Ausgabe 47/2009

The Land of the Rich Medvedev's Desperate Fight against Corruption

A new novel has drawn attention to the depth of corruption in Russian society. President Dmitry Medvedev has taken steps to combat the problem, but his appeals for improvement are falling flat.

By and

It isn't often that a senior member of the innermost circle of power writes an exposé novel in which he describes the demise of the very system he created. Which explains why a book, written under a pseudonym but widely assumed to be the work of one Vladislav Surkov, is causing such a stir in Moscow. Surkov is the chief ideologue at the Kremlin or, as retired KGB General Alexei Kondaurov describes his former associate, a "genius of cynicism".

The novel, "Okolonolya" (Close to Zero), is being touted as "gangsta fiction," but the political gangsters featured in its 112 pages are very much real. The author paints a shocking picture of the Russian capital, with its "trading in offices, medals and bonuses." It is a place where government funds are siphoned off into the pockets of wives, lovers and nieces. "Corruption and organized crime, next to schools and the police, are the pillars of social order," explains an intelligence service colleague of the protagonist.

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There is probably no other European country -- not Silvio Berlusconi's Italy or post-communist Romania -- where political offices and wealth are so closely intertwined than in Russia. The affliction has "struck deep roots in our country" and has "taken on particularly repugnant forms," President Dmitry Medvedev said in a SPIEGEL interview in early November. Bribery and nepotism are pervasive in public life, from the healthcare system to the courts. Last year, it put Russia in a tie with Kenya, Bangladesh and Syria for 147th place on Transparency International's Corruption Perceptions Index.

"From the political leadership all the way down to local administrations, we are hampered by corruption" Medvedev said, adding how accepted it has become among the Russian population. "In your countries in Europe, drivers don't automatically pull out their wallets when stopped by a traffic policeman," said the president. According to Medvedev, the notion that bribery is a crime must become second nature to citizens.

Arbitrary Arrests

A few days later, a distraught police officer from the Black Sea port of Novorossiysk came clean on the Internet. Alexei Dymovsky, a narcotics officer, gave his account of testimony obtained through extortion, forged evidence and arbitrary arrests. He wrote that had taped 150 hours of compromising statements made by his colleagues and superiors, and that he wanted to speak with Prime Minister Vladimir Putin in person. Soon afterwards, a former police officer from the Komi Republic added his comments, writing about "fabricated investigations against innocent citizens." It was a rare instance of civil servants publicly rebelling against their superiors and the conditions in Russia's law enforcement organizations. Dymovsky was promptly fired.

According to a survey, the only people Russians fear more than their own police are terrorists. Only 30 percent believe that law enforcement officials abide by the law themselves. As a matter of fact, corruption does pervade all aspects of daily life in Russia, the world's largest country by land area. A Russian citizen is expected to reach deeply into his pocket to obtain an appointment for surgery with a good doctor, to buy his lazy daughter the grades she needs to be accepted into a university program or to convince demonstrably bored officials to extend his passport in time for a planned vacation trip.

Businesspeople ward off constant inspections by the fire authorities and sanitation and environmental agencies by handing the civil servants envelopes of cash. According to a study by the Moscow-based INDEM (Information Science for Democracy) Foundation, $319 billion (€216 billion) in bribes are paid in Russia each year. With a population of 142 million, that comes to more than $2,000 a person.

Five Percent for the Authorities

In a small basement office not far from the Kremlin Vladimir Ryzhkov, an opposition politician and former member of the Russian parliament, is compiling a list of cases in which bureaucrats extorted a bribe from companies. In Krasnoyarsk, a Siberian city with about one million inhabitants, a furniture-making company had to spend tens of thousands of rubles on bribes to ensure that government officials would certify its products. In Izhevsk, a smaller city between the Volga River and the Ural Mountains, a construction company pays an illegal 5 percent fee to authorities for each new contract it signs.

Civil servants and politicians conceal their lucrative business holdings using relatives and straw men. "The majority of bureaucrats do business on the side," says Ryzhkov. The construction of a few kilometers of new roads costs Russian taxpayers four times as much as it would cost in Europe. This is partly attributable to the country's harsher winters, but, to an even greater extent, a consequence of the fact that bribes are the rule and not the exception when government contracts are awarded.

For Ryzhkov, the separation between political power and economic perks is the subject of soapbox oratory at best. "If the business publication Forbes were to publish an honest list of the wealthiest Russians," he says, "half the people on that list would be ministers and other government officials."

Lawsuits for Journalists

As the owner of a construction company, the wife of Moscow Mayor Yury Luzhkov has become a dollar billionaire. The mayor, who has been in office for 17 years and is also a senior member of Putin's United Russia party, explains that his wife's success is the result of her exceptional business talents. Luzhkov may have noticed those talents when his current wife was still his secretary. The couple has managed to successfully inundate journalists who accuse the two of nepotism with lawsuits.

Because the Russian people know that their leaders continue to line their pockets, Medvedev's appeal for moral reform is of little avail within society at large. All it takes for Russians to lose all hope is to look more closely at their parliament, the Duma. Unlike Germany's parliament, the Bundestag, the Duma is not an assembly of lawyers and civil servants, but a club of celebrities and the wealthy. In addition to former top athletes, the nouveau riche and the occasional shady "bisnesmeni" fill the seats of the Russian parliament. It is an open secret that many a seat in parliament has cost its holder millions.

After the collapse of the Soviet Union and the period of unbridled capitalism during the 1990s, a social order with feudalistic features has become established in Russia, a system in which the political leaders behave like feudal overlords in control of their fiefdoms.

Prime Minister Putin has found jobs for friends and associates in newly created government holding companies. His counterpart Medvedev, eager to expand his own power base, is now cracking down on those appointments. In one case, the chief public prosecutor investigated the Russian Venture Company, which was believed to have misappropriated roughly €600 million, resulting in the resignation of the company's director.

Realm of the Rich

More than €100 million in funds from the government-owned aircraft company OAK and its subsidiaries were siphoned off to acquire shipbuilding companies in eastern Germany, which were subsequently privatized through offshore companies. The shipyards, in the Baltic ports of Warnemünde and Wismar, went out of business. The public prosecutor's office in Moscow is now investigating the case.

Members of the Duma report on ministers who only approved funds for the modernization of provincial airports after companies associated with them were awarded the construction contracts.

Even the Communist Party has found its place in the new Russian capitalism and the realm of the rich. Even as Communist Party Chairman Gennady Zyuganov tirelessly criticizes the "legitimacy of critical capitalism" in the party newspaper Pravda, his colleagues in the Duma are successfully taking advantage of it. His fellow party member Igor Edel is living proof that one can attack "bureaucrat capitalism" while benefiting from it at the same time. Edel, a former fruit wholesaler, runs a government-owned road construction company in the Moscow area. He is also a member of the parliament.

Too Late to Fix Things?

The Moscow papers occasionally run stories on the disparities between politicians' pay and their dubious second incomes. In one case, Lyubov Sliska, the deputy speaker of the Duma, who earns a monthly salary of about €1,600, reported that €85,000 in cash, as well as expensive watches and jewelry, had been stolen from his house in a 2006 burglary. And, as reported by the respected business newspaper Wedomosti, Chechen President Ramzan Kadyrov was seen wearing a watch worth about €200,000, while Moscow Deputy Mayor Vladimir Resin apparently sports a flashy DeWitt Pressy Grande Complication -- worth an estimated €700,000. The €7,000 and €21,000 watches worn by Prime Minister Putin and President Medvedev are downright modest by comparison.

Medvedev is enacting new laws to control corruption -- an effort to eliminate the mockery it makes of his reform and modernization plans. He is sending governors into retirement who have managed their districts like lords of the manor for years and he is demanding that ministers and government officials disclose their assets.

Medvedev also happens to be the boss of Vladislav Surkov, the deputy head of the Kremlin administration and presumed author of the novel "Close to Zero." The exposé ends with the optimistic sentence: "It isn't too late to fix things." Or is it?

Translated from German by Christopher Sultan


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