A major general: How Mikhail Babich became a billionaire by tapping into Russia's Defense Ministry budget

While Babich himself hasn't received much media attention, people associated with him hold top positions within the Ministry of Defense. Among them is Deputy Minister Yunus-Bek Yevkurov, the very same person with whom Prigozhin had dramatic negotiations in Rostov. Yevkurov refers to Babich as a “dear friend and brother.” They may have become acquainted when Georgy Shpak, who commanded the Airborne Troops (VDV) in the early 2000s, recommended Yevkurov as an assistant to Babich, who became the head of the government of the Chechen Republic in 2002. Yevkurov and Babich also studied in Ryazan at the same time, albeit in different military educational institutions. Yevkurov attended the VDV School, while Babich studied at the Higher Command Communications School. Yevkurov wrote about Babich that they had served together and carried out combat missions since their “lieutenant days”, “always supporting each other during the most challenging times.”

In the photo below, Babich has his arm around the waist of the wife of another top military official, Sergey Surovikin.

They celebrated the New Year 2022 at the elite restaurant “Podmoskovnye Vechera” in the company of Dmitry Peskov and Margarita Simonyan. Prior to this, Vladimir Putin appointed Babich to oversee the export of Russian weapons and bestowed upon him the rank of Major General.

Babich's haphazard career, where he is repeatedly placed in respectable positions across different agencies, has even sparked theories about a special moral obligation that Putin has towards him. Allegedly, Babich's father was a colleague (and superior) of Putin's in the Dresden KGB station.

Sis and her connections

Alla Polyakova, Mikhail Babich's sister, has also built her own career. Two years ago, she became a deputy in the State Duma, having been elected as a member of the United Russia party.

In her financial declaration, she disclosed ownership of a house measuring 939 square meters. The Insider managed to locate the property, which is a newly constructed house in the prestigious Razdory-2 cottage village.

This estate, along with its 19-acre land, could be worth up to a billion rubles ($11,170,000) in the upscale Rublyovka area. Interestingly, it appears that the residence is occupied not only by Babich's sister (or possibly not primarily by her), but also by Babich himself. Food deliveries to the mansion have been ordered by Babich's 16-year-old daughter, Maria. The registration of a Filipino governess in the house was handled by Oleg Slobodyan, whose contact number is saved among acquaintances as “Babich's assistant.”

Alla Polyakova herself resides in the more modest Lesnoy Gorodok settlement in the Odintsovo district and also owns an apartment measuring 123.8 square meters in the Dom Na Naberezhnoy residential complex in Moscow, valued at 84 million rubles ($940,000).

Babich also benefits from property registered under the family-owned company, LLC Seton. According to leaked digital pass records, he uses a Porsche Cayenne registered to the company. Meanwhile, his spouse, Galina, receives a salary from Seton.

Seton also owns an impressive business center (1,477.7 square meters) near the Prospekt Mira metro station. Its market value is estimated to be around 700 million rubles ($8 million).

Other luxury vehicles, including a Porsche Macan, three Mercedes-Benz cars, and a BMW X6, are also registered to Seton. Vadim Novozhilov, Polyakova's husband, formally acts as the owner of the LLC and drives the BMW X6.

Ex-con chauffer

It has been discovered by The Insider that Novozhilov himself has his own personal chauffeur named Konstantin Savin. Savin was seen parking the aforementioned BMW and is known among acquaintances as “Kostya, Vadim's driver.” The Babich family fictitiously registered several companies under Savin's name, which then received contracts from uniformed agencies. One such company is LLC Kombinat Prioksky, a manufacturer of army dry rations.

LLC Fabrika, a subsidiary of Kombinat, supplied uniforms and towels to the Ministry of Internal Affairs (MVD) and the Federal Protective Service (FSO) until its dissolution in 2021.

In 2019, Savin became the owner of LLC Osnova, a company that was transferred to him by Novozhilov. This company acted as a contractor for the Federal Security Service (FSB), the Ministry of Internal Affairs (MVD), and the Ministry of Defense, supplying underwear, briefs, T-shirts, socks, throttles, and first aid kits.

There is irony in the fact that Savin, becoming the formal owner of a company that serves as a contractor for the military and law enforcement, had a criminal record. In 2015, he was tried for theft, but the case was closed after reconciliation between the parties. He was also suspected of drug trafficking.

A classmate from Ryazan

The Insider has discovered several other “nominees” of Babich. Oleg Lvov is the owner of the company Arttorg, which produces army dry rations, and he is the CEO of the construction company LLC Stil-1, which, on behalf of the Ministry of Defense, builds residential houses for officers and military towns. Stil-1 is also a contractor for the Moscow Region Housing Renovation Fund. The total amount of government contracts awarded exceeds 11 billion rubles ($123 million).

Lvov was a member of the board of directors of the enterprise Krasnye Tkachi liquidated several years ago. Its owners concealed themselves behind offshore companies Fors Investment Venture and Livraco Trading, which are affiliated with Babich as they acted as founders of the family-owned company Seton. The Krasnye Tkachi factory earned over 200 million rubles ($2.2 million) from supplying military special clothing, tents, bedding, and, once again, underwear to the Ministry of Defense, FSO, FSB, and MVD.

Lvov, as revealed by The Insider, is a long-time comrade of Babich: they both graduated from the Ryazan Communication School in 1990, which means they were classmates. In phone books, he is listed as “head of security” and “from Babich.”

According to The Insider’s sources who have access to the accounting records of the company Seton, it lends money to the construction company ITRKS, which appears to be affiliated with Babich's family business. In the phone contacts of acquaintances, its founder is listed as “Alexey Grachev Stil-1.” On its website, ITRKS states:

“[The company] has implemented 4 projects for the Russian Ministry of Defense. It works on the 'turnkey' basis, from compiling as-built documentation and permits for construction to commissioning and obtaining final certificates. The total value of the implemented defense ministry-related projects is 3 billion rubles ($34 million).”

Mom and her penthouse

In addition to his sister, Babich prefers to register his real estate under his mother's name. Zhanna Babich owns a two-story penthouse (522.6 m²) in the Dominion residential complex on Lomonosovsky Prospekt in Moscow. Such property is valued at over 500 million rubles ($5.6 million). His mother also owns a 145-square-meter apartment in the Valovaya 20 residential complex (worth 90 million rubles ($1 million)). The total value of Babich's relatives' assets, according to The Insider's calculations, exceeds 2.5 billion rubles ($28 million).

In 2012, Babich joined the Security Council of the Russian Federation and remained a member until 2018. He served there alongside the heads of all the country's uniformed agencies. By leveraging these professional connections, Babich can lobby for the interests of his close business associates.