The Russian government invested in social media companies Facebook and Twitter through Russian-American billionaire and venture capitalist Yuri Milner, according to documents leaked as part of the Paradise Papers.
Records show VTB Bank and energy company Gazprom, both linked to the Kremlin, worked with Milner's investment fund DST Global to buy stakes in Facebook and Twitter before selling them when the companies went public in 2012 and 2013 respectively.
VTB Bank initially paid $191 million in 2011 to control 5 percent of Twitter at the time of its public offering, while a Gazprom subsidiary financed a business that partnered with DST Global to purchase 8 percent of Facebook by the time the stakes were sold.
Although neither Russian entity controlled Facebook or Twitter, the revelations follow a week in which lawyers for the social media companies were grilled on Capitol Hill for their role in facilitating Kremlin interference in the 2016 elections.
The discovery was made after almost 100 news organizations coordinated by the International Consortium of Investigative Journalists examined about 13.4 million documents leaked by the Bermuda-based Appleby law firm, an offshore services company and corporate registries from tax havens in a manner similar to the Panama Papers dump in 2015.
Milner told ICIJ and its partners, including the New York Times and the BBC, that his firm's investments were always based on business merits rather than politics, stressing that VTB Bank was a passive investor in Twitter.
“It was a different time,” Milner told The New York Times. “It never even occurred to me back then that VTB Bank was not just another investor for us.”