Monday, June 15, 2015

Russian Groups Crowdfund the War in Ukraine

If all you heard about as a Russian was exactly what Putin wanted you to hear, you might Crowdfund a Russian invasion of Ukraine too, especially when no one who is a Russian Soldier is thought to have died there(except by parents whose sons don't come back). But, there is no news about them dying at all in Ukraine anywhere in Russia on pain of death to reporters in Russia.

  1. Russian Groups Crowdfund the War in Ukraine

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    Pro-Russian rebels carried the flag of their self-proclaimed Republic of Novorossiya in Debaltseve, Ukraine, in February. Credit Brendan Hoffman/Getty Images
    WASHINGTON — The Novorossiya Humanitarian Battalion boasts on its website that it provided funds to buy a pair of binoculars used by rebels in eastern Ukraine to spot and destroy an armored vehicle. Another group, Save the Donbass, solicits donations using a photograph of a mortar shell inscribed with its web address and the names of donors. Yet another, Veche, states that its mission is to “create modern, combat-ready” military units fighting Ukraine’s central government.
    These organizations are part of an online campaign that is brazenly raising money for the war in eastern Ukraine, using common tactics that have at least tacit support from the government of President Vladimir V. Putin of Russia. Although they often portray their mission as humanitarian, most of the groups explicitly endorse the armed insurgency and vow to help equip forces in the two regions at the center of the fighting, Donetsk and Luhansk.
    An examination by The New York Times of the groups’ websites, social media postings and other records found more than a dozen groups in Russia that are raising money for the separatists, aiding a conflict that has killed more than 6,400 people and plunged Russia’s relations with the West to depths not seen since the Cold War.
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    A QIWI terminal in Moscow. Its system can be exploited for illicit uses. Credit James Hill for The New York Times
    The groups have relied on social media — including YouTube and the Russian version of Facebook — to direct donations through state-owned banks in Russia and through a private system of payment terminals owned by a company called QIWI that is affiliated with Visa and traded on the Nasdaq. While most of the donations appear to come from Russia, the organizations have also solicited funds from abroad using large American and European financial institutions, including banks and companies like Western Union and PayPal, even though many of the groups are targets of international sanctions.
    The fund-raising could pose legal risks for those companies, which are prohibited from doing business with blacklisted people or groups. In fact, the sanctions have helped give rise to a cat-and-mouse game in which the fund-raising groups morph with the shifting circumstances, changing names and redirecting donations to new accounts to keep the money flowing.
    With the European Union expected to renew its sanctions later this month, Mr. Putin has continued to insist that the fighters in eastern Ukraine are part of a homegrown opposition movement, even though a preponderance of evidence shows that Russia has provided manpower and weapons. In late May, for instance, two Russian soldiers were captured on the battlefield and charged with terrorism.
    Mr. Putin participated in the negotiations that produced a tenuous cease-fire in February, and he has called on both sides to reach a lasting political settlement, most recently during his meetings with Italian officials and Pope Francis in Rome. Officials in Ukraine and elsewhere, however, say that he has continued to stoke the conflict in order to keep his neighbor weak and unstable.
    Continue reading the main story

    Graphic: Russia’s Endgame in Ukraine

    In recent days, new signs of a buildup of Russian troops and equipment at the border, as well as fighting that killed at least 19 people on the outskirts of Donetsk, have raised fears that the simmering conflict will erupt again.
    A Common Cause
    It is unclear just how extensive the fund-raising network is, or how much money flows through it, though the separatist groups identified by The Times claim in social media posts to have raised millions of dollars.
    The network features a disparate yet overlapping cast of characters that includes a mustachioed former Russian military intelligence officer credited with starting the uprising, Igor Girkin, who uses the nom de guerre Igor Strelkov; the dissident writer and Putin critic Eduard Limonov, whose neo-nationalist followers have championed the territorial expansion in ethnically Russian regions with far more vigor than Mr. Putin’s Kremlin; and a former “foreign minister” of the Donetsk People’s Republic, Yekaterina Gubareva, and her husband, Pavel, an ethnic Russian from Ukraine and one of the most prominent separatist leaders there.
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    Igor Girkin, a former Russian military intelligence officer who uses the nom de guerre Igor Strelkov. He is a leader of the Novorossiya Movement, which has been a target of Western sanctions. Credit Bulent Kilic/Agence France-Presse — Getty Images
    All share a common cause: establishment of a region loyal to Russia that is sometimes called the Donbass or Novorossiya. They make similar appeals to ethnic and political solidarity with the fighters opposing the central government in Kiev, and they share methods for raising money for illicit activities that the Internet has made vastly more efficient, according to experts and officials monitoring financial flows of criminal and terrorist groups.
    “Violent groups operating in war zones and their supporters abroad are exploiting advancements in communications and financial services technologies to more efficiently increase popular support and raise funds for their cause,” said Howard Mendelsohn, a former deputy assistant Treasury secretary and now the managing director of Camstoll Group, an advisory firm in Washington.
    According to their own online appeals, the organizations have directed that donations be made via state-owned or state-controlled banks in Russia, including the country’s largest, Sberbank, or credit cards issued by those banks, some branded with MasterCard and Visa logos. Mr. Putin’s government, which strictly regulates nongovernmental organizations to monitor opposition political activity, has done little to stop the fund-raising.
    The head of Russia’s Federal Service for Financial Monitoring, Yuri A. Chikhanchin, for instance, recently told Mr. Putin that his agency had frozen 3,500 bank accounts suspected of supporting terrorist organizations. The fighters in eastern Ukraine, however, are not among the groups Russia has designated as unlawful.
    Photo
    The separatist leader Pavel Gubarev, center, in the Parliament chamber in Donetsk, Ukraine, last year. Mr. Gubarev and his wife, Yekaterina, solicit donations through the Humanitarian Battalion of Novorossiya. Credit Uriel Sinai for The New York Times
    “Anyone in Russia who wants to provide assistance to the D.P.R. and the L.P.R. is encouraged by and gets support from the Russian government,” said John E. Herbst, a former American ambassador to Ukraine now at the Atlantic Council in Washington, using the abbreviations for the self-proclaimed People’s Republics of Donetsk and Luhansk.
    Following the Money
    One of the fund-raising groups, Save the Donbass, claimed in May to have raised the equivalent of $1.3 million in donations through Sberbank and other payment systems, including QIWI.
    The fund run by Ms. Gubareva and her husband, the Humanitarian Battalion of Novorossiya, claims to have raised $213,000 since its founding in May 2014, shortly after the fighting began.
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    A pro-Russian group battling for control over the Ukrainian port city of Mariupol solicited donations for equipment on VKontakte, Russia's most popular social network. It wrote "help is very much needed" and listed ways to transfer money, which The Times has redacted.
    Its website allows donors to direct their contributions to specific militia units, including a mortar battery named after the Russian version of Pinocchio, a puppet called Buratino, and boasts that it has provided not only the binoculars used in the destruction of the armored vehicle, but also tactical military gloves, laser range finders, radios and a car used by the battery’s spotters.
    At least five of the organizations solicit donations through PayPal, the online payment company based in California that is now owned by eBay. PayPal has in the past faced legal trouble for processing payments to entities in Iran, Sudan and Cuba, recently paying nearly $7.7 million in penalties in a settlement with the Treasury Department.
    When asked about the Ukrainian-related accounts — identified by email addresses in Russia — a PayPal spokeswoman, Sarah Frueh, said none of the accounts were valid. She declined to respond to additional questions seeking clarification. Many of the organizations openly advertise ways to donate using American and European banks. On the Humanitarian Battalion website, for instance, Ms. Gubareva explains how to wire dollars or euros into her account at Sberbank using correspondent accounts at Citibank, JPMorgan Chase and Deutsche Bank in New York, among others. So did the separatist group Veche.
    It remains unclear how much money is flowing into eastern Ukraine from abroad. Only one of the international banks said it had detected illicit donations, blocking a contribution to Ms. Gubareva’s organization, according to a bank official who spoke on the condition that the bank not be identified. Another donation of $200 did pass to Veche, which is not on any blacklist but proclaims links to organizations that are — including Mr. Strelkov’s Novorossiya Movement and the Ghost Battalion, led by Aleksei Mozgovy until he died in an ambush last month.
    Photo
    An image taken from a video posted on Russian social media in November shows a mortar shell inscribed with the web address of the separatist group Save the Donbass.
    But the widespread use of QIWI has created potential risks for its partner, Visa. Nearly all the fund-raising groups solicit donations through QIWI, a virtual payment company founded in 2004 and later incorporated, like many Russian companies, in Cyprus. QIWI provides consumers in Russia — and increasingly other countries — with a variety of ways to make payments online or through a network of tens of thousands of terminals that act like reverse A.T.M.s, allowing users to deposit cash and then pay participating vendors.
    Users can also move money to individuals — or charitable organizations — as long as they have accounts linked to working telephone numbers. Its partnership with Visa, begun in 2012, allows customers to use a QIWI-Visa credit card to pay vendors outside QIWI’s network.
    The system has become wildly popular, used by 17 million Russians, but it has also skirted legal trouble. The company’s terminals and credit cards — along with the failure to require identification for transactions, as demanded by Russian law since last year — can be easily exploited to transfer proceeds from illicit activities, from drug dealing to tax evasion.
    In a recent filing with the Securities and Exchange Commission, required because its stock is traded on the Nasdaq, QIWI said its system “remains susceptible to potentially illegal or improper uses” such as money laundering by organized crime groups and other illicit actors, including those named in sanctions by the West for their activities in Ukraine.
    Photo
    The dissident writer and Putin critic Eduard Limonov, left, at the funeral of a man identified as a Russian volunteer who was killed during fighting in Debaltseve, in eastern Ukraine, in February. Credit Anatoly Maltsev/European Pressphoto Agency
    In February, the company filed an amendment, saying that law enforcement officials had carried out an investigation at its Moscow offices involving “a small number of clients,” though it did not elaborate.
    Officials with Visa said they did not believe their company had processed any donations to the organizations examined. QIWI’s chief executive, Sergei Solonin, said in a telephone interview that QIWI blocked some of the accounts identified by The Times last summer because they were engaged in fund-raising activity prohibited by company policy. The company, for instance, blocks the use of its system for political fund-raising.
    Mr. Solonin said other accounts were blocked after The Times brought them to QIWI’s attention. One group, Tricolor, posted photographs of donations made on QIWI accounts as late as October 2014, but Mr. Solonin would not say whether that was one of the accounts closed later, citing Russia’s financial confidentiality laws. After that interview, a number of groups noted on their websites that their QIWI accounts had been blocked, and removed them as payment options.
    But underscoring just how tricky it can be to curtail the groups’ fund-raising activities, a number redirected money to new accounts. On April 20, a group called Batman noted on its social media page that all but its Sberbank account had been blocked. But by May 18, it had updated the page to include a new QIWI account number and a plea: “Donbass needs your help!”
    The Western sanctions lists, for their part, have not kept up with the groups’ ever-changing names. Mr. Strelkov’s Novorossiya Movement, for instance, stopped soliciting funds after the European Union placed sanctions on it in February. Instead, it asked that the funds be sent to a related group, not blacklisted, called Global Initiatives, run by the movement’s chief of staff with Mr. Strelkov as chairman.
    In early May, it morphed yet again, redirecting funds to yet another related group, ANO KNB. Later in the month, a group identified by the Novorossiya Movement as its partner, Strelkov Info, wrote that because of constant blocking of its accounts, “we’ve decided to not post them in places open to all”; donors could send an email “to find out transfer details.”
    Meanwhile, new fund-raising appeals keep popping up. A group calling itself Dobrovolec.org was soliciting funds online as of May 26, with QIWI and Sberbank accounts among the payment options. The group, which claims to be conducting at least two campaigns involving volunteer snipers and “tankmen,” called on fighters familiar with such deadly weaponry as surface-to-air missiles, flamethrowers and anti-tank guided missiles to join its effort to “participate in military conflict in the west of former Ukraine on Novorossiya side.”

     

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