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By John Helmer in Moscow

Noone who knows and loves Victor Vekselberg doubts his philanthropy towards the country of his birth.

He has helped finance the return of the original Danilovsky Monastery bells, sold to the US in 1930, and then donated to Harvard University. He allows his collection of Faberge eggs to tour Russian provincial museums from time to time.

Then there are the charitable causes of Vekselberg’s Moscow holding, Renova. The Renova website describes, for example, that in 2007 the holding and its staff decided to “forgo corporate Christmas presents in favor of the funding of charity causes… As part of this project, in 2007 the Renova Group provided aid to 18 non-profit organizations and social institutions in various regions of Russia: Moscow, Krasnodar region, Sverdlovsk region, Perm region, Chelyabinsk region – in the total amount of RUB 7 883 529.00 [$321,121]. Employees of the Group took part in the project to support Spaseniye burn center, including purchases of surgical equipment and saving the lives of four children through paying for complex surgeries.”

A church orphanage in the Tver region was another beneficiary that year.

Renova also reports that its corporate charity fund was founded in 2007 “for the purpose of implementing the policy of corporate charity and social investments of the Renova Group in the priority areas of the national development agenda in science, education, culture and arts, development of civil society and local self-governance institutions, environmental protection and sustainable development.” Among the projects which have been identified as recipients of Renova grants there have been: “support of the Russian Olympic national team and participants in XXIX Olympic games in Beijing, Russian Olympic Committee, 2008; support of creation of three films about peoples of Kamchatka, IA ROSBALT 2008; support of the Moscow Easter Festival in 2008-2010; funding of repairs of M. Vrubel hall in the Tretyakov gallery, 2008; support of the International Competition of Young Russian Romance Performers, Romanciada (charity fund for support and development of Russian romance music), 2008; support of the IХ Festival of Russian Arts in Cannes, France, Russian Culture Fund, 2008; Leonid Tyagachev’s alpine skiing club; aid to war veterans and servicemen, All-Russian National Military Fund…[and] a contribution to the development of the special-purpose capital fund of the Russian School of Economics, 2008-2010,… a project for the establishment of Professorial Fellowship for talented young scientists in the Russian School of Economics, 2008.”

An announcement today in a Moscow newspaper that Vekselberg is proposing to offer the Russian Air Force aeroplanes built in Switzerland for pilot training may be a fresh case of philanthropy from the Renova group.

According to the publication, Vekselberg “can build a plant in Russia for production of training airplanes using the technology of the Swiss-based Pilatus. The project depends on whether it will be possible to sign contracts with the Ministry of Defense.” That’s a big conditional, and if each of the aircraft is currently priced at $6.2 million (without the extra avionics required for Russian pilots), then the hundred generously offered to the Air Force would be worth at least $620 million, and probably much more.

It is far from obvious what connexion Vekselberg has with the Russian Air Force, or with Pilatus, a Swiss aircraft builder, which developed a seamy reputation for its trainers in the 1970s. At that time, it was discovered that the PC-7 trainer could be easily adapted to carry and drop bombs. Since the modifications were not carried out in Switzerland, before the aircraft were shipped to their users, the Swiss government denied it had anything to do with what were nicknamed “the poor man’s bombers”. Bombing was what the Pilatus trainers were used for in Laos (CIA operations) in 1962, and since then in such places as Myanmar, Guatemala, Mexico, Chile, Bolivia, Nigeria, Iraq, and Darfur.

In 2001 the Oerlikon company, which owned Pilatus, announced it had sold it off to a group of investors, which included the pension fund of the Swiss pharmaceutical company, Hoffman-LaRoche. Apparently, Oerlikon retained a 14% shareholding after that transaction. Oerlikon executives decline today to say whether there is a relationship between Oerlikon and the investors who bought Pilatus; or whether Oerlikon has sales and other ongoing commercial relations with Pilatus.

These may be important because the controlling shareholder of Oerlikon since 2006 is Vekselberg. The methods by which Vekselberg and his associates acquired their shareholding control of Oerlikon (and after that an associated Swiss company, Sulzer) have been under civil, then criminal investigation in Switzerland for several years. Despite his protestations of innocence, the outcome has not been looking good for Vekselberg.

A scheduled visit to Moscow next month by the Swiss President, Doris Leuthard, will take up this case, and the looming financial liability for Vekselberg, where the matter was left off when President Dmitry Medvedev visited Switzerland last September.
 

According to a defence expert quoted in today’s report of Vekselberg’s Air Force offer, Russian trainee pilots start on the propeller-driven Yak-152, and then progress to the jet trainer, the Yak-130. In between the two, it is reported there might be a place for training on the turboprop Pilatus, whose engine is built by Pratt & Whitney of the US. That Washington would agree to the supply of the engines for Russian military pilot training seems improbable. If Vekselberg and Renova have gone further than the newspaper announcement, Renova isn’t saying, and there is no other sign.

The Air Force is not yet responding to queries, nor the Yakovlev Aircraft Corporation, which makes and markets Yak aircraft; it would be directly threatened by the arrival of the Pilatus in Russia, if that happens.

Konstantin Makiyenko, a well-known analyst at the Center of Analysis of Strategies and Technologies (CAST) in Moscow, is skeptical of the bona fides in the proposal. “The new Vekselberg project seems to be a fake,” Makiyenko said. “It’s scarcely possible to come true. First of all, there is no sense in building an aircraft factory while there is the Yakovlev Bureau which supplies training aircraft to the military. Second, training aircraft are not a priority sector for the Russian Air Force. Third, Vekselberg will try to avoid building anything [in Russia], but instead will import the ready-made aircraft. It is evident that what he really wants is to get access to the state budget – nothing else.”

The spokesman for state aircraft production holding, United Aircraft Corporation (UAC), said it is too soon to comment on the Renova initiative. “Everything is possible,” he said, “if they [Renova] find an investor”.

Andrei Shtorkh, Vekselberg’s spokesman, clarified his position by saying: “Renova does not hold any negotiations with Pilatus to build a plant in Russia to produce training aircraft for the needs of the Defense Ministry.” The Defence Ministry has been sounded out for its interest in the Pilatus, however. If buying interest materializes, then negotiations are likely to start.

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