On a Tiny Finnish Island, a Helipad, 9 Piers — and the Russian Military?

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The mainland headquarters of Airiston Helmi, a company that Pavel Melnikov, a Russian businessman, helped to set up, in Ybbersnäs, Finland, Oct. 2, 2018. Finnish commandos recently raided 17 islands purportedly owned by Melnikov, setting off speculation that their real owner could be the Russian military. (The New York Times)

Sakkiluoto, Finland — Retired to a tiny island in an archipelago between Finland and Sweden, Leo Gastgivar awoke early one morning to visit the outhouse in his bathrobe, only to notice two black speedboats packed with Finnish commandos in camouflage fatigues waiting in the bay near his front door. After an exchange of awkward greetings, Gastgivar went inside, collected a pair of binoculars and watched aghast as the commandos raced off toward the island of his nearest neighbor, a mysterious Russian businessman he had never met or even seen.

“I thought: ‘Wow! That is certainly unusual,’” Gastgivar recalled of the encounter. “Nobody ever visits that place.”

The island, Sakkiluoto, belongs to Pavel Melnikov, a 54-year-old Russian from St. Petersburg, who has dotted the property with security cameras, motion detectors and no-trespassing signs emblazoned with the picture of a fearsome looking guard in a black balaclava. The island also has nine piers, a helipad, a swimming pool draped in camouflage netting and enough housing — all of it equipped with satellite dishes — to accommodate a small army.

The whole thing is so strange that the Sept. 22 raid, one of 17 in the same area on the same day, has stirred fevered speculation in Finland that the island’s real owner could be the Russian military. Finnish officials have attributed the raid to a crackdown on money laundering and cheating on tax and pension payments. But few are convinced. More than 400 Finnish police officers and military personnel swooped down on Sakkiluoto and 16 other properties in western Finland linked to Russia. Helicopters and a surveillance plane provided support. The air space over the region was closed to all craft not involved in the security operation.

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One of many small villas on Sakkiluoto, a tiny island in Finland’s Archipelago Sea which was recently raided by Finnish commandos, Oct. 1, 2018. (The New York Times)

When Prime Minister Dmitry Medvedev of Russia visited Helsinki, Finland’s capital, a few days after the raid, he scoffed when asked at a news conference if Russia had been preparing landing zones for military helicopters on Finnish islands.

“I don’t know in whose sick mind such a thought could be formulated,” Medvedev said. “Such thinking is paranoid.”

Yet the problem for Russia, and now also for Finland, is credibility. Moscow has denied so many strange and sinister things that have turned out to be true — or at least far more plausible than the Kremlin’s often-risible counter stories — that even the most seemingly far-fetched speculation about Russian mischief tends to acquire traction. One former member of the Finnish parliament, who once served as a border guard officer, has claimed without evidence that Russia had plans to build docks to service its submarines. One theory popular on social media is that the raided islands — which lie near Finnish military installations and important Baltic Sea shipping lanes — were part of an undercover operation by Russia’s military intelligence service, the GU, formerly known as the GRU.

Gastgivar, for one, has long thought something curious was going on at his Russian neighbor’s island.

“I’ve been thinking for many years that they are doing something military over there,” he said. “Building, building, building, but nobody knows what for.”

Finland’s intelligence service, according to recent reports in the Finnish news media, has long warned that property purchased in Finland by Russian nationals could be used for military purposes.

One of nine piers on Sakkiluoto, a tiny island in Finland’s Archipelago Sea which was recently raided by Finnish commandos, Oct. 1, 2018. (The New York Times)

During a recent visit to the island, not a soul was in sight, only clusters of deserted clapboard villas joined by wooden pathways through the forest of birch and pine that covers the island. Despite the abundant security precautions, no alarms were tripped and nobody rushed out to confront the intruders. Yet the seafront sauna, stacked with fresh towels, looked ready for use, as did the barbecue pits and other amenities on an island that seemed like the luxurious lair of Ernst Stavro Blofeld, the fictional villain of James Bond’s creator, Ian Fleming.

Finland, anchored firmly in the West but wary of antagonizing Moscow, has a long-standing policy of not raising issues, at least in public, that might create friction with Russia, with which it shares an 830-mile-long border. This approach, however, has come under strain from Russia’s increasing assertiveness. Finland, though not a member of NATO, risked Russian ire this week by sending troops to Norway to join U.S. forces taking part in Trident Juncture, the military alliance’s largest military exercise since the end of the Cold War in 1991.

The September raids coincided with discussions in parliament of new legislation to strengthen the powers of Finland’s intelligence service. Lawmakers are also considering prohibiting people from outside the European Union from acquiring land in strategic areas. The biggest group of foreign property owners is from Russia, including people close to President Vladimir Putin.

Two people were taken into custody after the raids — an Estonian of Russian descent and a Russian — and officers seized a stash of cash in multiple currencies, including 3 million euros (about $3.5 million). Also seized were computer discs and flash drives containing more than 100 terabytes of data — more than 50 times the estimated size of the entire print collection of the Library of Congress. All the targeted properties were linked to Melnikov, the Russian owner of Sakkiluoto island, and a company he helped set up in 2007 called Airiston Helmi.

The company has repeatedly reshuffled its board of directors and ownership over the years, with the identity of its real owners disappearing behind opaque shell companies registered in the British Virgin Islands and other tax havens. It is now headed, at least on paper, by an Italian, who says he took the position as a favor to a businessman he knows from Russia.

One of many security cameras on Sakkiluoto, a tiny island in Finland’s Archipelago Sea recently raided by Finnish commandos. (The New York Times)

It is far from clear exactly who Melnikov is. A man with the same name and birth date appears in Russian corporate and other records as the owner of six companies in Russia, including a well-known manufacturer of plumbing equipment, and as the holder of several patents related to plumbing. That man, now back in Russia at an office in St. Petersburg, declined to comment on what his assistant called “private” matters in Finland.

While investing in Finland, Melnikov operated under several different guises. Annual corporate filings variously identify him as Russian, Latvian and Maltese. Finnish news media outlets report he also has residency in Hungary and passports from three tiny Caribbean nations that, like Malta, sell citizenship. When Airiston Helmi first registered in Finland in 2007, the company declared itself engaged in “travel and accommodation services as well as real estate holdings and leasing/renting.”

It invested millions of euros in buying and developing property on the archipelago between Finland and Sweden but, year after year, reported a loss and had no evident source of revenue. Kaj Karlsson, a Finnish contractor who supervised much of the construction on Sakkiluoto, said he could never work out what Melnikov was up to, especially after he started building new piers and installed a network of security cameras on an island with no people or crime.

“Usually an island has two piers, but how do you explain nine? It makes no sense,” Karlsson said. Melnikov, he added, “always made a good impression and seemed legitimate,” but never seemed very interested in getting a return on his investment.

“No way is this all about money laundering or tax evasion,” he said. “You don’t put so much effort into a money-laundering case.”

Even local officials are skeptical.

Patrik Nygren, the mayor of Parainen, the archipelago’s administrative center, said he received no advance notice and was out picking mushrooms with his family when the raids happened. The scale of the operation struck him as strange; Melnikov sometimes skirted building codes — like when he installed the helipad on Sakkiluoto — but was never threatening, the mayor said.

“Personally, I don’t think this operation was just about money laundering. There has to be something else,” he said.

Niklas Granholm, deputy director of studies at FOI, the Swedish Defense Research Agency, Division for Defense Analysis, did not rule out that the islands that were raided could have been part of a money-laundering scam. But he added that their helipads, multiple docks, barrackslike structures and location near Finnish military facilities suggested possible preparations for “some kind of hybrid warfare.”

Airiston Helmi’s seafront headquarters has a helipad and multiple surveillance cameras like Melnikov’s island, as well as a decommissioned military landing craft that has been converted into a sauna and three other vessels. Standing guard next to the main entrance of the company’s office is a fashion mannequin dressed in military fatigues with a cracked plastic head.

Its basement, according to a recent report in Iltalehti, a Finnish newspaper, contained a communications center with sophisticated equipment far beyond what an ordinary tourism or property company would need.

Thomas Willberg, a dairy farmer whose land abuts Airiston Helmi’s headquarters on the mainland, said he was asked several times by the Russian and his associates whether he would be willing to sell his cow patch. He declined.

The farmer said he met Melnikov a few times and did occasional odd jobs for him like clearing snow, but could never figure out why the Russian needed so much security equipment or what kind of business Airiston Helmi was really in.

“Finland is maybe sending a signal to our eastern neighbor that it is ready to take action if needed,” Willberg said.

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