Thread by @ChrisO_wiki

1/ Stacks of cash were among the many items found and photographed (and allegedly stolen) by Russian security forces searching Yevgeny Prigozhin's house. He has been responsible for disbursing vast amounts of 'black cash' to relatives of dead Wagner troops. ⬇️

2/ A recent Bloomberg article highlights how cash payments to the families of dead soldiers have distorted the entire Russian economy, leading to a boom in cash payments and the growth of a 'shadow economy' resulting from the war.

3/ At least until the recent Wagner mutiny, relatives of its dead fighters were paid compensation of up to 5 million rubles ($60,000) plus uncollected wages (up to $2,650 monthly). The money was paid in cash, stuffed in bags and disbursed from collection points around Russia.

4/ Relatives have been told not to deposit the cash at a bank and are not given any documentation about the source of the money. It's effectively concealed from the tax system. Prigozhin himself has said that his fighters "get all the money in black cash".

5/ The ultimate source of the money is the Russian government, but Wagner is not a tax resident of Russia (and indeed is not even operating legally, as mercenary activity is banned under Russian law). Its fighters sign contracts with a different Prigozhin-owned company.

6/ For these reasons, Wagner has always conducted business in cash, according to a former Wagner staff member interviewed by Bloomberg. "All disbursements, bonuses, funeral payouts and others have always been made only in cash, in envelopes — both then and now"

7/ It's likely that Wagner has disbursed a huge amount of cash. Prigozhin has said that it lost 20,000 fighters in the battle for Bakhmut, which would imply payouts of over 100 billion rubles ($1.1 billion).

8/ The scale of cash disbursements as a result of the war is such that it's having a significant effect on the wider Russian economy. Since mobilisation began in September 2022, there have been 2.2 trillion rubles ($24.3 bn) in cumulative excess cash outflows from banks.

9/ Russians withdrew huge amounts in cash when the full-scale invasion began, fearing a run on the banks. Although that didn't happen, the amount of cash in the economy has continued to grow. It's now about 1.4 trillion ($15.4 bn) rubles past the peak reached in March 2022.

10/ As a result, Russia's cash-based 'shadow economy' has become increasingly prevalent, distorting the whole economy and likely having significant implications for tax revenues.

Source:
($)bloomberg.com/news/articles/…