Russia: A Ponzi Scheme to Destroy the Opposition's Coordinating Council?

The election of the Russian opposition's “Coordinating Council” is set to take place in just one day. Voter registration is now closed and more than 200 candidates will compete for 45 spots in a 48-hour vote, beginning October 20. The majority of those candidates recently participated in three weeks of televised debates [ru], aired on the oppositionist-friendly Dozhd TV channel. Once all verifications are completed by Saturday, the electorate could surpass 165 thousand people. Anticipation and spirits are running high, as the opposition is poised at last to establish for itself a formal coordinating body, relying primarily on the Internet to marshal and manage this grand project.

There are storm clouds rolling in, however, and the promise of a democratic triumph for the protest movement could be faltering, thanks mainly to the unsavory scheming of one of Russia's most infamous and odious characters: Sergei Mavrodi, the founder of the MMM series of pyramid schemes. Throughout the 1990s, MMM defrauded millions of Russian investors of their life savings, a crime for which Mavrodi ultimately served over four years in prison. After his incarceration, he amazingly resurrected MMM, first openly as a ponzi scheme (which is not illegal in Russia), and later as a political party. Mavrodi's platform is vague, to put it gently, but I can tell you that the organization's premise involves instigating a financial collapse that somehow makes MMM the dominant political force in Russia. (When asked [ru] him why he was meddling in the opposition's elections, Mavrodi ranted wildly against “circus” “swindlers” and declared that MMM is Russia's “only real political force.”)

Sergei Mavrodi, screenshot from one of his YouTube videos, 11 October 2012.

Choking on Candidates

Mavrodi's attack on the Coordinating Council election has come on two fronts: candidate and voter registration. First, MMM tried to pack the list of candidates with 64 of its own (disguised) representatives. Leonid Volkov and the opposition's Election Commission realized the ploy only after 53 of Mavrodi's “zombies” had slipped through and successfully submitted the “voluntary” 10,000-ruble (325 USD) candidate-registration fee. Volkov and the Commission identified MMM's people by singling out all applicants whose personal information was limited to “I am an ordinary person.” This, Mavrodi later revealed openly, was intended to be how MMM's voters would later know whom to support in the election.

On September 20, the Election Commission denied [ru] candidate registration to all individuals considered to be Mavrodi's operatives, primarily on the grounds that they misrepresented themselves by declining to acknowledge their ties to MMM.

In response, Mavrodi immediately accused the opposition of robbing MMM of thousands of dollars in registration fees. In a homemade video [ru], he mocked the Coordinating Council's election process, and told his investors that Volkov had stolen from them.

Writing in his LiveJournal, Volkov answered in kind:

А вот все-таки, конечно, грустно: вот этот человек, он очевидно сумасшедший и очевидно жулик, он 20 лет занимается мошенничеством, разводя на бабки дебилов, не понимающих разницы между арифметической и геометрической прогрессией […], он плохо говорит и ужасно выглядит.

It's really quite sad, of course: here's this person, and he's clearly insane and obviously a cardsharp. He's been swindling people for twenty years, making money off morons who don't understand the differences between arithmetic and geometric exponents […]. He speaks poorly and he looks awful.

Volkov went on to ask why the Election Commission should have to refund MMM any money, and argued that Mavrodi had apparently embezzled the funds from his investors, at any rate. Volkov also proposed (perhaps as a joke) that MMM's orphaned registration fees might be spent on bolstering the Election Commission's defenses against DDoS attacks. “[It would be] the first time in twenty years that [MMM] money would go to something useful,” he quipped.

Five days later, the Commission established a refunds procedure [ru] available to Mavrodi's rejected people (as well as other banned candidates). This, however, didn't prevent MMM representatives (Volkov says [ru] three, the Prosecutor General's Office says sixty-four) from appealing to police and accusing the Commission of fraud. On October 17, the Prosecutor's Office formally opened a criminal case [ru] against the opposition's Election Commission on the grounds that it defrauded MMM's people of more than 20 thousand dollars.

While there is disagreement about the actual size of the total registration fees in question, the rub is that the MMM candidates paid in bank money orders. In other words, the Commission is incapable of returning the funds without the bank routing information of MMM's rejected candidates. Rather than provide this information to the Commission, MMM has instead convinced federal prosecutors to open a criminal investigation!

Voter Registration

While Mavrodi's meddling in the candidates pool has sparked this latest run-in with the law (which Volkov is convinced is a pretext to search [ru] the Commission's physical offices), MMM's voter registration scheme poses a far greater threat to the election.

Leonid Volkov, screenshot from YouTube, 17 October 2012.

Bloggers and journalists have poured over the Election Commission's web traffic statistics (which Volkov has made partially transparent [ru]), trying to gauge MMM's penetration of voter registration. Conservative estimates hold that Mavrodi's people have captured roughly 15% [ru] of the electorate, granting them a sizable but not decisive influence over the vote. Others, like Kommersant's Dmitri Butrin, put that figure closer to 30% [ru] (depending on whom among the already registered voters the Commission ultimately verifies). While precise numbers are hard to determine, the evidence of MMM's presence is irrefutable. (Volkov himself acknowledged [ru] that recent spikes in registration were largely the result of an MMM initiative.) Mavrodi's personal website, for instance, referred over 100,000 visitors to (the Commission's webpage) in September and October. (To create such traffic, Mavrodi restricted [ru] access to the MMM website, requiring his own investors to register for the Coordinating Council election, in order to enter MMM's portal.)

Some commentators, like Vedomosti newspaper's editorial desk, are convinced that Mavrodi is working in league with the Kremlin. “He's got something worth selling to the state,” that publication said [ru] of his slavish investors. Others, like Butrin, are prepared to view [ru] MMM as a kind of religious sect that's opposed both to Russia's “protest movement” and its federal government.

The pro-government blogger camp has done its best to exploit the election's MMM-inspired scandals. Viktor Levanov used the federal prosecutors’ criminal case to launch a wider critique [ru] against Volkov's accounting practices, scrutinizing the election's outreach expenses, some of which he believes may have trickled down into the wallets of prominent oppositionists. Former NASHI spokesperson Kristina Potupchik cited Levanov's post, and added [ru] her own questions about 800 thousand rubles (26 thousand USD) that were apparently paid to Dozhd TV to finance coverage of the opposition's debates. Stanislav Apetian also addressed [ru] suspicious web traffic to and from

Volkov's response to the MMM crisis has been optimistic, as well as defeatist. He has been vague in explaining how the Commission might weed out Mavrodi's voters, seemingly asking the public to take it on faith that justice will be done. Indeed, when it comes to neutralizing the MMM “zombie” voters, Volkov's pronouncements have orbited a single idea: the opposition's real supporters must participate maximally, if Mavrodi's scheme is to be overwhelmed and defeated. In other words, the fate of the election hinges on voter turnout.

The same, of course, could be said of Mavrodi's bizarre gambit.


Join the conversation

Authors, please log in »


  • All comments are reviewed by a moderator. Do not submit your comment more than once or it may be identified as spam.
  • Please treat others with respect. Comments containing hate speech, obscenity, and personal attacks will not be approved.