a speech to police, he stated, “What you can’t do, the Cossacks can. We have no other way—we shall stamp it out, instill order; we shall demand paperwork and enforce migration policies.”

Source: Wikipedia, New York Times

Russian Trade Union Blues

f98cd1
“Peace, Labor, Putin.” The Federation of Independent Trade Unions of Russia (FNPR) has 22.7 million members, who annually pay out almost 68 billion rubles to fund their trade union associations. (The FNPR has 122 such affiliated organizations nationwide). At best, only 140 million rubles make it to Moscow. The rest stays at the local level. Photo courtesy of vestnikburi.com

An RBC Investigative Report: How Russian Trade Unions Make Money 
Vyacheslav Kozlov
RBC
April 29, 2016

The Federation of Independent Trade Unions of Russia (FNPR) will celebrate May Day with a march in support of workers. As RBC has found out, the budget of the country’s largest trade union organization runs in the billions of rubles, much of it earned from real estate it freely inherited from the Soviet Union. 

In February 2016, Crimea’s most famous resort got a new owner. The Foros Spa, right down the road from the residence where Soviet President Mikhail Gorbachev was held captive during the 1991 coup attempt, was purchased for 1.4 billion rubles by the Federation of Trade Unions of Tatarstan.

Even their bosses in Moscow could not understand where a little-known noncommercial organization from Kazan had got its hands on that kind of money.

“When we saw the news, we didn’t even reprint it at first. We called and checked whether it was true,” an employee at the FNPR’s central office told RBC. (The Federation of Trade Unions of Tatarstan is an affiliated member of FNPR.)

The folks in Kazan reassured the trade union bosses in Moscow. The organization, which is mainly funded by membership dues paid by workers, really did not have that kind of money. It had acted as a middleman in the purchase of Foros, getting the money from major regional companies.

“There are such companies there: KamAZ, Tatneft, petrochemical plants [part of the TAIF GroupRBC],” said FNPR leader Mikhail Shmakov, bending his fingers back as he listed off the companies.

Shmakov spoke with RBC in his office on Leninsky Prospekt, 42, in Moscow. In keeping with Soviet tradition, the building is even nowadays called the Trade Unions Palace of Labor.

foros
Ukrainian billionaire Igor Kolomoisky, who owned the property before the peninsula was annexed by Russia, could have insisted on imposing sanctions on the buyers of the famous Crimean spa Foros. The scheme for buying Foros, involving the Tatarstan trade unions, made the deal less risky, sources told RBC. The view, above, is of the government dacha Zarya (Dawn), where the coup plotters held Mikhail Gorbachev in 1991. Courtesy of Mikhail Pavlishak/TASS

Shmakov could not conceal his satisfaction with the deal, calling it “brilliant.” RBC’s source in the FNPR executive committee and another source, close to the Tatarstan government, said the scheme for buying Foros, involving trade union bosses, was employed so the real buyer would not end up on the sanctions lists of the European Union and the US.

“To act as a middleman in such deals you have to have good connections with the authorities and big business. They have to consider you one of their own. You have to be a loyal organization,” a source close to the FNPR leadership explained to RBC.

The FNPR has long been cooperating with the authorities and business. Heir to the All-Union Central Council of Trade Unions (VTsSPS), the federation is proud of the fact it is the largest labor union in Russia, with 122 affiliates and over 20 million members.

How does the country’s largest trade union organization make its money?

Budget
Despite its federal scale, the FNPR is an extremely closed organization. It does not publish financial statements.

“This information is available only to members of the executive committee, and even then documents containing specific figures are not distributed to everyone. Some are given documents without any figures,” said an employee in the central office.

RBC has obtained a document describing the FNPR’s budget in terms of percentages. From this document it follows that the federation has only two sources of income, membership dues and “other income,” a phrase that mainly conceals revenue from commercial operations.

shmakov
FNPR chair Mikhail Shmakov (pictured above) has remained at the helm of the country’s largest trade union organization for all 25 years of its existence. Photo courtesy of Oleg Yakovlev/RBC

The document reveals that membership dues make up 70% of the FNPR’s revenues, while “other income” amounts to 30%.

Expenses are more complicated. 40.5% is spent on organizational and business operations, and 46.6%, on subsidizing FNPR institutions. Six percent goes to the so-called solidarity fund (for holding protests, paying wages of workers during downtime on the job, and making one-time payments to members involved in work-related accidents), while another 6.3% pays for dues in the international organizations of which the FNPR is a member, and 0.4% is spent on maintaing the auditing commission. In other words, nearly 90% of expenses go towards maintaining the organization itself.

Shmakov confirmed the income percentages in conversation with RBC. (He said nothing about expenses.) In 2016, the FNPR’s budget was 200 million rubles, according to Shmakov. An RBC source close to the Kremlin, who was well acquainted with the operations of the trade unions, confirmed that the FNPR’s annual budget was comparatively small.

“A few years ago, it did not exceed one million dollars,” he said.

The amount looks strange when you consider the number of people paying membership dues nationwide. The income of FNPR’s various affiliated trade unions, from factory locals to central committees, is incomparably greater than the parent organization’s budget.

Membership dues in most Russian trade unions are one percent of wages. If we take the official membership figures (according to Shmakov, the FNPR has around 20.7 million dues-paying members, plus another three to four million students and pensioners who do not pay dues) and the national average monthly wage (according to Rosstat, it was 33,900 rubles in February 2016), the dues paid by all FNPR-affilated trade unions should come to approximately 5.7 billion rubles monthly or 67.9 billion rubles a year.

But not all that money makes it to Moscow.

“The money is spread around the entire organization,” said an employee in the central office.

Locals keep from fifty to ninety-five percent of collected dues, explained our source. The rest is split among central and regional organizations.

How are these billions of rubles spent?

Expenditures
“Exempt trade unionists” is the Soviet-era legal term for trade union employees, from executives to secretaries, who are exempt from working directly at a particular enterprise. Their salaries are usually paid by the trade union itself. Trade union association executives surveyed by RBC confirmed that up to half of an organization’s budget can go to paying exempted workers. For example, the Pskov Federation of Trade Unions spent nearly 30 million rubles of its 2015 budget of 66 million rubles on the salaries and bonuses of over sixty exempt employees, says the federation’s head, Ulyana Mikhailova.

RBC asked the FNPR to provide it with the number of exempt employees nationwide but our request was turned down. Open sources mention the number of elected trade union officials. According to a 2011 FNPR executive committee decision, there were 13,500 such officials.

union membership
How Union Membership Has Declined. [According to the graph, union membership in Russia has declined from 65 million in 1992 (the first full year of independence) to 20.7 million in 2016. – TRR.] Sources: RBC interview with Mikhail Shmakov; decisions of the FNPR executive committee; white paper edited by Sergei Khramov and Mikhail Delyagin. Inserted text reads: “On average, 24% of the able-bodied population, i.e., approximately 17.2 million people, admit they are trade union members, according to an October 2008 poll conducted by the Russian Public Opinion Research Center (VTsIOM).” Courtesy RBC

But this is only a small part of the trade union army. According to figures for 2011, there were 191,000 trade union locals in Russia.

“At least one exempt worker emerges in a local with no less than three hundred members,” said Yuri Milovidov, director of Proftsentr, which assists trade union activists. “By my calculations, at least a quarter of these locals have at least one trade union worker. Some have several. There are fifty to seventy thousand such workers countrywide.”

A source in the FNPR executive committee said there were fewer trade union employees, around forty thousand. But even if we take this figure at face value, it turns out that the FNPR is one of the country’s major employers. (By way of comparison, AvtoVAZ, Russia’s largest auto manufacturer, employed around fifty thousand people as of late 2015.)

According to the FNPR employees surveyed by RBC, the average monthly salary among trade union employees is around 25,000 rubles, a little lower than the national average. The payroll bill for professional trade unionists across the country thus might be as much as one billion rubles a month.

Known as the Labor Palace of Trade Unions since Soviet times, FNPR's headquarters on Leninsky Prospekt in Moscow is of the most well-known pieces of real estate managed by the federation. Photo courtesy of Oleg Yakovlev/RBC
Known as the Trade Unions Palace of Labor since Soviet times, the FNPR’s headquarters on Leninsky Prospekt in Moscow is of the most well-known pieces of real estate managed by the federation. Photo courtesy of Oleg Yakovlev/RBC

The exact number of employees in the FNPR central office is unknown. The federation declined to answer this question when asked by RBC. A source in the central office said there were no more than 120 employees. Another source said their salary was small but higher than the national average: around 60,000 to 70,000 rubles a month.

Shmakov declined to disclose his salary.

28 Kilometers from Moscow
In the village of Chigasovo, in an elite neighborhood on the Rublyovskoye Highway in the Moscow suburbs, there is a house and plot of land (516.2 square meters and 1,798 square meters large, respectively) owned by a Viktor Shmakov, which is the exact same name as that of Mikhail Shmakov’s son. The FNPR chair’s son does business. According to SPARK, he is the director of Art Mix LLC, which organizes celebrations and events. As ads on the real estate and property rentals website CIAN.ru indicate, several five-hundred-square-meter cottages sited on fifteen-acre plots in Chigasovo are valued at around 36 million rubles. Mikhail Shmakov forwarded our questions about the house and land’s ownership to the proprietor, as listed in the Unified State Register of Real Estates Rights and Transactions (EGPR).

The Russian Federation of Spas
The FNPR acquired property amid the turmoil of the early 1990s, when familiar institutions of Soviet power crumbled. It was then that the young trade union leader Mikhail Shmakov, previously employed as a rocket engineer, managed to gain standing among Russian leaders and head the new organization, which immediately declared itself the VTsSPS’s legal successor. In legal terms, its property was transferred to the FNPR in 1992 through a special agreement. This property is now the source of the “other income,” mentioned above, the revenues the trade unions generate from commercial operations.

The exact number of real estate properties and land plots that were donated to the FNPR is contained in the appendices to the 1992 agreement, which the federation keeps secret. During the twenty-five years of its existence, the agreement has never been published. (The FNPR also refused to provide a copy to RBC.)

Milovidov, who worked for the FNPR for many years, claimed that 2,582 properties were transferred to the federation: 678 health spas, 131 hotels, 568 stadiums, and over 500 Young Pioneer camps.  It is unclear how many of these properties are still managed by the federation, but informally, sources there said the trade unions had lost around sixty percent of the property belonging to the VTsSPS when the Soviet Union collapsed.

According to Profkurort, the main trade union tourist agency, the trade unions now run exactly 374 resorts (health spas, boarding houses, vacation retreats, and children’s summer camps) in sixty-five regions from the Russian Far East to Kaliningrad.

The FNPR’s most profitable properties are in the southern Russia and Moscow. The trade unions particularly cherish their properties in the Caucasian Mineral Waters area. Their health spas account for over a quarter of so-called bed capacity among all the resorts in the area. Annually, they can take in 160,000 guests.

“Shmakov personally handles the Caucasian Mineral Waters. It’s his project,” RBC’s source in the federation’s central office explained.

To manage all its properties in the Caucasian Mineral Waters area, the federation founded Spa Management (Holding) LLC in 2005, which runs twenty-two health spas, including balneo baths and mud baths, mineral water drinking rooms, three boiler plant companies, a kindergarten, a library, a repair and construction company, and a car and truck pool. The federation’s share in the holding is nearly 85%, while over 15% belongs to the Stavropol Territory Association of Trade Unions, also affiliated with the FNPR. In 2015, the holding’s total revenue was 5.4 billion rubles, and its net profit was 294 millions rubles, Yulia Korogodova, Spa Management’s director, told RBC.

The FNPR’s other claim to fame are its hotels and health spas in Sochi. (According to RBC’s calculations, the FNPR and its subsidiaries own twenty-six buildings and seven lots there.) Sochi was the site of the FNPR’s biggest project in recent years, the reconstruction of three hotels for the Winter Olympics.

“Everyone was surprised that Shmakov had decided to get involved in the reconstruction of Sochi along with billionaires Vladimir Potanin and Oleg Deripaska, and other big businessmen. The authorities set them the harsh task of finishing in time for the Olympics at all costs, and this led to the fact that the poor FNPR was almost among the first to deliver its sites,” a source close to the federation’s central office told RBC.

metallurg
Steelworker Spa in Sochi is one of three properties reconstructed by the FNPR for the 2014 Sochi Winter Olympics. The federation borrowed two billion rubles from Vnesheconombank to finance the work. The trade unions are now attempting to restructure their debt. Photo courtesy of PhotoXPress

The trade unions had no money of their own, said our source, so they took out a loan from state-owned Vnesheconombank, which was the main source of funding for the Olympic projects, another source close to the FNPR told RBC. Shmakov confirmed that there was a loan. RBC found out from Vnesheconombank that the funds had been allocated to three joint-stock companies: Adler Spa, Steelworker Clinical Spa, and Trade Union Spas (Svetlana Spa). These companies all manage trade union properties in Sochi.

According to Shmakov, the loan amounted to 1.5 billion rubles. Spa Management, however, clarified that 2 billion rubles had been borrowed. The total investment in the Olympic hotels was 2.7 billion rubles, according to Spa Management, although they did not explain the source of the additional 700 million rubles. Shmakov said the FNPR was forced to put up Adler Spa as collateral for the loan. He confirmed that all revenues from the reconstructed hotels now have to go towards paying off the loan. In the current circumstances, however, the FNPR would rather not have to pay. According to sources at Vnesheconombank, the FNPR has sent them a request to restructure the loan.

Vnesheconombank’s money was used to rebuild the Svetlana Health Resort as the Sea Galaxy Hotel Congress & Spa and renovate the Steelworker Spa and one wing of the Adler Spa. There are 690 beds in the 18-story Sea Galaxy. In high season, a standard single room, according to the hotel’s price list, costs 5,300 rubles a night. In 2014, Profkurorty (Svetlana Spa) JSC, which manages the reconstructed hotel, recorded revenues of nearly 197.3 million rubles and a net profit of over 178.6 million rubles.

The ownership of trade union real estate is extremely confusing and opaque. Without engaging in commercial operations itself, the FNPR has founded dozens of companies to manage its properties nationwide.  (The Krasnodar Territory Trade Unions Council alone has registered 74 subsidiaries at various times.) However, as analysis shows, many of the spa companies in the Caucasian Mineral Waters areas and Kuban are closed organizations: over thirty of them are closed joint-stock companies, while the rest are private legal entities. From 2010 to 2014, these companies earned nearly 45 billion rubles.

From One Funeral to the Next
In late June 2015, the latest memorial service took place in the House of the Unions on Bolshaya Dmitrovka in Moscow, a building that belongs to the trade unions. People came to pay their last respects to former Russian Prime Minister Yevgeny Primakov. Even President Putin attended the ceremony. Almost three weeks later, Alexander Bulgakov, perennial director of the House of Unions, was arrested by police investigators right in his office, next door to the State Duma.

The Investigative Committee reported that Bulgakov had been detained as he was receiving 308,000 rubles from the director of another commercial entity, House of the Unions Refreshments LLC. Allegedly, Bulgakov had extorted the money, which was ten percent of the cost of the banquets and receptions catered by House of the Unions Refreshments. A year later, Bulgakov was sentenced to four years in prison.

house of unions
The House of the Unions, adjacent to the State Duma building in Moscow, has long been considered the country’s primary venue for paying last respects to famous politicians and public figures. Along with the Trade Unions Palace of Labor, it is the most popular architectural landmark belonging to the trade unions. Photo courtesy of Wikipedia

An RBC source, close to the FNPR, did not rule out a link between the two events, the memorial service for Primakov and Bulgakov’s arrest.

The service’s organizer, the Presidential Property Management Directorate, was, allegedly, displeased with the original fee Bulgakov had asked for holding the ceremony, said the source. (According to the state procurements site, the event’s final cost was 1.222 million rubles.) Complaints against Bulgakov were made to law enforcement authorities. RBC’s source in the FNPR’s central office confirmed he had heard this hypothesis.

Shmakov also acknowledged he had heard the story about dissatisfaction with the price of the memorial service, but he said it was not confirmed in the end. According to him, when negotiating the arrangements for Primakov’s service, Bulgakov had quoted the usual rate for such an event.

“It all started with the memorial service for Shvetsova [former State Duma deputy and former Moscow deputy mayor Ludmila Shvetsova — RBC]. It cost four million rubles. Moscow city hall paid this money, because that is how much such events cost. It was this price that he [Bulgakov] offered,” Shmakov said now.

Like most of the trade union properties in the capital, the House of the Unions belongs to the Moscow Federation of Trade Unions (MFP), which is part of the FNPR. The MFP also owns the Izmailovo Hotel Complex, Krylatskoye Velodrome, Znamensky Brothers Olympic Center, Trud Swimming Pool, Sokolniki and Peredelkino Spas, and Planernaya Olympic Center in Khimki.

Izmailovo-Hotel
The Izmailovo Commercial and Hotel Complex in Moscow is trade union property like, for example, the Sputnik Hotel on Leninsky Prospekt. In contrast to the Sputnik, however, which is owned directly by the FNPR, the Moscow Federation of Trade Unions holds the controlling stake in the Izmailovo complex. Photo courtesy of top10hm.net

The most profitable asset in Moscow is the Izmailovo Hotel Complex. The Moscow Trade Unions Property Fund owns 75% of the shares in Izmailovo Commercial and Hotel Complex JSC, which manages the Gamma, Beta, Delta, and Vega buildings, while the FNPR holds a seven-percent share. (The remaining shares are owned by members of the board of directors.)

In 2014, the total revenue generated by the hotels in the Izmailovo holding was over 3.25 billion rubles, with a net profit of over 240 million rubles. The MFP wholly owns the Alpha Commercial and Hotel Complex, which manages one more of the Izmailovo hotels, which is not part of eponymous joint-stock company. In 2014, Alpha’s gross profits were over 770 million rubles; its net profits, over 33 million rubles.

The FNPR does not own so much property directly in Moscow. It owns the Trade Unions Palace of Labor on Leninsky Prospekt, where the organization has its central office; the nearby Sputnik Hotel; a motorpool near Kaluzhskaya subway station; the building of the Academy of Labor and Social Relations, in western Moscow; and its own tailor’s shop and primary care clinic.

At Public Expense
People who began their careers in Soviet times know the terrifying sounding word sotsstrakh (“social insurance”). These were payments made by the Social Insurance Fund (FSS), which was managed by the trade unions until the early 2000s. Sotsstrakh paid for children’s trips to Young Pioneer summer camps, and for workers and pensioners to go to health spas. Then the FSS was taken over by the state, but the health spas were left to the trade unions, providing them with yet another way of making money.

“When the state lacks enough of its own health spas to provide treatment for everyone who has a legal right to it, it refers people to trade union spas,” explained Nikolai Murashko, director of the FNPR’s Spa Directorate.

Judging by public procurement records, government contracts are a serious source of revenue for the trade unions. Over a period of six years, from 2010 to 2016, FNPR’s Resort Holding implemented government contracts worth more than 4.8 billion rubles. During the same period, the spas owned by the Krasnodar Territory Trade Unions Council sold holiday packages worth a total of approximately four billion rubles.

The FNPR’s affiliated trade unions also make money on government contracts. The MFP and its member organizations, for example, were awarded government contracts worth more than 617 million rubles during the same six-year period. The Federation of Trade Unions of Saint Petersburg and Leningrad Region earned 242 million rubles, while the FNPR earned 32 million rubles itself.

What does the FNPR give the state in return?

A Necessary Organization
Shmakov had no doubt the federation fulfilled its main functions: protecting labor rights and controlling the propertied classes. For sixteen years, the government has convened a special tripartite commission for regulating social and labor relations. Government ministers, employers (e.g., the Russian Union of Industrialists and Entrepreneurs and Opora Russia), and trade unions officials sit at the same table. A Kremlin official, however, warned against exaggerating the commission’s role.

“The minutes from some of the meetings are long, but that is where it ends: in the minutes. The state conducts its own policy,” he said.

He was echoed by someone who had been involved in the meetings.

“A trade union that, for example, is capable of getting people onto the streets can have a real impact on social and economic policy. Because of this, when it comes to the FNPR’s bread-and-butter issues, pensions, for example, the federation finds it quite hard to pound its fist on the table and say things will be the way it says.”

Rosstat’s data suggests that while in the 1990s there were several hundred or even thousands of labor strikes recorded annually, the numbers slumped to several strikes a year in the 2000s. One of the causes was the tightening of procedures for striking, as described in the new Labor Code, which took effect in 2002.  One of the authors of the new Labor Code was current State Duma deputy speaker Andrei Isayev, formerly a secretary of the FNPR.

“The law on strikes is prohibitive,” said Boris Kravchenko, chair of the Confederation of Labor of Russia (KTR).

The KTR, like a number of other independent trade unions, such as the locals at AvtoVAZ and the Ford plant outside Petersburg, emerged in the late 2000s as a counterweight to the the FNPR, which cooperates with the authorities.

The Kremlin appreciates the fact that the FNPR does not go on strike and cooperates with the United Russia Party. [Isayev is a member of the party’s general council — RBC.]

“The FNPR are constructive critics. The goal of certain other organizations is to get people protesting on the streets. The FNPR has a different stance: solving a problem before people take to the streets,” says an official in the presidential administration.

* * *

In May 2011, the FNPR was one of several organizations that joined together to establish the Russian People’s Front (ONF), headed by Vladimir Putin. The ONF is now the only public organization in Russia comparable to the FNPR in terms of numbers of regional offices. And, like the FNPR, the ONF does not disclose its budget.

With additional reporting by Mikhail Rybin, Anastasia Napalkova, Maria Zholobova, and Yevgenia Glazova.

Translated by the Russian Reader. Thanks to Sean Guillory for the heads-up. NB. Because of the sheer quantity of figures given in rubles in this article, I have foregone my usual practice of converting them into euros for ease of comprehension. Current and historical currency rate conversion tables, however, are eminently accessible on the web, so knock yourselves out. TRR

Sochi Opening Ceremony

Ilya Matveev

Common sense is based on a sense of measure, a sense of proportion. Common sense is simply impossible in Russia, because the very fact the Olympics are being held here does not jibe with any justice of “number and measure,” as Plato called it. Meaning, literally, there are the Olympics, and “there is nothing else to talk about.” The hospitals have no drugs, the countryside has no schools, roads and stores, the universities cannot pay salaries of more than 10,000 rubles [approx. 200 euros] a month, and the most widespread dwellings, after all these years, are shabby nine-storey prefabs, built forty years ago by authorities who still possessed a shred of conscience. If you work in a kindergarten you’re dirt poor. If you’re a pensioner, boil yourself buckwheat and ask at the shop for an eighth of a loaf of bread. And in the midst of all this there is the Olympics. No “discussion” whatsoever is possible here. It was hard to imagine that the renewed tradition of ancient sporting competitions would come to symbolize the total, final and irrevocable humiliation of absolutely all people in Russia.

Source: Facebook (with kind permission from the author)

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Sergei Loiko
Triumph of the Will

Every day Nina Toromonyan comes to feed her pets amid the ruins of her house in the center of Sochi.

sochi story

The house and 25-acre plot with a view of the sea were confiscated by force and the house demolished, ostensibly because they impeded construction of Kurortny Avenue.

Thirteen people lived in the house, three families. They received total compensation of five million rubles [approx 105,000 euros]. Masked riot police toting machine guns evicted them on October 23, 2013, although Kurortny Avenue had already been built two kilometers from Nina’s house.

Her grandfather was officially granted the plot in 1947 in recognition of his heroism in World War Two.

None of the three related families who lived there has been able to buy themselves a house or even an apartment in Sochi. Like vagabonds, they find shelter where they can.

No one touched the homes to the right and the left of the plot. Experts says someone had set their sights on Nina’s property and used Putin’s Olympics to grab it on the sly. In fact, the prices in Sochi are such that the compensation payment should have been no less than forty million rubles [approx. 845,000 euros] .

When the riot police were dragging the bawling women from the house, Nina’s nine-year-old grandson Grisha shouted, “Don’t shoot, don’t kill us!” Trying to calm him down, his mother took his hand and said, “Don’t be afraid, son. They’re just making a movie—about fascists.”

Source: Facebook

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Fontanka.Ru
Four LGBT Activists Detained on Vasilievsky Island 
February 7, 2014

Four gay activists were detained today on the Spit of Vasilievsky Island [in Petersburg] when they decided to take a picture with a banner on the way to the place where a protest action was planned.

The LGBT activists did not make it to Belinsky Bridge, where they had planned, according to a previously circulated press release, to unfurl the meters-long banner in support of Olympic values.

As Fontanka.Ru has learned, along the way the activists decided to take a picture on the Spit. However, before they could unfurl the banner, emblazoned with the slogan “Any form of discrimination . . . is incompatible with belonging to the Olympic Movement,” police officers arrived at the spot and detained them.

According to preliminary reports, among the detained is a young man and three young women, one of whom is pregnant. They are being taken to the 16th police precinct.

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Elena Kostyuchenko

Well, I’m home.

The short version is that during the four hours at Kitai-Gorod police station [in Moscow] Lynne Reid and Knicks Nemeni were handcuffed and kicked, Gleb Latnik was punched and pulled by the hair, and Ginger was put in a choke hold. I got off relatively easy: first, they suggested I “suck their cocks,” then they spat in my face.

Oh yeah, “You all should be burned” was among the remarks they made.

None of the policemen were wearing badges.

They enjoyed themselves. They confiscated our telephones. They sat there looking through our photos and leafing through our text messages.

A defense lawyer (an aide to MP Ilya Ponomaryov) was not let in to see us.

Then I was simply kicked out of the police station, with no arrest report, no nothing. “[He or she] sang a song to the tune of the Russian national anthem with distorted lyrics” was written in the arrest reports of the people who got them.

That’s not true. We sang our country’s national anthem, including the parts about “our free fatherland” and “you are unique in the world.”

We sang the national anthem all the way to the end.

It’s excellent singing the national anthem on Red Square. It’s nice on Red Square in general. We need to go there more often.

kostiuchenko-red square

Oh yes. When we left the cafe where we met before the protest, the police were already waiting for us. Dear LGBT activists, phones really are bugged, email really is scanned, and text messages are received not only by the people they’re sent to. Use alternative means of communication and take care of each other.

Love triumphs, both at the Olympics and just like that.

Source: Facebook