Uber secretly hired a political operative linked to Russian oligarchs in a bid to buy influence in the country, despite concerns that paying the lobbyist risked bribes being paid to “smash the skids.”
The deal was part of a concerted effort by the Silicon Valley company to court several billionaires as well as senior government officials said to be linked to Vladimir Putin in an effort to secure a foothold in the Russian market.
Uber’s previously unknown lobbying campaign in Russia has been revealed in Uber files, a leak of more than 124,000 documents to the Guardian. They reveal how in 2015-16 Uber sought to gain influence at the highest levels of the Russian state by reaching out to oligarchs said to have close ties to the Kremlin and encouraging them to invest in the company.
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What are Uber files?
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The Uber files are a global investigation based on a set of 124,000 documents leaked to the Guardian. The data consists of emails, iMessages and WhatsApp exchanges between the Silicon Valley giant’s top executives, as well as memos, presentations, notebooks, briefing documents and invoices.
The leaked records cover 40 countries and cover the period from 2013 to 2017, the period when Uber was aggressively expanding around the world. They reveal how the company broke the law, defrauded police and regulators, used violence against drivers and secretly lobbied governments around the world.
To facilitate a global public interest investigation, the Guardian shared the data with 180 journalists in 29 countries through the International Consortium of Investigative Journalists (ICIJ). The investigation was managed and led by the Guardian with the ICIJ.
In a statement, Uber said: “We have not and will not make excuses for past behavior that is clearly inconsistent with our current values. Instead, we ask the public to judge us by what we have done in the past five years and what we will do in the years to come.”
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But the deal with Vladimir Senin—an influential lobbyist at the time and now a pro-Kremlin member of the State Duma—may prove to be the most damaging for Uber. Former US prosecutors and corruption experts have said the circumstances under which Uber hired Senin in 2016 should have been “red flags” and risked a breach of US anti-bribery laws.
Uber admitted it hired Senin and paid him hundreds of thousands of dollars, but said it did not believe there was any violation of the law. Citing his ties to Putin, a company spokesman said: “We will certainly not engage with Mr Senin or others like him today.”
Uber’s relationship with Senin was one of the pillars of an aggressive push in Russia as the company carved its way into a potentially huge market before facing threats from state agencies, prosecutors and competitors.
Vladimir Senin at a banking forum in Sochi in 2017. Photo: Artur Lebedev/imago/Itar-Tass
With few friends in Moscow and no Russian investors, Uber initially approached Roman Abramovich before securing deals with companies controlled by billionaires Alisher Usmanov, Mikhail Fridman and Petr Aven, as well as Herman Gref, head of a major state-controlled Russian bank Sberbank.
Each of the powerful figures Uber secured as a partner in Russia — a market it has since pulled out of — was subsequently placed under Western sanctions in response to Putin’s invasion of Ukraine this year, accused of benefiting from strong ties to the president and his inner circle.
Usmanov, Friedman and Aven contest the EU sanctions against them. Friedman and Aven described the basis of the sanctions as “bogus” and spoke out against the invasion. Usmanov said it was “incorrect” to describe him as connected to Putin.
But the filings show that between 2015 and 2016, Uber’s goal was to attract business tycoons as “strategic allies,” offering their companies coveted shares in the Silicon Valley company ahead of a widely expected stock market move.
In return, Uber wants political support.
The strategy replicates Uber’s approach to lobbying in other parts of the world, which has often gone over the heads of regulators and officials to please prime ministers, presidents and power brokers.
In response to the Guardian’s findings, a spokesperson for Uber said its current management “disclaims any previous association with anyone associated with the Putin regime”.
Ultimately, Uber’s brazen and transactional lobbying strategy appears to have misjudged the political realities of an increasingly authoritarian Russia hostile to a brash American startup.
Uber taxis in Moscow. Photo: Alexander Saiganov/Sopa Images/Rex/Shutterstock
Uber effectively pulled out of Moscow in 2017 and earlier this year announced it would “accelerate” the sale of its remaining stake in a joint venture with Yandex, a partnership that has kept its brand alive in the country.
But Uber’s filings raise pressing questions about the company’s current leadership on Russia, its stance on corruption and the firm’s decision to dive headfirst into some of the murkiest political waters it has encountered in its global expansion.
“rated power”
Uber’s first major PR crisis in Russia began in September 2014. After a nationalist Duma member publicly denounced it, Moscow city officials backed calls for the Kremlin to ban the hailing app. Fearing a backlash, executives placed security in his office.
Uber’s man in Moscow warned his colleagues that Putin’s party in the Duma could seize the opportunity to “take revenge” on the company.
Days later, senior executives at Uber’s headquarters in San Francisco began discussing potential Russian investors. In an email to the company’s top lobbyists, Emil Michael, Uber’s chief business officer, named industrial tycoon Abramovich as an option.
“I think we want someone to agree with Putin,” he wrote, admitting he knows little about Russian politics.
Roman Abramovich. Photo: Justin Tallis/AFP/Getty Images
The documents show that a strategy emerged in the coming months: to find an oligarch or someone with enough influence to invest in Uber, incentivizing them to serve as a political ally in Moscow.
Uber first approached Abramovich’s top lieutenant, and in February 2015 an internal email said the oligarch was “actively seeking” a deal. When the talks broke down, an Uber executive reported that Abramovich had “decided not to invest due to high valuation, but offered to help”.
Abramovich, who has denied claims of his closeness to Putin, did not respond to repeated requests for comment from the Guardian.
Undeterred, Uber commissioned political consultants in Moscow to compile a list of oligarchs and assess their potential as “strategic partners” based on their influence among Russian elites and their ties to the state. The survey showed a leading contender: Usmanov, the Uzbekistan-born metals and technology magnate.
According to the consultants, Usmanov enjoyed “the trust of senior government officials” and maintained long-standing relationships with close associates of Putin. A similar list gave the tycoons a “power rating” and gave Usmanov the highest score.
Uber reached out to one of its senior executives and received an immediate response. As things moved quickly, Michael adopted a note of caution: “We have to be clear with the Russian investors, but at the same time not offend them, so let’s be careful what we say.”
Uber secured a $20 million investment from the billionaire’s holding company USM months later. A spokesman for Usmanov said the deal was brokered by an investment bank and was a “purely financial investment” with “nothing to do with politics or the Russian government.” He said USM made “no promises or commitments” to Uber regarding government relations and any suggestion that Usmanov was connected to Putin was “incorrect”.
For Uber, however, politics seems to have been at the forefront of its approach to all the oligarchs in its sights. After USM’s initial investment, Travis Kalanick, then Uber’s CEO, met with two of Usmanov’s top executives in Davos in January 2016 in an effort to raise more money. A briefing prepared for the meeting outlined Uber’s messaging: invest and “give us government relations support.”
Alisher Usmanov in his Moscow office in 2017. Photo: Bloomberg/Getty Images
The Russians were receptive, an internal memo said. “USM presented what they can do to move the needle on the policy front.”
Deal-making in Davos
But Usmanov was not the only Russian backer of Uber, and it was in the Swiss alpine resort that the company struck a deal with another powerful oligarch.
On the sidelines of the 2016 World Economic Forum, Kalanick was able to pull together a crucial meeting at the stately five-star Belvedere Hotel with an emissary from LetterOne (L1), a private equity firm controlled by Fridman.
Along with fellow oligarch Aven, Friedman runs Alfa Group, a growing Russian conglomerate. The two had amassed vast fortunes in the economic chaos after the fall of the Soviet Union. Helpfully, they were already deeply integrated into the Western financial system.
Weeks after the Davos meeting, a press release announced L1’s $200 million investment, with Friedman personally backing the partnership. But executives appeared keen to ensure a key aspect of the deal remained secret.
Along with the $200 million investment, Uber granted L1 a package of warrants that gave the firm an option to later purchase an additional $50 million in Uber shares at a bargain price. The orders will be granted if Uber trips in Russia continue to grow.
The documents suggest Uber designed the warrants to “incentivize” and “motivate” L1 to help the US company resolve its political and regulatory issues in Russia, something L1 offered to help with.
Uber’s senior in-house lobbyist, Mark McGann…
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