The greedy ‘needy’

Russia has handed out millions of rubles in housing subsidies to government officials who already own large amounts of real estate

Russian citizens in need of public housing often go decades without receiving assistance. Meanwhile, hundreds of government officials — including ministers, governors, and their deputies — have received tens of millions of rubles in housing subsidies since 2012, according to a joint report from iStories and Transparency International Russia. What’s more, the investigation uncovered that some of these officials deemed “needy” already owned multiple pieces of real estate. Meanwhile, others have used these funds to purchase additional properties or, by all appearances, haven’t used this government money to purchase any housing at all. Meduza summarizes the report’s findings here.

Since 2012, around 650 Russian officials have received subsidies for the purchase of housing — and, according to a joint report from iStories and Transparency International Russia, among them are high-ranking officials who one wouldn’t describe as “needy.” Indeed, some of them already owned expensive apartments, as well as country homes and dachas, and they’ve used these government funds to snap up extra pieces of real estate.

Housing subsidies for government officials were first introduced by Vladimir Putin in 2009, when he was serving as prime minister. These one-time subsidies were meant to provide housing support to government officials who have moved to another region or don’t own their own residence.

In order to receive a subsidy, a government official must qualify as “in need” of better housing conditions. This means that either their family (including a spouse and underage children) don’t have their own residence, or their current housing is inadequate. In practice, however, the officials who receive these subsidies often own large amounts of real estate and use the money to hang on to their properties in multiple regions.

Transparency International collated the data on housing subsidies allocated to federal and regional officials using its Declarator database, which contains information on the publicly declared income and property of Russian government officials.

According to the Declarator database, 650 Russian officials have received housing subsidies since 2012. Among them were 21 officials from the Economic Development Ministry, 16 from the Transport Ministry, and 13 from the Education Ministry. What’s more, iStories determined that 12 of these Economic Development Ministry workers and 14 of these Transport Ministry workers already owned other real estate during the period when they received housing subsidies.

For example, according to the investigation, Russia’s current Education Minister Sergey Kravtsov was the recipient of a generous housing subsidy back in 2016. At the time, he was heading up Russia’s Federal Service for Supervision in Education and Science (Rosobranadzor). The government gave him 16.6 million rubles ($233,000 by today’s exchange rate) to upgrade his housing — even though as of 2015, he and his wife owned five apartments and a dacha. (Apparently their housing conditions “worsened” in 2016 when they sold off two of the apartments to the tune of 18.2 million rubles — that’s the equivalent $255,000 today).

Also in 2016, housing subsidies were awarded to Sevastopol Governor Mikhail Razbozhayev (15 million rubles or $210,600), Deputy Culture Minister Alla Manilova (25 million rubles or $351,000), and Deputy Economic Development Minister Sergey Nazarov (17 million rubles or $238,500) — all of whom already owned multiple pieces of real estate.

In 2017, 30.8 million rubles ($432,000) was doled out to Deputy Sports Minister Odes Baysultanov, who is said to be the cousin of Chechen leader Ramzan Kadyrov. At the time, his property declaration included no less than nine residential buildings, two houses, and an apartment, all located in Chechnya.

In some cases, there’s no evidence that officials actually used the subsidies to purchase housing. According to Transparency International Russia general director Ilya Shumanov, this is one “corruption mechanism” built into the 2009 decree on the allocation of housing subsidies for government officials. Since there’s no designated period in which officials have to use the money to purchase real estate, they can simply park it in their bank accounts.

Asked about the iStories and Transparency International investigation during a press briefing on November 8, Kremlin spokesman Dmitry Peskov maintained that government officials with high levels of income “simply cannot use such support programs.” Subsidies, he said, are only for “those officials who don’t have the financial resources” to purchase housing. At the same time, Peskov admitted that he had not read the iStories report and wasn’t familiar with its findings.

None of the officials named in the report responded to iStories’s requests for comment. “Meanwhile, 2.5 million families are on the waiting list for improved housing conditions in Russia,” iStories underscored. “They will have to wait around 20 years for apartments, and the state is in no rush to help them.”

Original report by Roman Romanovsky (iStories) and Alexander Babilov (Transparency International Russia)

Summary by Eilish Hart

Cover Photo: Pixabay