Corruption in construction
Deputy Defense Minister Timur Ivanov arrested on corruption allegations
Hello from the Bear Market Brief.
This week in the news:
On Tuesday, Deputy Defense Minister Timur Ivanov was arrested on suspicion of accepting particularly large bribes.
After months of delays in the House of Representatives, the U.S. finally authorized a foreign aid package that includes $61 billion for Ukraine.
According to an article by Novaya Gazeta, the Kremlin may be looking to replace Chechen leader Ramzan Kadyrov, whose health has rapidly deteriorated.
Ukrainian embassies and consulates will no longer provide consular services to Ukrainian men abroad aged 18 to 60.
— Sara Ashbaugh, Editor in Chief
Deputy Defense Minister arrested
Russian Deputy Defense Minister Timur Ivanov was arrested this week on suspicion of accepting bribes. He was accused under a provision of Russia’s criminal code (Article 290, Part 6) that applies to taking large bribes of at least 1 million rubles ($10,830). Two other people were also arrested in relation to the case: Sergei Borodin, a close associate of Ivanov, and Alexander Fomin, founder of the Olimpsitistroy construction company. According to Kommersant, Ivanov allegedly received kickbacks from Fomin in exchange for closing major Defense Ministry contracts with the Olimpsitistroy company. State media agency TASS reported that the total amount in bribes Ivanov received may have been worth more than 1 billion rubles ($10.8 million). If convicted, Ivanov, Borodin, and Fomin face 8-15 years in prison.
As Deputy Defense Minister, Ivanov was in charge of construction, housing, and property management for the Armed Forces, including projects in Russian-occupied Ukraine. Notably, Ivanov oversaw reconstruction efforts in occupied Mariupol, which was largely destroyed during the Russian invasion. In 2022, he was investigated by the Anti-Corruption Foundation (ACF), an organization founded by Alexei Navalny. The ACF exposed Ivanov’s immense personal wealth and accused him of “corruption schemes during construction in the territories of Ukraine occupied by Russia.”
The investigative media outlet Important Stories reported that Ivanov was actually arrested for treason, not for taking bribes. According to Important Stories, two anonymous sources close to the FSB said that the bribery charges were “for the public,” because a treason case involving the Deputy Defense Minister would cause a scandal. “No one would have detained him for corruption. Everyone there knew about this for a long time,” one of the sources said. High-profile officials are rarely prosecuted for corruption in Russia, making Ivanov’s arrest unusual. Kremlin spokesperson Dmitry Peskov denied that Ivanov’s arrest had anything to do with treason, however. “Here, of course, you need to rely on official information,” he said, adding, “And all these arguments are nothing more than speculation around this matter.” Ivanov’s lawyer also refuted the treason allegations.
Another reason for Ivanov’s arrest may be Defense Minister Sergei Shoigu’s declining influence within the Kremlin. An anonymous source told Forbes that Ivanov was “Shoigu’s man,” and an unnamed Defense Ministry official told The Moscow Times that Ivanov’s arrest says more about “Shoigu’s weakening position” than it does about Ivanov. “In all likelihood, this will not prevent Sergei Shoigu from retaining his position in the new government either. But his position will be noticeably weakened,” the official said.
Shortly following Ivanov’s arrest, he was officially removed from his post. His assets and bank accounts were seized, and Moscow’s Basmanny District Court remanded him to pre-trial detention for two months. Ivanov’s next court appearance will be sometime after June 23.
— Sara Ashbaugh
Deputy Defense Minister Timur Ivanov, 48, appeared in court on Wednesday after being arrested on suspicion of taking bribes. Ivanov was detained at his office on Tuesday and spent the night in a detention facility. The next day, Moscow’s Basmanny District Court remanded him to pre-trial detention for two months, a decision that his lawyers have already appealed. (photo: Moscow City Court's Press Office / Handout via REUTERS / File Photo)
Biden signs aid package for Ukraine, Israel, and Taiwan
On Wednesday, President Biden signed a $95 billion aid package that includes $61 billion in aid for Ukraine, $26 billion for Israel, and $8 billion for Taiwan. This comes after months of delays within the House of Representatives. Upon signing the aid package, Biden approved sending the first installment of $1 billion in military assistance to Ukraine. The package includes urgently needed air defense capabilities, artillery rounds, armored vehicles, and other weapons. President Biden said the U.S. would ship military assistance from its own stockpiles, and then replace it with new munitions manufactured in the country. “We’re helping Ukraine while at the same time, investing in our own industrial base, strengthening our own national security, supporting jobs in nearly 40 states all across America,” he said.
Overall, the bill is similar to the one originally proposed by the Senate. However, the House added several provisions, such as a requirement to send more American-made long-range ATACMS missiles to Kyiv and to seek repayment of $10 billion in economic assistance. As for the latter provision, the bill allows the President to forgive this loan as early as in 2026.
Ukrainian President Zelenskyy thanked American leadership in his daily address on Wednesday. “I am grateful to President Biden, the U.S. Congress, and all Americans who realize the need to take the wind out of Putin's sails, not to submit to him, as only then will there truly be fewer threats to freedom. Together we can make this happen. I thank all Americans working in the defense industry. I am grateful to each state that produces weapons that are now truly defending democracy and our way of life,” he said.
According to a senior Biden administration official, the U.S. secretly transferred a number of ATACMS to Ukraine back in March, while the aid package was still being debated. This allowed Ukraine to bomb a Russian military airfield in temporarily-occupied Crimea and attack Russian forces east of temporarily-occupied Berdyansk near the Sea of Azov.
— Lisa Noskova
Kadyrov reported unwell
Chechen leader Ramzan Kadyrov has been suffering from pancreatic necrosis for more than five years, according to an article published this week by independent news outlet Novaya Gazeta. Citing anonymous sources, Novaya Gazeta claims that Kadyrov was diagnosed with the life-threatening condition in January 2019. His health began to deteriorate rapidly in the spring of 2022, resulting in kidney failure and fluid build-up in his lungs. According to the article, he undergoes regular treatment, including surgeries, at least twice a year at the Moscow Central Clinical Hospital. This information has not been independently verified.
There have been persistent rumors about Kadyrov’s ill health for several years, despite the Kremlin’s attempts to dispel them with PR campaigns featuring him alive and well. However, according to Novaya Gazeta, the government is also working on a succession plan to replace the Chechen leader. Novaya Gazeta claims that the Kremlin may be eyeing Major General Apti Alaudinov, Commander of the Chechen volunteer unit Akhmat (which absorbed some of the Wagner Group after Yevgeny Prigozhin’s failed mutiny), to take Kadyrov’s place. Putin recently appointed Alaudinov as deputy at the Main Directorate for Military and Political Work at the Defense Ministry, and Alaudinov attended the 21st Congress of the United Russia party last year. Some experts are skeptical of Novaya Gazeta’s analysis, however, pointing out that Kadyrov is expected to be succeeded by one of his children. Chechen human rights lawyer Abubakar Yangulbaev believes that, even if Alaudinov did replace Kadyrov, it would only be to “temporarily guard the seat” until Kadyrov’s son could take power.
Just a few hours after Novaya Gazeta’s article was published, Kadyrov posted several videos of himself on social media. In one video, Kadyrov can be seen discussing Chechnya’s role in the war on Ukraine. In another, he’s stretching and lifting weights at the gym. “A busy day ended with training and positivity,” the caption reads. Neither Kadyrov nor other officials have publicly commented on Novaya Gazeta’s reporting.
— Sara Ashbaugh
A major television tower in the Ukrainian city of Kharkiv was struck by a Russian Kh-59 missile on Monday. Regional governor Oleg Sinegubov reported that there were no casualties, but television broadcasting was interrupted. The tower has been damaged before, in March 2022, but it was restored to working condition. However, Monday’s strike collapsed the entire upper part of the structure, making it unlikely to be repaired anytime soon. Kharkiv has experienced increasingly frequent shelling over the past few weeks, as Russia takes advantage of Ukraine’s shortage of air defense systems. (photo: BBC)
Ukraine suspends consular services abroad for men of conscription age
Following the adoption of the mobilization law, Ukrainian embassies and consulates announced that they no longer accept new applications for consular services for Ukrainian men aged 18 to 60, “with the exception of applications for registration of identity cards for return to Ukraine.” Passports will only be issued at migration service offices in Ukraine from now on, and the service of sending passports abroad has also been suspended. Ukraine’s Minister of Foreign Affairs Dmytro Kuleba commented on X that the Ministry is working to provide further guidance to men aged 18 to 60 on procedures to receive services at the consulates and embassies. “Staying abroad does not relieve a citizen of his or her duties to the Homeland. That is why yesterday I ordered measures to restore fair attitudes toward men of conscription age in Ukraine and abroad. This will be fair,” he posted.
In response to this, Polish Defense Minister Wladyslaw Kosiniak-Kamysz said that Poland is ready to help Ukraine bring its men back. “I think many Poles are outraged when they see young Ukrainian men in hotels and cafes, and they hear how much effort we have to make to help Ukraine. However, the form of assistance [Poland provides] depends on the Ukrainian side,” Kosiniak-Kamysz said. Lithuanian Minister of Defense Laurynas Kasčiūnas followed suit and commented that the country is also ready to help Ukraine. “Of course, no one is going to grab them and transport them back to Ukraine—this will not happen. But these persons can be restricted in terms of social payments, work permits, any other paperwork—these are options, as I hear from the Polish side. So let’s wait and see what option they come up with, maybe it will be suitable for Lithuania as well,” he added.
— Lisa Noskova
On the Podcast
The Bear Market Brief goes nuclear! Andrey Baklitskiy dropped by to discuss all of Russia’s strategic red lines, what the introduction of hypersonic weapons means for global security, and more.
Quickfire
On Wednesday, Ukrainian drones struck several oil facilities in western Russia. The Russian Defense Ministry reported downing eight drones over four regions—Belgorod, Voronezh, Smolensk, and Kursk—but local sources reported attacks in Lipetsk as well. According to RBC-Ukraine, SBU drones hit two oil depots in Smolensk, resulting in powerful explosions, massive fires, and evacuations of facility personnel. Local Telegram channels also posted videos of fires in Smolensk. The head of the Smolensk region, Vasily Anokhin, said that any fires were extinguished by the Emergency Situations Ministry and no one was hurt. Ukraine has stepped up its attacks on Russian energy infrastructure in recent weeks. “These facilities are—and will remain—absolutely legitimate targets,” an anonymous Ukrainian source told The Moscow Times.
The Russian Book Union (RBU), a group of Russian publishers and libraries, announced the launch of an expert council to evaluate books for “compliance with legislation.” According to Vedomosti, this advisory body includes representatives of Roskomnadzor (the Russian federal media agency) as well as various historical societies and spiritual groups, such as the Russian Orthodox Church. While the final decision about which books to sell remains with publishers, the expert council’s recommendations have already caused AST, one of Russia’s largest publishers, to pull certain books for containing “LGBT propaganda.” AST stopped selling Heritage by Vladimir Sorokin, The House at the End of the World by Michael Cunningham, and Giovanni’s Room by James Baldwin, among others.
Polish Prime Minister Donald Tusk announced that the perpetrators of the attack on Leonid Volkov have been detained in Poland. “A Belarusian working for the Russians who ordered two Poles to assassinate Navalny's associate—detained. The attackers are also already in custody,” Tusk posted on X last Friday. “There will be no leniency for collaborators of the Russian services,” he added. Volkov was attacked on March 12 and beaten with a hammer near his home in Vilnius, Lithuania. The identity of one of the suspects, Polish citizen Grzegorz Dashkowski, was reported to Polish authorities by journalists Roman Dobrokhotov and Hristo Grozev of The Insider. Lithuanian President Gitanas Nauseda thanked Poland for its “excellent job” apprehending the suspects. In response to the news, Volkov thanked the Lithuanian police for their hard work. “Well, we’ll find out the details soon. I can’t wait!” he posted on X.
— Sara Ashbaugh