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Russia, Explained #53
Shady Covid drugs — Silencing Covid whistleblowers — Yanukovych eyes Crimea
This Week’s Highlights
Our investigation reveals a handful of Russian companies with ties to the state profiting off the sale of questionable Covid-19 drugs; we follow the pandemic mismanagement cascade to Crimea where the largest children’s camp battles an outbreak, but officials refuse to take any action; plus, we keep exposing Russian raiding racket set up by Ukraine’s fugitive president Viktor Yanukovych.
Want to get the full story? Click the links below for full-length articles in Russian.
Profiteering on Dodgy Covid-19 Drugs, Exposed
As the global hunt for a Covid-19 vaccine is still nowhere close to the finish line, in Russia, companies are already producing a small handful of drugs that claim to treat the virus. But our recent series of investigative reports expose the state-backed ‘cure’ to be a little more than a just repackaged version of a previously manufactured antiviral, and one that occasionally has dangerous side effects.
TOO EXPENSIVE.Russia already has three separate state-approved drugs that allegedly treat coronavirus: Coronavir, Avifavir, and Areplivir. The companies behind them are the pharmaceutical groups R-Pharm, Khimrar, and Promomed. They produce drugs in old Soviet factories and sell at exorbitant prices. Areplivir’s pack of 40 tablets costs over $150. Despite the hefty price, the pills flew off the country’s shelves that still battles a severe outbreak.
DANGEROUS AND LIKELY INEFFECTIVE.The active ingredient in all of these drugs is favipiravir, an antiviral medication produced in the United States and used in Japan to treat severe flu cases. It is a modified version of an older drug once used to treat tuberculosis and has never been registered in the US because some studies claimed it to be both ineffective and dangerous. However, the drug’s exclusivity license expired last year, which means that absolutely anyone can now produce favipiravir. Favipiravir is especially hazardous for pregnant women. One Russian doctor studying the drug also found that 2 out of every 40 patients who took favipiravir died.
STATE-LINKED COMPANIES PROFIT FROM SHADY COVID DRUGS. Take Khimrar, one of these Covid-drugs producers. It was founded in the 1990s by the late scientist Alexander Ivashchenko. The man fostered a network of ties with the government by building up close family friendships. Today, the company’s owners remain closely linked to the First Deputy Minister of Industry and Energy, Sergey Tsyb. But the relationship isn’t just based on a longstanding family friendship. Our investigation uncovers deep commercial and business interests connecting the pharmaceutical companies and ministry officials.
TRAIL LEADS UP TO KREMLIN.Our journalists also exposed state links of R-Pharm, the company that produces three generic versions of favipiravir. It is owned by Alexei Repik, one of Russia’s top 200 wealthiest businessmen, and a member of the President’s Economic Council.
“In Russia, some intelligent people realized that the coronavirus and a placebo were made for each other,” wrote our columnist Yulia Latynina, sarcastically explaining how unscrupulous businessmen are capitalizing on the virus.
BACKSTORY.These so-called ‘Covid cures’ aren’t the only questionable solutions to Covid-19 the Russian government is promoting. President Vladimir Putin announced in August that Russia officially has a vaccine for the virus. But the Gamaleya Institute, where the vaccine was developed, hasn’t published any research yet, and the vaccine hasn’t undergone phase three trials needed to determine its efficacy. Meanwhile, Novaya Gazeta analyzed the Russian government’s drug purchases and found that over 1 billion rubles have already been spent on ineffective drugs since the beginning of the year.
Read our full story about the drugs being sold as Covid-19 cures in Russia here and our investigation into who is profiting from these drugs here.
Mismanaged Second Covid-19 Wave, Explained
An instructor at the famous Soviet-era summer camp for kids in annexed Crimea has been trying to sound alarm bells about an outbreak of coronavirus there. At least 20 of the teachers have fallen ill at state-owned Artek. But as our special correspondent Irina Tumakova reports this week, the officials refused to take action and tried to silence the whistleblower instead.
INSTAGRAM CALL FOR HELP.Nina Lazareva, an instructor at the Artek, took to Instagram to inform the world about an uncontrolled Covid-19 outbreak ravaging through the camp. She warned that at least 20 teachers had coronavirus but kept mingling with the students. At least one teacher was already gravely ill, she claimed, but no one gave them medical assistance. The video got 9 million views.
“There's been a big tragedy here. Over 20 teachers have contracted the virus. At the time, Artek's administration isn't taking any action to protect the lives and health of the children and the teachers,” Lazareva says in the video.
BIG DENIALS. The officials at the camp called the viral cry for help ‘fake news’. When Novaya approached them for a comment, they deferred to an earlier published press release, which wasn’t very informative — it denied the outbreak, but didn’t provide any further details. Meanwhile, the camp’s administration has blocked Lazareva’s company-owned SIM card to keep her from contacting people.
SIX MONTHS IN, RUSSIAN OFFICIALS STILL IGNORE PANDEMIC THREATS. Lazareva kept posting Instagram videos that document inadequate living conditions of the teachers at the camp. Most of them keep sharing residential space with infected colleagues. “The last time I came into contact with a patient infected with Covid-19 was on September 18,” Lazareva clarified in a subsequent video. “This happened in one of the guest buildings, not in the school.”
MORE WHISTLEBLOWERS COME FORWARD.A math teacher at the camp corroborated Lazareva’s story in an interview with us. According to him, the staff at the camp started to contract the virus at the end of August. Many kept showing up for classes even while awaiting their Covid test results: "We had two big meetings in a closed and stuffy room with poor ventilation, the last of which was on August 28. In one of these meetings everyone gathered in a crowd,” he told us.
BACKSTORY.Russia has the third-largest Covid-19 outbreak in the world. Still, official statistics aren't always the most reliable indicators of the situation. Novaya Gazeta initially found relatively reliable data in only about ten regions, most of them with low infection rates. Our data analysis unit looked at other indicators to assess the severity of the epidemic, for example, whether the number of online searches for coronavirus-related symptoms has risen.
Read our full report on the covid-19 outbreak at Artek here.
Yanukovych Cronies in Crimea
When President Viktor Yanukovych fled Ukraine to neighboring Russia in 2014, he brought with him not only stolen riches, but his racket buddies, too. Now the “Yanukovych family,” a network of Yanukovych’s cronies, is expanding their operations in Russia. This week our special correspondent Irek Murtazin looks into the recent raid attempted by Ukraine’s disgraced president in Russian-annexed Crimea.
OLD TRICKS, NEW PLACE. Corporate raiding was one of the 'specialties' of Yanukovych's regime in Ukraine. He continues practicing it in Russia, too. Take Crimea. At the moment his mafia clan eyes a number of Crimean hotels and tries to bankroll them by claiming around $6.2 million in debt repayment. The story is linked to a court battle between Russian oligarch Alexander Lebedev (he is also Novaya's shareholder) and the Yanukovych clan. More importantly, it is a sign that Yanukovych might be trying to set up a safe haven for himself in the region.
WHO LEADS THE CRIMEAN PUSH.The company behind Yanukovych’s Crimea push is called Invest Factor LLC. It is an obscure shell entity established in a southern Russian region of Krasnodar just last October. It is officially founded and owned by the brothers Pavel Malik and Dmitry Murakhver. Both are Ukrainian citizens residing in Austria. As we’ve reported earlier, this EU country is a key operational base for the Yanukovych’s international racket.
SHELL COMPANIES. We started digging and found out that Dmitry Murakhver is the founder of around a dozen Russian legal entities, most of which are registered in annexed Crimea and the Krasnodar region. Some of the companies have almost no registered capital, while others have accounting documents reporting millions of dollars in turnover.
TOURISM TAKEOVER. Murakhver also has a longstanding interest in Crimea's hospitality sector. In recent years he took control of the luxury hotel Romanova in Evpatoria, and the Golden Resort and Severnaya Dvina hotels in Alushta. Novaya Gazeta discovered that Murakhver is involved in numerous court battles over hotel assets in Crimea through different legal entities, yet always represented by the same lawyer.
“The lawsuit filed by Invest-Factor LLC against the Alushta hotels looks like a kind of reconnaissance operation. They (the Yanukovych clan - ed.) are trying to find out if it's possible to consider Crimea a safe haven where the Donetsk mafia in exile can now take over the assets of Russian enterprises,” writes Novaya Gazeta’s special correspondent Irek Murtazin.
BACKSTORY. The Ukrainian president Viktor Yanukovych fled Ukraine after a mass murder of anti-government protesters during the pro-democratic Maidan Revolution in 2014. Since then he has been hiding in Russia and the Kremlin keeps recognizing him as a legitimate Ukrainian leader. Yanukovych supported both the Russian annexation of Ukraine and the Russian-backed separatism in Eastern Ukraine. Last year, a District Court in Ukraine sentenced him in absentee to 13 years in prison for high treason. Since fleeing to Russia, Yanukovych and his cronies have reportedly established an international racket based on hostile takeover, extortion and corporate raiding.
Read our full report on Yanukovych’s cronies in Crimea here.
Other Top-Stories Russia Has Been Reading
- HOW TO BE A MILLIONAIRE:One of the top stories that our audience has been reading this week looks into the salaries of some of the country’s most prominent television propagandists. The figures are truly extraordinary compared to the incomes of ordinary Russians. They range from $55,000 to $1,200,000 per year. Compare this to an average annual income of $5500 across the country to spot the gap. You can literally get rich from spreading Russian state propaganda on television across the country. And more wealth is coming — the Russian government has increased the amount of support it’s giving to stations like Channel 1 and Russia Today this year. RT will get around $360 million in the annual funding. By comparison, the country’s only independent channel TV Rain, which relies on individual subscriptions, has an annual budget of $3.6 million.
Thanks for reading!To keep up with Novaya Gazeta’s reporting throughout the week, you can follow us on Facebook, Twitter, Instagram, and Telegram. Our video content is available on Youtube and don’t forget to visit our website for the latest stories in Russian.
— The Novaya Gazeta Team
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