Continuing support
After Russia annexed Crimea in March 2014, the European Union imposed travel bans and asset freezes on dozens of Russian officials. The United States too imposed sanctions and urged Berlin to halt cooperation on Nord Stream 2. But Toennies stood by Putin, telling Germany’s Bild newspaper: “We have a good relationship.” In an interview with German broadcaster ntv in 2017, Toennies said boycotting Russia helped no one. “We need the bridges that we have to Russia,” he said.
When many other CEOs stayed away from Putin’s annual showcase for foreign investors, the St Petersburg International Economic Forum, Toennies attended in 2017. He also joined a German business delegation that met Putin in the Russian city of Sochi in 2019.
Even as Washington and other allies were raising the alarm over Berlin’s over-reliance on Russian gas, Toennies and other German industrialists doubled down. In May 2015, Toennies told an energy forum organised by Gazprom that natural gas was “clean, efficient and versatile.”
By 2018, Gazprom switched the focus of its Schalke sponsorship to promoting Nord Stream 2. Pitch-side advertising carried the pipeline consortium’s name instead of Gazprom. Warnig, leader of the Nord Stream 2 consortium, took a seat on the Schalke board soon after and Nord Stream executives began drawing up their own lists of guests for the VIP box, according to a source at the club and another who worked for Gazprom.
Toennies meanwhile played a crucial role in heading off moves by some fans of Schalke, a not-for-profit association which is owned by its 165,000 members, to loosen its ties with Gazprom.
Roman Kolbe, one of the editors of fan magazine Schalke Unser, described two occasions when he had face-to-face disagreements with club bosses over its ties to Russia: once when Toennies wanted to fly the team to the 2014 Winter Olympics in Sochi, and a second time after Russia annexed Crimea and Kolbe questioned the wisdom of the Gazprom sponsorship deal. Toennies, via club executives, defended the relationship, Kolbe said. A club executive told Kolbe that Gazprom paid more than any other potential sponsor would.
Toennies said in his statement that perspectives have changed today, but that in 2014 and beyond, no leading German politician, or European soccer’s governing body, questioned cooperation with Gazprom and it was fully accepted as a gas supplier to Germany. “From the club’s point of view there was no reason not to hold on to the sponsor at the time.” There was also no sign of disquiet among the club’s other sponsors, said people who worked at Schalke.
Russian venture
In 2008, two years after Gazprom became Schalke’s sponsor, Toennies announced that his privately held companies with minority partners, would launch pig-rearing ventures in Russia. He chose Belgorod, near the Ukraine border, part of Russia’s most fertile “Black Earth” region, where gently rolling hills are dotted with industrial farming complexes and silos.
Later, in a 2013 interview with a German agriculture publication called Wochenblatt fuer Landwirtschaft und Landleben, Toennies recalled: “I promised Putin that I would also get involved in Russia.”
Local officials were enthusiastic. Belgorod’s governor, Yevgeny Savchenko, travelled to Toennies’ German headquarters in Rheda-Wiedenbrueck, a complex surrounded by a high concrete wall where the stench of livestock and meat production hangs in the air. A Savchenko ally was named general director of one of the biggest new ventures in Russia, and Belgorod city put up 88 lots of municipal property, with a value of at least $ 1.3 million, as collateral to underwrite loans.
Over the following decade, the ventures grew and expanded into the neighbouring Voronezh region, where the Toennies-controlled business was given approval to lease large tracts of land. At a 2012 meeting with Voronezh governor Alexei Gordeyev, Putin’s German-born former agriculture minister, Toennies thanked him from his “whole heart” for his cooperation, according to an account of the meeting published by Russia’s ruling party.
The growth was funded by extensive borrowing. Belgorod regional government data for 2017 show that for every rouble Toennies and his partners invested in infra-structure projects at their main business in the region, Alekseyevsky Bekon, they borrowed six.
Loan documents reviewed by Reuters indicate that, in some cases, banks eased their lending rules for the Toennies-controlled ventures. Most of this debt was issued by Russian state-owned lenders, Rosselkhozbank and Sberbank. The documents are available on the Spark-Interfax database, which collates official data from the Federal Notary Chamber and Fedresurs, a Russian government database. The database does not give the values of individual loans, nor a figure for the total.
One of the documents showed a five-year loan, of unspecified value, was secured against “a pig.” The database shows that the same Russian-made Kamaz truck was listed as around $30,000 collateral in three loans that Sberbank issued to a Toennies-controlled firm. Sberbank declined to comment. Rosselkhozbank, the Russian agriculture ministry and the governments of Belgorod and Voronezh regions did not respond to requests for comment.
In his statement, Toennies denied securing a loan with a single animal or vehicle. He said borrowing was secured against high-value farm equipment and a 50 million euro cash deposit lodged with Sberbank, but didn’t provide evidence. On state support in general, the statement said: “At no time was Toennies treated in a special way in Russia, or had advantages that were not generally available to every company in Russia.”
The break comes
Toennies was invited to mix with Kremlin insiders at the 2014 Sochi Winter Olympics. And he had audiences with Alexei Miller, the Putin associate who heads Gazprom.
Then, in 2020, he stepped down as chairman of the Schalke 04 board. He was accused of racism after saying in a speech to an annual gathering of German tradespeople that if Africans had more power stations, “they would stop making babies when it gets dark.” He apologised. He had also been mired in crisis after a COVID outbreak at one of his plants prompted criticism of working practices from a government minister and workers’ rights campaigners. The company said many of the accusations were untrue.
In August 2021, it was announced that Toennies and his minority partner had sold their Russian businesses to a Thai firm. The purchase price was approximately 22 billion roubles, or about $300 million, according to a notice from the buyer to the Thai stock exchange. The deal was completed at the end of 2021, Russian company ownership records show, weeks before the full-scale invasion of Ukraine began. Toennies, in the statement to Reuters, said the company decided to sell because original plans for the Russian business were no longer feasible and the offer from the Thai firm was lucrative.
On Feb. 28 last year, four days after the invasion, Schalke 04 cut short its sponsorship deal with Gazprom, and the gas giant’s logo was removed from players’ shirts.
Toennies sent a Tweet the following day that said: “I am shocked by Putin’s war of annihilation in Ukraine and condemn it in the strongest terms. I was wrong about him, like many others. Our business activities in Russia were wound down in 2021. And Schalke has also come to an end with Gazprom. Everything has been done right.”
Toennies added in his Tweet: “My thoughts are with all Ukrainians, affected by this senseless war.”
Toennies was photographed in March visiting a Polish warehouse where humanitarian aid for Ukraine was being distributed. Among the help he provided: long-lasting canned sausages. In another initiative, he tried to recruit refugees to work at his plant in Rheda-Wiedenbrueck. He uses a lakeside house in the town, locals told Reuters, and a local shooting club lists him as honorary chairman.
In late March, an aid group called Friends of Medyka said that Toennies employees had been handing out flyers in a refugee reception centre in the Polish border town of Przemysl offering wages starting at 11 euros an hour, Germany’s minimum wage for the sector at the time. Campaigners for the rights of migrant workers accused the company of exploiting human misery. The company issued a statement on March 31 saying it had been offering jobs to refugees on the border as a humanitarian gesture, but had re-considered and decided to suspend the initiative. “Sorry, perhaps we were too hasty,” the company said. Toennies told Reuters the majority of its workers earn above the minimum wage.
Some Ukrainians have taken the meat mogul’s help nonetheless. Two Ukrainian women who fled the war told Reuters they have worked this year with several dozen other Ukrainians at the Toennies plant in Rheda-Wiedenbrueck. One of the women said she does shifts standing next to a conveyor belt packing, sorting and weighing meat. She said she earns 12.20 euros an hour and lives in a two-storey house with a group of other workers.
She said she didn’t know the boss used to do business in Russia. For her, the most important thing was that Toennies had given her a job in a safe place away from the violence in Ukraine.
“My village has been hit twice. Missiles. They bombed the outskirts of the village. Bombed the forests, too,” she said.
Putin had presented himself as a “good person,” she reasoned, adding that perhaps Toennies had not seen what was really happening.
“Another person’s soul is a mystery, as they say.”
A Special Relationship
By Tassilo Hummel, Polina Nikolskaya, Mari Saito, Maria Tsvetkova and Anton Zverev
Photo editing: Simon Newman
Art direction: Eve Watling
Edited by Christian Lowe and Janet McBride
The post The meat magnate who pushed Putin’s agenda in Germany appeared first on Reuters.
