Armed Rebellion by Wagner Chief Prigozhin Underscores Erosion of Russian Legal System

By DASHA LITVINOVA Associated Press

10:46 JST, July 8, 2023

TALLINN, Estonia (AP) — Russia’s rebellious mercenary chief Yevgeny Prigozhin walked free from prosecution for his June 24 armed mutiny, and it’s still unclear if anyone will face any charges in the aborted uprising against military leaders or for the deaths of the soldiers killed in it.

Instead, a campaign is underway to portray the founder of the Wagner Group military contractor as driven by greed, with only hints of an investigation into whether he mishandled any of the billions of dollars in state funds.

Until last week, the Kremlin has never admitted to funding the company, with private mercenary groups technically illegal in Russia. But President Vladimir Putin revealed the state paid Wagner almost $1 billion in just one year, while Prigozhin’s other company earned about the same from government contracts. Putin wondered aloud whether any of it was stolen.

The developments around Prigozhin, who remains unpunished despite Putin’s labeling of his revolt as treason, underscored what St. Petersburg municipal council member Nikita Yuferev called the “gradual erosion of the legal system” in Russia.

Andrei Kolesnikov, senior fellow at the Carnegie Russia Eurasia Center, writing about the mutiny in a column, concluded: “The fabric of the state is disintegrating.”

After Putin indicated the government would probe financial irregularities by Prigozhin’s companies, state TV picked up that cue.

Commentator Dmitry Kiselyov said Wagner and another company owned by Prigozhin earned over 1.7 trillion rubles ($18.7 billion) through government contracts. Russian business daily Vedomosti cited a source close to the Defense Ministry as saying the earnings occurred between 2014 and 2023, years when both Prigozhin and Russian officials denied any ties to Wagner or even its existence.

“Big money made Prigozhin’s head spin,” Kiselyov said Sunday, saying the private army’s battlefield successes gave the mercenary boss “a feeling of impunity.”

One possible reason for Prigozhin’s mutiny, he said, was the Defense Ministry’s refusal to extend a multibillion-dollar contract with his legal catering company, Concord, to supply food to the army.

According to Kiselyov, Wagner earned 858 billion rubles from government contracts, while Concord earned another 845 billion. Those numbers were 10 times higher than what Putin gave last week.

Also unclear is whether Prigozhin will move to Belarus, Moscow’s closest ally, under a deal with the Kremlin to end the rebellion. Belarus’ authoritarian President Alexander Lukashenko said Thursday that Prigozhin was in Russia. The Kremlin refused comment.

Russian media on Wednesday — including popular state TV channel Russia 1 — showed video of searches of Prigozhin’s St. Petersburg offices and an opulent mansion he purportedly owned, complete with helipad and indoor swimming pool. They also showed a van with boxes of cash, as well as gold bars, wigs and weapons in the estate.

Russia 1 programs also alleged Prigozhin’s adult children amassed significant wealth through him and said the searches were a part of an ongoing investigation, contrasting his lifestyle to his anti-elite image.

“So it turns out, Yevgeny Prigozhin didn’t have enough and wanted more?” an anchor mused.

The goal of these revelations is “to smear the person, show he is an oligarch,” said Ilya Shumanov, Russia director for Transparency International, noting Prigozhin often made crude and plain-spoken attacks on the military leadership.

“And here they say that he’s a billionaire, and all this (money) isn’t his, it’s from the (state) budget, and he was sitting on it, and there would have been no private military company without the Defense Ministry,” Shumanov told The Associated Press.

The revelations raised questions of how the government could fund Wagner at all, given that laws prohibit mercenary activities, including funding and training private troops, that put the company in a legal gray area.

Until the rebellion, Putin always denied any link between the state and Prigozhin’s mercenaries. Kremlin spokesman Dmitry Peskov said as recently as 2020 that “there is no such thing as a private military company in Russian law,” and that he wasn’t aware of one.

By then, however, Wagner had sent its soldiers-for-hire to Syria and African countries as Russia expanded its global influence. By Prigozhin’s own admission, his forces also operated in eastern Ukraine to support a separatist uprising and later fought there after the 2022 invasion.

Asked Monday about the legality of state funding for Wagner, Peskov refused comment.

Shumanov told AP that Wagner was likely funded either with cash through shell companies, or through government contracts via Prigozhin’s other entities. How much is impossible to know, he noted, but added it was clear Putin’s remarks “gave a green light” to investigate the Wagner chief’s finances.

“I’d wait several weeks, and I think there will definitely be a reaction from the security forces in terms of Prigozhin and his economic activities,” he said.

The Kremlin’s message is that “we are dealing with a thief, a corrupt person, a thief and an oligarch, who went too far and stole money from the budget,” Shumanov said: “This is a very clear explanation, and no one needs to be sacrificed except for Prigozhin.”

Besides the finances, there is the matter of whether anyone will face prosecution for the deaths of the Russian troops who died at the hands of Prigozhin’s fighters.

Russian media reported about 15 military troops were killed during the rebellion as thousands of his soldiers seized a military headquarters in the southern city of Rostov-on-Don, then headed for Moscow, shooting down military helicopters and other aircraft on what Prigozhin called his “march of justice.”

At a June 27 Kremlin ceremony, Putin held a minute of silence to honor the dead, although he didn’t say how many were killed.

A deal struck with Prigozhin to end the uprising stipulated that the Federal Security Service, or FSB, would drop charges against him and his fighters of mounting a rebellion. That agreement went against Putin’s vow in a nationally televised address during the uprising to punish those behind it.

Instead, the Kremlin said Prigozhin agreed to end the mutiny and go to Belarus — a settlement that didn’t sit well with some.

Yuferev, the St. Petersburg municipal council member, filed a request with the Prosecutor General’s Office and the FSB, asking who would be punished for the rebellion.

Thousands of people “rolling toward Moscow on tanks shoot down aircraft, kill 15 troops. … The president speaks, says: ‘I will punish all of you, you are mutineers,’ the FSB launches a case -– and then nothing,” he added.

He said authorities must respond in 30 days, and while he doesn’t expect a substantive reply, he at least hopes to draw attention to this “erosion of the legal system of a state.”

“It is very interesting what they will write there, how they will justify people committing an armed rebellion,” Yuferev said.

Whether other charges will be filed is unclear. Prominent lawyer Ivan Pavlov told AP that mounting an armed rebellion is only one charge, and that Prigozhin may face others -– especially since deaths occurred — but so far, “no one is talking about it.”

Another topic drawing official silence is how the FSB — the successor agency to the feared KGB — failed to prevent the uprising, even though it routinely boasts of averting terrorist attacks, sabotage plots and other major crimes.

Russian security experts Andrei Soldatov and Irina Borogan said the FSB’s Rostov department “barricaded itself in its city headquarters,” while its military counterintelligence operatives assigned to Wagner ”did nothing.”

After Prigozhin announced his intentions June 23 to act against Russia’s defense minister, the FSB issued a statement urging Wagner fighters not to follow the rogue commander and for the troops “to detain him.”

Soldatov and Borogan wrote in a recent article that such a call for the mercenaries to take that action was odd, since only law enforcement agencies and security services like the FSB have the power to detain people.

Mark Galeotti of University College, London, an analyst on Russian security affairs, said the rebellion tested previous assumptions that Putin could count on his security forces.

“Now, the first time there’s a real challenge we actually see, security forces are willing to hang back and wait and see what happens,” he told AP.

So far, there has been no negative impact on the FSB, which Galeotti called “Putin’s favored institution,” having been a former member.

Asked by AP during a conference call with reporters Monday why the FSB failed to stop the mutiny, Kremlin spokesman Peskov refused comment, except to say that such services “perform their functions, they do it properly.”

He also noted Putin last week had praised soldiers, law enforcement and security officers and “expressed his gratitude” to them.