Hundreds of millions flow from Russian Ministry into an obscure Geneva organization — and officials’ pockets
24 Jul 2020

By Olesya Shmagun, OCCRP, 22 July 2020

OCCRP – Though its population barely exceeds 200,000 people, Geneva is one of the world’s most important diplomatic centers. The International Red Cross and the World Health Organization are headquartered in the picturesque Swiss city, along with the second-largest office of the United Nations.

Geneva also hosts dozens of smaller groups working in everything from meteorology to intellectual property. Typically funded jointly by their member states, these intergovernmental organizations have been a central feature of the international order since the Second World War. But they can also hide surprises.

In the middle of a leafy neighborhood in the Geneva suburb of Petit-Lancy, a gabled stone villa hosts what might appear to be just another group of diligent international bureaucrats. The International Civil Defence Organization (ICDO), which operates out of the villa, says it’s dedicated to the mission of strengthening rescue and emergency services.

The ICDO has all the appearance of a legitimate international body: A yearly budget in the tens of millions, a history that dates to the 1930s, and dozens of member states (mostly in Africa, the Middle East, Central Asia, and Central America). Its top employees hold diplomatic status, and it enjoys certain civil and administrative immunity from the Swiss government.

But though the ICDO is an intergovernmental organization on paper, the reality is very different.

Internal records from 2012 through 2018, as well as interviews with insiders and business partners, reveal that the organization’s work over that period was made possible by the Russian government. Funded almost entirely by Russia’s Ministry of Emergency Situations, the ICDO’s main occupation is carrying out humanitarian missions on its behalf in politically sensitive places like Cuba, North Korea, and Abkhazia.

With little independent decision-making and no transparent procurement processes, the ICDO essentially took money from the Russian state — about $140 million from 2013 to 2018 — and passed it to contractors pre-selected by Russian officials.

“We received everything from Moscow: the money, the contracts to be signed. Then we rerouted the money, that’s all,” says a former employee who asked not to be named in fear of retaliation.

Perhaps unsurprisingly, in addition to operating as an instrument of Russian foreign policy, the ICDO became a tool of personal enrichment. An official close to Defense Minister Sergey Shoigu funnelled ICDO contracts to his own companies. Others were awarded to mysterious firms set up just months earlier.

The organization’s head received a higher salary than the general secretary of the United Nations. And, over the years, the ICDO has attracted a cast of colorful characters who used their association with it to further their own interests, including a self-declared “prince” and a man who founded an international organization that has a single member state.

“With less than 60 members, including no Western countries, and this dependendence on financing from one single country, we can clearly question the universal objectives of this organization,” said Laurence Boisson de Chazournes, a law professor at the University of Geneva, in an interview with Radio Television Suisse, describing the ICDO as “a unique case in the world of international organizations based in Switzerland.”

In response to questions from OCCRP and Radio Television Suisse, an ICDO representative said that all its contractors were indeed chosen by the Russian government, but that the organization’s role was to “ensure contact and follow-up with beneficiary countries,” set up trainings related to the projects, and report to the Russian government at the conclusion of each field mission. The representative also underlined that the ICDO “has always been and will remain independent” and that all its decisions and activities are governed by the organization’s constitution and internal rules, as well as a General Assembly. “All international organizations have donors that contribute more than others — usually these are the big countries like the U.S., China, and Russia,” the representative said.

The French Connection

The ICDO traces its history to the early 1930s. Moved by the horrors he had experienced in the First World War, French surgeon general George Saint-Paul founded an advocacy group in Paris to promote the creation of neutral “Geneva zones” in cities to serve as refuges for civilians in wartime.

The idea didn’t catch on in its original form, but his Geneva Zones Association survived, moving to Geneva after World War II, changing its name, and refashioning its agenda to focus on disaster response.

The ICDO’s charter was adopted in Monaco in 1966 and entered into force in 1972 after being signed by its first 10 member states. Four years later, the organization signed an agreement governing its legal status with the Swiss government, granting diplomatic status to three of its high-level staff, certain legal immunities, and tax advantages.

Today the ICDO has 59 member states, including China, Russia, and smaller countries across Africa, Asia, and Central America. No major Western countries have joined, and Cyprus is the only EU member.

The ICDO receives small annual dues from its member states, but they only add up to about $1.5 million a year, an amount that doesn’t even cover the salaries of the organization’s ten or so Geneva employees. According to annual audits and internal accounting records, almost every year about half of ICDO members’ fees remain unpaid.

Fortunately for the organization, it has another source of income — the Russian government. The country’s Emergencies Ministry has given the ICDO tens of millions of dollars over the past decade to implement humanitarian projects.

Internal accounting records obtained by reporters show that the organization received about $140 million from the ministry to implement 17 humanitarian projects between 2012 and 2018. These included delivering firefighting equipment to Cuba, Nicaragua, and North Korea; sending inflatable boats to Armenia; and conducting demining work in Serbia.

This money from Russia makes up a large majority of the ICDO’s budget. (By comparison, the organization received about $9 million from its members in fees over the same period).

Its largest recent project, with a budget of over $40 million, is a “humanitarian center” in the Serbian city of Niš that American officials have warned could become a Russian spy center in the Balkans. Serbian diplomats and managers at the facility have dismissed the accusations as absurd.

Between 5 and 10 percent of the funding for every such project goes into the ICDO’s budget to cover its own expenses.

It’s not just money that comes from Moscow. The organization appears to have little discretion on how to spend the funds it receives, making it essentially an instrument through which the Russian Emergencies Ministry can funnel money to its preferred list of contractors.

Former ministry employees who agreed to speak with reporters anonymously explained where the humanitarian projects originate: First, requests for help from various countries are passed to the Ministry from the presidential administration or the government.

Within the ministry, the approved missions are assigned to Emercom, an agency dedicated to international humanitarian assistance work.

The process of defining each project and drawing up its budget is performed within this agency and then approved by the finance ministry, which sends the ICDO the money.

Crucially, by this point, the list of goods to be delivered and their prices have already been determined. This leaves room for the ministry to skirt its formal procurement process, since the payments the ministry makes to the ICDO are technically donations to an intergovernmental organization.

The ICDO has no publicly available procurement policy or explanation of how it chooses its contractors.

In an interview, the ICDO’s former secretary-general, Vladimir Kuvshinov, confirmed that the contractors the organization paid for its humanitarian projects were chosen in Moscow.

“We didn’t even have the possibility of controlling, checking, monitoring or doubting something,” he said. “We got documents from Russia already approved by all the authorities.”

According to Axel Dreher, the editor-in-chief of a peer-reviewed journal that covers international organizations, such a lack of transparency was, until recently, a common practice. “Most of these procedures have been in the hiding until recent years,” he wrote. He added that “most Western organizations such as the IFC [International Finance Corporation] are, however, highly transparent about procedures today.”

Yury Zaitsev, an international trade expert at RANEPA, a university in Moscow that specializes in public administration, said that governments that provide international humanitarian assistance are often pursuing the simultaneous goal of helping domestic suppliers enter foreign markets.

In the case of the ICDO, it’s clear that those who benefited from this help were not independent operators.

Emerkom and Belaventsev

Between 2001 and 2012, Emercom was helmed by a man named Oleg Belaventsev.

The one-time Soviet diplomat was expelled from the United Kingdom by Margaret Thatcher’s government in 1985 for unspecified “unacceptable actions” that “threatened national security.” In the 1990s, he worked in Rosvooruzhenie, Russia’s main arms exporter, before beginning a long career in the Emergencies Ministry.

As reported in OCCRP and Novaya Gazeta’s previous investigation, Belaventsev used his time at the ministry to build a lucrative business empire, with millions of dollars in turnover, in the area of firefighting and natural disaster preparedness. ICDO projects were among these streams of income, and the money continued to flow long after he left the emergencies ministry. After Belaventsev left, his position as head of Emercom went to a former subordinate, Alexandr Mordovskiy.

Though Belaventsev was known to have received money through ICDO contracts, the exact breakdown of the spending was unknown. But the new documents obtained by reporters show that three companies connected to the businessman received two-thirds of all the money the ICDO paid its commercial contractors for humanitarian projects between 2012 and 2018.

The money flowed through the subsidiaries of a company started by Belaventsev called Zarubezhtekhpromproekt (ZTPP).

ZTPP’s specialty is installing fire fighting systems in new buildings, but over the years when Belaventsev headed Emercom, the company grew into an entire holding whose subordinate companies are all connected to rescue work.

These include:

  • Mobilnye Systemy, founded in 2008, a company that has registered a patent for firefighting gloves.
  • Spetstekhnika Pozharotusheniya (“Special Firefighting Equipment”), founded in 2008, is a major fire truck manufacturer.
  • Emercom Demining, initially a state-owned company created by Emercom but later acquired by ZTPP. It conducts mine clearance operations.

All three companies received ICDO contracts from the Emergencies Ministry, at times carrying out work that had no connection to their main line of business. For example, Emercom Demining was awarded contracts to deliver medicine to Palestine and mobile hospitals to Guinea.

Read more at OCCRP

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