Here’s a fact about the way Russia’s state-owned companies operate.
Did you know that the state-owned company Rosneft has already spent 2.5 billion rubles on procuring “legal services” since the start of this year (that is, in just the first 24 days of 2017)?
That means payments to outside contractors, on top of the enormous in-house legal apparatus—around a hundred lawyers—that already exists within Rosneft and its subsidiaries.
Quite something, isn’t it? Apparently, even the tea is served to Sechin by a London lawyer billing at a thousand dollars an hour.
I’m saying this because every day we read news about how there isn’t enough money for cancer patients’ medication, how there’s no money to buy diapers for disabled orphans.
Rosneft is a state-owned company that consistently underpays dividends to its shareholders, above all to its main shareholder—the state.
In theory, the state owns companies like Rosneft in order to benefit as a shareholder—to receive a great deal of money, to the benefit of all of us. That money should go into the budget and be spent on pensions, cancer medication, and diapers for orphaned children.
Instead, it all goes toward the comfortable and prestigious life of yacht owner I.I. Sechin and his friends.
Of course, I’m not disputing that a large company sometimes needs to hire outside lawyers. But if you, my friend, can’t pay your shareholder a return in line with comparable oil companies, then lawyers like these are beyond your means. Be more modest. Remember your role, your responsibilities, and your priorities.
First, you pay dividends of at least 100 rubles per barrel of oil equivalent produced (Lukoil) and up to 200 rubles (Bashneft), and only then do you go shopping for more expensive American lawyers. But if you’re paying 60 rubles, then sit down and stop showing off. Find cheaper lawyers. Make your own lawyers work better.
As has been said, quite rightly, many times before: we could cover a huge share of urgent budget spending and solve many problems—including the pension one—if we simply made these fat cats pay dividends on their shares to their owner (us, the state).
Here’s today’s news: the government allocated 8.3 billion rubles for the construction of rural roads. That’s across 54 regions of the country. In other words, 153 million per region. For all rural roads. Roads used by millions of people—if you can even call it driving. Hundreds of thousands of them get stuck on these roads every day and curse their condition in the strongest possible terms. This is genuinely one of the country’s most important problems: the catastrophic state of rural roads. If Rosneft chipped in some money there, that would be very good indeed. But it won’t send money to the roads—it will send it to American lawyers. And then once again it will underpay its shareholder.
In the beautiful Russia of the future, oil companies will pay proper taxes and proper dividends to shareholders. At the level seen in developed countries. The budget will receive a great deal of money, and we will be able to solve many problems.
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P.S. If anyone is interested in which lawyers received money from Rosneft:
A contract worth 1,450,000,000 rubles for the “provision of legal services supporting projects and transactions” was signed with Baker Botts L.L.P. The procurement was made from a sole supplier without a competitive tender. The contract itself is not available. Link: http://zakupki.gov.ru/223/purchase/public/purchase/info/common-info.html?noticeId=4819936&epz=true&style44=false Baker Botts L.L.P. is a major international law firm registered in the United States. Link to the Russian website: http://www.bakerbotts.com/offices/moscow
A contract worth 950,000,000 rubles for the “provision of legal services” was signed with Linklaters CIS. The contract was concluded without a tender; the text of the contract is not available on the procurement website. Service term: http://zakupki.gov.ru/223/purchase/public/purchase/info/common-info.html?noticeId=4787243&epz=true&style44=false Linklaters CIS is an international law firm. Website: http://www.linklaters.com/Pages/Index.aspx