War on Corruption – Chaika Reports, Bastrykin Interrogated, Powers Sought, Personnel Changed

[Note: for new readers, the ‘war on corruption’ here refers to a program that performs two roles – (i) reducing the overall level and pervasiveness of corruption in Russia; and (ii) providing a platform through which Pres. Medvedev can build an independent power base. I detailed this analysis in a series of posts this year]

Today, Prosecutor General Yury Chaika, head of the Investigative Committee (IC) Aleksandr Bastrykin, and Interior Minister Rashid Nurgaliev participated in a hearing at the State Duma. In his presentation, Chaika gave some interesting statistics about the war on corruption over the first six months of 2009:

  • 174,000 = # of corruption crimes discovered by the General Prosecutor’s office
  • 11,000 = # of violations of laws on civil service which require officials to declare earnings
  • 6,000 = # of cases under investigation
  • 4,000 = # of guilty verdicts for corruption prosecutions
  • $1,000 or less = the size of bribe taken by 80% of those convicted on corruption charges
  • 532/764 = # of bureaucrats and accomplices found guilty of corruption

The guilty included several high-ranking officials cited in Nurgaliev’s presentation (with links to corresponding news reports I could find):

  • Vice-Premier of Karelia, Vladimir Sobinsky – from 2005-07, Sobinsky and his subordinates allocated over 40 bodies of water in Karelia to commercial fishing operations without conducting a competitive bidding process or charging a fee; 2005-06 provided patronage to several Open Joint Stock Companies in the trout industry in the form of subsidies
  • Deputy Governor of Kurganskaya Oblast, Anatoly Bondarev – violated Art. 285.2 of Russian Criminal Code (“Abuse of Official Position”); from late-2006 to early-2007, Kurgan held a public tender for the construction work on the communal heat supply system; Bondarev prepared documents for and ensured the victory of a company to which he has ties; by overestimating the maximum cost for the project, Bondarev was able to divert over $574,000 to the company; unnamed sources told Kommersant that the company was ЗАО «ЭКФИ» (ZAO “EKFI” – renamed from ЗАО «Аудитпроф» [ZAO “Auditprof”] in 2007); Bondarev is still listed on the Kurgan Government’s website (Nurgaliev also listed the ‘Vice-Governor’ of Kurgan but this position does not exist)
  • Deputy Governor of Orlovskaya Oblast, Vitaly Kochuev – guilty of illegally withdrawing funds from the government account and personally buying for $20,000 a government-owned hotel complex called “Lesnoye” (Лесное), which was in fact valued at $608,000.
  • Deputy Governor of Volgogradskaya Oblast – this has been denied by the regional prosecutors
  • Chairman of the Stavropol Duma (might be this)
  • Various officials from the Republic of Adygea and the Kaliningradskaya, Moskovskaya, Rostovskaya, and Orenburgskaya Oblasts

Chaika also gave as an example one Vice-Minister who was unlawfully running a business, and stopped once notified by the General Prosecutor’s office. Chaika refused to provide the Vice-Minister’s name, though Duma Deputies claimed it was Oleg Savelyev, who is in charge of Special Economic Zones at the Ministry for Economic Development. The overall impression from the hearing was that Russia is “at the start of a very long path” and that political “will is not enough.” The more interesting moment in the hearing, however, was not in the presentations and did not concern any officials in far-off regions.

The moment was an exchange between Bastrykin and Duma Deputy Aleksandr Khinshtein, in which Khinshtein suggested that, in the war on corruption, Bastrykin should start with himself. He also asked Bastrykin why he never reacted to the publication of allegations last year that Bastrykin and his wife own a business registered in Prague. Coincidentally, Khinshtein was the author of that article. Bastrykin’s response: “In my opinion you are a sloppy lawyer. In connection with your accusations I chose my own defense. I gave a report to the Prosecutor General and communicated to the press that neither my wife nor I conduct business in either Russia or the Czech Republic.” He added that he was ready for an investigation, even if by the Duma. (It should be noted that Khinshtein does, in fact, look like a sloppy lawyer.)

I’ve written before that I think Bastrykin is on his way out – perhaps to make way for either Aleksandr Gutsan or Aleksandr Konovalov – though I have no idea whether Khinshtein’s line of questioning is related. It seems more likely that Khinshtein’s ego is at play. In any case, the 2008 accusations – especially in light of the new reporting requirements for bureaucrats – illustrate Bastrykin’s weakness.

The General Prosecutor’s office has also recently sought new investigative powers, including the ability to seize property in cases where there still are no suspects and the power to challenge arbitrazh (commercial) court decisions. Expert commentators criticized these proposals, arguing that any expansion in power for government investigators would lead to abuses.

In general, some observers are starting to see some personnel changes that suggest a pro-Medvedev shift. One Kremlin ‘source’ told Vedomosti that people in the administration have been waiting for a major change since March of this year, and that Presidential Administration Head and old Putin hand Sergei Naryshkin may be the first to go. The Financial Times followed up on this report with another source, and was told that it is mere ‘conjecture’. Finally, semi-famous, Kremlin-friendly political scientist Gleb Pavlovsky recently said that Medvedev is “turning into a real leader” and will be reelected in 2012. Here is Pavlovsky explaining his analysis:

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