Who Helps Russia’s Corrupt Get their Money Out?

Despite hearing quite a few nice speeches about the Kremlin’s commitment to fighting corruption, 2009 was most definitely a boom year for graft in Russia.

Earlier this month Transparency International released its Corruption Perceptions Index report, which had Russia coming in at 146 alongside Sierra Leone and Zimbabwe.  Then there was the economic crime survey from PricewaterhouseCoopers, which again put Russia way down near the bottom of the most corrupt countries in the world, with 71% of the 89 companies they surveyed in the country reporting at least one instance of bribery, embezzlement, harassment, or fraud in the past 12 months alone.  On top of all that, we have the death of the innocent lawyer Sergei Magnitsky who was denied medical treatment in jail, the ongoing travesty of the second trial of Mikhail Khodorkovsky, and repeated killings of human rights activists with impunity and zero prosecution success to speak of.

As Jason Bush writes on his Reuters blog, these events “illustrate the huge gap that exists between official rhetoric and depressing reality in Russia.

Socorruption is deepening and no one in the Kremlin is doing anything to stop it … butwhat is being done outside of Russia?  One thing that has always beeninteresting to us over here is the complicity of other players in thecountry’s corruption – those who politically and financially facilitatethe abuse of state powers to rob the Russian people.  With so manyhundreds of millions of dollars getting stolen and somehow sent out ofthe country to be salted away, who is helping to traffic the dirty money?

That’s why our ears perked up when we heard about a judge in Geneva goingafter Abba Abacha, the son of the one-time brutal dictator of Nigeria. Not only did the court pass a seminal decision on Abacha-era statecorruption, they also went after the financial intermediaries whohelped them launder their money.  For those banks working with unsavory clients in Russia,this may be something to keep in mind…  From the Financial Times (emphasis mine):

General Abacha is estimated to have plundered Nigeria’s publiccoffers to the tune of some $2.2bn between 1993 and his death in 1998.A year later the new Nigerian government asked the Swiss to open aninvestigation.

In the same judgment Mr Aeschlimann also fined anunnamed Monaco-based financier for helping the Abacha clan hide itsgains and ordered him to pay SFr10m ($9.8m, €6.6m, £6m), equivalent tothe illegal commissions he received, to the canton of Geneva.

The move marks a further step in international efforts to tackletheft by corrupt rulers by going after intermediaries as well asprincipals. Another financier alleged to have helped Gen Abacha tolaunder cash through Jersey has been arrested in the UK and is expectedto stand trial.