September 30th, 2010

US Congress Acts Against Corruption

US Congress began steps to battle corruption in Russia. Senator Benjamin L. Cardin (D-MD), Chairman of the Commission on Security and Cooperation in Europe (Helsinki Commission), and U.S. Representative James P. McGovern (D-MA), Chairman of the Tom Lantos Human Rights Commission, yesterday introduced bills that would freeze assets of and block visas to individuals responsible for the 2009 death of Russian anti-corruption lawyer Sergei Magnitsky, related to a $234 million tax fraud scheme against Hermitage Capital.

This bill would bar all individuals connected to the 2009 death of Sergei Magnitsky from receiving U.S. visas and accessing U.S. financial markets.

As the US Congress tries to fight corruption from abroad, Russian authorities continue to tighten their grip on political discourse. This week Russia President Dmitry Medvedev fired Moscow mayor Yuri M. Luzhkov. In early September Luzhkov criticized Medvedev on his management of a highway between Moscow and St. Petersburg and seemed to call for Putin’s return to power. Some say this crack in Kremlin leadership left Medvedev no choice but to let Luzhkov go, but he needed affirmation by Putin, the real power in the Kremlin.

As authoritarianism calcifies in Russia, financial markets and public discourse suffers. Despite Medvedev’s grand tour of Silicon Valley and his musing on legal nihilism, the status quo in Russia remains strong.

Russian Officials Involved in Tax Fraud Against Hermitage Capital and the Death of Sergei Magnitsky

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