This is an audio transcript of the Behind the Money podcast episode: ‘The Russian Banker, Part 2: The Whistleblower’

Stefania Palma
We weren’t sure what to make of what Sergei told us. It seemed plausible that he could be targeted by Russian authorities, but it also seemed possible that this wasn’t the whole story.

Courtney Weaver
As we were reporting, it occurred to me that I’d actually covered the fall of Probusinessbank when I was working in Russia back in 2015. So I unearth some of my old stories and I found a quote from someone who said, “The situation at Probusinessbank was worse than people thought.” This was the first clue that there might be more here. So we started making lots of calls, trying to track down people who worked for and with Probusinessbank. Like this person . . . 

Teresa, via an actor
As a foreigner, we had our own suspicion that something was going on.

Courtney Weaver
This is a representative of one of the big foreign investors that had a large stake in Probusinessbank. She worked closely with Sergei and wanted us to protect her identity. So we’ll call her Teresa. We had an actor read her quotes. Teresa told us she asked Sergei and other bank leaders a lot of questions about parts of the bank’s annual report and its balance sheet, like suspiciously risky unsecured loans going through companies registered in Cyprus.

Teresa, via an actor
I’ve been too many years in Russia and with too many banks to see that, OK, when they start doing something, you know, what are the instruments that they’re using to cover up, like how you siphon money off from a bank’s balance sheet for your own use? You know, so when you start seeing very strange counterparties for midsized retail-oriented Russian bank, it just doesn’t make sense.

Courtney Weaver
But Teresa didn’t have the whole picture. She told us to talk to someone else. Someone who worked high up at the bank. He’d be able to tell us more. And he sure did. In fact, he told us he was responsible for Sergei’s fall.

[MUSIC PLAYING]

Stefania Palma
From the Financial Times, this is ‘The Russian Banker’. I’m Stefania Palma.

Courtney Weaver
And I’m Courtney Weaver.

Stefania Palma
Part Two: The Whistleblower.

Courtney Weaver
We quickly realised we definitely needed to track down this whistleblower. We hit a few dead ends. We ended up having quite curious calls and conversations, but then we finally got this person on the phone and we tell him we’re two reporters from the Financial Times and that we had been given these interviews with Sergei and that he told us that he had been politically persecuted in Russia because of his ties to Alexei Navalny.

. . . In Russia, that the charges against him were all made up.

Peter, via an actor
OK. He was the victim. Yeah, sure. 

Courtney Weaver
And that he . . . and then he was targeted because of his links to Alexei Navalny.

Peter, via an actor
(Laughter) It’s a joke. Sorry, yes.

Courtney Weaver
So that’s what we’re trying to figure out . . . 

And he just starts laughing and he says that’s not true.

Peter, via an actor
I don’t know how much I can tell you because I was the whistleblower.

[MUSIC PLAYING]

Courtney Weaver
Stefania and I are sitting together in my office and we just look at each other and our jaws just drop.

Stefania Palma
I think that at that point, even the mere existence of a whistleblower just raised the stakes of the story so much higher.

Courtney Weaver
Up until that point, we only had Sergei’s side of the story, and it just kind of felt like someone’s like knocking over the chessboard, you know? And all these pieces are going flying up in the air. Like, here was a totally different version of events that we hadn’t even considered. And then the whistleblower proceeds to tell us how he furthered Sergei’s downfall.

Stefania Palma
The whistleblower finally agreed to talk to us on the record, but only if an actor could disguise his voice. We’re going to call him Peter. Peter told us that given his position as a high-ranking executive at Probusinessbank, he had quite a lot of access to documents, but also means to look at material and information that many other people at the bank probably didn’t even know existed. And what he ended up discovering troubled him deeply. He decided to take an extraordinary step, which was to reach out to the Russian central bank and start to meet them secretly to share what he had found.

Peter, via an actor
The first time it was in a café. Other times it was in very odd places in the middle of the night, in remote places, even out of Moscow, in the forest.

Ivan, via an actor
He was extremely scared. He asked, “Was it safe to talk?” And I said, “Yes, it’s safe to talk.”

Courtney Weaver
This is the central banker. He didn’t want his name or his voice used either. So we’ll call him Ivan. And we’re using an actor for him as well.

Ivan, via an actor
He told that he had discovered and he had the understanding that the bank was involved in a massive fraud and the management knew that.

Stefania Palma
Peter told Ivan, the central banker, what he suspected: that there was a hole in the bank’s balance sheets, that the bank was posting losses on foreign exchange operations with counterparties in Cyprus, and that the money from some big loans was going to offshore shell companies that didn’t look legitimate. And the bank’s management also appeared to be double dipping, using some of the bank’s assets as collateral but not actually reporting this. So the bank was more leveraged than it appeared.

Peter, via an actor
It was fake. It was fake.

[MUSIC PLAYING]

Courtney Weaver
He just couldn’t see where the money went. Then around 2014, there was a liquidity squeeze in Russia. Russia had just invaded Crimea, pulled off the Sochi Olympics, and money was tight. Peter and other bank officials held meetings with their leader, Sergei.

Peter, via an actor
Leontiev himself was talking about covering some billions of roubles, which were pretty big sums, right, in dollars. It was something like 50 to 100mn or whatever that must be covered. People were not stupid. They didn’t want to ask because they knew. But they understood that something was going wrong.

Courtney Weaver
The bank catered to ordinary Russian businesses and depositors. And Peter says he thought they’d end up getting hurt. He also thought by coming forward, it would grant him some protection. But the central banker, Ivan, he couldn’t make any promises.

Ivan, via an actor
He asked me what I should do. And the first advice I told him was, “Please don’t sign anything anymore and bring us more, more documents, because we want to be sure.”

Courtney Weaver
Peter doesn’t want anyone to find out what he’s doing, but he has two employees that he trusts, and he asked them to start looking through the company’s IT system to try to find more documents to give to the central bank.

Peter, via an actor
I was assuming that the IT systems were not as secure as they should have been. If the IT systems were so secure, I think I would have been caught.

Courtney Weaver
These employees find things that Peter would not have been able to find on his own.

Peter, via an actor
And that’s the way some of the assets that I was looking for were looking more and more dubious. And I knew that I was going in the right direction on that.

Courtney Weaver
The central bank takes the information Peter gives them and uses it to dig into Probusinessbank.

Ivan, via an actor
It was shocking, I’d say, in terms of the size of the falsification.

[MUSIC PLAYING]

Sergei Leontiev
That’s completely untrue.

Stefania Palma
Sergei denies all of Peter and Ivan’s allegations.

Sergei Leontiev
The rest of the person who told you this lie we can forget. Because if he lies once, then the rest is the lie as well.

Stefania Palma
We spoke to Sergei several times about the whistleblower and his allegations. He, at different points, argued that perhaps the whistleblower just did not fully understand the bank’s operations, or that perhaps he had only been exposed to certain chunks of transactions and that therefore these incomplete pictures merely seemed suspicious.

Sergei Leontiev
This whistleblower don’t put too much on it, really. I will be even not interested in knowing his name.

[MUSIC PLAYING]

Stefania Palma
Sergei’s legal team argues that his version of events has actually been confirmed by several courts around the world. They also argue that Russia’s main strategy has been to extrapolate parts of the bank’s transactions, twist the truth, and show them as fraudulent. And according to Sergei’s legal team, that is the hardest thing to disprove.

Courtney Weaver
This whole story just makes me wonder what’s going on. On the one hand, it was 2015 — a time when Putin was consolidating power at home. He had just invaded Crimea and Russia was becoming more authoritarian. But the Russian central bank was really celebrated at that time by western investors, by economists. The central bank was cleaning up the banking sector, getting rid of a lot of banks that were bogged down in corruption and cronyism. A lot of people thought they were doing a good thing.

[MUSIC PLAYING]

Stefania Palma
There was someone else pushing for reform in Russia around this time: Alexei Navalny. And according to Sergei, it was his connections to Navalny that led Russian officials to target him and seized the bank. And later, this would become the crux of his asylum case. In recent years, Navalny has become Russia’s most prominent Kremlin critic. Today, he sits in a Russian jail in poor health. But before he became an opposition figure and a household name around the world, he was a blogger chronicling corruption.

Courtney Weaver
Back in 2011, right before that year’s parliamentary elections, Putin announces he’s coming back to power. And it kind of sets off this period of instability in Russia. People come out to protest in Moscow and other big cities, and no one really knows where the country is going. This is where Navalny kind of first comes on to the scene.

[CLIP OF RUSSIAN PROTESTERS]

The protests are joyful. There are people dancing, singing.

Slava Solodkiy
We are peaceful people. We are real people. You can see beautiful faces, smart faces, young faces across the road.

Courtney Weaver
Slava Solodkiy was Probusinessbank’s marketing guru at the time, and he also happened to be a big Navalny fan. And he took part in the protests.

Slava Solodkiy
Basically inspired not only by Navalny, but how beautiful we are. (laughter) I mean . . . 

Courtney Weaver
Just feels like this moment where the opposition movement — which until that point had really been on the fringes — seems to be coming into the mainstream. And there’s hope that there’s going to be this non-Putin future.

[MUSIC PLAYING]

Stefania Palma
When running the bank, Sergei would organise these big meetings, gathering all the business managers from the bank from all over the country. They would come together and listen to conversations with high-profile speakers. And so Slava Solodkiy has the idea of inviting Alexei Navalny to join one of these events. He puts the idea to Sergei, who says, “Sure, let’s do it.”

Slava Solodkiy
Then I just wrote to . . . so I remember it was some quite stupid email like navalny@gmail.com or something like that. He answered, “OK. Cool that I’m interesting for such guys like you. Let’s meet.” 

Courtney Weaver
So Navalny comes in and he gives this talk talking about corruption in Russian business and why it’s bad for the country’s economy. It’s not as political as some of his later speeches, but he gets a good reception. And later, Navalny and the bank, they start to think about how they can work together.

Slava Solodkiy
I created the idea of why not to launch Navalny card.

Courtney Weaver
Slava has this idea. He’s thinking about how a lot of cards give cash back. And what if the money actually went to Navalny’s anti-corruption fund? So people feel like they’re doing something good with their money.

Slava Solodkiy
You can use this 1 per cent from each purchase to donate to Navalny campaign.

[ADVERTISEMENT IN RUSSIAN PLAYING]

Courtney Weaver
They have some marketing material drawn up. Stuff that highlights Navalny’s activism in the anti-government protests, basically showing that there’s this appetite for change in Russia.

[ADVERTISEMENT IN RUSSIAN PLAYING] 

Courtney Weaver
Navalny starts to tease this card on social media, but he doesn’t reveal the bank’s name.

Slava Solodkiy
We thought that it’s risky, but it’s possible because there are many protests for sure. Police came and, like, people disappeared, but there were not many arrests at the time. They were not so hard times to raise your voice against Putin or against anyone else. Like, it’s risky, but it’s affordable risk.

Courtney Weaver
Then the whole venture, it starts to attract this bad publicity. It comes out that it’s Sergei’s bank behind the card. And the reaction from the Russian authorities isn’t great. Sergei’s business partner, he says he starts getting calls from people, people with connections to the government. And the message is pretty simple: kill the project. Pretty soon after that, Sergei and his business partner decide to pull the plug.

Sergei Leontiev
We’ve got the message that we’re being punished because of Navalny. That because I was supportive of the opposition. That was clear message. But that’s my problem. I just behave the way I think.

Stefania Palma
On the one hand, it is true that Sergei did approve the Navalny card projects. However, does this mean we should believe that it was the key reason why the Russian regime started going after him; that that is why he lost the bank license?

Courtney Weaver
If you think back to when Sergei was still in Russia, he didn’t actually attend those anti-government protests that Slava attended. He didn’t give any money to Navalny’s organisation when he was there. And when we spoke to a top official at Navalny’s organisation, that person hadn’t even heard of Sergei. At the same time, Sergei keeps telling us that he is convinced that this is the reason he was persecuted.

Sergei Leontiev
It’s just the narrative of all of the different theories and narratives, which is consistent with reality.

Courtney Weaver
Like a lot of things in Russia, it’s hard to know whether Sergei and the bank were targeted because of the Navalny card project. But in his asylum application, Sergei links his fate to Navalny’s, writing: “Navalny has been repeatedly arrested and convicted for the same unsubstantiated financial crimes that the Russian authorities have charged me with.”

Ivan, the central banker that Peter met with, he insists that Navalny had nothing to do with the raids.

Ivan, via an actor
The central bank was not aware at all about Navalny and Navalny involvement. Even if we knew at this time, it would change really nothing. Nothing at all. The victims here clearly are the depositors, the owners. They just took money of the depositors and they live for 10 years with that money.

Courtney Weaver
But this is Russia and Vladimir Putin. Kyle Parker, the congressional staffer who looked at Sergei’s case, he says he’s seen all this before.

Kyle Parker
I have had to revise my view on just how thin-skinned and petty some of these Russian officials can be. Where I have thought, “Surely they’re not going to go after that individual. Surely that’s too small of a . . . ” And nope, not too small. And they’re going after him.

Courtney Weaver
And Russia did go after Sergei. Next time, how Russia unleashed its playbook on Sergei around the world and how that bolstered his case for asylum.

[MUSIC PLAYING]

I’m Courtney Weaver.

Stefania Palma
And I’m Stefania Palma.

Courtney Weaver
We reported this series and it was produced by the Financial Times and Rhyme Media. At Rhyme Media, the producers are Lydia McMullen-Laird and Jennifer Sigl. Dan Bobkoff is the executive producer.

Stefania Palma
At the Financial Times, the executive producers are Cheryl Brumley and Topher Forhecz. Sound mixing by Breen Turner. Special thanks to Peter Spiegel, Marc Filippino, Alastair Mackie, Persis Love, Josh Gabert-Doyon and Tania Cherkas.

Copyright The Financial Times Limited 2024. All rights reserved.
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