No Presidential Fortune, Just Rich Feelings

MTThe record gathering of 1,368 reporters listening to President Vladimir Putin field questions at his final annual news conference in the Kremlin on Thursday.
President Vladimir Putin scorned reports that he had amassed huge personal wealth during his tenure, calling them nonsense "picked out of someone's nose" at a news conference Thursday.

Western news media ran reports late last year that quoted political analyst Stanislav Belkovsky as saying Putin controlled stakes in oil and gas companies and that his fortune was at least $40 billion.

"I have seen some papers about this. Just gossip that's not worth discussing," Putin said in his first public response to the allegations. "It's simply rubbish. They picked everything out of someone's nose and smeared it on their little papers."

Putin was responding to a question from the Moscow bureau chief of The Associated Press, Douglas Birch, who started by mentioning the media reports that said Putin could be Europe's richest man. "If it's true, what are the sources of your wealth?" Birch asked in Russian.

In interviews with British newspaper The Guardian and German newspaper Die Welt, Belkovsky claimed that Putin secretly controlled 37 percent of oil company Surgutneftegaz, 4.5 percent of Gazprom and at least 75 percent of Gunvor, a Swiss-based oil trader.

Putin on Thursday said he was Europe's -- and the world's -- wealthiest man, but said that fortune was measured in emotions, not money. "I collect emotions. My wealth is that the Russian people and, perhaps, God have twice entrusted me to lead such a great country as Russia," Putin said.

Putin's statement to the Central Elections Commission as a candidate in December's State Duma elections said he owned an apartment in St. Petersburg, two vintage Soviet-era cars, a plot of land outside Moscow and $149,000 in bank accounts.

Belkovsky, who said his information about Putin came from Kremlin sources but declined to provide any supporting documents, insisted Thursday that he was right.

"Vladimir Vladimirovich [Putin] says many interesting things ... stating, in particular, that Russia is a thriving democracy," Belkovsky said. "In light of that ... I don't see anything strange in him replying that way."

Liberal politician Boris Nemtsov and energy expert Vladimir Milov said in a report presented this week that the speculation about the personal fortunes of Putin and his Kremlin aides was the result of opaque ownership and financial flows at several major Russian companies. "This will be the subject of an investigation into the Putin era, I assure you," Nemtsov said by telephone Thursday.

In response to a question about the economic effect of Russia's foreign policy differences with the West, Putin dismissed the idea that they were putting off foreign investors.

The question was apparently prompted by recent criticism from Anatoly Chubais, chief executive of state utility Unified Energy System, that the Kremlin's tough foreign policy line was potentially harmful to investment into the country.

In a world of increasingly unstable financial markets, the recent spat between Moscow and London over the closure of British Council offices could cost Russia lost business opportunities, Chubais told an economic forum in Moscow last month.

Putin insisted that Russia would remain attractive as a safe heaven for investment and cited as proof the inflow of more than $80 billion in foreign capital last year. "There's no need for tales that foreign policy stands in the way of something," Putin said. "It helps because it demonstrates the growing opportunities of the Russian Federation, our confidence and the openness of our economy at the same time."

For the second time in less than a week, Putin responded to persistent rumors about an imminent ruble redenomination. "They are totally lying. Don't believe them," Putin exclaimed.

Prompted for a guarantee, he said, "Listen, do you want me to eat soil from a flowerpot? Or take a blood oath? It simply is silly. There's no economic need. ... It would only do harm."

The rumors of redenomination began before the new year, with some news reports even suggesting that the state mint had printed a stock of new bills.

Tatyana Orlova, an economist at ING Eurasia Bank, said a sharp growth in the money supply -- a result of the record capital inflow -- and a wider circulation of the new 5,000 ruble bill may have given rise to such speculation. The last redenomination took place after the Central Bank launched a 10,000 ruble bill, she recalled.

Orlova said the timing for a redenomination would be wrong until after the next president settled into his job.

Putin first felt moved to dispel the rumors in a session of the State Council on Feb. 8.

In fielding questions, Putin reiterated many of his previous statements on the economy. Low inflation, he said, would remain a key priority for the government this year and in following years. Putin has agreed to head the Cabinet if his preferred successor, Dmitry Medvedev, wins the presidential election next month.

Raising pensions, especially for those who retired before the fall of the Soviet Union in 1991, will be another key goal for the next government, Putin said.

Putin defended the role of state corporations, saying they would invest in economic sectors, such as shipbuilding and nuclear power, that private capital was not yet ready to step in and develop.

The corporations will organize public share offerings after they upgrade their respective sectors with government investment, he said.