For more than a month, a mystery of sorts that sounds ripped straight out of a Hollywood spy thriller has been brewing in Finland. Officially, Finnish authorities are investigating a Russian real estate company over money laundering, but a lack of information about the case has led to widespread speculation that the firm was actually buying up land and setting up covert facilities to support Russia’s spies during peacetime and special operations forces during a potential crisis.
On Sept. 22, 2018, Finland’s Keskusrikospoliisi (KRP), or National Bureau of Investigation, similar in certain functions to the U.S. Federal Bureau of Investigation, led a raid on the private island of Sakkiluoto, also known as Sackilot, which Russian businessman Pavel Melnikov owns through his Finnish-based company Airiston Helmi. Local police, Finnish border guard, Finland’s national customs agency, and the Finnish Defense Forces all took part in the massive operation, which also targeted 16 other sites linked to Melnikov and his associates.
In total, more than 400 personnel took part in the operation, including 100 from the KRP alone. Helicopters and a Dornier Do-228 surveillance plane watched overhead and authorities put a no-fly-zone into place over the Turku Archipelago where Sakkiluoto is situated.
“I thought: ‘Wow! That is certainly unusual,’” Leo Gastgivar, a retiree who lives on a neighboring island to Sakkiluoto and witnessed the raid there, told The New York Times for a story that outlet published on Oct. 31, 2018. “Nobody ever visits that place.”
But the assault on Sakkiluoto, which armed, fatigue-clad police tactical units in small boats carried out, is just one of the unusual things about the entire situation. Since Melnikov purchased the island, workers have built a total of nine docks, a helipad, barracks-like housing, security cameras, and motion detectors, all without any apparent specific purpose.
At the end of the day, Finnish authorities arrested just two unnamed individuals, a Russian – not Melnikov, who is reportedly back in St. Petersburg – and an unnamed Estonian of Russian extraction. The KRP also said they seized cash in various currencies, including $3.5 million worth of Euros. They also recovered computers and flash drives containing a reported 100 terabytes of data, according to The Times, which noted that this was equivalent to 50 times the print collection of the U.S. Library of Congress.
Finnish national authorities gave no advance notice of the operation to Patrik Nygren, the mayor of Parainen, which acts as the archipelago’s administrative hub. Finnish media reported, citing an unnamed military source, that both the Finnish Defense Forces and the Suojelupoliisi (SUPO), or the Finnish Security Intelligence Service, one of Finland’s top counter-intelligence arms, had been monitoring Airiston Helmi’s activities for some time. In 2016, the country's state broadcaster, Yle, reported that Russians making large real estate purchases in Finland had raised suspicions within the Finnish government and suggested that the Kremlin could be engaged in a "hybrid warfare" campaign.
Airiston Helmi, and its supposed owner Melnikov, are equally enigmatic and sound like something intended for a James Bond movie. In publicly available corporate filings he has listed his citizenship as Russian, Latvian, and Maltese, the last of which sells citizenship. He reportedly also has legal residency in Hungary and passports from three unnamed Caribbean nations.
Melnikov is no longer listed as the head of the company, with an unnamed Italian businessman running the operation. The Times says that individual told them he had only taken the post “as a favor to a businessman he knows from Russia.” The company itself is formally owned by a series of shell companies based in popular tax havens such as the British Virgin Islands.
Oh, and did we mention that Airiston Helmi has never publicly turned a profit since its founding in 2007, despite millions of Euros in investment capital and a spending spree on property and equipment that includes not only Sakkiluoto and its facilities, but a pair of surplus Finnish Navy watercraft? The company owns a former workboat, which features a front-loading ramp like a landing craft and is presently configured as a floating sauna, and another small launch.
“There are no commercial grounds for acquiring land, but the roads are strategically important and their military significance is considerable,” Tom Packalen, a member of Finland’s parliament and a former police officer wrote in a blog post on the website of the Finnish newspaper Uusi Soumi on Sept. 24, 2018. “If Airiston Helmi is a truly commercial company, it's run by really bad business people or it's money laundering, which led police to lead a massive operation on the site.”
Herein lies the crux of the present public debate. It is entirely possible that Melnikov and partners have been using Airiston Helmi to launder money. It’s also possible that the Russian and his firm are a front for the Russian government in some way and are perhaps covering for various intelligence and paramilitary activities in Finland.
The Turku Archipelago, in particular, is highly strategic, containing major ports that are as physically separated from Russian territory, and therefore the threat of attack. These facilities are critical to Finland’s peacetime economy and would be of critical military value in a crisis.
The city of Naantali, which is on the Finnish mainland at one end of the archipelago, is also home to one of the country’s two major oil refineries, which has a daily output of 50,000 barrels of processed fuel. All of this would be of significant interest to Russia’s intelligence services and would be ideal targets to disrupt Finland’s economy or hamper its response to a military confrontation.
Finland, along with its neighbor Sweden, has long sought to chart a neutral course in regional geopolitics. This has become increasingly more difficult given its desire for closer ties with the West, which has drawn fierce criticism from the Kremlin.
After Russia’s illegal seizure of Ukraine’s Crimea region in 2014 and the Kremlin’s subsequent support for separatists fighting the central government in Kiev, the Finnish government became even more concerned about what might happen if it found itself embroiled in a serious political crisis with the Russians.
In July 2018, Russian special operations forces executed a mock airborne raid on facilities on Gogland Island, which is Russian territory, further to the east in the Gulf of Finland. The drill had all the hallmarks of the Kremlin’s lightning takeover of Crimea. Many observers interpreted this as a signal to NATO- and non-NATO countries, especially in the Baltic region and in Scandinavia, ahead of U.S. President Donald Trump’s summit with Russian President Vladimir Putin in the Finnish capital Helsinki.
It is actions like this that have pushed Finland further toward the West and has prompted the country’s government to suggest it could be interested in joining NATO, drawing even stronger rebukes from Russia. Finland is presently taking part in the Alliance’s Exercise Trident Juncture in and around Norway, which is the largest NATO-led drill in decades.
It’s also why Russia might want an insurance policy of sorts already in place in the form of nebulous non-state actors such as Melnikov. Putin is widely understood to use a network debatably legal connections, including through powerful Russian oligarchs, to support clandestine or malign activities abroad.
The facilities on Sakkiluoto could give the Kremlin a physical lily pad from which to stage various intelligence and para-military operations inside Finland, which the Russians have become increasingly willing to launch in order to advance various national interests. In principle, the island would be an ideal place to covertly insert personnel, especially via small submarines.
Just this year, agents from Russia's GRU, the country's main military intelligence agency, attempted to assassinate former Russian intelligence officer Sergei Skripal, who now lives in the United Kingdom, with a nerve agent, killing an innocent bystander in the process. More recently, the Kremlin’s operatives sought to hack into the computer networks at the Organization for the Prohibition of Chemical Weapons (OPCW) at The Hague in The Netherlands, which is helping investigate the Skripal case.
All that being said, though, there’s still no firm evidence yet that the raids on properties linked to Airiston Helmi had to do with anything but money laundering as the KRP has insisted. Finnish authorities have been tight-lipped about the investigation. Finland's geography means that the Finnish Defense Forces often aid police operations with transportation and logistics support. SUPO is part of the Ministry of the Interior and often works with the KRP, as well. So the involvement of these organizations does not automatically point to something more sinister.
“It should also be remembered that money laundering is in itself a lucrative business, and there are a numerous reasons for people to want somewhere to stay for a night or two without having to sign a hotel ledger,” Robin Haggblom, a Finnish military observer who writes a blog under the name Corporal Frisk, wrote on Sept. 23, 2018. “On the other hand, the Russian cleptocracy [sic; kleptocracy] makes the dividing lines between crooks, spies, and businessmen somewhat blurred, and even if Airiston Helmi would prove to be a non-political criminal enterprise (it should be noted that no-one is convicted of anything as of yet), it isn’t beyond the realms of imagination for the GRU to call in a favour every now and then.”
We'll definitely be keeping a close eye out for any new information about this mysterious situation in the Turku Archipelago.
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