Who profits from Russian slave labor?

By Slava Tsukerman

During the previous week, every Russian journalist was commenting on the letter from Nadezhda Tolokonnikova describing inhuman conditions of life and work of women–prisoners in a Russian prison colony.

This week, after verifying the truth of the information presented in Tolokonnikova’s letter, the most popular Russian member of the opposition Alexei Navalny has published information about people who profit from the slave labor of Nadezhda Tolokonnikova and her comrades. The publication became the sensation of the week.

Nadsezhda Tolokonnikova reported that women in her colony IR-14 were sewing police uniforms 16-17 hours a day 7 days a week. Each of them was earning about 29 rubles ($1) a month.  A 20 women team was making $20 a month. The team had produced 4,500 uniforms a month. Cost of each uniform is 2.500 rubles ($83).  The retail value of a month’s production of the team, whose work costs $20, is about $375.000.

The prisoners are working not for the state, as the prisoners of Stalin’s GULAG used to work.

The prisoners of the colony IR-14 where Tolokonnikova worked, as well as prisoners of many other Russian prison colonies, for a private company Vostok – Service (East – Service). Vladimir Golovnev  owns 90% of the company.

Mr. Golovnev has a lot of awards. He is an “Honorary Citizen of the city of Vladivostok”, “Honored Worker of textile and light industry”, ”Distinguished Entrepreneur of Russia”. Also he received “Star of the Russian management-2005” award, the “National greatness” prize and an order of “Philanthropist of Russia” from the Academy of Security, defense and law enforcement.

Mr. Golovnev is a member of the ruling United Russia party. From 2007 to 2011 he was a member of Duma, a Deputy Chairman of the Duma’s Economics and Business Committee.

The Vostok–Service Company was created in 2002 and was very profitable from the very start.  As have most of Russian successful businessmen, the ”Distinguished Entrepreneur of Russia” Golovnev had transferred his profits abroad. In June 2003 his wife and stockholder of his company Ivetta Golovnev(a) bought an apartment in Miami Beach, Florida for $518.900. Alexei Navalniy published the address of the apartment: 18911 Collins Ave, North Miami Beach, Florida. Here is the photo of the building.

In April 2004, Yvetta Golovneva jointly with her husband bought a second apartment in the building for $829,000.

In December 2005, Yvetta Golovneva sold the first apartment, the one that she had bought in June 2003, for $980,000.

In January 2006 Yvetta Golovneva bought an apartment in a residential complex of Ocean Four Condo at 17201 Collins Avenue, Sunny Isles Beach, Florida for $1,275,000.

Here is the photo of the building.

Golovnev , a member of  the Russian Duma, never officially reported his ownership of real estate in Florida, thus breaking the Russian law.

When in 2010 campaign against corruption of Duma members started, both apartments were sold to the company named Step LLC.  According to reporter Alexei Navalny, the company is owned by Yvetta Golovnev(a)!

Here is what Vladimir Golovnev said to a correspondent of the web site Kasparov.ru:

“Prison administration of the colonies are good fellows, they have the most advanced foreign equipment, they have excellent seamstresses – we order them the most difficult jobs and everybody who work in garment industry do the same thing.  Yes, it’s a mutually beneficial cooperation. I have been in those areas many times and never felt that women hate me. I do not believe in their labor slavery, as written by Tolokonnikova.”

“Vostok-Service” has several branches in Europe, more than 200 stores in Russia and abroad, six companies producing clothing and footwear. This fact is not advertised, but a large portion of Vostok-Service production indeed is sewn in correctional facilities.

The biggest Russian official paper, Izvestia, commented:

“Vostok-Service is the largest private customer of the prison camps and, as reported by the Federal Penitentiary Service, the garment factory of the colony IR-14 is considered to be the best in the production area. The lion’s share of the orders of most firms engaged in clothing is fulfilled in the colonies. Last year the colony IR-14 had earned more than 70 million rubles ($2.330.000).

The annual turnover of Vostok-Service is more than 18 billion rubles ($600 million). According to experts, they produce one-third of the entire clothing market in Russia.”

Garment production is a small part of the huge industry built on using slave labor of prisoners.

According to official reports Russian prisons in 2012 have released commercial products, performed different assignments, and rendered services worth more than 30.7 billion rubles (more then a billion dollars).

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Updated: October 5, 2013 — 6:42 am
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