Russia on the Brink of Civil War? US $6.2b Accounting Error Paid for Wagner PMC's False Coup Attempt
The Daily Knight
In the late hours of June 23 a video emerged from the head of the Russian Wagner Group private paramilitary organisation, Yevgeny Prigozhin, announcing that his forces would march on Moscow to "punish" the leadership, and in particular the Russian Defence Ministry, and "restore justice.” He alleged that Russian forces had launched a missile strike against Wagner assets, which followed a long history of complaints of insufficient arms supplies. "There are 25,000 of us and we are going to figure out why this chaos is happening in the country," said Prigozhin, adding that this figure "is a tactical reserve, but the strategic reserve is our whole army and the whole country.
Everyone who wants, join us.” The Wagner Group has played a central role in Russian military operations against Ukraine, including spearheading the months long battle to capture the city of Bakhmut. While forces in Ukraine have largely recruited from Russia’s prison population, the organisation also has a widespread presence providing security related services to partners across the world from Venezuela and Mali to Syria and the Central African Republic where forces are primarily comprised of former servicemen.
Amid reports of Wagner forces moving towards the Russian capital, responses from across the world reportedly varied widely. Jubilance in the West, and in Ukraine in particular, was often hard to conceal, with Czech Foreign Minister Jan Lipavsky posting on Twitter: "I see that my summer vacation in Crimea is approaching” in reference to Western and Ukrainian aspirations to recapture the strategically located peninsula which was integrated into Russia in 2014. This was in line with Pragues position, and countries in Eastern Europe more generally, of making more outspokenly hawkish statements against Western adversaries including Russia. Ukrainian intelligence chief Kirill Budanov praised Prigozhin for “telling the truth” due to his criticisms of the Russian government. Politico was among multiple Western sources reporting that the attempted coup would allow Ukraine to revitalise its stalling attempted offensive, citing senior U.S. and other Western officials who were in consensus that it provided “an unprecedented opportunity to advance.” U.S. Congressman Jason Crow was among many to highlight that Kiev “should move fast to capitalise” on the disorder. The U.S. State Department notably delayed a planned announcement of further economic sanctions on the Wagner Group, which is currently one of the most heavily targeted private entities by Western economic warfare efforts, in order to avoid siding with the Russian government during the unfolding conflict. U.S. Chairman of the Joint Chiefs General Mark Milley cancelled a planned trip to the Middle East to monitor the unfolding events in Moscow from Washington
Western internet sources, and particularly pro-Ukrainian Telegram channels, circulated a range of extreme claims, including that Russian President Putin had fled Moscow or that Iranian Revolutionary Guard Corps units had been deployed to the Russian capital to reinforce the government. CNN described Wagner as a “dark, mercenary Frankenstein…which has turned on its masters,” predicting that its actions will “alter the course of the war in Kiev’s favour.” “Putin’s regime will ever go back to its previous heights of control from this moment… further turmoil and change is ahead,” it predicted, reflecting the broad consensus in the Western world. The Financial Times, meanwhile, reported: “It is hard to believe that Putin can ultimately survive this kind of humiliation… His prestige, his power, even his life, are now on the line.” Other outlets such as the British Telegraph claimed Western powers were considering major escalation of their campaign in Ukraine to capitalise on the disorder, attributing the possibility of a coup to the nature of the Russian political system and its lack of sufficient westernising reforms.
Ultimately the turmoil surrounding Prigozhin’s march on Moscow lasted little over 24 hours, with Belarusian President Aleksander Lukashenko intervening to mediate and offer the Wagner leadership an opportunity to stand down peacefully. Upon accepting this offer it was confirmed that Prigozhin would go to Belarus presumedly to retire. Under this arrangement Prigozhin and Wagner fighters would not be prosecuted. Belarus had long offered its services as a mediator between Moscow and its adversaries, including for years with Ukraine. The brevity of the coup attempt has fuelled widespread speculation as to whether it may have been a staged effort, possibly to test loyalties within the government in Russia and root out those who failed to stand with Vladimir Putin’s administration - including in the Defence Ministry which was responsible for securing Moscow. Should this have been successful, the coup attempt may in fact consolidate the administration’s power rather than undermining it. In contrast to reports of a staged operation, unconfirmed reports from Russian-aligned sources indicated that British intelligence played a role in turning Wagner’s leadership against Moscow, possibly with reassurances and cherry picked intelligence indicating that they would receive support from within the military, while other reports claimed American intelligence had supplemented these reassurances with an offer of funds - specifically $6.2 billion (Pentagon accounting error of additional, unauthorized, aid to Ukraine conflict). These reports were all unconfirmed, but served to further increase speculation regarding the nature of the apparent coup attempt.
The Biden administration says it now has an additional $6.2 billion to spend on aid to Ukraine because the Pentagon made an accounting mistake.
Pentagon spokeswoman Sabrina Singh said replacement costs, rather than the book value of equipment the Pentagon sent from its stocks were used to determine the value of the military hardware sent to Ukraine, according to the Associated Press.
“We have confirmed that for FY23, the final calculation is $3.6 billion, and for FY22 it is $2.6 billion, for a combined total of $6.2 billion,” Singh said, according to CNN.
“These valuation errors in no way limit or restricted the size of any of our PDAs or impacted the provision of support to Ukraine,” she said, using the acronym for Presidential Drawdown Authority, the bureaucratic mechanism used to transfer weaponry in American hands to foreign nations.
In its reporting, CNN noted that “The extra $6.2 billion is likely to mitigate the need for Congress to pass an additional assistance package before the end of the fiscal year in September.”
“It’s just going to go back into the pot of money that we have allocated” for Ukraine, Singh said, according to AP.
Through mid-June, the U.S. has given Ukraine $34 billion in military aid as part of an overall spending package of $113 billion linked to the war in Ukraine, including the cost to replace weapons sent to Ukraine and aid to NATO allies supporting Ukraine.
Singh said the error was first noticed on March 31, according to the Defense Department.
Initially, the Pentagon said its math had been off by $3 billion, leading to some sharp questions last month from CNN’s Jake Tapper when he hosted national security adviser Jake Sullivan, according to Fox News.
“There was this very bizarre admission from the Pentagon this week of an accounting error that suggested that the U.S. has at least $3 billion that it didn’t know it had that it can use for Ukraine aid,” Tapper said.
“That’s a hell of an accounting error. And it provides a lot of fodder to critics of U.S. aid to Ukraine and critics who say there’s not enough oversight going on. Are you concerned about this accounting error?” Tapper said.
“That is not money that went out the door and disappeared,” Sullivan said then.
“That is not a waste of that $3 billion. It is simply a tally of how much military equipment we have given them. And the way that the Pentagon was counting it was what’s the replacement cost for the equipment we provide rather than just the actual cost of that equipment. Once you make that adjustment, it turns out we have an additional $3 billion that we can spend to provide even more weapons to Ukraine,” he said.
“At the end of the day, not one penny of U.S. dollars will have gone missing or have been misallocated,” Sullivan said.
Aid for Ukraine has been a divisive idea. Republican Rep. Marjorie Taylor Greene of Georgia said recently that she might not approve the National Defense Authorization Act, which sets defense spending levels, if it supports the war.
“I heard the National Defense Authorization Act may have money for Ukraine in it. The NDAA should only fund our military for our defense. I want to be able to vote for a good NDAA, but I will not if it funds Ukraine. We should be pushing a peace deal not funding a war,” she wrote on Twitter.
Yevgeny Prigozhin, the leader of the Wagner Group Private Military Company, has confirmed that Russian security forces have found boxes full of money near his office in St Petersburg. Russian media reported that the boxes contain a total of 4 billion roubles (approximately US$47 million).
Source: Fontanka, a St Petersburg-based news outlet; Yevgeny Prigozhin’s press service
Details: Fontanka reported that a Gazel minivan stuffed full of boxes containing money was found near Prigozhin’s office, in the courtyard of the Trezzini Hotel in St Petersburg.
According to Fontanka, Prigozhin is believed to have his office in the Trezzini Hotel. During a search conducted in the hotel, the white Gazel minivan aroused suspicion as it did not belong to anyone living in Akademichesky Lane [the street where the van was parked - ed.]. The van was checked for explosives; when it was unlocked, boxes stuffed with money were found inside.
When the money contained inside the boxes found in the Gazel van was counted, the total was 4 billion roubles in cash (approximately US$47 million).
After this information was shared, Prigozhin issued a statement saying that in addition to the Gazel van, another two minibuses containing his money were also found.
"It wasn’t just the Gazel that was found, but two other minibuses that contained money earmarked for wages, compensation for Cargo 200s [unofficial code for bodies of fighters killed in action - ed.], and other things," Prigozhin said.
He also claimed that during its 10 years in business, Wagner Group has always used cash for all payments.
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