Russian President May Be Implicated In Money Laundering Investigation

by Tatiana Smolensky, Tax-News.com, Moscow

29 August 2001

An investigation into money laundering allegations by a Russian-German venture may have turned up an unsavoury connection with the Russian President Vladimir Putin, according to a recent report in Newsweek.

The St Petersburg Real Estate Holding Company, commonly known by its German acronym of SPAG, has denied any wrongdoing. However, it first came to the attention of US and European intelligence agencies two years ago when the German foreign intelligence service (BND) accused the company's co-founder, Rudolf Ritter, of laundering organised crime and drug proceeds following an investigation in Liechtenstein. Mr Ritter has since been indicted on money laundering charges by prosecutors in both Germany and Austria.

According to the Newsweek report, President Putin, who has cultivated the image of Russia's 'Mr Clean' sat on the advisory board of SPAG, and spent more time on its affairs until he became President than the Kremlin is now prepared to admit.

Despite a denial issued last year which stated that Putin had never 'worked for [the company] as an advisor', or been paid a salary, the recent investigation suggests that the President was in regular and sometimes close contact with the company's key Russian and foreign directors when he served as St Petersburg deputy mayor in the 1990s, and signed some important city documents for the company's benefit.

Fears about the international implications of these allegations seem to be well grounded, as Newsweek revealed that despite the country's frantic efforts to enact more stringent money laundering legislation in order to secure removal from the FATF blacklist, concerns about the Russian regime still remain in the US as a result of President Putin's connections with SPAG.

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