Healthcare, Putin himself has said, is one of the most pressing issues facing post-Soviet Russia.
Life expectancy at birth plunged after the fall of the Soviet Union, hitting 65 in 2002 - down from 69 in 1989. Though it recovered to 69 in 2011, according to World Bank figures, it remains well below Western nations such as Britain and the United States, where life expectancies were 81 and 79 that year. Since Putin came to power, Russia’s population has declined to 143 million from 147 million.
Putin saw the need for improvements. In 2005, then in his second term as president, he initiated plans to spend $1 billion to build and equip 15 high-tech hospitals across Russia. His National Project Health was one of several efforts he said were vital to lift the quality of life for ordinary Russians. New clinics for emergency, heart and prosthetic patients were planned from Vladivostok in the east to Kaliningrad on the Baltic.
“It is a guarantee against the sloppy eating up of resources without any discernible results,” Putin said.
What Putin did not announce was that two of his associates became involved in constructing and equipping some of the hospitals.
One was a former dentist called Nikolai Shamalov, a well-built, strong-willed man now in his sixties. He knew Putin from their days in St. Petersburg, where the future president was a powerful city official. One of Shamalov’s sons worked for Putin’s department in the city’s administration.
Shamalov and Putin were also among a small group of men who founded an exclusive lakeside development of dachas north of the city known as the Ozero Cooperative. Shamalov grew rich through a stake in Bank Rossiya, a St. Petersburg company that expanded rapidly after Putin moved to Moscow and became president in 2000. He also worked as a top Russian sales executive for Siemens - a major producer of medical equipment.
The other associate in the hospital project was Dmitry Gorelov, who graduated from a military medical academy in 1973. Gorelov, described by one associate as a thoughtful man who is keen on photography, was also a shareholder in Bank Rossiya until June 2013. In 2000, Gorelov was granted the title of “honored healthcare practitioner of the Russian Federation” in a presidential decree issued by Putin.
A third key figure in the tale of the hospital deals and the Black Sea estate is Sergei Kolesnikov, a former business associate of Shamalov and Gorelov. A biologist by training, Kolesnikov said he helped Shamalov manage an investment company; he was also a shareholder with Gorelov in a healthcare company. His roles, he said, gave him deep insight into the two men’s association with the president as well as knowledge of the hospital and Black Sea deals.
For instance, Kolesnikov said, the two were guests at the leader’s 55th birthday party in 2007. “They were at his birthday; they told me about it,” Kolesnikov said in an interview in Estonia, where he now lives. He said Shamalov and Gorelov were also guests at parties held at Valdai, a secluded presidential residence between Moscow and St. Petersburg.
Independently of Kolesnikov, flight details seen by Reuters may underscore the proximity of Shamalov and Gorelov to Putin.
In 2008, the two businessmen traveled on a small private plane from Prague to the Russian resort of Sochi with Alina Kabayeva, a former Olympic gymnast described by some Russian media as having been Putin’s girlfriend. At the time the president, who was then still married, denied he had a relationship with Kabayeva and told journalists to keep their “snotty noses” out of his private life. Kabayeva declined to comment.
Also on the plane, according to the flight information, was Vladimir Kozhin, a senior Kremlin official who was sanctioned by the U.S. Treasury in March. Asked about the flight, Kozhin said he would not respond to speculation.
In 2010 Kolesnikov wrote an open letter to then-President Medvedev, claiming that Shamalov was building a luxury estate for Putin by the Black Sea. Kolesnikov said in his letter that he didn’t have a direct role in managing the palace project. The operation, he said, was run by Shamalov, but it drained funds from other projects that Kolesnikov oversaw. The letter said Kolesnikov knew about the project’s costs because of “detailed reports and budgets” he reviewed during his work with Shamalov.
Shamalov did not respond to questions for this article. Gorelov, asked about his role in companies involved in Putin’s healthcare project, told Reuters: “The achievements of modern medicine until recently were accessible only for inhabitants of the largest megalopolises of Russia, mainly Moscow and St. Petersburg. The aim of the project was to provide an opportunity for inhabitants of other regions of the country, in particular Siberia and the Far East, to receive highly specialized treatment with the use of the latest advances of medical sciences.”
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