Genuine Panama

Not many people actually wear Panama hats in Russia, but that doesn’t mean some very rich and well-connected Russians aren’t aware of how useful they can be …

That’s the wonderful thing about a genuine Panama hat – how flexible it is. When the glare gets too much, and you need something shady, you can take it out of the suitcase, unroll it, and hey presto! You’re incognito.

Unfortunately, for those Russians who wanted to keep their purloined wealth a secret, a Panama hat was no protection from the hackers who stole their financial details from the hard drive of Mossack Fonseca, and made it very public.

The world is outraged, but apparently not many Russians. Social networks, yes, seethed with commentary (not much different from their Western counterparts); and law enforcers and parliament largely kept quiet.

The Kremlin had the most difficult job: explaining how it is that approximately two billion US dollars from the biggest Russian corporations were paid into the offshore account of Sergei Roldugin, cellist and close friend of our beloved president.

Dmitry Peskov, Putin’s press secretary, gave the official line: “Although other countries and other leaders are mentioned in the inquiry, it is perfectly clear to us that the main goal of these smears was, and is, our president. Especially in the context of the upcoming parliamentary elections and, long-term, the presidential election in two years’ time.” Which perhaps unwittingly tells us how nervous they are in the Kremlin.

In any case, “the Panama Papers aren’t fundamentally about Russia,” said Elena Panfilova, Vice President of Transparency International. “The leaked documents are important primarily for countries that observe the rule of law and can take the appropriate legal measures. For countries without the rule of law, it’s important from the perspective simply of knowing. But there’s no reason to assume they’re going to run off to investigate everything.”

Political specialist Dmitry Oreshkin does not think that even the most convincing accusations of corruption addressed to the Kremlin will do much to shake up Russian society: “A significant part of the electorate, especially the Putin supporters, basically mistrust Western sources of information – because they are enemies – which discredit our beloved Putin. Secondly, attitudes to systemic corruption in Russia are quite different from those in the West: if the person in charge is doing his job, then it’s not unusual for him to take something for himself – when did the leadership in Russia not thieve? So there has been no crushing blow dealt to the reputation of the collective Putin. Disillusionment is more likely in Western public opinion, where there’s a much tougher attitude to corruption. Putin has many supporters in the West, especially those who have no time for America or Obama, and it is they who will be affected by these revelations.”

In other words, Putin has not so much been stitched up by the whole offshore affair as laid himself open: when Sergei Roldugin, his old friend, and godfather to his elder daughter, is effectively paid tribute by the country’s biggest corporation and businessmen, the shadow will automatically fall across Putin.

The newspaper Novaya Gazeta, which was part of the international investigation, had information about the special part played by Roldugin from someone who knows him: “In operational, sometimes secret, matters, Vladimir Putin relied on a circle of businessmen, mainly friends from the Petersburg stage of his life. But many showed themselves to be too greedy and lost his trust. The president needed someone he could trust unhesitatingly so he could use that person’s ‘share’ in some affair to suss out the real lie of the land.”

Professor Maksim Mironov of the Madrid IE Business School has spent a long time studying the ways Russian officials take and give bribes via offshore banks and companies. He is quite clear that Roldugin’s offshore were used for that very purpose: “No one except Putin could collect bribes on such a scale over such a period of time, and from such a wide circle of people.”

Dmitry Oreshkin does not think it at all unlikely that Putin would have received kickbacks from state contracts: “Why else would large structures so gladly have handed over money to a well-known cellist? Is it that they so value his friendship? His art! We’re talking about millions and tens of millions of dollars. I should like to see a cellist who was not connected with Vladimir Putin being paid a $750,000 cancellation fee for Rosneft shares.”

Which brings us to the possible endgame that the Panama Papers might produce. In the harsh glare of daylight, and with enough political will, perhaps there will be trials and sanctions; and that is when Putin will be at his most vulnerable, because we have arrived at the point where his courtiers are starting to think about what (or who) comes after him. They will be looking to save their own skins, and like every pack of jackals, they will abandon without a backward glance, the ailing and injured leader.