THE BELL WEEKLY: Prigozhin’s legacy

Hello! This week we explore the fallout from Yevgeny Prigozhin’s dramatic death last Wednesday. In this newsletter, we’ll explore how a restaraunt owner from St. Petersburg became one of the most powerful businessmen in Russia, and what will happen to his businesses now he’s gone.

Who will inherit Prigozhin’s private army, businesses and “troll factory”?

The death of Wagner’s Yevgeny Prigozhin has effectively put an end to his business empire, which was underpinned by the services his mercenaries provided for both the Russian state and African dictators. That private army is no more, and his Russian businesses will not last more than a few months without their owner. But there are two questions remaining: who will inherit the African mineral deposits that his companies were developing, and who will take over the notorious “troll factory”?

What we know about Prigozhin’s death

As one of the few outspoken characters in a Russian society torched by the Kremlin, Prigozhin’s status in his homeland is bordering on mythical. Unsurprisingly, his death immediately sparked a storm of conspiracy theories. As soon as his plane crashed, channels linked to Prigozhin started writing that another of his business jets was flying over Moscow at the time of the crash, hinting that Prigozhin may still be alive. It soon became clear that this “second plane” had nothing to do with Prigozhin. In the hours after the crash, there were widespread rumors that the plane was downed by Moscow’s air defenses. However, the following day American military intelligence effectively ruled out that possibility.

As expected, there is nothing to confirm any of the theories. But tales of how Prigozhin was really alive and hiding in Africa were sufficiently widespread to inspire a meme of a parody “Nigerian Prince letter” from Prigozhin, asking for $400 “so he can return to Russia and expose the traitors.”

Yet reliable information about Prigozhin’s death remains scarce. All we know for sure is that his private jet suddenly lost altitude and crashed midway through a flight from Moscow to St. Petersburg. The most plausible explanation is that a bomb detonated on the plane, but there is no concrete evidence of this yet.

The prime suspect is even more obvious – President Vladimir Putin could hardly allow the man behind the “march on the Kremlin” to remain alive and free. After Prigozhin’s death, only the most apathetic people could fail to recall the president’s words that “betrayal is impossible to forgive.” However, one shouldn’t attach too much importance to those words. It seems that over almost 24 years in power, Putin has suspected different people in his circle of plotting against him on three separate occasions – yet all these supposed “conspirators” remain alive and well. Many occupy senior positions, although they do not have access to key decisions.

Moreover, we know that Putin allegedly attempted to poison Alexei Navalny, who was an outspoken critic of the president but not a traitor to him. It seems that Putin is happy to plot such covert assassinations. But these are guided by practical considerations rather than feelings of betrayal.

What will happen to Prigozhin’s assets?

Since he founded the Wagner Group (you can read more on that here), Prigozhin grew from the owner of a few St. Petersburg restaurants to a business magnate. However, his businesses, which relied on state contracts, are worth little without their owner.

• Prigozhin’s business was built on the Wagner Group itself. As a reward for its services, he won lucrative state contracts from Russian officials and concessions to develop gold, diamond and other mineral reserves from African dictators. But by the time of his death, little remained of Prigozhin's private army. Wagner’s main military base in the Krasnodar region was officially closed three days after the rebellion. Then, in July, Wagner handed over its heavy equipment to the Defense Ministry: more than 2,000 tanks, infantry combat vehicles, armored personnel carriers and artillery units, plus 2,500 tons of ammo. At the time of his mutiny, Prigozhin claimed to have had tens of thousands of men in his ranks. But hardly any remain - about 3,000 in Belarus, where Wagner’s supporters were allowed to flee after the rebellion, plus about 5,000 serving in Africa. The remaining soldiers signed up to the regular Russian army, or left.
• Prigozhin’s Russian business included multi-billion-dollar state contracts for his company Concord to supply food to the army, schools and other state operations. According to The Bell’s estimates, Concord’s annual revenues were worth about 150 billion rubles (more than $2 billion at 2022 rates). This roughly matches the statements of Dmitry Kiselyov, one of state TV’s leading propagandists, who claimed that over the 10-12 years of its operations the company earned 2 trillion rubles from the state budget. This side of the business continued working even after the rebellion: The Bell estimates that firms linked to Prigozhin won state contracts worth at least 3.6 billion rubles (about $40 million) since June 23. However, Prigozhin’s biggest contracts were already finding their way into “other hands,” according to the St. Petersburg news outlet Fontanka.
• The fate of Prigozhin’s Africa activities is more complex. Wagner has a significant military presence in at least four countries – the Central African Republic, Libya, Mali and Sudan. In each of these states, the governments have handed Prigozhin’s structures either mining rights (CAR, Mali) or money (Sudan, Libya) in return for military support. Russia’s Defense Ministry is now trying to secure Prigozhin’s military contracts for itself. Deputy Defense Minister Yunus-Bek Yevkurov, who was publicly humiliated by Prigozhin during the mutiny, has already flown to Syria and Libya in pursuit of this goal. He plans to visit other African countries soon. Russia’s military should try to reach agreements with Prigozhin’s African clients on military cooperation and on renegotiating his old contracts in its favor. But it is not clear how successful this diplomatic effort will be in the current circumstances. Prigozhin’s African business is a classic greenfield: right now it generates barely a tenth of the revenue of the rest of his Russian businesses But in future it could yield bigger profits: the Ndassima gold mine in CAR alone could be worth up to $1 billion a year.

What about Prigozhin’s media activity?

Perhaps the most interesting question is the future of Prigozhin’s media activities. In the mid-2010s, he pioneered the “fake news” industry and developed the key tactics of Russian propaganda – flood the information ecosystem with fakes to convince readers that there is no true story and that all sources are equally dishonest, sowing distrust in previously reliable titles. This technique made Prigozhin a globally known figure after his attempts to influence the 2016 U.S. presidential election.

• After the rebellion, Prigozhin’s media assets were paralyzed. Their offices were raided, and their tech was confiscated. At the time, staff at the notorious St. Petersburg troll factory, and other parts of Prigozhin’s Patriot media holdings, told The Bell they expected a swift change of ownership. The billionaire Yury Kovalchuk, Putin’s friend, was seen as the most likely buyer. But Prigozhin decided to liquidate his media empire himself. Within a week of the mutiny, he held a meeting with his directors where he instructed them to “put everything to the sword,” and to wipe out all traces of its  online presence. One by one, the publications in Prigozhin’s holdings announced their closure.
• Prigozhin’s media assets came in two parts – “news” publications and “troll factories'' that worked on social media. The Kremlin has no need of publications to spread fake news, nor their audiences, but the troll factories are undoubtedly of interest. The success of Prigozhin’s trolls has been widely copied, from pro-Kremlin PR agencies to the Defense Ministry’s press service, but so far none have managed to create a system as effective as Prigozhin, two sources told The Bell. From day one, the trolls had political aims: praise Putin and Moscow Mayor Sergei Sobyanin, criticize Alexei Navalny and the U.S., and defend the Syrian regime. At present, about 400 trolls work in the factories, writing tens of thousands of comments every day.
• The publications have closed, but the factories keep working, two sources within Prigozhin’s structures told The Bell not long before his death. The trolls’ work will continue to be financed by the presidential administration until the end of the year, one of them explained. The work involves promoting the Kremlin’s ideas on Facebook and Instagram, which are both banned in Russia, as well as on Twitter, TikTok and YouTube. Meanwhile, confusion has crept into the trolls’ work. They had instructions from Prigozhin’s team, but also from the presidential administration. These orders were increasingly contradictory. However, as one source told The Bell, “the trolls are, so to speak, performers – they don’t worry about what they are asked to do.” Outwardly, there are signs that the factory is working for the Kremlin. After Prigozhin’s plane crashed, the trolls actively began to promote the story that Putin had nothing to do with the Wagner boss’s death, Agenstvo noted.

Why the world should care

It’s important to keep track of who gets the assets of Prigozhin’s African companies and Russian state contracts. It will help us understand who benefits from the current redistribution of property in Russia. We already saw the first signs of this following the nationalization of Danone and Carlsberg’s Russian assets: one went to Chechnya’s Ramzan Kadyrov, the other to an old St. Petersburg friend of Putin’s.

In general, the story of Prigozhin as a businessman who used his influence to earn state money is not unusual in Russia. But the story of Prigozhin as a public figure is exceptional. For more than 20 years, the Kremlin has diligently destroyed any evidence of alternative voices in Russian politics. It was only the impact of a sudden military shock that enabled Prigozhin to flourish. Now, the Kremlin surely regrets this: while the mutiny, which exposed the limitations of Russia’s authorities, may not have direct consequences, it could easily inspire new conspirators.