THE BELL WEEKLY: Navalny aides accused of legitimizing fraudsters

Hello! This week we look at another scandal that has thrown yet more divisions into Russia’s fraught opposition. We also look at a round of tech layoffs that has spooked Russians working abroad and a Russian opposition figure killed while fighting for Ukraine.

‘Reputation whitewashing’ scandal rocks Russian opposition

Yet another scandal is tearing the Russian opposition apart. This time, the Anti-Corruption Foundation (FBK), set up by the late Alexei Navalny, is under fire. Maxim Katz, a former municipal deputy turned popular YouTuber, released an investigation that accuses the foundation of close ties with fugitive Russian bankers and alleged that the organization is receiving funds from people who are accused of fraud.

• Katz’s video is dedicated to Alexander Zheleznyak and Sergei Leontiev, the former co-founders of Probusinessbank. In the 2010s, the bank ranked 51st in Russia in terms of its assets, but it was stripped of its license by the Central Bank in 2015 and later filed for bankruptcy. When checking the bank’s financial situation, the regulator found large-scale operations to withdraw assets and losses caused by the bank’s management, estimated to run into hundreds of millions of dollars. In 2017, Zheleznyak and Leontiev, who fled Russia as soon as Probusinessbank hit trouble, were arrested in absentia. 
• In his investigation, Katz leaned heavily on the long-established facts of the Probusinessbank case, adding in some previously unpublished documents. Katz got these from a group of former depositors, led by Nerses Grigoryan, who are trying to sue to recover their money. The main allegation is that Zheleznyak and Leontiev stole billions  from depositors in Probusinessbank and then fled Russia. Once in the West, they reinvented themselves as entrepreneurs persecuted because of their criticisms of Putin’s regime.
• Zheleznyak and Leontiev repeatedly claimed that their troubles with the authorities began after 2012 following an attempt to launch a bank cardfrom which 1% of purchases would be transferred to Navalny’s Anti-Corruption Foundation — at the bank’s expense rather than the cardholder’s. There were talks about releasing the card, but it never saw the light of day. Zheleznyak and Leontiev allegedly had to abandon the idea amid pressure from the government and the Central Bank. Katz disputes this account, saying that there were no visible sanctions from the authorities at the time. Later, Probusinessbank was entrusted with rehabilitating a bank that ran into problems and Zheleznyak was even presented with a state award and worked on the State Duma’s expert council on security and combating corruption.
• Zheleznyak and Leontiev have played a noticeable role in the Anti-Corruption Foundation from abroad in recent years. Katz alleges they have used it to try to whitewash their reputations. Zheleznyak was the founder of the group’s legal entity in the United States and signsimportant documents on its behalf each month, while Leontiev makes a monthly donation of $20,000. 
• After the investigation was released, the Anti-Corruption Foundation’s leading figures did not comment on the substance of the allegations and called for their followers to wait for a more “detailed response” to follow. Chair Maria Pevchikh complained that “we will have to do this to the detriment of our real work.” Leonid Volkov, one of its directors who was last year embroiled in a scandal over issuing a letter in support of sanctioned Russian oligarchs, dismissed all claims of “whitewashing.”
• Mikhail Khodorkovsky, former oil magnate turned opposition figure who is also embroiled in a row with the Anti-Corruption Foundation over separate allegations, said that he was shocked at the reaction from the group and its failure to give a detailed response. “When an outrageous situation becomes public it raises the question of the need for greater transparency in the funding of opposition forces and the compliance of their activities with Western legal standards,” he said. 

Why the world should care:

After the war in Ukraine and especially after the death of Alexei Navalny, there were great hopes for unity among the opposition in exile. This latest scandal shows yet again that this is unlikely to happen — at least in the foreseeable future. For now, it seems that key figures and groups are more interested in fighting their own turf wars than joining a collective struggle against the Putin regime.

Mass layoff of Russian IT staff spooks emigrants

A round of mass layoffs at ABBYY, the IT company founded by David Yang, a businessman with Russian roots, was one of the big stories in the Russian business world last week. The firings affected only the offices in Cyprus, Serbia and Hungary. Russian citizens were featured heavily among those who were dismissed, according to former employees.

• ABBYY isn’t even a Russian-born company, but rather a Soviet one. David Yang, born in Yerevan to a Chinese father and an Armenian mother, set it up in 1989 while studying at the prestigious Moscow State Institute of Physics and Technology. The company’s first products were the ABBYY FineReader text recognition system and the ABBYY Lingvo electronic dictionary. Today the company is still making products for document processing, now with the help of AI, and also offers services to analyze and optimize business processes. For many years ABBYY maintained a business in Russia but it left the Russian market after the invasion of Ukraine. David Yang himself moved to the USA back in the early 2010s.
• Details of the mass layoffs emerged thanks to a post on X from a former employee of the Cyprus office. Dmitry Nizovtsev, an employee of Navalny’s Anti-Corruption Fund, alleged that ABBYY had fired staff members in Hungary, Serbia and Cyprus “because they had Russian passports.”
• Between 200 and 500 people were laid off, Forbes Russia wrote later. Management informed the employees who had lost their jobs on group video calls, during which they were kept on mute and their access to ABBYY’s working systems was restricted, Forbes reported, citing sources. According to one of the developers, the lay-offs were explained by a need to “move on.”
• So far there has been no clear explanation of the mass layoffs. It seems unlikely that staff were axed based on their nationality. One former top manager told Forbes that the layoffs had an “economic, not political background.” Another theory, discussed among the dismissed programmers, is that ABBYY is about to move all three offices to a single operation in India. One former employee said that the company recently held a conference there to attract local talent. “The ‘Russians are being laid off’ thing is probably just hype, it’s just that now the focus is on a different region,” they suggested.

Why the world should care:

The layoffs at ABBYY are another reminder of the fears among Russians that they might lose their jobs for political reasons There is still no significant precedent for this happening, but the concern is real. Many Russians who left the country after the start of the invasion are now working for international companies, and feel they cannot be completely certain that they won’t lose their job because of their passport.

Russian opposition figure killed fighting for Ukraine

Russian opposition activist Ildar Dadin was killed fighting for the Ukrainian army. Dadin achieved widespread notoriety after being convicted of unlawful behavior at rallies. After becoming disillusioned with non-violent protest, he joined the Ukrainian Army in 2023 to fight against Russia.

• Dadin was the first Russian to be convicted under new anti-protest laws that targeted people who had repeated violations of rules on staging rallies. The logic behind the law was that if somebody is sentenced to a minor punishment on three separate occasions for staging mass protests (despite being based on the word “mass”, in reality it includes solo demonstrations) they can be jailed for up to five years for repeated offenses. In 2015, Dadin was sentenced to three years as the first person sent to jail under the new rules. Journalists later dubbed the criminal clause the “Dadin article.” 
• Dadin wrote to his wife in 2016 about torture in the penal colony where he was serving his term, a letter that caused a stir in the prison system. He was transferred to a different facility and a criminal case was opened against the head of the colony. He was ultimately sentenced to two-and-a-half years, although he was released early. 
• In 2017, a few months before Dadin was due to be released, his conviction was overturned. However, the “Dadin article” remains in the Russian criminal code. So far, fewer than 10 people have been convicted due to it.
• After Russia invaded Ukraine, Dadin — who had taken part in street protests after his conviction was quashed — said that he was disillusioned with non-violent protest. In 2023, he joined a battalion of Russian volunteers in the Ukrainian army. Dadin was killed fighting in the Kharkiv Region, close to the Russian border, after he was caught in an artillery bombardment.

Why the world should care:

Ildar Dadin’s life and death shows how the fate of Russian activists and opponents of the Putin regime can unfold in tragic circumstances. Often their choices in opposing the regime are limited to fleeing the country, staying and facing the perpetual risk of new criminal charges, or joining the Ukrainian army to fight in the war. Dadin opted for the third, a fatal choice.