After “optimization”, Putin’s multibillion-dollar cultural and educational project stalled, and his employees were fired Now they complain to the president and file lawsuits

Olga Golodets tells Vladimir Putin about a project for a museum and theater and educational complex in Sevastopol.  2018 year
Olga Golodets tells Vladimir Putin about a project for a museum and theater and educational complex in Sevastopol. 2018 yearPress Service of the Presidential https://meduza.io/impro/g5ptZDw6jyy8aIpBNrGiH_P-32XF7PBR1JD6KNYAA6Y/fill/980/0/ce/1/aHR0cHM6Ly9tZWR1/emEuaW8vaW1hZ2Uv/YXR0YWNobWVudHMv/aW1hZ2VzLzAwNS84/NjkvMzc4L29yaWdp/bmFsL0N1Yy1ZWkot/ekxPaVVhRWdWNGI3/Q3cuanBn.webpAdministration of the Russian Federation

In 2018, President Vladimir Putin proposed the creation of cultural, educational and museum complexes throughout the country “to reveal the cultural and educational potential of our regions,” since many works of art remain in the “storerooms” of museums. It was decided to finance the new megaproject from Rosneftegaz’s money-box, but it was with the money that now the problems arose. 128 employees of the fund involved in the project were fired in a matter of days and without compensation due to the desire of the investor to cut costs.

The presidential cultural program began in Vladivostok. Then Kaliningrad, Sevastopol and Kemerovo were added. Branches of the main Russian museums and theaters are to appear in these four cities: the Tretyakov Gallery, the Bolshoi Theater, the Hermitage and the Mariinsky Theater. Putin said that this idea was inspired by the director of the Mariinsky, Valery Gergiev, and the director of the Hermitage, Mikhail Piotrovsky. The President ordered the completion of the construction and equipping of all complexes by the end of 2023.

What money will be spent on this megaproject, it became known later. Putin himself revealed this secret: the state will finance him with funds from Rosneftegaz, the most closed Russian state company. The president calls Rosneftegaz “our oil and gas revenues, put into a separate box”, from which some things are financed “when the government forgets that there are priorities to pay attention to.” The retained earnings of Rosneftegaz in 2019 alone amounted to 570 billion rubles, and it was decided to spend 120 billion rubles from the fund for the creation of cultural centers. These funds are being used by the general contractor of the project, the Stroytransgaz company of Gennady Timchenko, Putin’s friend, billionaire and sixth in the list of the richest Russian businessmenaccording to Forbes.

THE BEGINNING OF THE STORY – IN MORE DETAIL

Visualization of the cultural complex on Oktyabrsky Island in Kaliningrad
Visualization of the cultural complex on Oktyabrsky Island in KaliningradPress Service of the Government of the Kaliningrad Region
Visualization of the cultural complex on Oktyabrsky Island in Kaliningrad
Visualization of the cultural complex in Vladivostok
Visualization of the cultural complex in VladivostokPress Service of the Primorsky Territory Administration

But after two years from the start of construction, Rosneftegaz suddenly decided to reduce its costs, and this happened after the change of government and the start of a pandemic, when the officials were not up to it. As a result, during the quarantine, more than a hundred of the foundation’s employees working on the project were fired. Now they are writing letters to Putin, the prime minister and other officials, and are filing lawsuits. Meduza tells how Putin’s ambitious project ended up in crisis.

Optimization during quarantine

In April 2020, the general director of Rosneftegaz, former Minister of Taxes and Levies Gennady Bukaev demanded to optimize the costs of the organization responsible for the construction of cultural complexes. This is the National Cultural Heritage Foundation, which was established by the Tretyakov Gallery, the Hermitage, the Bolshoi and the Mariinsky Theaters specifically for Putin’s project and is the customer for the construction of four cultural and educational complexes in Kaliningrad, Vladivostok, Sevastopol and Kemerovo. Several former employees of the foundation told Meduza about the funding cut; the head of the fund Natalia Volynskaya confirmed this information. Among the reasons for which Rosneftegaz demanded optimization, Volynskaya named the fall in oil prices and the entire economy due to the coronavirus epidemic.

How money from the box went to the project

TRACE

After lengthy negotiations with its sole sponsor, the fund cut 80% of its employees in one day on June 4, 2020. Several dozen more people were fired in the following days. In total, 128 people were fired from the fund. 

Demolition of the youth center of the Far Eastern State Technical University for the construction of a museum and theater complex.  Vladivostok.  2019 year
Demolition of the youth center of the Far Eastern State Technical University for the construction of a museum and theater complex. Vladivostok. 2019 yearYuri Smityuk / TASS

Meduza’s interlocutors close to the fund elaborated on the essence of Rosneftegaz’s demands. The sponsor demands to include the expenses for the maintenance of the fund in the construction estimate, since the project is partly regulated as a budget construction site, and on budgetary construction sites, construction control costs are “immersed” in the estimate. “Construction control is such people in white helmets, engineers who come to the construction site and check that everything is being built normally. The costs of these people – usually several people – are included in the cost of the properties. And accountants, lawyers, overhead costs – they do not fit into state standards, ”one of the interlocutors explains the problem. In the opinion of several interlocutors of Meduza, with the design required by Rosneftegaz, the project estimates will not pass the state examination of the reliability of expenses: the law does not provide for suchback office , which was the fund, and only construction control workers are registered – the very same engineers.HOW IS THIS PROJECT REGULATED

However, the head of the fund, Natalya Volynskaya, told Meduza that at the current stage of the project, so many employees are not needed in the fund, since most of the issues and approvals “in terms of design and survey work, land allocation, with the local community, the Bolshoi Theater and the Tretyakov Gallery” have already been resolved. True, the main buildings of the project – the very branches of the main museums and theaters of the country, which should become the face of this project – have not yet been agreed upon in any of the four cities and have not begun to be built.

Volynskaya calls staff cuts a “difficult decision” and admits that the fund has not yet paid off those laid off.

Letters to Putin and courts

On June 29, before the vote on amendments to the Constitution, a letter was sent to the president’s e-mail office. In it, former employees of the National Cultural Heritage Foundation reported that right during quarantine due to the coronavirus epidemic, on June 4, the foundation’s management massively reduced its staff. This was done at the request of the fund’s donor, Rosneftegaz, but the company did not give money to pay for the downsized staff, “in connection with which the procedure for dismissing employees took place with a gross violation of labor law,” the letter reads Meduza reads. … In the fund, the letter emphasizes, worked specialists who participated in the construction of facilities for the Olympic Games in Sochi, as well as for the World Cup in Russia. 

The fund, the employees write, has repeatedly appealed to Rosneftegaz for funding to pay off the dismissed employees, but the appeals “did not work.” The letter says that Rosneftegaz is requesting additional materials that are not stipulated by the terms of donation agreements and is making unnecessary bureaucratic demands.

Volynskaya explains the problem not only by interruptions in the fund’s financing, but also by a complex multi-stage system of permits for spending funds. First, you need an application from the fund to Rosneftegaz for the allocation of funds for some purpose, this application must be approved by the supervisory board of the fund, and then you also need permission from Rosneftegaz to spend this money.

Former employees of the fund told in a letter to Putin about the “systematic shortage” of funds for its maintenance. According to them, salary delays in the fund were constant, and since October 2019 they have not been paid the bonus part of their salary, which is half of it. In 2020, bonuses for January-March were awarded to all employees, but not paid. The foundation also owed its former employees the termination benefits due to them for the reduction of staff and other payments (compensation for unused vacation, etc.).

 “We ask you for help in solving a vital issue for more than 120 citizens of the Russian Federation and instruct JSC Rosneftegaz to provide financing to the fund for the calculation of laid-off workers in connection with the massive layoff at the request of JSC Rosneftegaz,” the dismissed employees address to to the president, adding that in his addresses to citizens at the beginning of the epidemic, Putin himself said that employers should not lay off staff and should pay workers salaries during quarantine. 

The answer came the same day: the president’s office for work with citizens’ appeals redirected the appeal to the Federal Service for Labor and Employment. On September 3, the dismissed workers sent the same letter to the President, as well as to Prime Minister Mikhail Mishustin. 

Putin’s press secretary Dmitry Peskov and Rosneftegaz did not respond to Meduza’s inquiries. The prime minister’s press office did not answer whether he received the letter from the staff.

The reduced employees of the foundation addressed a letter to the founders of the foundation – the leaders of the Bolshoi Theater, the Hermitage, the Mariinsky Theater and the Tretyakov Gallery – as well as complaints to the prosecutor’s office, to the labor inspection (however, appeals to it, as employees write in letters, were fruitless) and court. In July and August alone, 43 lawsuits were filed against the National Cultural Heritage Foundation in the Presnensky Court of Moscow. Another four dozen lawsuits were filed in Kaliningrad, Sevastopol, Kemerovo and Vladivostok. The courts have already partially satisfied several claims.

<img src="https://ukrainetodayorg.files.wordpress.com/2020/09/image-7.gif?w=1&quot; alt="At the time of publication, even the fund's website was not working: when trying to access it, a notification from the RU-CENTER hosting provider appeared.
At the time of publication, even the fund’s website was not working: when trying to access it, a notification from the RU-CENTER hosting provider appeared.

The first lawsuit was heard in Moscow on August 27. The Meduza correspondent was present at the court session. The lawsuit was filed by Andrey Shostak, Deputy Head of the Legal Department, who worked in the fund from the very beginning of the project – from August 2018. It was reduced in one day on June 4, 2020, but has not yet been calculated. He filed a lawsuit in the amount of almost 1.4 million rubles: this is the salary for June, compensation, severance pay, and an unpaid bonus. He also claimed compensation for the delay in payments upon dismissal and moral damage in the amount of 20 thousand rubles.

The representative of the defendant in court agreed with all the claims of the plaintiff, objecting only to the amount of non-pecuniary damage and compensation for the delay in payments. “And what is the problem with concluding an amicable agreement, if you recognize everything? Or is it an artificial appeal to the court? What is this we have here? ” – Judge Julia Zenger asked. But she awarded Shostak almost the entire amount he demanded, reducing only the penalty for delayed payments and compensation for moral damage.DOES THE FUND HAVE MONEY?

Some of the fund’s employees – mainly accounting employees – left by agreement of the parties a month later, and the court was not so supportive of them. According to the lawyer of the group of eight plaintiffs, Maxim Krylov, the management of the fund asked his clients to transfer the cases, help conduct the audit and leave at the end of June. In return, they were offered six average monthly salaries. However, the court awarded each of them approximately 30-40% of the amount they demanded (approximately 500 thousand rubles, with claims on average of 1.3 million rubles). The plaintiffs will appeal the court decision, lawyer Krylov told Meduza.

Now there are only a few people left in the fund, the workers have moved to Moscow City, where the office of the general contractor of the project, the Stroytransgaz company, is located, and the old office on Zoological Street is closed. Due to urgent optimization, the project customer and its contractor, to the bewilderment of the former employees, practically merged together – even Volynskaya and the Stroytransgaz press service provided a joint response to Meduza’s request. 

It says that the downsized employees were offered an alternative job – in a subsidiary of the general contractor STG-Service. But those who joined STG-Service were also fired from there, former employees of the foundation told Meduza. 

Confusion in the government

At the end of June, the head of the fund, Volynskaya, herself turned to the deputy prime ministers of the government Dmitry Chernyshenko and Marat Khusnullin for help. She sent both of them identical letters (Meduza got acquainted with them) about the situation with the financing of the fund. It says that in March the fund sent applications for a donation to Rosneftegaz to finance the fund’s work in the amount of 350 million rubles (in 2018, according to the fund’s report to the Ministry of Justice, 99 million rubles were spent on its maintenance, and in 2019 – 488 million rubles). These applications were approved by the supervisory board in February and agreed at a meeting with Chernyshenko in March. By the end of June, Rosneftegaz had fulfilled these applications only partially, transferring 98 million rubles in five tranches, which the fund spent on partial repayment of wage arrears.

But the fund did not pay off the dismissed employees, and since October 2019, employees have not received the bonus part of their salary – half of it, Volynskaya admits in a letter. To settle accounts with them, the fund needs 126.5 million rubles, and another 11 million to pay insurance premiums. In addition, the fund’s employees were not paid the bonus accrued in April for the previous three months. This debt amounts to 39 million rubles more. 

Volynskaya points out that she may have to answer for this situation according to the law: the fund violates the Labor Code, and the Criminal Code provides for liability for partial non-payment of wages for more than three months. She asks Chernyshenko and Khusnullin to “provide assistance” in obtaining the necessary funding to pay off debts to “reduce social tension.” According to interlocutors close to the fund, Volynskaya has repeatedly addressed this problem to the government, but “the matter has not moved off the ground.”

In the government of Dmitry Medvedev, the project for creating the complexes was supervised by Deputy Prime Minister Olga Golodets, she headed the supervisory board of the fund – the highest collegial governing body that made all fundamental decisions on the project. Rosneftegaz’s claims to the fund appeared under the old government, say Meduza’s interlocutors close to the fund, but then Golodets “acted as an arbiter” and resolved this issue. In mid-January, the Deputy Prime Minister, whose main task was this project, left the government and the supervision of the project passed to Deputy Prime Minister Dmitry Chernyshenko.

“After the change of government, the supervising deputy prime minister [Dmitry Chernyshenko] did not take an active position and the claims of Rosneftegaz arose again,” says one of the interlocutors. According to another source, Chernyshenko “got away” from solving the project’s problems.

Rosneftegaz, according to Meduza’s interlocutors, declares its readiness to give the fund money to pay the debt to the staff, but subject to agreement with the supervisory board. Volynskaya again wrote to Khusnullin and Chernyshenko about the same in early September (Meduza got acquainted with the letters). She writes that the fund this year has repeatedly asked to convene a meeting of the supervisory board, as there are many issues “requiring urgent consideration.” She also asks to hold a meeting on September 16 and appoint Deputy Prime Minister Khusnullin, who is responsible for construction in the government, as co-chairman of the council. Marat Khusnullin himself told Meduza that the meeting of the council has already been scheduled for September 16, and if he is elected co-chairman, he is ready to deal with construction projects. Khusnullin’s press service declined to answer other questions from Meduza, addressing them to the current head of the council. At the same time, Khusnullin himself has already visited the construction sites of complexes in Sevastopol and Kaliningrad.Marat Khusnullin at a construction site in Kaliningrad, August 14, 2020

In a joint response to Meduza’s inquiries, the press service of Prime Minister Mishustin and Deputy Prime Minister Chernyshenko cite the position of Rosneftegaz. According to her, the number of staff and salaries of the fund’s employees are “significantly overstated”, and therefore the fund incurred “ineffective excess costs of wages to the fund’s employees.” In order to obtain reliable information about the state of affairs with the financing of the project, the supervisory board of the fund decided in May that it was necessary to conduct an audit of the fund’s costs .

“The audit (carried out by the audit and consulting company FBK – approx. Meduza) revealed a significant excess of the incurred and planned costs of the fund over the market price level, as well as over the regulatory limits in the conditions of the turnkey construction by the contractor,” reads the response from the press services. The costs of maintaining the fund will be further financed taking into account the results of the audit, which will be considered at the next meeting of the supervisory board. As a result, the dismissed employees will be paid or not, the response from the press services does not directly say.

Construction of educational buildings of the Moscow State Academy of Choreography and the Central Music School at the Moscow State Conservatory.  Kaliningrad.  2020 year
Construction of educational buildings of the Moscow State Academy of Choreography and the Central Music School at the Moscow State Conservatory. Kaliningrad. 2020 yearPress Service of the Government of the Kaliningrad Region

Due to all the problems of the fund, the deadline for the delivery of its first object, an educational complex in Kaliningrad, has already been disrupted. Employees of the Kaliningrad branch of the foundation wrote about this in a letter to the heads of the Bolshoi Theater, Tretyakov Gallery, the Hermitage and the Mariinsky. On September 1, the first students were supposed to come to the educational buildings of the Moscow State Academy of Choreography, as well as the Central Music School at the Moscow Tchaikovsky Conservatory, but this did not happen. 

The press services of the Hermitage, the Tretyakov Gallery, the Mariinsky Theater did not respond to Meduza’s inquiries; the Bolshoi declined to comment.

(c)MEDUZA 2020

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