Reality and Rhetoric of Anti-Corruption in Russia

Given all that’s been said about Russia’s suddenly rediscovered passion for fighting corruption, there’s at least one section of the ruling elites who mean what they say or who are either setting themselves up for a public disappointment of comical proportions.

What started with the firing of Defense Minister Anatoly Serdyukov, seen as the highest level cabinet firing in the past decade, escalated into a full blown anti-corruption theme as further investigations rapidly opened and spread, and the president began talking more forcefully and publicly about the importance of fighting corruption. Understandably, not many people are taking him seriously, especially as the true reason for Serdyukov’s firing is not believed to be related to corruption at the Ministry (which has been happening for years), but rather a Petraeus-like moment of infidelity to his wife’s powerful family which got him the job in the first place.  And, of course, he made himself many enemies in the military industrial complex who had gotten used to over-sized contracts.

But the leadership is not giving up. A couple of days ago, President Vladimir Putin promised, once again, that you need not adjust your TV sets, that his anti-graft campaign is real, and that officials would be punished and jailed. Then on Wednesday during this state-of-the-nation addres, Putin again raised the prospect of passing legislation that would require officials to list all their foreign assets. He means business! Or does he?

Personally, I think it says quite a lot about the quality of the investigative bodies that television documentaries are the first ones to break open an investigation, followed by action from police and prosecutors.  And then of course, there’s just such a long track record of insincerity.  Keep in mind that Medvedev also required officials to declare their incomes and worth, and Putin made a practical joke out of the law by reporting about $150,000 income a year (as Boris Nemtsov has written, he wears many luxury watches worth more than that).  In Russia, “anti-corruption” is just the latest euphemism for the clan wars, it seems.

No matter how absurd we might think it is to even talk about a serious anti-corruption campaign by a Russian administration that exists through corruption, it is the de facto question the media shall be debating in 2013, just like we used to be distracted with the whole is-Medvedev-independent-of-Putin-or-not debate.  You gotta feed the pundits something.

Anyways, one thoughtful entry here comes from Tatyana Stanovaya, published on Polit.ru, who explains why it might be useful for the authorities to create an anti-corruption mindset in the public sphere, but with only selective arrests removing targeted individuals.  Below is a translation.

Fighting corruption: between reality and campaign

Tatyana Stanovaya

On November 27, Rossia 1 channel broadcasted a powerful documentary titled “Corruption” as a part of Arkady Mamontov’s “Special Correspondent” series.  In this edition, the main subject of the investigation was the former Minister of Agriculture Elena Skrynnik. Earlier Arkady Mamontov showed an exposé documentary featuring former Defense Minister Anatoly Serdyukov as the protagonist.

Thus, as of today we have several high-profile criminal scandals. They are JSC “Oboronservis” (Serdyukov), Ministry of Agriculture (Skrynnik), APEC (Panov), RSS (Russian Space Systems), VTB and “Rostelecom”. All these together create a powerful impression of the anti-corruption campaign initiated from above. However, the situation is much more complicated and it is possible to speak of the beginning of a parallel processes within the Russian government.

The first process is the aggravation of inter-clan relations. Competitors use old criminal cases to settle scores, to start regrouping, to fight for control over the budgetary financial flows, and to impact various economic sectors. This type of conflict includes the situation around the RSS (the struggle for control over the cash flow for GLONASS development), the conflict over “Rostelecom”, as well as a case of the embezzlement in relation to the APEC summit (as a result of struggle between the old and new governors of the Perm Krai). This type of conflict as a whole was originally inherent to the Putin’s regime. In such situations Vladimir Putin always served as the arbiter, preventing conflicts from going beyond his political control. A special feature of this type of conflict is the “quiet settlement”: usually, high-ranking officials did not get involved in public fights, and with time, the conflicts were gradually silenced and disappeared.

The second type of the corruption fight is against the real corruption cases, usually involving mid-level officials. One, for example, can recall a real anti-corruption case in relation to the procurement of medical scanners.  Investigations have also targeted some federal officials, however, the wave of criminal cases focused on the regions; and a number of officials were brought to the court. According to President Medvedev’s order in 2010, the head of the control department Konstantin Chuichenko initiated the investigation which led to the conviction of a former employee of the Presidential Administration Andrey Voronin (sentenced to three years in 2011) and a former Deputy Minister of Health Alexey Wilken (received a suspended sentence.) Typically, such trials happened during Putin’s regime with the political will “from above.” In this case, the initiative came from Medvedev and it distinguished him from the Putin’s behavior style. While under Putin’s regime, for example, the high-profile anti-corruption cases occurred due the initiative of one of the rival “clans”, with Putin only getting involved in the situation when trying to “settle” the close influential groups.

The third type of anti-corruption cases can be called part of the “campaign”. For example, one high-profile case was an exposé of “werewolves in uniform” in 2003, when Boris Gryzlov was Minister of the Interior. At the time, the Kremlin was preparing for parliamentary elections with Gryzlov eventually becoming the leader of “United Russia.”  The case against Skrynnik most probably belongs to this type of anti-corruption campaign. The documentary “Powerful” is based on a criminal case, which goes back to 2010, and is linked to the struggle over the “Rosagroleasing.” The company, established in 2002 by Skrynnik, was controlled by her close people. However, when she became a minister in 2009, she was not able to find a common language with the Deputy Prime Minister Viktor Zubkov. The Prosecutor General’s Office started an investigation against the “Rosagroleasing” management. As a result, CEO of the company Leonid Orsik died on New Years Eve from a heart attack; and the new leader became “neutral” Valery Nazarov, a former head of the Federal Property Management Agency. The conflict was brought to its end, although the relations between the minister and Zubkov remained tense. It is important to note that the initiator of Skrynnik’s appointment was Dmitry Medvedev, who worked with her on the APK (agriculture) national project. It is significant that all of the  exposé cases from the Mamontov’s documentary have already long been discussed in the media. “Vedomosti” newspaper conducted its own investigation with citing intermediaries, suppliers, and customers discussed in detail; as well as prosecutors who have been monitoring “Rosagroleasing” activity since 2007. It is similar to the situation around the RSS, when the head of the presidential administration Sergei Ivanov acknowledged that he followed theft cases inside the agency for two years, but did not start the investigation in order not to scare the corrupt officials.

The documentary also shows an old episode. Back in February of this year, General Directorate investigators tried to arrest the head of the administration at the Department of Agriculture Oleg Donskih in his own office. A few days before this incident the general director of LLC “Mezhregiontorg +” Sergei Burdovsky and general director of OOO “Lipetskagrotehservis” Igor Konyakhin had also been arrested. Together with Donskih, they were accused of embezzling 500 million rubles given by “Rosagroleasing” in 2007-2009 for the purchase of equipment. At that time Donskih was the head of Central Federal District division in “Rosagroleasing”, and, according to Vedomosti, Elena Skrynnik was the head of the company. Donskih eventually fled and was on the federal wanted list. According to one version, this case was related to an attempt by the head of the Main Directorate at the Ministry of Interior (the Central Federal District) Andrei Kemenev to prove his work capacity amid the conflict with the State Ministry of Interior in Moscow (by the way, the head of the State Ministry of Interior in Moscow was the current Interior Minister Vladimir Kolokoltsev).

It turns out that this old case was used for the creation of a new documentary. Only now it is presented as a theft of 39 billion rubles – a huge amount, even for Russia’s corruption. However, Skrynnik was not appointed as an assistant or advisor to the president and thus almost dropped out of political elite. Skrynnik’s interview to Marianne Maksimovskaya drew a wide response last Saturday: surrounded by children, in Moscow, she assured that she was not going to go anywhere, and she had nothing to hide. Speaking of real estate abroad, she noted that she only had a small apartment in France. Some viewed this interview as an attempt by the government to soften audience attitudes to the former minister from a humane point of view. If the situation with the Minister of Defense had political interests aiming to replace him due to the conflict with the military-industrial lobby, the situation around Skrynnik has nothing similar with it.

The official representative of the Ministry of Interior Pilipchuk told Vedomosti that this case continued to be investigated in the normal fashion: Donskih is wanted and Skrynnik is a witness and is not called in for questioning. A source close to the former minister told Vedomosti that now the documentary can only be explained as a campaign against corruption. The ex-minister protects herself and tries to counter-attack with caution, arguing that all financial matters should be addressed to Viktor Zubkov, who was in charge of the Rosagroleasing board of directors after she moved up in the government.

One can understand the Kremlin’s motives for approving a new documentary about corruption: the government provokes anti-corruption trend in the public mind, but imprisons only a few. The “Oboronservis” case raises many questions.  The Investigative Committee made a statement that all the orders on the disposal of defense ministry’s property were signed with the sanctions by the Minister. A documentary about corruption in the Ministry of Defense is also sending a clear message to the public – the Minister is a corrupt official. However, the Kremlin, in accusing Serdyukov of de facto corruption, is in no hurry to accuse him in de jure. This is understandable: in Russia, corruption is extremely high, and the system of kickbacks and budget schemes through government contracts/procurement is well known. To imprison Serdyukov would mean to “hang” the entire bureaucracy that was formed on the basis of political loyalty during the Putin’s regime. Corruption was perceived by the authorities as an inevitable side effect, which can be ignored when building the power “vertical”. Vladimir Putin has repeatedly responded to questions about corruption in Russia, pointing out that this problem exists in all countries, thus there is no need to exaggerate its importance. For many years law enforcement agencies also recognized only domestic corruption, and only president Medvedev spoke of the “large corruption” several times.

Therefore, the conviction of Serdyukov can destroy a sort of “contract” between the bureaucracy and Putin’s politicians – the Kremlin turns a blind eye to corruption and bureaucracy becomes more “statist”. Although this scheme was originally flawed (state corporations and businessmen close to the government, rather than large businesses, bribed the government officials), it made it possible to build the notorious vertical.

Probably that is why the Kremlin drew attention to a more harmless criminal case, which for some time could distract people from the former defense minister. However, there are still many questions: how far are the authorities ready to proceed as a part of their anti-corruption campaign? There is a possibility of charges against Skrynnik that would inevitably put Medvedev under an attack, because he was standing behind her appointment. A law enforcement source told “Interfax” that they have accumulated “enough material” to be used to prosecute the former head of the Ministry of Agriculture. An interlocutor also said that investigators learned of Skrynnik’s foreign accounts and property that could be seized in case of her prosecution.

The situation with Serdyukov is also questionable – the Investigation Agency anonymous source did not exclude the probability of the transition from a witness to the accused, but allegedly Putin ordered not to touch the former minister for right now.

Such situation can cause severe irritation among the public. “Levada Center” poll showed a reduction in the confidence in Putin and Medvedev. Both leaders still top the Russians’ trust among Russian politicians, but in January 2012, 41% of Russians were confident in Putin, and already in November – only 34%; corresponding numbers for Medvedev – in January and April 28% , and in November – only 20%. At the same time – which is important – 30% of respondents said that the resignation of Defense Minister Anatoly Serdyukov was among the most memorable political events of the last month. Other political life events did not make it to the top five in the ranking.

The fact is that Vladimir Putin is in no hurry to head up the anti-corruption campaign. On the one hand, he has an interest in improving governance, at least in terms of the regime’s image. On the other hand, the reluctance to fight with elites makes the president keep away from prosecuting former ministers. But the former ministers are well aware that Arkady Mamontov’s documentaries would not have been possible without the political approval. As such, the Kremlin is at risk of losing control over information: Skrynnik makes statements that may affect the reputation of the government in a negative way (for example, justifying her ownership of the house in France). It all means that the “pressure from below” in regards to this topic will continue to grow, and the Kremlin will have to make a difficult decision: either wait for higher disapproval ratings, or to start to imprison not only little-known official, but also famous (high-ranking) officials.

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