Over the 2000s Russian elections have become increasingly unfree and unfair, characterized by suppression of electoral competition, rising levels of administrative interference and drastic growth of electoral frauds. In this paper I propose that the pattern of fraudulent elections in Russia can be explained by combining an idea about federalism with a game-theoretic model of the relationship between the Kremlin and a single regional governor. Specifically, election fraud becomes a basic signaling mechanism of regional bosses’ loyalty and of their ability to control the administrative resources to the Kremlin’s benefit. If electoral signaling occurs, data manipulation is most likely to take place with 0s and 5s in the last digit of rounded percentages of turnout and electoral support, which is the easiest and most readily detected way to report basic information to superiors. Based on the Russian electoral and financial data for 2000-2018, my analysis shows strong evidence of election fraud associated with the post-electoral interbudgetary transfers.