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FORMER PRIME MINISTER BEING PROBED ON ALLEGATIONS OF FRAUD
Russian prosecutors have opened a criminal inquiry into allegations of fraud
levelled against the Country’s former Prime Minister, Mikhail Kasyanov. The
former Prime Minister is being investigated for acquiring land fraudulently
while in office. (Guardian Russia Slams West
for Double Standards on Beslan. In the wake of the bloodiest hostage
crisis in
Senior official arrested on corruption charges in
Russia's Kaliningrad Region.
It was reported that the deputy head of the Kaliningrad Region
administration, Savva Leonov, arrested for bribe-taking, may be connected to
other corruption-related crimes. The report said that Leonov contacted a
number of businessmen and offered to speed up the process of obtaining
documentation if he was paid a bribe of 250,000 dollars. (BBC Monitoring Service,
Fake
licensing scandal threatens Russia's construction industry: report.
According to reports, a major corruption scandal is threatening to undermine
Russia's construction industry after police unearthed a seemingly endless
network of fly-by night companies with fake licenses. According to police,
small-time operations pay a bribe of around 8,000 dollars to win a
construction license without any requisite papers. Police launched their
investigation shortly after a roof collapsed on a Moscow water park in
February, killing 28 and injuring 110 people. Investigators found that while
the major constructors involved could be reached, their subsidiaries no
longer existed. (Agence France Presse, 25 June 2004 summary by Sherldine Tomlinson).
World Bank to
invest $1.5bn in Russia. It was reported that the World Bank will
invest $1bn to 1.5bn in Russia over the next three years. Up on making the
announcement, World Bank President James Wolfensohn stressed that the
importance of fighting against corruption and administrative barriers.
Wolfensohn also said that Russia had significant resources at the moment, and
it did not need aid from international financial organizations, but the World
Bank continued cooperating with Russia, acting as a “knowledge bank” (The Russia Journal, June 4, 2004 summary
by Sherldine Tomlinson).
Senior state officials get hefty pay RISES. President Vladimir Putin has handed out hefty pay raises to federal employees and to himself as part of an ongoing government overhaul aimed at boosting efficiency and curbing corruption. Putin said that the raises will help fight corruption while giving the government a better chance of retaining qualified professionals by closing the gap between the salaries of civil servants and those in the private sector. (The Moscow Times 19 Apr 2004 summary by Sherldine Tomlinson). An article in the
Los Angeles Times dated March 28, 2004 by the staff writer Sergio Loiko urges
Putin to shine light on the vast shadow economy which is draining billions of
dollars. David Satter book “Darkness
at Dawn: The Rise of the Russian Criminal State. Published by Yale
University Press, 2003 (tel: 800.405.1619). complains that present leadership (Putin) is very corrupt and there
is no rule of law in Russia. Besides
bribery, the system since 1991 is marked by institutionalized violent
gangsterism.. Crimimals have became the partners of businessmen who use them
as guards, enforcers, and debt collectors. Of course it is a good sign that the book was allowed to be published
in 2003. Bureaucrats
to tackle their own corruption. It was reported that
Vladimir Putin appointed Mikhail Kasyanov to head the Kremlin’s new
Anti-Corruption Council. Putin believes that the anticorruption council
''must have objective information on the scale of corruption and know where
it has taken root most deeply''. The head of state told a session of the
council that it should base its work on ''unambiguous legal assessment
criteria''. The president also spoke out in favour of public control over the
authorities and instructed the anti-corruption council to draft laws covering
this area. (Gazeta via
Gateway2russia.com 15 Jan 2004 summary by Sherldine Tomlinson).
Putin hints at fresh crackdown. Russia’s president, Vladimir Putin, hinted that the Kremlin had begun a crackdown against corruption in business and politics. Recently, Putin made moves against oil giant Yukos by arresting its chief. While speaking at an EU meeting in Rome, Putin hinted that more arrests could follow. (The Guardian 07 Nov 2003 summary by Sherldine Tomlinson). RUSSIAN STATE CUSTOMS COMMITTEE REPORTS CORRUPTION RATE AMONG EMPLOYEES In the first nine months of 2003, 788 internal inquiries were conducted; 43 customs employees were sacked; 568 received disciplinary sanctions and 27 transferred to another job, revealed chief department of internal security of Russia’s state Customs Committee. According to his agency’s analysis, 14% of crimes were bribe-taking, 10% exceeding and abusing power and 26% negligence, which is the most common crime. (BBC Monitoring Service – 14 Oct 2003, summarized by Hanh Vu).
TYCOON BUYS MOSCOW NEWS In respond to recent attacks on Yukos biggest oil group made by Kremlin hardliners, who are seen as a force behind the attacks, Mr. Mikhail Khodorkovsky, Russia's richest man and the head of the Yukos oil group, has raised the stakes in his confrontation with the Kremlin by acquiring a flagship liberal newspaper and installing as editor leading critic of Vladimir Putin, the country's president. Moscow News made its name in the late 1980s with its revelations about the crimes of the Soviet regime and its secret service – many of whose former members now hold key government posts. Irina Yasina, a director of the fund that bought the newspaper said that there was a clear deficit of free democratic press in today’s Russia. If the government continued to impose its ideology, soon there would be no forum for liberal debate which people got used to during the Yeltsin years. According to one senior politician, Khodorkovsky’s latest move is a red cloth for the Kremlin. (Financial Times 05 Sep 2003, summarized by Hanh Vu).
Russia
says police officers suspected in contract killings. Russia officials have arrested 11 people, including
police officers, on suspicion of carrying out contract killings. Interior
Minister Boris Gryzlov said that the individuals were part of a criminal
group that also extorted money from business owners. He also said that at
least six current and former police officers are part of the ring. The
Interior Ministry also said that a senior police official in charge of
fighting corruption has been detained while in the act of demanding a $20,000
dollar bribe from a businessman. In June Gryzlov declared war on police
corruption, announcing the arrests of more than 30 police officers and a
general in the Emergency Situations Ministry, suspected of extorting money
from falsely arrested individuals. (VOA
News 22 Aug 2003
summary by Sherldine Tomlinson). Ex-Defense
official gets 5 years. A court
has convicted the Defense Ministry's former financial chief of abuse of
office and sentenced him to five years in prison, in one of the most widely
publicized cases of military corruption. The Moscow military court found
Georgy Oleinik guilty of abusing his authority by selling the Defense
Ministry's domestic bonds to Voyenbank at lower prices. Prosecutors claimed
that the state lost $60 million as a result of Oleinik’s action and urged the
court to force him to pay the damages back. But the court ruled that should
be considered in a separate case. The court also stripped Oleinik of his rank
of colonel general and barred him from taking a government job for three
years. (The Moscow Times Jul 25 2003 summary by Sherldine
Tomlinson). CORRUPTION NOOSE TIGHTENS AROUND ST. PETERSBURG GOVERNOR YAKOVLEV. It was reported that Petersburg has become Russia’s corruption capital. An example, of this is Deputy Governor Valery Malyshev, who was charged with taking bribes in return for placing city business in certain St. Petersburg banks. Malyshev soon was forced to temporarily step down from his post. Another deputy governor was also charged by prosecutors with conducting business while in office and was forced to step down. In February of this year, the Audit Chamber’s St. Petersburg office uncovered the misappropriation of money from the city’s Road Fund. (The Russia Journal, June 18, 2003, summary by Sherldine Tomlinson). Eradicating Corruption Among Judges. Chairman of Russia’s Supreme Court Vyacheslav Lebedev has stressed the importance of combating corruption among the judges. “We must create a situation of intolerance to persons committing acts detracting from the honour and dignity of judges”. In 2002, Lebedev said that, 60 judges were stripped of their powers for actions disgracing honour and dignity. “It is necessary to study more thoroughly candidacies for the posts of both federal judges and magistrates,” the Supreme Court chairman said. In his view, to prevent violation of laws and ethical norms by judges the press should be invited on a broader scale for covering the work done by the courts. (Russia Information Centre, June 16, 2003, summary by Sherldine Tomlinson).
CORRUPTION, FINANCIALLY UNFEASIBLE LAWS ARE AMONG RUSSIA'S MAJOR PROBLEMS Corruption and financial unfeasible laws make most obstacles to Russia's development, said United Russia Representatives. According to Sergei Borisov, president of the Russian public organization for small and medium entrepreneurship Russia's Support, one half of Russia's annual budget (equal to $33bn.) was spend on bribing Russian officials; 60% of government employees in Russia (110,000 people) were bribe taking officers with an average graft of $4,000 a month for each. (Interfax 13 Apr 2003, summary by Hanh Vu)
Corruption Costs Russia USD 30 Billion a Year. According to Russian entrepreneurs, last year corruption cost businesses between 10 and 12% of gross domestic product. Khodorkovsky compared the problem of corruption with terrorism and unemployment. To combat corruption Mikhail Khodorkovsky proposed the practice of eliminating odious figures in the machinery of state as they lose trust. (Rosbalt News, February 21, 2003, summary by Sherldine Tomlinson).
Russian Interior Ministry activates drive to combat CORRUPTION. The Russian interior ministry has decided to activate the drive to combat corruption among the authorities. Having reliable information about bribe-takers and corrupted persons, law enforcers “do not try to use it to the full but instead keep fighting petty bribe-takers,” said the interior minister. He also urged interior ministry employees to “activate the drive to combat corruption on all levels of power.” (Russian Information Agency, February 6, 2003, summary by Sherldine Tomlinson).
ONLY HALF OUR ECONOMY IS BLACK, ADMIT RUSSIANS. In a live interview with a Moscow radio station, Victor Zubkov, the chairman of Russia's Financial Monitoring Committee, has confessed that criminal activity accounts for up to 50 per cent of the country's total income. According to Mr. Zubkov, the main sources of illegal income are fraud, drugs trafficking, the illegal sale of arms, illegal immigration and prostitution.(MoneyLaundering.com, January 24, 2003, summary by Pavlidis George).
RUSSIA ATTEMPTING TO REFORM A MILITARY SYSTEM THAT BREEDS ABUSE AND CORRUPTION. The Russian army is attempting to reform a military that is plagued by rampant desertions, increased reliance on the use of contract officers, and a notoriously feared and unpopular conscription. Hoping to fill its ranks with volunteers, government officials recognize the need to change a system entrenched with corruption in order to entice recruits. At root is the unprofessionalism of the officers, notorious for brutal hazing of new conscripts who are reportedly treated as chattel, beaten, and coerced into giving their salaries to their commanders. A reported 20,000 soldiers were injured from noncombat-related causes over a ten month period. Four thousand deaths occur each year, attributed to hazing, suicide, illness and accidents. In one of the largest publicized mass desertions, 54 soldiers in Volgograd abandoned their post in September after severe beatings of their colleagues by an officer. Ninety percent of conscripts attempt to avoid the draft through college or medical deferments often granted through bribes, facilitating a flourishing bribery industry amounting to $50 million a year. (by S. L. Myers, The New York Times, Dec. 18, 2002, summary by Kelly Kristen).
RUSSIA: ANTI-CORRUPTION CAMPAIGNER SHOT DEAD IN WESTERN RUSSIA Nikolay (? Petilin), the coordinator and one of the founders of the Smolensk region anti-corruption committee was shot dead near the entrance to his home in Smolensk this morning, the killers remained uncovered. The Smolensk anti-corruption committee saw the first light some months ago and has helped exposed a dozen criminal cases thank to its hotline for calls about drug trafficking. (BBC Monitoring Service, 14 Nov., 2002, summary by Hanh Vu).
STUDY: BRIBERY GETTING OUT OF HAND A corruption survey interviewed 7,500 everyday people and business executives in 40 regions in August this year showed that the existing Russian bureaucratic system has so many areas in which nothing can be done without a bribe. It said that 350 billion rubles ($11 billion) would be given out as bribes, of which about 230 billion rubles ($7.5 billion) is expected to be spent in bribes in Moscow this year, or 30 times the national average. $1 billion, comparing to $370 million last year, has been being doled out to the traffic police; the frequency of bribes being offered to judges and other court officials has jumped from 26% to 47%. (The Moscow Times, 10 Oct 2002, summary by Hanh Vu).
RUSSIAN MAFIA IN RETREAT BUT CORRUPTION REMAINS HIGH It's reported that Russian mafia is no longer a threat to most businesses, instead, underpaid government employees make "their existences" in every aspect of doing business in Russia. A survey of average Russians by the Russia Journal, an online business publication, found that corruption is still a way of life in the country where nearly 100% of those asked said that they are willing to pay bribes to get something done. (Forbes, 01 Oct, 2002, summary by Hanh Vu).
INSURANCE AGAINST BUREAUCRACY AND CORRUPTION $200 million in guarantees against the risk of interference by inept or corrupt officials is the compensation pledged by the Russian government under a month-old program back by World bank which designed to magnetize investment in the nation's hard-hit timber and coal industries. Ten companies have so far applied for the government insurance since the program began in mid-August and three of which ready for final approval, said Alexander Shamrin, director of the government's Federal Center for Project Finance. This kind of insurance, in fact, is not quite alien with the Russian Government, in mid -'90s the Sea Launch, a project to orbit satellites from a converted oil-drilling platform in the Pacific Ocean also received warranty from the government. It's said that the similar insurance programs in Bosnia and Albania also obtained support from World Bank. (World Bank Press Review, 23 Sep 2002, summary by Hanh Vu).
COURT RELEASES THREE SUSPECTS IN CORRUPTION TRIAL AGAINST FORMER AEROFLOT EMPLOYEE Vladimir Skoropupov, Igor Providukhin and Andrei Lugovoi, have been released with no reason given from a Moscow court after being accused of helping in the escape attempt of former Aeroflot deputy general director, Nikolai Glushkov, who was being held on charges of money laundering. Glushkov, and several former Aeroflot employees and the head of the Financial United Corporation are accused of funneling over $252 million of Airline revenues into two Swiss accounts held by Russian business tycoon Boris Berezovsky, who is on self- imposed exile in London. Berezovsky, once a powerful Kremlin insider, claims all allegations are politically motivated. His fortune was amassed in suspicious privatization deals in the early 1990s, and he has also been accused of stealing $13 million in cars from Russian automaker, Avto Vaz. (Yahoo News, September 16, 2002, summary by Aruna Balakrishnan and Marg Reynolds).
REPORT: RUSSIAN SOCIETY SATURATED BY CORRUPTION 12 million Russians each year are denied necessary health care because they cannot afford to bribe their doctors; 54% of those who entered university last year were not able to get through the entrance exam without paying a bribe; 33.5 billion dollars was paid in bribes by Russian companies to gain business favor; 2.8 billion dollars was changed hands annually under the name of grafts by Russian ordinary citizens to manage with all of their everyday problems and the strangest thing was that people seemed to look bribing as a normal deed since according to Indem director Georgi Satarov, things in Russia has got to a state in which bribery services have reached all sectors of life. Bribery is the most organized in the Duma, the lower house of the Russian Parliament, where members have set tariffs lists for available services. The shocking figures were extracted from the result of a survey conducted by the Moscow-based Indem Foundation which interviewed experts from various fields, as well as 700 influential business figures and more than 2,000 ordinary citizens. (Helsingin Sanomat, Aug 13, 2002, summary by Hanh Vu).
CRIME BOSS CHARGED WITH TRYING TO FIX OLYMPIC SKATING. It was reported that Italian authorities
have arrested an alleged Russian crime boss on U.S. charges he conspired to
fix figure skating and ice dancing events at the 2002 Winter Olympics in Salt
Lake City, Utah. Alimzhan
Tokhtakhounov is charged with rigging Olympic skating competitions, including
the gold medal for ice dancing awarded to the French team of Marina Anissina
and Gwendal Peizerat. He is also accused of brokering a deal involving French
and Russian judges mutually voting for each other’s skaters. In the figure
skating competition, French judge Marie Reine Le Gougne’s vote helped the
Russian pair of Elena Berezhnaya and Anton Sikharulidze win the gold medal by
a slim margin over the Canadian team, Jamie Sale and David Pelletier. (VOA News (AFP, AP, Reuters), August 1, 2002,
summary by Sherldine Tomlinson). FORMER AIRLINE EXECUTIVES GO ON TRIAL FOR CORRUPTION. Former
executives of Aeroflot, Russia’s main airline went on trial in Moscow for
alleged embezzlement in a case connected to self-exiled tycoon Boris
Berezovsky. Aeroflot’s former first deputy general director Nikolai Glushkov,
former deputy general director Alexander Krasnenker, vice president for
finance Lidiya Kryzhevskaya are on trial in connection to financial
operations in which Aeroflot revenues were allegedly transferred to Andava, a
Swiss firm founded by Berezovsky. According to the prosecution, Glushkov and
Krasnenker told the company’s foreign offices to transfer 80 percent of their
foreign currency revenues to Andava. Aeroflot offices wired over dlrs 252
million to Andava between May 23, 1996, and Nov. 20, 1997. (Yahoo
News (Associated Press), July 8, 2002, summary by Sherldine Tomlinson).
PROSECUTOR CALLS FOR MORE ACTIVE FIGHT AGAINST CORRUPTION Prosecutor general Vladimir Ustinov has
called for more steps aimed at thwarting corruption. “We are working actively
in this sphere and thousands of criminals” are facing criminal charges,
Ustinov told journalists. Unfortunately, criminal groups sponsored some of
the articles aimed against the prosecutor-general’s office. When asked
whether a large-scale operation similar to Italy’s raids in, Ustinov expressed
apprehension about a possible outcome. Moreover, Italy’s chief mafia
prosecutor Luigi Vigna told journalists that the Italian and Russian agencies
agreed on cooperation and information exchanges on specific criminal cases. (BBC Monitoring Service (Interfax News
Agency), May 14, 2002 summary by Sherldine Tomlinson). GENERAL JAILED FOR FRAUD. General Georgy Oleynik is the former head of the military budget and financing department of the defense ministry. A Russian military court found General Georgy Oleynik guilty of abuse of office. General Georgy Oleynik had authorized the transfer of $450m to Ukraine as payment for materials, which were never delivered. The court held that there was a gross breach of the regulations for the transfer of such sums. Namely, General Oleynik did not seek the permission of the Central Bank to transfer the money abroad, and the money was transferred before the contract for the materials had even been signed. According to the state prosecutor the fact that the correct procedures were not followed meant for the country a loss of $327m. (BBC News, April 29, 2002, summary by Pavlidis George).
PUTIN COMPLAINS ABOUT CRIMINALS. President Vladimir Putin and Prosecutor General Vladimir addressed a meeting of top prosecutors from across the country. According to the ITAR-Tass news agency, Putin criticized prosecutors for suspending 1,300 criminal investigations illegally. On the other hand, Ustinov urged for a more efficient campaign against the corruption. According to First Deputy Interior Minister Vladimir Vasiliyev, 382,000 economic crimes were reported last year, including 8,000 cases of corruption. 1,700 police officers were indicted for corruption or abuse of authority. However, Mr. Vasiliyev insisted that the fight against corruption was "under control." (AP, February 11, 2002, summary by Pavlidis George). Kazakh paper hints
at corruption in military establishment A Russian newspaper has criticized army generals and Defence Ministry
officials for the frequent cases of weapons theft in the army. The newspaper
reported that weapons and ammunition seized by law-enforcement officers.
According to the newspaper an unidentified service man purchased the weapons
and ammunition. The newspaper also reported that nothing will come out of
this scandal. (BBC Monitoring, February 7, 2002, summary by Sherldine
Tomlinson).
KREMLIN BAILIFFS PULL THE PLUG ON LAST INDEPENDENT TELEVISION NETWORK. Yevgeny Kiselov, director of TV-6, stated the single goal of the authorities is to gag its broadcast links to 150 cities across Russia. Many of TV-6’s journalists, who reported official corruption and the war in Chechnya, will be replaced with an all-sports station. Electricity and telephone services have been shut off to the independent facility, effectively depriving Russians of access to information, even though the network has shown a solid profit and doubled rating in the past year. Experts believe the limits on criticism and debate in the media are political and have been imposed by the Kremlin, however, the Kremlin denies any involvement in either the closure of TV-6 or last year’s closure of NTV. (The Independent, Jan. 23, 2002, summary by Marg Reynolds).
PROSECUTOR- GENERAL’S OFFICE INVESTIGATES 18 CORRUPTION CASES OF NATIONAL SIGNIFICANCE At a news conference today, the advisor of the Prosecutor- General, Vladimir Kolesnikov said that the department was investigating 18 top cases of corruption involving Russian businesses and the tax police. He stated that according to estimates, more than half the money earned unlawfully or criminally is spent on bribing officials. He also said that in the last year alone, the law enforcement agencies recorded 361,000 economic crimes out of which 22,300 were against state property or public service, and that there was a 13.7% increase in the number of bribery cases exposed in 2001. He deplored the fact that an entire “system of bribery and abuse of power” had developed and several provisions in the law were encouraging officials to commit criminal offences. (Financial Times, January 11, 2002, summary by Aruna Balakrishnan).
MOSCOW: CLEANING UP RUSSIA’S CULTURE OF CORRUPTION. The bureaucracy that exists in the system of setting up and maintaining a private medium-size business permits constant extortions of the owners, with several well-known cases recently exposed, thus the government statistics show that Russia has now fewer small businesses than it had in 1994, but president Putin has sent a signal that the attitude of the government is changing, although this process is going to be a very slow one. (Washington Post, December 29, 2001, summary by Monica Voitovici).
WORK TO CURB ECONOMIC CRIME, CORRUPTION NOT GOOD ENOUGH - RUSSIAN MINISTER Boris Gryzlov, Interior Minister, stated that the Ministry will continue and intensify its social service role this year. Priorities will include anti-terrorism and illicit arms trade, criminal prosecution and crime prevention, enhancement of Ministry discipline and efficiency, intensifying criminal organization infiltration, and decriminalizing the economy. (FT (Interfax News Agency), Dec. 25, 2001, summary by Marg Reynolds).
CENTRAL BANK A CORRUPTION HOTBED. An independent study released Tuesday warns of the deep-reaching roots feeding corruption at the Central Bank of Russia. The 70-page report was prepared by the Moscow Carnegie Center and Dmitry Vasilyev, former head of the Federal Securities Commission. "The Central Bank as an independent, absolutely opaque and uncontrolled administrative-financial system did not arise by chance or overnight," said the authors of the report. Among the major "corruption-causing" problems with the bank is that it regulates the entire banking industry while being a profit-seeking participant. Moreover, there seems to be no clear, straightforward grounds for issuing licenses or approving operations, which provides ample opportunity for bribery. "There are thousands of regulations, but billions of dollars are leaving the country as capital flight. Banks go bankrupt. The system doesn't work," Vasilyev said. "If the preconditions for corruption remain, corruption will remain," he added. (Source: The Moscow Times, November 28, 2001, summary by Pavlidis George).
AUDIT CHIEF STEPASHIN TURNS ON HEAT ON ARCH RIVAL AND OTHER MINISTERS IN A WIDER WAR ON CORRUPTION Chief of the Audit Chamber, Sergei Stepashin has said that the audit on railways minister and arch rival, Nikolai Aksyonenko, and his ministry revealed misappropriation and inefficient use on funds to the tune of $370 million, further to which the Prosecutor’s office has filed criminal charges against Aksyonenko. The charges include abuse of office resulting in a loss of 70mn rubles ($2.3mn) in Government funds, non-payment of taxes upto $379mn and misuse of railway ministry funds to build homes for individuals unrelated to the ministry. Stepashin and Aksyonenko are archrivals from Yeltsin’s time, when both were considered equally for the Prime Minister’s post, which was finally given to Stepashin by Yeltsin. But, Aksyonenko was believed to be behind the plot wherein Stepashin was fired and Putin came in, in his stead. However, being a close ally of Putin, Stepashin is said to be undertaking this current tirade against corruption with the support of Putin. The other ministries under fire from the Audit Chamber include the State Fisheries Committee for robbing $4bn- $5bn from the budget each year, the State Customs Committee, the Emergency Situations Ministry, Press Ministry, the Presidential property department and the Natural Resources Ministry. According to political observers, the anti- corruption drive started as a search for the source of internal financial resources but had got catapulted into a political campaign by Putin on Yeltsin's allies like Aksyonenko, the Natural Resources Minister Vitaly Artyukhov, former Kremlin property chief Pavel Borodin, and Press Minister Mikhail Lesin. Analysts also said that it was unlikely that Aksyonenko would be retained at the post, and that the surprise support shown to him by Unified Energy Systems Head, Anatoly Chubais indicated that Chubais would be the next target. (The Moscow Times, November 6, 2001, summary by Aruna Balakrishnan).
RUSSIAN BUSINESSMAN BORIS BEREZOVSKY HAS BEEN PUT ON THE COUNTRY'S WANTED LIST ACCUSED OF CORRUPTION AND MONEY LAUNDERING. The Russian businessman Boris Berezovsky was charged in absentia of corruption, money laundering and embezzling millions of pounds from Russia's national airline, Aeroflot. Since last summer, Mr. Berezovsky has been in Europe in "self-imposed exile". President Putin has set as priority the breaking of the connections between the Kremlin and Russia's business oligarch. (Source: The Daily Telegraph, October 23, 2001, summary by Pavlidis George).
RUSSIA OPENS NEW
CRIMINAL CASE AGAINST YULIA TYMOSHENKO. The Russian Federation has started a criminal case against
Batkivshchyna party leader Yulia Tymosheno for alleged violations of customs
legislation in 1995 and bribery in 2000. Tymoshenko is also accused of
being involved in another case against Col.-Gen Heorhiy Oliynky for illegally
transferring US $450mn and for bribery. (Eastern Economist Daily,
August 9, 2001, summary by Barbara Gray).
Financial Action Task Force (FATF), international body against money laundering has not only retained this country in its Blacklist but declared that this country faces countermeasures.(Wall St. J. June 22, 2001, p. A3).
GOVERNMENT SEEKS TO GET OFF CORRUPTION BLACKLIST DURING CONFERENCE Boris Gryzlov, Interior Minister, stated President Vladimir Putin’s recent signing of a key money laundering bill helps make Russia’s case for being struck off an offender blacklist. At a St. Petersburg conference sponsored jointly by the Russian government, the UN Office for Drug Control and Crime Prevention, Interpol, the Financial Action Task Force, the World Bank, and the IMF, he further stated that Russia must not be a site for money laundering by international crime syndicates. Pino Arlacchi, UN Deputy Secretary General, believes the future is bright for action against the illegal economy and money laundering as the estimated illegal capital flight from Russia’s financial activities is 40 percent of GNP, or $100 billion. (WB DevNews, June 5, 2001, summary by Marg Reynolds).
HUGE GAS COMPANY CHIEF REPLACED AMID SCANDALS Rem Vyakhirev, Gazprom chief executive, has been replaced by Alexei Miller, Deputy Energy Minister and associate of Vladimir Putin, President. Wide-ranging effects may be expected as Gazprom recently seized control of NTV, perceived as a government attempt to muzzle the free media. Gazprom has annual sales of $17 billion, control of a third of global gas reserves, and is the supplier of a quarter of EU demand. However, accusations of insider dealings, diversion of cash, murky finances, and corruption allegations have caused its $8 billion market capitalization to be well below that which it could be. (Yahoo News (AP), May 30, 2001, summary by Marg Reynolds).
DISGRACED KREMLIN AIDE REFUSED TO GIVE SWISS INVESTIGATORS NAMES SOUGHT Pavel Borodin, disgraced former Kremlin aide, has stated Swiss prosecutors are asking too many questions and that he refuses to cooperate as he does not wish to incriminate others. Borodin is accused of receiving multi-million-dollar bribes for award of contracts for Kremlin construction and new inquiries would result if he mentioned names. He is also accused of laundering $25 million and refuses to discuss the matter until the end of the hearing. Vladimir Putin, President, fired Borodin from his position as top manager of the multi-billion-dollar Russian government property holdings, at which time he was posted as Secretary of the unofficial Russia-Belarus union. (Yahoo News (AFP), May 21, 2001, summary by Marg Reynolds).
THE BATTLE AGAINST TRAFFICKING IN HUMANKIND A campaign has been launched by the Angel Coalition, an alliance of forty Russian NGO’s, to fight human trafficking across Russia and other nations of the former Soviet Union. Each year, as many as 50,000 women and girls are lured into sexual slavery with promises of cheap visas and employment. The victims’ passports are then taken and they are isolated, threatened, drugged, beaten, and sometimes raped until they succumb to the demands. It is estimated at least 500,000 women and girls from former Soviet nations have been sent to fifty countries around the world, including the United States, Western Europe, the Middle East, and China. Corrupt and lax officials, together with society’s willingness to look the other way have allowed the networks to become entrenched and profitable, but the group plans education campaigns in the towns and villages. Valentina Gorchakova, Coalition Director, stated world involvement in the sex industry is even greater than the drug industry. Assistance in combating the trafficking networks through new legislation and international laws to return the betrayed women to their homes has been promised by MiraMed Institute, an American group; the International Organization for Migration; and several programs and initiatives of the American Bar Association. (Boston Globe, May 17, 2001, summary by Marg Reynolds).
ETHOS OF CORRUPTION IN NUCLEAR ESTABLISHMENT CREATES DANGER. Corruption within the nuclear establishment could presage major covert exports of fissile material such as plutonium oxide or HEU fuel, weapons components, or even intact nuclear weapons. Nuclear weapons are missing from storage of certain labs in criminally brokered schemes to sell products to unspecified Middle Eastern states. The Russian nuclear complex is in a shambles due to privatization, defense conversion, porous security, endemic official corruption, and pervasive influence of organized crime, inability to control state institutions, and inability to successfully establish the rule of law. (Asia Times, May 10, 2001, summary by Marg Reynolds).
PUTIN SEEN AS ONLY TALKING TOUGH ON JUDICIAL REFORM A key promise in last year’s election campaign of Vladimir Putin, President, was a thorough reform of laws governing the courts, law enforcement forces, politicians, and businessmen to conform with the 1991 draft adopted by the Supreme Soviet. The reform has never been implemented; and the Prosecutor-General’s Office has maintained its powers, as Vladimir Putin stated the reforms would be too expensive to implement. Badir Kekhlerov, Deputy-Prosecutor General, stated that obeying Western standards would only happen when Russian people get paid on time, when the mentality of the people is the same, when the peoples’ perception of justice is the same, and respect of the law is the same – when these standards are obtained – then introduce judicial reforms. (Asia Times (Radio Free Europe), May 1, 2001, summary by Marg Reynolds).
RUSSIA: ASTRONAUT RETURNS TO EARTH TO HEAD TRANSPARENCY INTERNATIONAL-RUSSIA Yuri Baturin, astronaut, will lead Russia’s ‘almost impossible’ mission of promoting transparency, accountability, and integrity as Chairman of Transparency International-Russia, and will also promote the National Anti-Corruption Coalition, the Russian National Anti-Corruption Guidelines, the Program on Drugs Trafficking and Corruption, the PR of Integrity Program, and a newly launched project, Municipal Transparency: Empowering Municipal Authorities and Civil Society in the Fight Against Corruption. Baturin has also served as a lawyer and mathematician, political scientist, journalist and writer, Alpinist, National Defense Council Secretary of the Russian Federation and adviser to Boris Yeltsin, President, from 1993 to 1998. Russia has been rated as 82nd most corrupt of 90 countries on the Corruption Perceptions Index that is prepared by Transparency International. (TI Press Release, Apr 30, 2001, summary by Marg Reynolds).
PROSECUTOR VOWS TO PURSUE EXTRADITION OF MEDIA MOGUL Vladimir Ustinov, Prosecutor General, has stated Vladimir Gusinsky, head of the Media-MOST holding company, may be extradited from Israel on money-laundering charges. A court in Spain, Gusinsky’s former home, rejected an extradition request on the grounds the evidence in the case would not constitute a crime in Spain. He has Israeli and Russian citizenship and full confidence in the Israeli government; however, the two countries are members of a pan-European agreement making extradition possible. He has been accused of obtaining a $262 million loan from Gazprom by misrepresenting his company’s assets. The State Duma recently signed a 1990 European Union convention to give authorities better opportunities in the prosecution of money laundering and in the return of hidden criminal assets. Illegal privatizations of state companies will be targeted by Ustinov’s office. (St. Petersburg Times, Apr 27, 2001, summary by Marg Reynolds)..
AUDIT BLASTS $880 MILLION MOSCOW CHARITY SCHEME Viktor Dvurechenskikh, Audit Chamber Chairman, stated 12 percent (25 billion rubles) of the city’s revenues was given away in tax exemption grants to organizations funding social and cultural programs. Several program grants were spent for other purposes, and City Hall budget irregularities include wasted, missing, mismanaged, and over-expended funding. The audit chamber has limited the annual charity funding program to a 10 billion rubles and now plans to initiate a funding inspection of twenty neighorhoods and ten administrative districts. (Moscow Times, Apr 27, 2001, summary by Marg Reynolds).
MONEY LAUNDERING BLACK LIST TO BE PUBLISHED In response to accusations by industrialized countries that the nation is ill equipped in its anti-money laundering efforts, a list is presently being prepared of banks and countries who launder the estimated $20 billion annually taken out of Russia. Alexander Mikhailenko, head of the Intergovernmental Center Against Money Laundering, stated the list would have a sound legal basis. Russia has been accused of sub-standard legislation and urged by the industrial countries to quickly remedy the gaps. (Russia Today (AFP), Apr 23, 2001, summary by Marg Reynolds).
WORLD TRADE ORGANIZATION ENTRY KEY IS FIGHT AGAINST DRUGS AND CORRUPTION Leonid Lozbenko, deputy head of the World Customs Organization (WCO), stated that removal of temptation to take bribes would be difficult as customs officials in Russia and elsewhere in the world received low wages. Although Russia works to fight drug trafficking and corruption, the WCO will continue to cooperate and share information with the World Trade Organization to reduce trade barriers by harmonizing and improving customs regimes around the world. (AOL News (Reuters), Apr 11, 2001, summary by Marg Reynolds).
RUSSIA/SWITZERLAND: EX PRESIDENTIAL AIDE ACCUSED OF LAUNDERING $25 MILLION FROM KREMLIN CONTRACT KICKBACKS Bernard Nertossa, chief prosecutor in the money laundering inquiry of Pavel Borodin, stated eighteen volumes of court documents proved the existence of a criminal organization. Borodin opened at least six accounts in Switzerland since 1994 and two firms Mercata and Mabatex, have used the accounts three and ten times respectively. Commissions of $25.6 million were paid to Borodin by the two firms, for awarding them $500 million in contracts for renovating the Kremlin and the presidential plane. The two firms have rejected all the allegations against them. (AOL News (Reuters), Apr 10, 2001, summary by Marg Reynolds).
PROSECUTOR CALLS FOR HARDER CORRUPTION FIGHT Vladimir Ustinov, Prosecutor General, stated at a conference for law enforcement bodies that rampant corruption costs Russia about $15 billion annually and that $12 billion annually is laundered in offshore zones such as Cyprus. Bribes are demanded for nearly every facet of Russian life and $20 to $25 billion is illegally taken out of the country due to unstoppable money laundering scams. Criminal groups control one-third of the country’s banks and Ustinov expressed concern for the resultant split of society. (The St. Petersburg Times, Mar. 27, 2001, summary by Marg Reynolds).
BRIBE-TAKING OFFICIALS ‘NOT CORRUPT’ Vladimir Rushayo, Interior Minister, recently stated bribe-taking is not a corrupt practice in response to reports that 70% of Russian officials are corrupt. He further stated that corrupted officials are only those who are linked to criminal gangs or organized crime. (Ananova, Mar. 14, 2001, summary by Marg Reynolds). MTV RUSSIA TAKES STAND ON CORRUPTION. MTV Russia reaches an estimated 58 million viewers, 21.5 million households in 68 towns across Russia, along with Kazakhstan and Kyrgyzstan. The channel employs over 200 people and is produced by ZAO Energia TV, broadcasting from Moscow. Music biz mogul Boris Zosimov is now chairman and CEO of MTV Muzykalnoye Televideniye, MTV Russia's official name. MTV Russia said it broke ground by rejecting industry practice of taking money in exchange for screening videos. "We changed the rules of the game on the market completely," Mr. Zosimov said. "We demonstrated that you could have as much money as you like, invest enormous sums on videos, but if you make music that lacks the honesty required by our viewers, you have no chance to get on MTV." (Source: The Moscow Times, March 26, 2001, summary by Pavlidis George). CORRUPTION
COULD PUSH KALINGRAD TOWARD INDEPENDENCE
Kalingrad, geographically fragmented from Russia and between Poland
and Lithuania, has become a bustling, tax-evading trader in smuggled
cigarettes, vodka, gasoline and other products. Visa-free travel and duty-free imports on some products has
caused the impoverished region, a strategic listening post for Moscow on the
West, to become a cause for concern for the European Union, with its unified
economy and strict border controls.
Vladimir Yegorov, Governor, has requested European Union officials
give special status for trade and visa rules, however, Russian President,
Vladimir Putin, is cautious as the region and the military base in it would
be surrounded by the potential new entries into the European Union – Poland
and Lithuania. (Moscow Times, Feb. 27, 2001, summary by Marg Reynolds). MARKET
OF CORRUPTION – AN OPINION Mr.
Klebnikov, a senior editor at Forbes, has recently advanced the following
opinion. Russian businessmen have
been taught by their capitalist Western counterparts to bribe the relevant
official to obtain a project over a rival and park the cash flow in a personal
offshore account. The presidential
pardon of Marc Rich, commodities trader, is seen by Russians as a routine
example of corruption and note that violence and lawlessness were prevalent
in the formation of capitalism in the United States as well. However, U.S. barons, Rockefeller,
Carnegie and J.P. Morgan has the vision to create a 19th Century economic boom, while the mediocre Russian businessman
have allowed former state-owned companies to languish. Russian businessmen claim, “polish Boris
Yeltsin’s Russia – and it becomes America”. (DJ Newswires, Mar.
2, 2001, summary by Marg Reynolds). CORRUPTION
IN NEWSPAPERS EXPOSED Kirill
Semyonov, director of Promaco, a public relations firm, has exposed more then
a dozen newspapers caught demanding money for publishing a bogus
advertisement news story. The media
firms charged between 390 and 31,200 and include Moskovsky Komsomolete,
Komsomolskaya Pravda and Nezavisimaya Gazeta. The public relations firm wished to expose a market dominated
by dishonest competitors and newspapers; a system exploited by criminal
politicians, Russian and foreign companies and businessmen; and the venal
Russian media which, if the price is right, will promote or libel anyone or
anything. In another case, Anna
Politkovskaya, Russian journalist, has caused Chechen prosecutors to
investigate evidence of Chechens held in pits in the ground at a detention
camp. The public, as with the
newspapers mentioned by Kirill Semyonov, should check the stories thoroughly
before drawing conclusions.
(Electronic Telegraph, Feb.
26, 2001, summary by Marg Reynolds). PROSECUTORS
PROBED 8,000 CORRUPTION CASES IN YEAR 2000
Russian prosecutors investigated more than 120,000 cases of all kinds
last year, including 8,000 corruption and 23,000 murder cases. Bladimir Ustinov, Prosecutor General, did
not state the number of convictions as many cases have been closed due to
lack of evidence. (WSJ, AP, Feb. 22, 2001, summary by Marg Reynolds). “IN
THE WILD, WILD EAST” – AN OPINION Ariel
Cohen, research fellow in Russian and Eurasian studies at the Heritage
Foundation, stated outside investors shy from investing in the Former Soviet
Republic because of pervasive corruption, lack of respect for property rights
and a $141 billion foreign debt.
Russia is presently experiencing a limited-lived economic bounce due
to a worldwide high in oil and commodity prices, the 1998 default on its
foreign debt payment, the devaluation of the ruble which thus protected asset
prices and decreased the cost of labor, and price controls (subsidies) that
are paid by the government on electricity, transportation and other domestic
products. Rampant corruption and slow
progress on economic reform has caused lenders not to renew agreements with
the Russian Finance Ministry. Studies
have indicated a 90 percent probability within five years of losing foreign
direct investment, due in a large part to corrupt courts incapable of
enforcing decisions, a high level of legislative and executive decisions
being paid for by bribes, and the rapidly aging work force and industrial
base. Russia must develop a
transparent legal system and government that recognizes that economic
prosperity is linked with the land market or be limited to its Soviet-era
equipment and pipelines of the oil and gas sector. (WSJ, Dec. 30, 2000, summary by Marg Reynolds).
RUSSIAN CORRUPTION AND MARC RICH: In Wall Street Journal Europe, Mr. Klebnikov, a senior editor at Forbes, author of Harcourt book "Godfather of the Kremlin: Boris Berezovsky and the Looting of Russia," writes a curious opinion that Russians learned corruption from Marc Rich, American commodities trader recently pardoned by President Clinton. Mr. Rich's companies showed how to set up shell companies in obscure offshore tax havens, open Swiss bank accounts, resell Russian commodities abroad at a huge profit. (WSJ Europe, March 2, 2001).
Russia Gets Low Marks In PwC Opacity Index. PricewaterhouseCoopers unveiled at Davos an Opacity Index, which examines and quantifies the effects of economic transparency, namely increased capital and investment costs and availability. Russia was placed next to last in a group of 35 countries measured for the transparency of their economies, scoring 84 on a scale of 150 (China was bottom with 87) compared to Singapore’s 29 which was used as a benchmark. The implication is that businesses operating in Russia indirectly agree to pay bribes and other work-related expenses that are 43 percent higher than in Singapore. Russia ranked last in the survey in the areas of corruption and economic policy. (Moscow Times, January 26, 2001, summary by Hema Kotecha). RUSSIAN
REPUBLICS: ISLAMIC TEACHINGS
CHALLENGE STATUS QUO.The Islamic extremists of the North Caucasus, known as
Wahhabis, continue to be persecuted as they dare to defy the corrupt regimes
of the Caucasian republics. The
Wahhabis offer an alternative social order and set of moral values and in
Nalchik, have assaulted families of bureaucrats and accused them of fattening
on government funding. The republic’
s mufti, Shafig Pshikhachev, has been unable to unite the Islamic community
and mount a serious challenge to the status quo as he is, himself, suspected
of a corrupt scandal involving millions of roubles, and has been unable to
control mafia-like gangs that are motivated by religious convictions. (Institute for War and Peace, Jan. 2,
2001, summary by Marg Reynolds). ANTI-CORRUPTION
JOURNALISTS TARGETED IN ATTACKS
Oleg Luriye, a journalist for Moscow’s independent ‘Novaya Gazeta’ was
attacked in his home for his writings about bribe-paying Kremlin contractors
and corruption amongst other government officials. Luriye believes his assault stems from his recent article
accusations of Alexander Voloshin, Putin’s Chief of Staff, who he claims to
have illegally enriched himself through deals with Boris Berezovsky,
businessman, who is now targeted in a criminal investigation. Last year, another reporter was beaten to
death after being mistaken for a colleague who was investigating allegations
of high-level corruption involving oil deals. Yuri Schekochiken, deputy to the editor-in-chief of ‘Novaya
Gazeta’ and also deputy to the head of the Security Committee in the lower
house of parliament, believes the attacks on journalists to be typical of the
press policy of President Putin, with room only for officially sanctioned
propaganda. Luriye believes the
Kremlin ignores allegations about insiders and singles out Putin’s opponents
for criminal prosecution. (Altavista
News, Dec. 28, 2000, summary by Marg Reynolds).
ELECTRONIC ANTI-CORRUPTION PROPOSED. Anatoly Karachinsky is the head of Information Business Systems (IBS) Russia's largest computer and technology services firm: IBS group is the $250 million leader of Russia's roughly $1.4 billion information technology market. Mr. Karachinsky said Friday that businesses would use the Internet to become more transparent: "There is a model of stealing money from companies and taking it offshore, which is a much easier way to make money than to earn it honestly," he said. "People are discovering that is more profitable to have a high capitalization than to steal a bit of money today," he added. Computerization and the Internet leave deal trails, uncovering bribes and foul play, Karachinsky says. "It is effectively a way to get out from under the control of independent company bureaucrats". However, the problem is that in Russia there are only a million or two users in a nation of 150 million. (Source: Yahoo News -Reuters, September 22, 2000, summary by Pavlidis George).
GIANT MEDIA FIRM CHARGED WITH FRAUD. A criminal embezzlement case has been opened against the heads of companies of Russia's biggest independent media group. Media-Most is a conglomerate headed by Vladimir Gusinsky that includes a radio station, newspapers and NTV, the only non-government television network. The heads of Media-Most are accused of fraud on the basis that they are transferring into offshore funds abroad assets that are collateral for a $473m loan. This loan was made to the company by Gazprom, the State gas company. Mr. Gusinsky and the Media-Most admit the loan but deny the charges. They claim they are the victims of blackmail by the Government to bring NTV under its control. According to a disclosure from the Press Minister, Mikail Lesin, criminal charges against Mr. Gusinsky would be dropped if he sold shares in his company to Gazprom. Mikhail Kasyanov, the Prime Minister, said yesterday that Mr. Lesin had "acted improperly in signing a document on relations between two for-profit companies". Mr Lesin may lose his job because of his involvement in the ownership dispute. (Source: Independent News, September 29, 2000, summary by Pavlidis George).
MOSCOW – Russian journalists investigating corruption are becoming the targets of violence. In the latest incident, four men who entered his home slashed Moscow reporter Oleg Luriye’s face. Luriye says the attack may have been motivated by an article he published accusing Alexander Voroshin, Putin’s chief of staff, of illicit enrichment through deals with the notorious businessman Boris Bereshovsky. (Washington Post, Dec 28, 2000. Summary by Fabian Camacho). Russia plans creation of new spy agency MOSCOW- Vyacheslav Soltaganov, the Tax Police head, told a news conference that a new intelligence agency maybe formed by next year to uncover corruption and crime in the country, plagued with financial problems and hierarchy corruption. (WASHINGTON POST 31 DECEMBER 2000, Summary by Shaun Carter).
Moscow - The high-profile corruption case against former president Boris Yeltsin, his daughters, and a Kremlin official, has been dropped, the Russian prosecutor’s office announced today. The chief investigator of the case, which details alleged kickbacks by a Swiss construction company in charge of renovating the Kremlin, announced there was insufficient evidence. (International Herald Tribune, Dec 14,2000. Summary by Fabian Camacho). MEDIA EXECUTIVE ORDERED ARRESTED, VOWS
TO STAY OUT OF COUNTRY. Media tycoon Vladimir Gusinsky
has been ordered arrested by Russian prosecutors
on charges of embezzlement. Gusinsky, who owns
Russia's only independent national television
network, is now in Western Europe. According to Gusinsky's
station NTV, two of the charges Gusinsky is accused
of are transferring the assets of Gusinksy's
conglomerate, Media-Most, abroad, and a debt of $211
million by Media-Most to the state-controlled
natural gas monopoly Gazprom. (Washington Post, 14
November 2000, summary by Debbie Uy). Corporate Governance:
Wall Street Journal, Nov. 8, 2000 (Front page sec. C) notes that this country
is among the lowest ten in corporate governance by CLSA, Salomon Smith
Barney. This means that shareholders do not get equitable treatment and
disclosed information can be false and misleading. The laws governing duties of managers, accountants, etc. are
inadequate or not enforced properly. WORLD BANK
PRESIDENT WOLFENSOHN PRAISES EMPHASIS PLACED ON ANTI-CORRUPTION, AND LEGAL, JUDICIAL
AND FINANCIAL REFORMS World Bank President James Wolfensohn on Friday gave an
enthusiastic backing to economic goals laid out by Russian President Vladimir
Putin and said the bank was eager to support them. "I think his analysis
is our analysis," Wolfensohn said at a press luncheon. "I think
that we are entirely on track with him in the programs that we´d like to
see." Wolfensohn highlighted themes that Putin raised in a July 8
speech, which was his first "State of the Nation" address since his
election in March. Putin said
Russia´s economy remained inefficient, burdened by foreign debt and rife with
corruption He called for energetic reforms to sustain a fledgling economic
recovery and urged "less administration, more entrepreneurial freedom,
freedom to produce, to trade, to invest." Wolfensohn said Putin´s
emphasis on issues such as tackling corruption and on the necessity of proper
legal, judicial and financial systems was right on target. "We are very
anxious to support him," Wolfensohn said. AOL News (AP) Sept. 1, 2000).
MONEY LAUNDERING IN RUSSIA. The Bank of New York money laundering scandal has revealed that $7 billion moved to front companies. Yuri I. Skuratov, Russia’s former prosecutor general says that if if Ms. Edwards and Mr. Berlin of the Bank of New York talk, illegal activities and money launderings will be revealed. Sobinbank, Flamingo and others are named. (NYT, Feb 18, 2000, p. A1)
Corruption in Post-Communist
Societies,
“Rationality and Corruption in the Post-Socialist World,” Paul B. Stephan, III, University of Virginia School of Law, June 1999. PStephan@law1.law.virginia.edu Document Available from the author or from SSRN Electronic Paper Collection: http://papers.ssrn.com/paper.taf?abstract_id=169212
The upper house of Russia's parliament on Wednesday confirmed the appointment of Vladimir Ustinov as prosecutor general and he pledged to wage an all-out war on corruption. After he took the oath of office, Ustinov, who had been the acting prosecutor general since Skuratov's suspension, told the council he would continue the fight against corruption, one of Russia's biggest problems. "No one will escape punishment," he said, according to Interfax. "We will carry all of the corruption cases through to the end." Ustinov said he had already set up an investigative group to make the struggle against corruption more effective. He said that he would try to keep politics out of the prosecutor's office. "The investigation mechanism is working too slowly and the investigation process is extremely politicized," he said. In the future, he said, "we will not allow the law enforcement bodies to turn into political organs. "The approval of Ustinov's nomination was yet another political victory for Putin, who has promised to make the fight against corruption a top priority. (DJ News, May 17, 2000).
MOSCOW - Kremlin Official Seeks Amnesty For Chaotic Privatization Era- A senior Kremlin official has urged an amnesty for wrongdoing committed during Russia's chaotic post-Soviet sell-off of state assets. The Audit Chamber, an official watchdog, said it was looking into allegations that RAO Unified Energy Systems illegally sold a big chunk of shares to foreigners. (WSJ, July 17, 2000. Summary by L. McPherson).
FOREIGN AID PROGRAMS FOSTER CORRUPTION IN RUSSIA: Finance experts in Moscow say foreign aid programs are use for corruption practices. Although most projects are well intentioned according to Russians involved in the aid scenario, they are poorly executed, ignoring Russians needs and the money ends up in the hands of corrupt Russian bureaucrats. (World Bank Development News, July 24, 2000, summary by Rosado Maritza).
SWISS INVESTIGATORS
CONFIM THEY ARE STILL INVESTIGATING DIVERSION OF IMF MONEY. RUSSIA: Swiss investigators are investigating if a
$4.8 billion IMF credit to Russia was diverted through Swiss Banks to private
individuals close to the Kremlin. It
is alleged that the Bank of New York was involved in money laundering. The IMF had denied that the money was
misspent. (World Bank Development News, July 25, 2000, summary by Rosado
Maritza).
The Index of Economic Freedom (by Driscoll-Holmes-Kirkpatrick) for 2001 places Russia in the “Mostly Unfree” category with a rank of 129 (Ranks range from 1 for Hong Kong to 155 for North Korea, Wall Street Journal, Nov. 1, 2000). H. D. Vinod’s trimmed correlation analysis indicates that countries free from economic regulation are less corrupt. After allowing for some exceptions by 20% trimming, the correlation is near 0.9. |
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