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Grigory Pasko: Eye on Sochi, Part V

[Also see Part I, Part II, Part III, and Part IV of this series] sochi1119.jpgPart V: Special Operation «Olympiad» By Grigory Pasko, journalist The Olympic state corporation Just one week after Sochi was announced the capital of the 2014 Winter Olympiad, prices for “economy class” real estate had increased by 20%, and those for “elite class” by 30-33%. However, it is known that in certain districts, the construction of houses had already begun before it became known about the Olympic future of Sochi. Could this mean that those who began the construction knew about the city’s prospects? The sports status of Sochi has attracted the attention of foreign investors. In the number of potential ones is already numbered Mercury with a desire to build a little town in the settlement of Esta-Sadok in Krasnaya Polyana with a hotel and Armani, Prada, and Dolce&Gabbana boutiques. Willing to receive contracts are the Austrian companies Skidata, SUFAG, Doppelmayer, and Strabag.

stend1129.jpgOne of the myriad billboards for new real estate developments in Sochi – “Olimpik plaza”, a “business class complex” (photo by Grigory Pasko)Experts assess the yield from Sochi projects as higher than that from Moscow ones.And it would be strange if today’s masters of the country would give all this into the hands of foreigners.It is known that at the beginning of September of this year, Putin proposed creating a new state corporation «Olympstroy». State corporations are the beloved child of today’s Russian power. Their quantity has sharply increased precisely in recent years. There are now around ten of them. These are «Olympstroy», which we already know about; the Agency for the insuring of deposits; arms exporter «Rosoboronexport»; the Fund for assistance to the development of housing and public utilities; the VEB Bank of development; «Rosnanotekh»; «Rosatom», about which much has been written on this blog already; the United aviation construction company; the United shipbuilding company; and a state corporation in the process of creation, «Rostekhnologii». In the planning stages are the creation of state corporations for improving the image of Russia abroad; for the monopolization of the market for ethyl alcohol and others.stend-2.jpgChernavsky & Co. say “We’re building for the ages” (photo by Grigory Pasko)The mechanism for stealing the state’s money through such corporations is obvious. It was described in detail in «Novaya gazeta».It’s really quite simple in essence: budgetary money, as soon as it ends up in a state corporation, becomes a part of its charter capital and goes over into private ownership. At this, any monitoring stops, and nobody, not even the Chamber of Accounts, will be able to audit these structures. In whose hands, then, is the property? There is a very simple definition in Russian legislation: whoever’s got the property is the owner. And in the law «On non-commercial organizations», it is said: “A state corporation shall not be liable for the obligations of the Russian Federation, while the Russian Federation shall not be liable for the obligations of a state corporation, unless otherwise prescribed by the law prescribing the creation of the state corporation.”polyana-2.jpgConstruction of the Polyana restaurant-café near Sochi (photo by Grigory Pasko)It is known that the Sochi Olympiad, as intended by its organizers, is going to have to eat up 4.5 times more money than the previous one in Turin did. In order to create the appearance of a struggle for the safekeeping of state money, the Chamber of Accounts has decided to monitor the spending of the state corporation «Olympstroy». One of the auditors in charge of this direction will be the former vice-speaker of the State Duma, Vladimir Katrenko, who is famous precisely for having worked on the law on the creation of «Olympstroy».But the corporation is going to be accountable to the Chamber of Accounts only indirectly, inasmuch as the money that has gone for its funding will stop being state money. In the opinion of doctor of economic sciences Krichevsky, a de facto destatization will take place as well of the property that has been transferred to the balance sheet of «Olympstroy». Such a form did exist in the previous century in the West as well, but was rejected as far back as the 1980s because of inefficiency.planPuk1129.jpg«United Russia» billboard near Sochi – “Putin’s plan – the victory of Russia! 2 December elections!” (photo by Grigory Pasko)Here is the opinion of the director of the department of strategic analysis of the company FBK, Igor Nikolayev: “Always state/non-state ownership is determined by whose hands the property is found in, who is the owner. Realistically state corporations — this is private property. …Here is a definition from the All-Russia classifier of forms of ownership: “Private property is property belonging through the right of ownership to citizens or legal entities”. It turns out that all this is private property. We have created something that can not be understood with the mind….What is taking place is the uniting in one party of economic management and state functions. In the USSR, state institutions carried out economic management functions. This was bad, but it corresponded to that system. Now history is being repeated, but in the form of a farce.”I would think not only in the form of a farce, but also in the form of a big – in the scale of a huge country – swindle. Is it not a swindle when state funds flow into private hands?And those who have conducted the special operation under the code name «Olympiad-2014» no doubt count not only on investing state funds into the construction of Olympic and other facilities, but also on subsequently appropriating all of this “economy” for themselves. The first step towards legalization – the creation of a state corporation – has already been made.plakat-21129.jpgOn a closed newsstand – “I love Sochi 2014 Olimpic [sic] City” and the bear mascot of the 1980 Moscow Olympics saying “Hello Sochi! I’m back…” (photo by Grigory Pasko)