nightingale can reveal details behind bumbling billionaire Konstantin Malofeev and his attempts to interfere with European politics. We investigate into his contacts in Europe and reveal the identity of Bellingcat’s mystery man “Yuri”.
There is no Russian separatism without Konstantin Malofeev, a name at the center of Russia’s annexation of Crimea and interference in Ukraine. In 2014 Malofeev was placed on a EU sanctions list for material support to the separatists in Eastern Ukraine. Since then Malofeev has been revealed as a central figure in similar failed insurgencies in Montenegro and Bulgaria. In Russia Malofeev has found himself at the center of a large number of failed businesses and the theft of $450m.
After multiple failed coups, businesses and backroom deals, you would think that the Kremlin might question their support of this reputational time-bomb. However, nightingale can exclusively reveal through our sources that Konstantin Malofeev is more active than ever setting his sites on the establishment of the EU that is trying to restrain him.
Should the EU be seeking to do more to stop or control Konstantin Malofeev and his activities? Why is Putin allowing Malofeev’s activities to continue and what does it say about Russia’s foreign policy goals?
nightingale takes a look in detail at who this man is and what his activities reveal…
The bumbling Billionaire
Malofeev, previously better known for his Orthodox activism, gained his vast wealth in Russia, during the early years of Putin’s presidency in finance and investment industry. From here Malofeev has branched out his business interests, with involvement globally in a range of businesses, many of which have seen countless problems and court cases.
After the sanctions Malofeev’s main investment firm Marshall Capital effectively ceased functioning. These days Malofeev has shifted focus and now uses the Tsargrad group to further his aims. According to one newspaper report, between 2013 and 2017 Malofeev’s companies recorded annual losses ranging from $7.6 to $25m. In 2012 his house and office were raided in connection with a case brought against Marshall Capital by the Russian state-bank VTB. The bank alleged it had provided a loan for a deal, in which Marshall Capital was involved as both the buyer and seller. This case was closed in 2015 when VTB agreed to an 83% discount on Malofeev’s debts and agreed to accept $100m payment.
This isn’t the only example of Malofeev’s questionable business practice. Another source of trouble for Malofeev in recent years has been repeated failed attempts to finance the purchase of a Bulgarian telecom company, Vivacom. A company linked to Malofeev, went on to make several costly unsuccessful attempts in court to declare the sale of the company null and void. This was an attempt to stop the sale to a company not controlled or owned by Malofeev.
In 2019, he was linked to the theft of $450m of cryptocurrency from the WEX cryptocurrency exchange. According to testimony from the administrator of the WEX, the FSB forced the handover of bitcoin wallets to them. According to police statements by the administrator of the WEX right before it collapsed, he was in talks with Malofeev who wanted to obtain the database of the WEX users and had previously negotiated a sale to Dmitri Kharchenko, a militia fighter in Eastern Ukraine, whose daughter is now the nomincal owner of the exchange. Audio recordings reportedly have Malofeev discussing the importance of bringing the exchange under the control of the Russian intelligence services.
Although Malofeev has lost the trust of cryptocurrency investors, he found investors for a new fund called the International Agency for Sovereign Development, who has recently signed deals with economically fragile, developing nations such as Niger, Guinea and the DRC. The fund sells itself as having the ability to attract investment into countries, which seems unlikely given Malofeev’s business record.
Not just a businessman
Malofeev doesn’t just have business problems but also political ones. Malofeev clearly has political ambitions inside Russia and his first attempt at getting political power was to announce his candidacy as a deputy for Smolensk Oblast in 2012. Despite being the winning candidate Malofeev was stuck off the ballot, when a Russian court decided he had been offering money for votes.
Outside Russia Malofeev has been more successful. HE is accused of facilitating a barrage of political interference. In the build up to the annexation of Crimea in 2014 Malofeev funded illegal armed groups, and liaised with his lieutenants on the ground. Further evidence of Malofeev’s involvement in Ukraine came when his assistant was caught sending a list of potential candidates to lead breakaway parts of the country to the office of Vladislav Surkov. Surkov was and is a Russian Presidential Aide. A criminal case was subsequently launched against Malofeev in Ukraine.
As a result of the growing case against Malofeev in Ukraine, it is believed that in late 2014 the Kremlin made a token gesture of restricting Malofeev’s geopolitical meddling to the Balkans. Even though countries in the Balkans like Serbia are supposed to be friends of Russia, so why would they need to use someone like Malofeev in these countries?
After this Malofeev was linked to political interference in Bosnia and Herzegovina for three hours before being expelled from the country. Bosnian press has linked Malofeev to the purchase of Republika Srpska bonds, in fact he tried to visit Milorad Dodik just 20 days before the transaction, which is when he was returned from the Banja Luka airport. In 2019 Nikolay Malinov a former Bulgarian lawmaker and head of the Bulgarian NGO, National Russophile Movement (NRO), was charged by Bulgarian authorities for spying for Russia. Prosecutors said Malinov was funded by Malofeev. Malinov wrote a secret report which talked of using Malofeev’s assistance to move Bulgaria towards Russia. As a result of this, Malofeev was banned from Bulgaria for 10 years.
According to online reports, Moscow tried to engineer a coup in Montenegro in 2016 to stop the country joining NATO. Malofeev was rumored to have been involved. Bellingcat research in March 2017 identified an email sent from Alexander Usovsky who had freelanced for Malofeev’s active measures campaign in 2014 and 2015. Usovsky proposed a new initiative in the email that would wash embarrassment from Malofeev’s name following the Montenegro failure. Malofeev was subsequently barred from entry into Montenegro which joined NATO in 2017. Another example of Malofeev’s best attempts giving absolutely no results.
Interference in Western Europe
Recently Malofeev’s interference seems to have spread to Western Europe. Our sources informed us that one key operative being used on the ground there is Mikhail Yakushev, who according to our research appears to have also worked for the Russian Ministry of Foreign Affairs. Yakushev has been seen linking up with European far-right groups such as the German Alternativ fur Deutschland (AfD), Freedom Party of Austria and the French Rally National. There have also been reports of Malofeev helping to facilitate two loans to Marine Le Pen’s party of two and nine million euros. One of the collaborators for one of Malofeev’s websites Katehon is in fact Marine Le Pen.
In 2019 Italian news outlet L’Espresso linked Malofeev’s oil company Avangard to the attempted funding of an Italian political party, La Liga. In Moscow in October 2018, four Russians and four Italians discussed a deal for an Italian political party to received Russian funding through an oil deal. Audio of this meeting leaked and one of the Italians present – Gianluca Savoini was heard saying the deal would mean that the Italians “can pay for a campaign”. This campaign is thought the be 2019 European parliamentary elections. Bellingcat identified all attendees of the meeting except one by the name of “Yuri”. nightingale have spoken to a source close to the deal who was able to provide more details on Yuri. At nightingale we believe that this is probably Yuri Burundukov. Avangard is a secretive organization and after the Bellingcat leaks a lot of information about them disappeared online, but we do know that Burundukov had an Avangard email address. Malofeev, as usual, was pulling the strings in the background, however his efforts were easily discovered and caused more embarrassment.
This October 2018 deal was the second deal after the first fell through, according to L’Espresso. The first also involved Avangard. Documents show that Avangard’s Director General Alexei Mustafinov, offered oil for sale to Savini in July 2018. Similar to Bulgaria, our sources have identified that Malofeev’s associates, including Yakushev, maintain contact with a number of Italian political actors even after this debacle. It could be that Yakushev and Malofeev still have intentions to interfere in Italy.
Malofeev in 2020 continues to take an interest in the German political scene, in particular AfD. Malofeev even commented to the french newspaper Le Figaro last year that he considers himself its Russian ambassador. Unsurprisingly there were numerous reported sightings last year of ex-AfD member Manuel Ochsenreiter at Malofeev’s Tsargrad hotel, with suggestions he was even living there.
So what?
It has been and will always remain difficult to understand the intentions of Putin and Russian leadership. It seems that in Russia the oligarchs try and do what Putin wants even if he hasn’t told them what that is. If they fail, they deny ties to the Kremlin, the oligarchs, as in case of Bulgaria and Montenegro are lightly punished and given opportunity to try again. If there’s a success, like in Ukraine, the success is that of the Kremlin and Russia’s leadership not of the individual. Their one and only success in Ukraine has provided them with the motivations to continue to act in this way.
We have seen Malofeev use his business to promote Russian interests from inside the EU democratic system. He is helping to finance divisive, far-right nationalist groups in Europe for the benefit of Russia’s strategic policy and we have seen him attempt to acquire companies for the benefit of the Russian security and intelligence agencies. This seem to be a win-win for the Kremlin; however, Malofeev has provided more embarrassment than benefit. His failed coups hurt Russia’s reputation abroad and make it more difficult for Russia to do business. Malofeev sees himself as an ambassador but the world sees him as a bumbling billionaire regularly failing to carry out the Kremlin’s tasks.
We at night hope that the EU increases sanctions and scrutiny on Malofeev and his associates. Increased sanctions can and will help prevent destabilizing activity across EUrope, especially necessary at a time of global upheaval.
In the meantime, can Russia’s reputation really suffer the repeated mistakes of the self-appointed ambassador. nightingale will keep investigating and let you know.
Our sources/ further reading:
https://espresso.repubblica.it/attualita/2019/02/28/news/3-million-for-salvini-1.332104
https://www.lefigaro.fr/international/2018/12/07/01003-20181207ARTFIG00367-russie-konstantin-malofeev-evangeliste-du-kremlin-et-apotre-des-populismes.php
