Report Links Putin to Dresdner

The St. Petersburg Times

Published: March 1, 2005 (Issue # 1048)

MOSCOW - The head of Dresdner Bank in Russia, Matthias Warnig, has built his career on his personal relationship with President Vladimir Putin, whom he first met while the two men served as secret agents in East Germany, The Wall Street Journal reported Wednesday, citing former colleagues of both men.

During his time as an agent for the Stasi, the East German secret police, Warnig first met Putin, who was serving as a KGB agent in East Germany, and helped him recruit spies, the paper reported.

Later Warnig opened Dresdner's St. Petersburg office in 1991 and oversaw the bank's awarding of high-profile government contracts such as the valuation of Yuganskneftegaz last year. Warnig maintained a close relationship with Putin, who worked as St. Petersburg's liaison to foreign businessmen in the early 1990s, once intervening to fly Lyudmila Putin to Germany for medical treatment on the company's dime, the paper said.

In 1993, City Hall assisted Dresdner in opening a joint venture branch with Banque Nationale de Paris in the massive former German embassy on St. Isaac's Square, the Journal reported.

Earlier this month, Warnig was nominated to the board of the state-owned energy behemoth Gazprom.

Although neither man has been accused of business improprieties and Dresdner appears not to have violated Russian law, the paper said their relationship "underscores the shadowy interplay between businessmen and former intelligence operatives in today's Russia."

Neither the Moscow office of Dresdner Bank nor a Frankfurt-based spokesman for its investment banking arm Dresdner Kleinwort Wasserstein could be reached for comment Thursday. The Kremlin press office said nobody was available for comment.

Retired Dresdner CEO Bernard Walter, who headed the bank's Eastern European operations in the early 1990s, told the Journal that he would not have hired Warnig had he known of his Stasi past.

In an interview published in the online version of Germany's Manager magazine, Walter said that years after being hired, Warnig alluded to a Stasi connection but that German investigators later dropped the case.

As for Warnig's connection to Putin, Walter dismissed the report that the two men had first met in their capacity as secret agents.

"Mr. Warnig told me clearly that he met Mr. Putin for the first time in his life in 1991, when I sent him to St. Petersburg," Walter said.

Walter confirmed that the bank had paid for Lyudmila Putin's medical treatment after a car accident, which he called "completely self-evident from a humane point of view." But Walter denied the Journal's report that Dresdner had funded subsequent trips to Germany by Putin and his family.

While Putin's KGB past is no secret - and even celebrated - a connection to the Stasi has often been enough to kill a career in unified Germany.

"I am surprised that a man with a Stasi past was hired by the bank," said Andrei Piontkovsky, an independent political analyst. Former KGB officers in Russia have no need to conceal their intelligence background, he said.

"They are proud of it," Piontkovksy said, likening the admiration of intelligence officers to a "new brand of national ideology."

An increasing number of the so-called siloviki, former KGB and military officials, have been receiving key government appointments since Putin took the reins in 2000.

Even before he came to power, Dresdner seized a number of key deals.

The bank consulted Gazprom during its first shares sale to foreign investors in 1996 and advised Ruhrgas, when it acquired a 2.5 percent stake in Gazprom in 1999.

"I personally built up the client relation to Gazprom. Warnig was far from Moscow and had nothing to do with it," Walter told Manager.

Later, Dresdner was among the top managers for Gazprom's issuance of $1.75 billion of eurobonds in 2003. The Journal reported that the government bypassed the requirement for an open bid when choosing Dresdner Kleinwort Wasserstein as the valuator of Yugansk and as Gazprom's advisor on the pending merger with Rosneft.