#6036
#10
Asia Times
January 22, 2002
Putin undertakes apparent crackdown on corruption
By Sergei Blagov
MOSCOW - Russian President Vladimir Putin appears to be ushering in a new era: a recent two-day trip to Poland ended years of frosty relations, and Russia's recent pledge to help the US fight terrorism has led to a strengthening of ties. Perhaps most important, however, has been his crackdown on Russia's endemic graft - one of his key electoral pledges. The Kremlin seems determined to carry it out.
In early January, Putin sacked Railways Minister Nikolai Aksyonenko, who was accused of embezzling millions of US dollars. The former minister had been linked to Boris Berezovsky, the once-powerful tycoon, who found himself in exile after Putin began distancing the Kremlin from so-called "oligarchs". Before Putin's sudden accession to power in 1999, Aksyonenko - once a deputy prime minister under former President Boris Yeltsin - was viewed as a leading candidate to become Yeltsin's successor.
Moreover, earlier this month the Russian Prosecutor-General's Office announced that it had launched an inspection into the prior commercial activities of one the country's most powerful officials, presidential chief of staff Alexander Voloshin. Prosecutor-General Vladimir Ustinov said that the initial probe may or may not result in a criminal case. In the early 1990s, Voloshin worked with Berezovsky on the so-called "pyramid" schemes, say Russian media outlets. According to the reports, Voloshin ran several companies that were accused of embezzling millions of US dollars, but the case never led to criminal charges.
Ustinov eventually backed down and said there was no criminal investigation relative to Voloshin. Yet the probe renewed speculation about Voloshin's imminent sacking, as well as several high-profile cases against officials associated with Yeltsin's influential inner circle. However, it has been argued that the high-profile probes are a reflection of the ongoing battle between two powerful clans influencing Putin: his old colleagues from the special services and the old Kremlin team joined by some right-wing politicians.
There have been other signs of an ongoing crackdown on graft in Russia. In 2001, Russian law enforcement agencies investigated a total of 40,000 officials at Russia's various institutions. However, most investigations involved minor paperwork violations. As the Prosecutor-General's Office marked its 280th anniversary, Putin urged them to do more to combat crime, according to the RIA news agency.
Putin is also moving toward jettisoning the legacy of the early wild years of Russia's "bandit capitalism" and taming super-rich "oligarchs". In 2001, Putin initiated the sacking of the head of natural gas giant and Russia's largest company Gazprom, Rem Vyakhirev. And earlier in January, Ustinov indicated that his office intends to interrogate more Gazprom executives, widening an investigation into the sale of the gas monopoly's assets by the management of rogue subsidiary Sibur. Until recently, Gazprom high-ranking executives were considered untouchable in Russia.
Earlier this month, Gazprom first deputy chief executive officer, Vyacheslav Sheremet (who is also Sibur's board chairperson), Sibur CEO Yakov Goldovsky, and vice president Yevgeny Kozhit were detained for questioning. Sheremet was eventually released while the two other executives remain in custody. Prosecutors had opened a criminal case based on incriminating documents sent to them by Gazprom's security service. However, last week Gazprom Deputy CEO Alexander Ryazanov dismissed reports that Gazprom was behind the arrests.
When Putin initiated the appointment of his old St Petersburg contact Alexei Miller as Gazprom chief last year, the Russian leader made it clear that he wanted to stop the siphoning off of valuable assets at the 38 percent state-owned gas monopoly. Sibur has long been seen as the final outpost for the cronies of Vyakhirev, and analysts regarded the petrochemical giant as a back door through which management could embezzle Gazprom's stakes in valuable enterprises.
While the investigation centers on the sale of Sibur's assets, worth US$86 million, a bigger story of missing assets may be disclosed. Last year, Russian media outlets alleged that close relatives of Gazprom's top managers acquired stakes in Gazprom's affiliates - worth millions of dollars - for the symbolic sum of 10 rubles (30 American cents).
Few people in Russia were terribly shocked when news about corruption at Gazprom first surfaced. Russia's lucrative commodities sectors - oil and gas, aluminum, and metals - had long been marred by alleged illegal acts and associations with organized crime. For instance, Russia's top oil company LUKoil and the country's aluminum monopoly Russian Aluminum are both being sued for $4.8 billion in disputes with foreign business partners over alleged asset-grabbing.
It has been understood that many Russian companies, including major corporations, emerged due to the corrupt use of political influence to steer business into the hands of well-connected tycoons. Now the Kremlin appears to be moving towards uprooting graft in Russia by cracking down on "oligarch" capitalism.
Russia's closest post-Soviet ally, Belarus, is following suit. In early January, authorities started a criminal investigation over the alleged embezzlement activities of Mikhail Leonov, head of Minsk Tractor Plant (MTZ). If convicted, the businessman faces up to three years in jail. The Belarus Interior Ministry insists that Leonov embezzled funds from his state-controlled plant. However, Leonov's supporters argue that the former MTZ head became a scapegoat in ongoing attempts by the Belarus government to blame top managers and the plants' directors for all the problems faced by Belarus' unreformed economy.
Matters don't stop there. Putin - as well as many other post-Soviet leaders - have repeatedly promised to tackle crime and combat bribe-taking. Putin's recent moves could arguably indicate that he is finally trying to tame Russia's "bandit capitalism".
On the other hand, the recent wave of criminal investigations in Moscow seemingly raises the stakes in intrigues around the Kremlin, making the government's anti-graft crusade seem more politically motivated. It remains a matter of debate whether the recent probes could actually result in a meaningful crackdown on graft in Russia. (Inter Press Service)
Back to the Top Next Article
- Back to the Top -