Billions on Valaam: on the Valaam Monastery's Economic Miracles

BILLIONS ON VALAAM: ON THE VALAAM MONASTERY'S ECONOMIC MIRACLES

The story of the residents' of Valaam fight for their constitutional rights is well- known: Russian as well as international media sources have covered it. There are two sides to the conflict. The first is that of the local residents who were evicted from the island, and who in recent years have received the support of journalists and human right activists. For example, Karelia's Commissioner of Human Rights, Alexander Sharapov, and the employees of his apparatus. The second is that of the Valaam Monestary and the hiearchy of the Russian Orthodox Church, including the patriarch. As numerous documents and judicial verdicts show, the secular authorities are on the side of the Church.

As it is, this adversary has not only a social side, but a financial one as well. The editorial staff at 7x7 has gathered a sufficient amount of information about the financial currents flowing to the island. We attempted to figure out why the state authorities are investing so much in developing the Valaam Monastery, and whether or not they are the real reason behind the monastery's desire to gain absolute rule over Valaam.

The answer to that question turned into a separate small investigation of its own. In it are facts and figures that give insight into the the financial prosperity of Valaam Transfiguration of the Savior Patriarchal (that is, directly subordinate to the patriarch) Men's Monastery.

On a Monastery Scale

In order to estimate the scale of the financial infusions into the monastery, it is sufficient to turn to open sources and databases. From them it becomes clear: The Valaam Monastery loves and knows how to earn cash. Half a dozen firms figure into the list of commercial and non-profit (but still profitable) institutions saffiliated with the monastery. Like the monastery itself, many them them (including the most profitable Pilgrimage Services LLC) are registered in Saint Petersburg or Moscow where their tax information is recorded. Diagram of physical and legal entities founded by or affiliated with the Valaam Monastery

According to the Kommersant Card Index, the combined proceeds of the monastery's enterprises (not including the individual entrepreneurs affiliated with the monastery such as Agapius Pancratevich, who produces cheese on the cloister farm) in 2015 totalled 179, 744,000 rubles. Add to this the 322 million rubles the state designated to the Valaam Non-Profit founded by the monastery. These funds had been collected to reconstruct the Winter Hotel which burned down on May 1, 2016, and to find living quarters for the people who had been living there at the time.

An Agreement with the Valaam Non-Profit

Appendix to the Asset Allocation Agreement:

Billing Statement:

Almost all of the monastery’s firms work in the sphere of trade and services: they sell groceries and souvenirs to local residents, tourists and pilgrims (such as the strong liquor under the brandname "Valaam Monastery. Apothecary Garden"), they provide hotel and guide services, as well as collect local utility payments. All of this is functions as a monopoly.

It began with a family-owned grocery store being shut down--the monastery didn't like to neighbor a liquor store. But after some time, the monastery opened its own store in the very same building with the same assortment of products only with much higher prices than the Sortavala level (Valaam's autonomy was abolished in 2006 when the town joined the city of Sortavala located 40 km down the shore).

— Previously, the store belonged to the private entrepreneur Voronko. The monastery criticized him for selling vodka, beer, and cigarettes next door. This was the pretext under which the store was closed down. And then the monastery opened its own store in the exact same location. There one finds (among other things) vodka, beer, and cigarettes “in assortment.” "Only the prices rose," says local resident Svetlana Strelnikova. PHOTOS of the store

The monastery monopolized the sale of souvenirs on the island too. As of last fall, little souvenir shops selling locally made crafts still lined the pier on the monastery's harbor. The production and sale of souvenirs brought in a decent seasonal income to dozens of local residents as well as to the monastery: “Secular” shops neighbored the Church's. The shop buildings belonged to one of the monastery's companies, Valaam-Service, who business owners signed leases with. However, after Patriarch Cyril's visit to the island last year, a decision was made to remove the shops: supposedly commerce obstructs pilgrims from praying.

All attempts to come to an agreement with the monastery or the local Sortavala Administration to whom the land on the island belongs, led to no success. The monastery's "security police" rigidly suppressed any local tradesman who continued dealing on the pier with folding tables. Even Yelena Gnetova, the Public Defender of Karelia, could not help the small business owners renew their trade. Several families, including of those with children and disabled parents, have now been deprived of a constant source of income. PHOTOS Barbara Sergeeva

For many years, Barbara Sergeeva has made and sold souvenirs on the pier. Last year, she was looking for work. As a result, she was forced to move to the mainland, where her disabled child and sick, aging parents remain in her care. Where to find the money to continue treatments? She doesn't know. Unsold "inventory," which at first glance totals around ten thousand rubles, and a now- obsolete sewing machine collect dust in her apartment at the Winter Hotel. Last September, Varvara and her son lost the latest in a series of suits against the monastery. The monastery’s SENT LLC took the same kind of legal action against the residents of the Winter--to forcedly move them from the island to housing projects constructed for them on the mainland in Sortavala-- in order to build a spiritual-enlightenment center in its place. Now they, like other "malevolent disrupters" of Valaam's peace, await an apartment in the Plywood District that lacks central heating but has plenty of mold in the walls.

Pilgrimage Services, yet another monastery organization, attends to all the “organized” tourists who come to the island. All excursions include a visit to the Central Estate and its surrounding premises. This program was not the monastery's invention. After all, the monks knew nothing about it before arriving to the island. The monastery gained all of its materials (ready-made instructions for the guides, diagrams, maps, documents) through inheritance from the Deputy Director of Pilgrimage ServicesVladimir Rudin, the former head of the Valaam Preservation Museum. According his former colleagues at the museum, he “joined the monastery.” Taking the museum's methodological materials with him, and obtained the leading post, and together with that — a comfortable living situation on the island.

Even those who wish to land on the island not for “religious,” but “nature” experiences nevertheless contribute to the monastery's coffer. Indeed, even the boats cruising between the mainland (Sortavala) and the island belong to Pilgrimage Services. A one-way trip costs 900 rubles.

The monastery offers hotel accommodations to those wanting to stay on the island — from the modest Hegumen to the luxurious Summer. True, after the "Easter" fire of 2016, the monastery suddenly lost two of its hotels — the Winter and the Garret. But this problem was strategically removed: By May, the ship-hotel Admiral Kuznetsov was already anchored to the monastery's pier. PHOTO The Slavic Hotel in the building of the former Summer Hotel

PHOTOS Check from the cafe On the Pier

The Valaam hotel and food services are entirely legal businesses established and controlled by the monastery's commercial structure. Unfortunately, their integrity in a number of instances leaves room for doubt. For example, our request for a receipt at the monastery's On the Pier Cafe was met with incomprehension and surprise. "We do not have a cash register, so I do not have any blank receipts either. We are never asked for such things.”

After several telephone calls, the cafe manager sent the “kitchen worker” somewhere who returned after 10 minutes with a receipt with “Valaam Monastery Pilgrimage Services LLC” printed on it.

If you want to go to Valaam not for an excursion but official matters, and need a receipt for your hotel accommodations, be prepared to be presented not with an official financial document, but a "proof of donation."

Are the revenues from undocumented sale of food to tourists and from "donations" for living in monastery hotels reflected in the financial books of the monastery's firms? As follows, are these proceeds taxed so as to support the state, regional, and municipal budget of Sortavala? We're hoping a relevant authority can give us answers to these questions.

However, it's unlikely that the church entrepreneurs themselves would venture to remark on the actual profit of the monastery's enterprises. We are only stating the fact that in 2015, according to the Kommersant Card Index, the monastic companies responsible for handling tourists-- Pilgrimage Services LLC and Equal LLC-- showed altogether weak gains compared to profits.

Profile relation Pilgrimage Service's Profit and Gains Equal's

Profit and Gains. Photo: Stay at a hotel-- contribute a donation

Difficult to control, easy to invest!

In all likelihood, the regional authorities suspected something. In any case, the idea to control, or more precisely, to monitor, the monastery's cash flows was brought up by regional authorities already back in the 1990s. To do so required filing the monastery's enterprises with the Department of Revenue. Judging by the 2016 State Registrar of Legal Entities, this attempt failed miserably. At the same time, the government's ruling is still active, and therefore the regional authorities could repeat their attempt if they so desired.

Photos: Ruling by the Government of Karelia from July 31, 1998

The ruling's text reveals some details about Valaam Monastery's relationship with both the federal and regional secular authorities. It talks about the existence of a federal program called "The Revival and Development of the Valaam Archipelago," as well as using taxpayer money to fund the monastery, which includes the construction of building projects into which to move local residents..

It is not customary to audit the Church in Karelia (or in all of Russia for that matter). But to spend taxpayer money on the Church is a completely common practice. And the level of support is steadily growing. The federal and regional authorities did not forget about the monastery even during the hardest of times. Thus in 1999, the country's most intense post-crisis year, the chairman of Karelia Sergei Katanandov allotted 135 million rubles of the republic's budget to be granted the monastery during the course of 15 years, 30 million of which were to be distributed in the first 5 years. What's to even be said about 200K! Only the island's energy plant cost the federal budget more at 2.5 billion rubles (more will be written about that later). Despite the economic crisis the country has been in for the last several years, the flow of cash to the Valaam has not run dry.

The same open sources provide if not exhaustive, at least suggestive evidence about the volume of state funds entering the the Valaam Monastery. In last three years, around 600 million rubles were spent on the creation, restoration, and maintenance of Valaam's infrastructure through state purchases. The state financed roads, energy and aqueous infrastructure. Valaam's super highway: to dust off and repair!

Mikhail, a local resident who confessed to helping build the roads in Valaam in the mid-1980s, is unhappy with their current condition as well as how they are maintained:

— "You can see that the roads are getting worse everyday.” The road builders who are helping to build the Avramiev Hermitage moonlight at the monastery. Meanwhile, no one is working on the roads. Earlier graders were going around, but now there is nothing of the sort. We took our own shovels and leveled out the land so that it would be at least possible to cross the bridge. The gravel and road metal delivered, presumably, to repair the roads is simply sold to the monastery. It is all put into storage. The road remains in disrepair, while the supplies all disappear somewhere. It means they're using the road as a write off. Earlier, they were filling the ditches with gravel and running a grader over them. Now the grader just goes back and forth, but there's no more gravel. But they sell it whereever the monastery is doing construction. According to local residents, the roads in Valaam were never in bad condition. Most likely because the island never had any serious automobile traffic. But the monastery's restoration was accompanied by frequent heavy use of the roads. Today one finds technology of varying calibre traversing the island— from mini electric cars to enormous diesel dump trucks. This along with a steady increase in tourism to the island drew attention to Valaam's roads in the early 2000s. It was around this same time the first budgetary money was spent on laying down gravel roads on the island. They are still cleaning up the dust. In any case, drivers talk about this a lot. According to them, this is a completely useless endeavor: it does not get rid of the dust, and many contract organizations frequently pour the dust setting solution on roads during the rain.

— “It's some sort of idiocy. They pour some special sort of solution down so that there would not be dust. I get the impression that they've been convening with a celestial office for the last two years: ‘It will rain tomorrow,--fill the truck and treat the roads. Or at least write it off.’ I'm thinking, ‘What is this nonsense?’ The rain is coming down in torrents and he (the street sprinkler driver) is going around sprinkling the roads. I say to him: ‘Why don't you just go straight to the ditch, open the valve, and dump it all out?’ He says to me: ‘To me they said to treat the roads today, so I'm treating them.’” PHOTOS Roads of Valaam

VIDEO: Local resident talks about dust removal on the roads In recent years, investments in the island’s roads from the regional budget significantly increased. Thus from 2014 to 2015, 26,182,000 rubles were spent on the measure named "Repairing the Stonework of the Filtering Hopper at Kidron Valley, 5 Main Monastery Road, Valaam Archipelago."

In 2015, a government contract was finalized for 99,187,000 rubles to be spent on “The Complex Set of Tasks Associated with the 21,067 Kilometer Network of Motorways and the Road Facilities on Valaam Island to be Completed Between January 1, 2015 and December 31, 2020." That is, 16.5 million rubles a year, or 800 thousand rubles per kilometer per year.

The competition winner, SK WORLD LLC, has been in liquidation since september 2016. However, the contract about the upkeep of Valaam's roads is still "underway." This is in contrast to seven additional government contracts obtained from that same Karelian Department of Motorways.

It is unclear as to how a liquidated enterprise is going to attend to the island. All that is clear is that the road workers haven't been too troubled. A year and a half of "thorough" upkeep has brought parts of these roads to a pretty sorry state. According to the local drivers, most of the work being done at the moment is on the sections of road most valuable to the monastery. The discussion deals with laying down fresh screening on the roads in the districts with a lot of new construction, such as the dairy farm. To compare, according to state contract records, an average of 12 million rubles per year was spent on the upkeep of roads in Sortavala from 2013-2015. Juxtaposed with Valaam, these expenditures are even lower. With that money, With that, Sortavala managed to completely replace the asphalt on 12 central streets (Here's a paradox: Central Street in Sortavala is not in the city, but on Valaam, forty kilometers away from the mainland).

Figure: Roadmap of Valaam Figure: Roadmap of Sortavala Sortavala, Road Maintenance from 2013-2016 The question about how it is possible to bury 16.5 million rubles under the roads of Valaam remains rhetorical.

A washroom in every cell

Autumn 2016 Before it burned down on Easter, the Winter Hotel was the main consumer of water on the island. Now the water there is shut off. Granted there is no shortage of water there: it gathers in large quantities within the ceilings and walls of the ravished apartments and even collects in their light fixtures. There's just no water in the pipes. The monastery utility services turned them off after the fire, as they did the lights.

The tenants who stayed in the building got water either from the neighboring administrative building where the Nature Park's office is (at least for now) still located, or they traversed the "Water Bearer's Path," so named by monks' forefathers in times long past, and got water from the lake.

— "I have to run for water two or three times a day. It's good physical activity. There's no time to get weak, tells Kiril Smyshnikov, the father of a daughter just born in March. Kiril has has fit all their necessary objects into their apartment. After the fire, there was a dried up shower and deactivated washing machine. It was actually pretty nice when everything worked. Now just rows of canisters and buckets.

By late autumn 2016, the Winter's tenant were forbidden to light their stoves. Then the building was condemned and a fence put up around it. Its former tenants were forced to disperse wherever they could go. And only after this did the water and lights come on in the building again; not for the tenants, but for those cleaning up after the fire.

Turning the water off was dissonant not only with common sense (how could functional plumbing disrupt the restoration of the Winter?), but also with the state contract records, which suggest that Valaam's water-supply should be completely up-to-date. In 2013 alone, Saint Petersburg Water Canal, a state-owned enterprise, spent 314.7 million rubles modernizing the water-supply and sewer system on Valaam (see appendix Water Canal). In 2014, "only" 26,607,000 rubles were spent on the island's sewer system. In summer 2016, Petersburg Water Canal allocated another four million rubles "to render operational services in the water-supply facilities" on Valaam.

It is remarkable that these hundreds of millions of rubles all went to Alliance Electro, an LLC joined with Water Canal through some sort of non-profit organization called Saint Petersburg Water-Supply and Sewer Facility Management. The Connection Between AE LLC and Water Canal

It's interesting that the state enterprise conducts all Valaam business in a simplified matter-- through a so-called purchase from a single supplier. This is one of five ways it buys goods and services using "proprietary funds." 10.5.2.12 an eponymous Regulation. According to this, buying from a single supplier (execution, contracting) is possible because "it is impossible for the work and services of other contractors not to disrupt the complex and technological ties with services and work rendered by the previous executing agency."

Alhough it's true that Alliance Electro's books don't reveal the millions and millions of government contract rubles it received from Water Canal. In 2015, the company reported a loss of 2.7 million rubles. Its public access records also attest to Petersburg Water Canal having worked in Valaam since the mid 1990s. In 1995, the water-supply and canalization reconstruction projct was begun on the island. According to the figures provided by various Petersburg media sources , the project was estimated to cost 3.5 billion rubles. After several years, the Valaam Monastery "gifted" its water supply and removal network to Saint Petersburg Water Canal. After that, the second stage of “reconstruction” began.

Within its framework, water supply and removal systems were installed not only in the monastery's central estate, but in some of its surrounding priories as well. This, in any case, is true for the recently-built St. Vladimir Priory. Here one finds the patriarch's residence and "guest house" where President Vladimir Putins has stayed, along with a "presidential" bathhouse.

Most likely, Valaam's sewer system is no longer a significant source of income for Felix Karmazinov, one of Peterburg Canal's directors. But this organization has worked on the island for a long time now. Back in the mid-1990s, it built a filtration system on Valaam for a total of 3.5 billion rubles (that is, for approximately 9-9.5 million dollars in 1995 when the exchange rate equaled 3600- 4600 rubles on the dollar, which in 2016 prices equals more than 600 million rubles), including foreign funding (back then the project was supported by government and business associations of Finland). In 2015, dp.ru, a business news agency, and the Anti-Corruption Fund of Saint Petersburg, published a report on how Karmazinov "built a multibillion ruble empire" in the three decades he spent as the director of Petersburg Canal . After these publications were released, as their authors will assert, Karmazinov resigned from his post. The company's website now has him called Strategic Programs Coordinator, a position that stands even higher on the staff list than General Director. To compare, the filtering system Sortavala built in 2003 cost nearly 5 million euros — and not from Russia's budget, rather the European Union's. In 2013 alone, Petersburg Water Canal spent more than 250 million rubles, or around 6 million euros, on modernizing Valaam's water-removal system. By the way, according to the monastery employees, the money in the mid-1990s was spent on "constructing artisan wells," but no sceptic system.

It is worthwhile to note, however, that the state enterprise while under Karazinov's management reported only to have built the infrastructure essential to Valaam's water supply and removal system, as well as the "memorial cross," which according to local guides, always causes tourists walking by to ask, "did someone die here?" Then a different state unitary enteprise — the public joint-stock Federal Network Company (FNC) which manages the island’s electricity, used the monastery's "blessing" to erect an enormous "administrative building,” as well as a two-storied floating bathhouse with all the amenities.

Yes, there will a bath!

Halfway from the Central Estate to the St. Nikolai Priory, a path made from fine wooden planks leads into the forest. At the entrance you'll find a typical Valaam inscription: “Entry is not Blessed!” Most often, these plaques shield some kind of monastery structure. However, in this case someone did not bless the entry onto the beautiful shore of a small inlet where local residents loved to swim and relax. Now there is a bathhouse of imposing size anchored to the opposite side of the inlet by equally imposing chains.

PHOTOS The bathhouse

Not far from the the bath stands the "administrative building" that belongs to the Federal Network Company. This enormous-by-Valaam-standards, secular structure is stuffed with expensive furniture and technology, a conference hall, and recreation rooms.

According the records of the State Register, the building has a total area of 512 meters 2 with three floors including a basement. PHOTOS The FNC Building

The building is empty for a the large part of the year. The electrical engineers who work on the island on a rotational basis do not live there. Rather, apartments are rented for them in one of the monastery's Central Estate buildings.

Why FNC needed such an imposing building, and whether it was easy for the company to obtain permission and find a site for it on an island preservation, is a riddle. But the building stands and was placed in the cadastral register, so this must mean the state-owned enterprise did not encounter any insurmountable issues. An interesting fact. After all, any talk of where to find space to build housing for local residents on the island ends the same way: the monastery and even the public prosecutor unanimously declare, "there's no room."

December 18, 2009, Bishop Pancratius, Father Superior of the Valaam Monastery, blessed the new electrical substation Valaam 35kV. The Federal Network Company invested 2.3 billion rubles on the installation of an electrical power cable along the the bottom of Lake Ladoga. This operation was widely broadcasted on the Valaam Monastery's website and in the regional administration's official resources .

The management of the public joint-stock company Russian Networks (FNC is a daughter company of Russian Networks) is still proud of the innovative methods by which they attached the cable to the new facility on the island, as well as of the power reserves it supplies the island's inhabitants. On July 25, 2016, Oleg Budargin, the head of Russian Networks stated at a meeting held by the Valaam Monastery's Stewardship Council : “The rated capacity of the cross flow from the mainland is 12.6 MW, while the Valaam only consumes 1.5 MW in winter months. The current level doesn't even exceed .8 MW. This means that Valaam's inhabitants have colossal reserves for further development." One of FNC's collaborators even acknowledged that “the amount of electicity supplied by the cable to Valaam would be enough to power, for example, a small European country .

In the last four years, FNC spent over 100 million rubles of state contracts on developing the island's electrical infrastructure. The most significant (more than 10 million rubles) purchases happened between 2015-2016.

What can be deduced from such a level of investment and power supply? Most likely, that new "ceremonial" and not-so-ceremonial facilities will start appearing on the island. Valaam's way of sorting waste

Another interesting facility not immediately associated with monastic life is the island's waste management plant. According to those familiar with the situation, it was built by FNC as well.

The monastery's steward Father Efraim (to the world — Eugene Vasilyevich Mukhin, the director and founder of several “cloister” enterprises) acknowledges that the plant built near the dump in 2013 is still not operating. The first problem is that there is no one to work there. The monastery hopes for the help of volunteers to solve this problem: --“It's difficult and economically ineffective for us to organize waste disposal ourselves. It's better to sort, compress, and take the waste to mainland. A rubbish- sorting plant was built next to the dump in 2013, but is still not operating. 12 tractor loads of garbage are brought there a week. But who is there to sort it?”

PHOTO Father Efraim (Eugene Mukhin) Steward of the Valaam Monastery

PHOTO The waste deposit on Valaam Island.

Now there is a cart, or garbage wagon, but the plant still did not work during the summer of 2016. Neither Valaam's monks nor their followers are prepared to work at the landfill. Either the work is too heavy, they do not have the labor resources, or sorting the island's waste and caring for the environment are not on the monastery's priority list. All three explanations are probably accurate: the work is not very respected, and they need workers in those areas where the monastery can produce and earn— at the trout and dairy farms, running the tour boats and excursions, at the souvenir booths and hotels.

By the way, there is no note of a "waste sorting plant” on Valaam's cadastral map. There is only an “uninhabited building” under the cadaster number 10:10:0100209:184. Our inquiry at the Unified State Register of Real Estate and Transactions went nowhere--there is no information there about the building's owner.

The director's of Russian Networks, Oleg Budargin's, rich patronage of the Valaam Monastery continued in 2015 with the establishment of the Light of Valaam Philanthropic Fund. Father Superior Pancratius (Zherdev) appeared as a cofounder of the fund. Caciotta, Ricotta, Monastiko.

“On the Monestary's farm, the cows live better than many on the island do. Their udders are washed with soap and warm water, and milked to the sound of classical music," says Svetlana Strelnikova, a local resident well acquainted with farm work.

This is how cheese is produced on Valaam. Quite recently, it was still difficult to purchase real, sanctioned parmesan. However, this summer "Caciotta," “Ricotta,” and “Monastiko” appeared on the counters of the monastery's store. One of the monks even acknowledged that the fraternity ceased to retain the most expensive and complicated-to-produce hard cheeses. Now it all goes straight to sale. The monks are displeased with the early-ripened, soft and inexpensive “ricotta” (at the store, 350 grams costs 300 rubles).

It's possible to judge the financial state of the monastery and the scale of investment on the island based on the Valaam Farm. Built at the end of the nineteenth century, it dutifully served to varying degrees both the monastery and the village. However, after Valaam’s boarding house for disabled veterans was moved to the mainland, the farm gradually fell to disarray. Local residents restored it in the late-1980s and it began to yield profits again.

In the early 1990s, the monastery outbid the farm's owners. According to the local residents, one of the farm's coowners either gave or sold documents to the monastery, after which he left the island. Since then, the farm has been run by the monastery. PHOTO: The farm on the public cadastral map

A massive reconstruction of the farm was carried out in 2014: Serbian specialists restored and built new barns and refrigerators, Italian cheese-making equipment was shipped in, and Agapius, one of Valaam's monks, even completed a training in Italy. After this, the small business owner Agapius Pancratevich Valaamsky appeared on the island (you'll agree, his name has an interesting assonance both with the island and with Father Superior Pancratius).

The monastery does not hide the fact that the farm's restoration and business launch was all organized by that very same Oleg Budargin. PHOTO : Valaam Farm. View from the water

Preservation kitsch The monastery's level of prosperity is evident in more than just government contracts and the Federal Network buildings. For the last several years, new "ceremonial structures" have been and continue to be erected around the archipelago. GOOGLE MAPS

The Saint Vladimir Priory

The St Vladimir Priory was erected in just two years. Construction began in July 2006 and in September 2008, Patriarch Aleksey II blessed the cathedral in honor of Saint Vladimir, the Evangelizer of Russia. Asserting that the cathedral was not named after St Vladimir by coincidence, town residents instead call it Saint Putin. The patriarch's residence and guest house for "important dignitaries" are located inside the monastery's thoroughly guarded territory where regular tourists and pilgrims are only allowed on big holidays. The locals simply call it "Putin's residence" because of the frequency they've seen him there. There are houses nearby, but they're separated by a small tract of woods. Next to “President's house” is the “presidential” bathhouse. The entire complex is equipped with an autonomous power supply (from a diesel-powered station), water pipes, and canalization.

There was no shortage of funds when building the priory--the "memorial" plaque bolted to the cathedral's wall leaves no room for doubt about this. Among the donors appear the names of well-known patrons, businessmen, and politicians — the President's Chief-of-Staff Vladimir Kozhina, the “carpenter” Nikolai Taskin, the bankers Andrei Anisimov, Ilya Yurov (of the ruined Trust Bank), Aleksei and Dmitri Ananevy, the “metallurgist” Andrei Kozitsyn, the “plumber” Felix Karamzinov, “the milkman” Sergei Plastinin, the Orthodox Maecena Vyacheslav Kiselev, and architect Andrei Anisimov.

However, tourists who visit the monastery are surprised not only by the magnitude and rate of construction, but also by the state the building is in: there are huge cracks in the basement walls and elevated humidity levels have caused mold to appear on the museum's artifacts. By the way, Patriarch Aleksei II did not take a liking to the residence built for him. Therefore in addition to his official residence, the "patriarchal cabin," or the "patriarchal hermitage" as as it is called on the public cadaster map, was built for him on the distant Bayon Island.

Based on the photographs taken by one of its builders, the patriarch's cell can "hardly be called a cell," rather “an entire Venice complete with artificial canals and bridges” was erected on the island preservation. PHOTOS THE PATRIARCHAL CABIN

Island of Defense (Kelisaari) Historians call the Island of Defense (Kelisaari) an outdoor museum of fortification arts. It's well-known to tourists thanks to the Mannerheim Line built on the island. Here, underground casemates, bunkers, and artillery notches were cut into the cliffs down to the lake, as well as an observation platform for directing artillery fire. These structures are recognized as historical monuments and receive rave reviews from the numerous "wild" tourists they draw to the island. The Island of Defense is probably the Valaam Archipelago's main tourist attraction.

The Church's new buildings on the main island are only of interest to a select few of religious and “boat tourists” who end up on one of the Pilgrimage Services’ PR-tours.

The monastery began a massive construction project on the Island of Defense back in Summer 2015. In December of that same year, the foundation for a new Priory of St. Andrew the First-Called was officially laid.

“In concluding a solemn liturgical service, Metropolitan Barsonofius expressed confidence that with the assistance of philanthropist donors, God will help complete the construction and this Ladoga island will become an attractive destination for many pilgrims," reports the Patriarchy's website.

However, the monastery's Pilgrimage Services does not organize excursions to this island. And not just because pilgrims weren't interested in its fortification system. Some of the buildings being built on the island (one of the most beautiful places on the archipelago and a breeding ground for Ladoga seals), hardly fit the "ceremonial structure" description. The marina and helicopter base erected on the island's rocky shore bare the least resemblance to a monastery's private enclosure. What's more, the public cadastral map does not describe a single one of these new structures. It only describes the historic Mannerheim Line.

An inquiry from our editorial is currently awaiting response from the Federal Service for State Registration. We're clarifying whether there was a mistake on the map, or whether illegal construction is taking place on the island.

Local residents, tourists, and journalists are sounding the alarm: one of Ladoga's most interesting tourist destinations is being transformed into yet another VIP- location before their very eyes. None of the local boat owners agreed to take a journalist and his driver to the island. They say it's become unsafe to moor on the island: the site managers are occasionally unruly and forbid anyone not only from taking pictures, but from landing on the island in general. For the record, no religious building has ever existed on the island.

“The Kazan Priory” “The sponsor ran out of money," reports a local resident who took us to one of the many new construction sites. According to him, the building's sponsor was Alexander Klimenko, the former head of the Ministry for Income and Tax Collections of Ukraine during President Victor Yanukovich’s administration (as well as the hero of several journalistic investigations ). Nowhere is this information broadcasted, but it's not hidden either.

More specifically, even the guide who "knows everything on the island" has not been down the narrow road that leads to the colossal brick church standing on the island's picturesque shore. This place is called the Second Point and is popular among nonreligious tourists who like to go camping there.

The fact that the building bears the name Kazan Priory is indicated on the warning sign electricians fastened to a nearby birch tree. They had already built the Tepushka Electrical Substation there. PHOTO As is evident by the half-wrecked construction camp and the absence of any activity in or outside the building, construction of the priory has come to a halt.

In May 2015, the island pompously buried Anton Klimenko, the ex-minister's brother who was killed under strange circumstances in Egypt. A year later, the funeral of their father, Victor Klimenko, also took place

At first, Klimenko intended to build a small grave for his brother directly on the cliff next to the Kazan Priory. But then he spurned this idea and built full-fledged tomb on the Abbey Cemetery in direct proximity to the historic Interment Belfry. The monumental tomb overshadows all the graves of Valaam's father superiors combined. PHOTO The Klimenko Tomb

Ukrainian news sources, who have followed closely the fates of elite officials from Yankovich's time, have a lot to say about Alexander Klimenko's close ties to the Russian Orthodox Church. Thus, two months after last year's Valaam burials, the NB-News portal released a report about how Alexander Klimenko was awarded a certificate of merit from Patriarch Cyril himself, what's more, right on Valaam.

The Kommersant Card Index hints unequivocally at the strong business ties between the Klimenko family the Director of Valaam Monastery's, Bishop Pancratius. The latter later became the founder of the philanthropic Klimenko Family Foundation. "China Town" and a floating island The latest of Valaam's new construction projects became the Chapel of All Valaam Saints erected near the entrance to the St. Nikolai Priory. The patriarch blessed the chapel in July 2016, and local residents are already calling it "China Town" because of the peculiar way in which its architecture resembles the Chinese tradition. Here, just as on the Island of Defense and Second Point, there was never any "ceremonial" construction whatsoever. However, this did not prevent the monastery from erecting yet another chapel, confounding local residents and tourists not just by its scale, but also by its irrelevance: the Church of St. Nikolai, which is popular among pilgrims and at one time even impressed the exacting classicist Alexander Dumas, stands not a hundred meters away from it. “This church is a true treasure, both in its art as well as its wealth — the creation of the best, in my opinion, architect of Russia — Gornostaev," wrote Dumas pére in the middle of the nineteenth century. PHOTO The Chapel of All Valaam Saints

A view of yet another new building, the Chapel of the Valaam Mother-of-God Icon, is available from the St. Nikolai Priory's viewing platform. The chapel "greets” all tourists who arrive to the island by boat. Its modern pretentiousness discords with the strict lines of the Church of St. Nikolai, as well as with the Asian-looking "China Town." However, after several days on the island, you begin to get accustomed to eclecticism. Even the elegant “Pallas” yacht moored at the monastery is no cause for surprise apart from a philistine interest.

The monastery's website zestfully tells of how Lukoil bought the “traveling ship” from the President's Office of Affairs and presented it to the monastery in 2005. The manufacturer's website, however, refers to the "Pallas" as falling under the "luxury" category, the cost of which according to Internet- sources ranges between four to 6.7 million dollars. When standing and scrutinizing “Pallas,” you suddenly hear a muted, familiar- from-distant-childhood (from the Moscow Zoo?) cry of a peacock, you begin to feel like a character out of The Adventures of Munchhausen. But no, it's not a cartoon, but reality: a monk on the neighboring island is actually breeding peacocks. What's more, he's been so successful that they're expanding: in summer 2016, construction began on an enclosure for the outlandishly feathered birds. Apparently, the mission to collect donations for the "peacocks' upkeep" turned out to be completely feasible.

The Central Estate and the Summer Hotel What is there to say about the very heart of the island—The Central Estate with the Transfiguration Cathedral in the middle? The cathedral's restoration began back in Soviet times and continued for a large part of Valaam's contemporary history. Parallel to the Cathedral, the inner (monastic) and outer facilities were remodeled, the Estate's central “streets” were paved, its surroundings areas were landscaped.

No small means (donations) were put into the monastery, as well as into reconstructing the so-called Summer Hotel for VIP guests. It's impossible to reserve a room there ahead of time. A regular tourist can get a room only when there are not "important guests" on the island. Valaam could serve as a good illustration of the oppositions between the “kingdom of heaven” and the “kingdom on earth” described by Aurelius Augustin in the 5th century A.D. A visit to the island leaves an impression of an explicit discord between the flourishing, expanding and solidifying monastery (“kingdom of heaven”), and the gradually fading, ailing, evicted-from-the-island “kingdom of earth." The village’s former apartment buildings, which the state handed over to monastery long ago, are in a depressing state.

The so-called Work House, where most of the remaining townspeople live, is in not much better shape than the boarded up Winter Hotel. In the decades that it has owned this historic, architectural landmark, the monastery has not found the means to remodel the entryway and apartments, or even keep them in acceptable condition. All of the donations, sponsor aid, rent and government subsidies went to building cathedrals and residences, plumbing and electrical wires, the dust removal of roads, and the breeding of peacocks.

But the monastery didn't have the means to keep up housing for the few dozen local residents who don't want to leave the island. Now all of the billions of rubles already invested and expected to be invested in Valaam with serve the monks "with faith and truth." And there's not long to wait. All of the 322 million rubles allocated for the creation of a spiritual-enlightenment center have still not been disbursed (according to the Federal Agency for Ethnic Matters, only 116 million rubles were spent in 2015). That and in his latest plans, the President promised the monastery even more money from the national budget. Back in May 2016, Vladimir Putin ordered funds to be isolated for the monastery to eliminate the consequences of the fire in the Winter Hotel. It's still unknown how much money the monastery will receive, but its representatives declared in court that the damages of the "gracious" (as it's called by the town's secular inhabitants) Easter fire on May 1 are estimated at more than half a million rubles.

There are are only about 80 monks and postulants on the small island monastery (before 1917, the average monastic community in Russia was more than 100 individuals, and the "old" Valaam numbered at almost 500), and of those only 15 are priests.

Yet in the corse of the last six years, according to our calculations, the yearly volume of federal investment in the monastery has surpassed that of Sortavala, a city of 20,000 inhabitants, by a minimum of 7 times! Valaam Arithmatic: In the last ten years, a single monk costs the state budget 43 million rubles.

1 ~ 80 monks and postulants

2 ~ 100 local residents the majority of which are moving to the mainland

3 several hundred employees attend to the monastery (it's impossible to give a more precise count as the the monastery conducts it's own registration)

4 hundreds of thousands of the tourists are served by the monastery's Pilgrimage Services

5 billions of government investments

AS A COMPARISON 7 billions rubles will be spent on the network of stadiums for the World Cup which will be held in 11 Russian cities in 2018.

The state put more than 2.3 billion rubles into Valaam’s electrification OR

The state invested 3.5 billion rubles (according to the most conservative estimate) into Valaam over the last 10 years

The state is investing 15 billion rubles for the Development of Karelia Federal Target Program 2015-2020

Author: Gleb Yarovoy

Translated by Anne Redmond