Vladimir Putin would like you to believe that he is a lowly civil servant with meager assets and a fairly modest government salary. According to his most recent financial disclosure, Putin's primary assets consist of a savings account with around $200k, a few Russian-made automobiles, and a 16,000-square-foot plot of land in the Moscow suburbs. He has proclaimed his net worth to be less than $250,000. As President of Russia his official salary is equal to around $187,000 per year. And while that salary is significantly lower than what his global Presidential counterparts earn, it's about 7 times higher than the average Russian household income.
With this modest financial portfolio in mind, you might be surprised to learn that Vladimir Putin is the purported owner of an unimaginably luxurious 190,000-square-foot mansion on a cliff above the Black Sea. A secret palace that sits on 170 acres. Reputed to be the largest private residence in Russia, the property features a 27,000 square-foot guest house, amphitheater, professional-caliber ice hockey rink, a Vegas-style casino, a nightclub with stripper poles, and an underground tasting room overlooking the water. Classical music plays around the clock at the property's vineyards. Bathrooms feature $850 Italian toilet brushes and $1,250 toilet paper holders. The value of this incredible palace?
$1.4 BILLION
There have been whispers, intrigue, and rumors about this palace for over a decade. A 2014 Reuters investigation broke it all down in amazing detail that's worth your time, but I'll touch on the key points here:
In 2010, a senior Kremlin official named Sergei Kolesnikov penned an open letter to then-President Dmitry Medvedev titled "Stop the Corruption." In the letter, Sergei complained that hundreds of millions of dollars of government funds that were supposed to be spent on medical equipment were actually being diverted to a construction project code-named "Project South." Kolesnikov alleged that Project South was a scheme being run by a couple of Putin cronies to build a private palace for their Presidential benefactor that was so lavish it would make Saudi Kings blush.
According to Kolesnikov, the man overseeing the project was Nikolay Shamalov. For most of his adult life, Shamalov worked as a humble dentist in Saint Petersburg. In the early 1990s, he gave up fixing teeth and became a mid-level government worker. From 1993 to 1995 he worked in the Committee on External Relations of the St. Petersburg Mayor's Office. His boss at this job?
Vladimir Putin
After Putin moved to Moscow to become President, Shamalov left his mid-level government job to work for the German medical equipment supplier Siemens Medical Systems. He was employed by Siemens as a medical device sales rep until 2008.
At some point along the way, Shamalov somehow managed to acquire a 10% ownership stake in a regional bank called Bank Rossiya. Not bad for a guy who was filling cavities a decade earlier.
Putin became President of Russia in 2000. By pure luck, around that time, Bank Rossiya decided to expand rapidly and soon became one of Moscow's biggest banks. By 2010, Shamalov's 10% stake in the bank was worth $500 million. Funny how that happens!
Another fun fact – Nikolay Shamalov's son Kirill was married to a woman named Katerina Tikhonova from 2013 to 2018. Katerina's father is…
Vladimir Putin
As a wedding gift, Kirill was reportedly allowed to pay $100 for a $380 million stake in a chemical company. Funny how that happens!
Kirill was also soon given an equity stake in a little bank called… you guessed it… Bank Rossiya. By 2016, Kirill Shamalov, the son of a humble dentist-turned-banker, had amassed a net worth of $1.2 billion. He was 34 years old at the time. Unfortunately, when he divorced Putin's daughter after reportedly being caught having an affair, Kirill was stripped of half his fortune. Could have been worse! I'm surprised he wasn't stripped of half his cranium by an assassin's bullet.
But we digress. Let's get back to Putin's palace.
So, how does one secretly fund the construction of a $1.4 billion palace? The alleged scheme was actually quite simple. Here's what allegedly went down, according to whistle-blower Sergei Kolesnikov, who now lives in exile in an unknown location away from Russia:
- After touring a bunch of hospitals and being disappointed by the equipment he saw, Putin ordered all Russian hospitals to be upgraded with the best medical equipment money can buy, no expense spared! Funds to buy the equipment would come from a mix of Russian taxpayer dollars and "donations" from oligarchs like Roman Abramovich, who not-so-subtly owed their fortunes to Putin.
- Putin puts two old friends in charge of procuring upgraded medical equipment for the hospitals.
- One of the friends is Nikolay Shamalav, the former dentist/medical equipment salesman turned banking tycoon.
- Shamalov arranges to buy tons of medical equipment from… you guessed it… Siemens Medical Equipment through a front company.
- After procuring the equipment, the front company then allegedly sells the equipment BACK TO RUSSIA at two or three times the amount they JUST PAID. The proceeds are then used to build a secret palace, sapping public funds and creating a windfall that is used to build a palace.
Pretty simple, actually? Almost brazen.
For the record, after the drone video we're about to show you went viral earlier this week (75 million views as of this writing), Putin's spokesperson told CNN:
"This is not true. There is no palace, he is not an owner of any palace. Those are all rumors and there were some disputes between the owners of those premises, but they really have no connection with President Putin."
Let's get to the drone video already!
Ok, so earlier this week, activists working with one of Putin's biggest political antagonists, Alexei Navalny, uploaded a two-hour video to YouTube that was essentially a colossal exposé of Putin's personal wealth. The two-hour video included the first-ever drone footage of Putin's palace.
You may have heard of Alexei. He's the guy who was hospitalized in August 2020 after being poisoned with a nerve agent during a flight. He had to be medically evacuated to Berlin and spent a month in a hospital. A week ago, Alexei returned to Moscow for the first time after being released from the hospital and was promptly arrested.
In the YouTube video, Navalny says:
"This is like a state within a state where one irremovable czar rules. It is built in a way that no one can reach it by land, sea or air, thousands of people working there are banned from bringing even a simple cell phone with a camera… but we will take a look inside."
I think I queued it up properly. If not, jump straight to the 29-minute mark for the drone video of the palace:
The whole video is subtitled and fascinating. They go into great detail about how Putin funds his lavish lifestyle in general. Down to how he allegedly bought a yacht and a mansion for a mistress.
Contrary to Putin's personal assessment of $250,000 for his net worth, it has been alleged that he is one of the richest people on the planet with a net worth in the hundreds of billions.
