November 14th, 2012

New anticorruption campaign has nothing to do with corruption

Several anticorruption probes became public in Russia last week. First, the defense minister was ousted and some of his close associates were arrested. Second, a former deputy head of the Ministry of Regional Development was arrested. Third, several high-ranked officials were dismissed in the course of investigation in the Federal Space Agency. In all these cases high-ranked officials are suspected in embezzlement of state funds.

Anatoly Serdyukov was a defense minister in 2007-2012 and served as the head of The Federal Taxation Services before that. He spearheaded the tax prosecution of YUKOS during his time in the tax office. His high-ranked associates were in the center of the tax fraud schemes, discovered by Sergei Magnitsky. According to the investigation of Novaya Gazeta, an independent newspaper, the federal budget lost around one billion dollars in such schemes. For now the investigators’ claims against Mr Serdyukov’s employees (but not himself) total three billion rubles (less than 100 million dollars). Roman Panov from the Ministry of Regional Development is suspected in defrauding the federal budget of 90 million rubles (less than three million dollars) out of many billion dollars wasted in the highly inefficient construction projects dedicated to the APEC summit.

KGB veteran Sergei Ivanov is in the center of the anticorruption campaign

The loud anticorruption campaigns don’t help to curb the corruption burden on the Russian economy. Plenty of famous cases, investigated by anticorruption activist and publicized in the media, are left without any attention from the officials. Anticorruption campaigns usually reflect the internal Kremlin fights. The real reason for Mr Serdyukov’s fall was either that he was not able to maximize cash flows from corruption or was not willing to share the wealth with his influential colleagues from the Mr Putin’s team. Charges against his associates most likely were triggered by his decline to buy the obsolete but overpriced production of the domestic defense industry.

More competitive political system is much needed to cure corruption in Russia. Free media, independent law enforcement authorities and court system are efficient instruments for combating corruption. An alternative is a dictatorship headed by a cruel but incorruptible leader – a model of governance that Russia experienced in Stalin’s years. The Putin’s Russia is equally far from the both poles of low corruption. As a result, corruption is flourishing as well as loud anticorruption campaigns.

CBS News

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