A leaked database of British Virgin Islands (BVI) companies links President Alexander Lukashenko to one of the largest private fortunes in Belarus, that of the shadowy oil trader Nikolai Vorobei.
Belarus' state-dominated economy is not "offshore" like Russia and Ukraine - because it remains mostly state-owned. Thus the database, which was leaked to the International Consortium of Investigative Journalists amidst no little publicity, contains only 19 with Belarus addresses. Further than that, only one comes with a director's name attached, those scant details suffice to link Lukashenko to Vorobei.
The telltale BVI offshore is Interforest Corp, registered in 1998 under director Alexander Metla at a Minsk address. bne spoke to residents at V.Horyzhej 16, who confirmed that the man in question is Alexander Mikhailovich Metla, the well-known head of the Pamyat' Afgana charity for Afghan veterans.
bne contacted Metla directly, who acknowledged that the company had been registered under his address. Metla said however that he knew nothing about the firm and that his name and address had obviously been used by a third party without his knowledge.
However, Metla apparently fronted for Belarus officials in one prominent case shortly after the BVI company was established. In 1998, when Interforest Corp was set up, no one had heard of Metla, but he made his public debut just a year later in a court case pitting the country's top policeman against an investigative journalist: a libel suit brought by Viktor Sheiman - the feared interior minister and secretary of the national security council - against journalist Sergei Anisko. Anisko had written an article describing what he said was a country residence being built by Sheiman at his parents' dacha in Podlipki, west of Minsk.
In the hearings, Metla testified that the sprawling new property under construction adjacent to Sheiman's parents' dacha belonged to him. As a result the judge awarded crippling damages against Anisko and the newspaper that published his piece.
During the proceedings, however, it transpired that Metla had served side-by-side with Sheiman in Soviet Army operations in Afghanistan in the 1980s, and the pair were close friends. Sheiman was head of the Belarus police, Metla a humble deputy director of a no-name firm. The huge new property was next door to Sheiman's parents' house but on paper Metla indeed owned the mansion. "Metla was and is Sheiman's man, not an independent player," Anisko claims to bne. Metla did not comment on the case.
Metla's subsequent career points to the same. Working in Sheiman's shadow, he has achieved prominence as director of Pamyat Afghana. Founded 2002, the charity boasts Sheiman as a member of the supervisory board. It is also personally patronized by Lukashenko and enjoys generous tax benefits.
Ironically for the director of a BVI company - and unusually, even in proudly pro-Soviet Belarus - Metla is an openly avid fan of Stalin. He even founded "The Stalin Line" theme park, which recreates a World War II battleground in Belarus. However, the links between Stalinist military glory and offshore practices may not be so incongruous in reality as they appear. Afghan veterans and Belarusian import-export operations were closely linked in the 1990s, when the state supported veterans' associations with excise tax exemptions, making them an important commercial channel, according to Anisko.
Joining the dots
Metla's apparent fronting for Sheiman highlights the relationship between the Lukashenko regime and Belarus' shadowy, but lucrative, private sector. Interforest Corp is linked to a prominent timber firm: Joint Venture Interforest, based in Novopolotsk in the north of Belarus, and founded in 1999, according to the Belaspravka online register. Under Belarusian legislation, as a joint venture, it must have a foreign shareholder. The company told bne that it has an investor from "Western Europe", but declined to name either the investor or the country of origin. Metla's Interforest Corp was founded just one year before the Belarusian Interforest JV, suggesting the BVI offshore may have played the role of "foreign investor". The leaked BVI data are valid up to 2010.
Metla denied any connection to the Belarus JV 'Interforest'.
Belarus does not have a publicly accessible register of company ownership, but according to the Orbis Business intelligence database, the Belarus shareholder in JV Interforest is OOO Avtoimport, also based in Novopolotsk. The database does not contain information on the foreign shareholders.
OOO Avtoimport is a car importer established in the 1990s by powerful Novopolotsk businessman Nikolai Vorobei, one of Belarus' richest men. Vorobei's core business since the 1990s is oil and fuel trading via OOO Interservis. His home town is situated on the crucial Druzhba oil pipeline - the mainline carrying Russian crude into Europe. Novopolotsk also hosts the flagship state-owned Polymir refinery, part of the giant state-owned Belneftekhim petrochemicals holding.
Interservis has been one of Belarus' two largest private fuel traders since for a large part of the last two decades, according to media reports. The relationship between the company's private oil product trading and the state-owned refinery has fuelled much speculation over the years.
Vorobei, of whom no photos exist and who has never given an interview, did not respond to attempts to contact him. He is clearly connected to the very upper echelons of power however. In 2012, Interservis business practices even prompted a bust-up with Russia.
Within the remit of the forming Customs Union - which now groups Belarus, Russia and Kazakhstan under free trade rules - starting in 2010, Belarus was granted the right to import Russian crude for its refineries free of export duties. However, should the resulting oil products be subsequently exported outside the Customs Union, the traders are required to stump up the bypassed levies to the Russian budget.
Belarusian exports of oil-based solvents and diluents - which do not trigger the export duty payments - promptly soared tenfold or so in 2011-2012 - with Interservis the main exporter, according to media reports. Russia is crying foul, alleging false classification of exports.
"We suspect that this product is a fraud: I cannot rule out that oil products are being exported under the cover of diluents," Russia's tax tsar Sergei Shatalov said last year. In April, Russia's ambassador in Belarus said that the scheme had finally been wound up, with losses to the Russian budget estimated at around $1.5bn.
Despite Russia's huge leverage over Belarus, Moscow's protests over its practices have done little to stem the rapid expansion of Interservis. In 2012, the company privatised Belarus' largest bitumen producer, launched construction of a new $270m oil refinery in Novopolotsk, and in January this year bought a controlling stake in Amkodor, Belarus' leading producer of road-building equipment. Such frenzied M&A makes Interservis the "fastest expanding holding in Belarus", claims Yaroslav Romanchuk, head of the Mises research center and an opposition presidential candidate in 2010. He estimates Vorobei to be the country's fifth richest man with assets worth over $2.5bn.
All the president's men
The pyramid climbs higher then. While Metla is Sheiman's sidekick, Sheiman - appointed head of the President's Property Administration (in other words in control of all state assets) earlier this year - in turn is Lukashenko's trusted henchman of twenty years' standing. The BVI connection to Vorobei's business in the 1990s - during Sheiman's five year stint as interior minister - suggests Sheiman acted as "krysha" (directly translated as "roof", but meaning a protector from the law and other predators) to Belarus' shadowy but lucrative private export-import business. Sheiman's loyalty to Lukashenko suggests that he in turn may have been acting in the name of the president.
Sheiman is generally regarded as the "enforcer" among Lukashenko's entourage. Opposition activists allege he was responsible for the disappearance - presumed murder - of a number of leading opposition politicians in 1999, mostly notably former interior minister Yury Zakarenko. Leaked US diplomatic dispatches - calling Sheiman an "odious" figure, and also linking him to the disappearances in 1999 - quote sources that put his personal wealth at $397m in 2006. Sheiman, like many top Lukashenko officials is banned from travelling to the EU or USA.
The Metla-Sheiman-Lukashenko link could for the first time offer a glimpse of documentation of the Lukashenko regime's involvement in Belarus' shadowy private sector. "Lukashenko has always been very careful never to leave any paper trail regarding property and money flows," says Romanchuk, "it has never been possible to prove anything."
Metla and his president on the prowl