If you have a couple of spare minutes, please read this. A very important behind-the-scenes battle is unfolding before our eyes—one that will determine not only the fate of projects like RosPil (an anti-corruption initiative focused on public procurement), but the fate of government procurement as a whole. And that’s 5 trillion rubles a year.
Want to see a real, honest-to-goodness draft law in support of corruption? Then you can go to the Ministry of Economic Development’s website and take a look. True, it’s not called "On Measures to Promote Corruption in the Russian Federation," but rather "On the Federal Contract System." Don’t let the title fool you—the meaning is exactly that. Briefly, here’s the point: Right now, all government procurement (the notorious 5 trillion rubles in budget money) must be carried out under Federal Law No. 94-FZ, which requires an open and competitive procedure. Starting this year, five platforms are being introduced for conducting all government procurement through electronic auctions. Electronic auctions make real access to government contracts possible for any business, because they provide a unified procedure, full anonymity, and—most importantly—eliminate prequalification. Naturally, officials who distribute money want to distribute it to certain people and cheat in every way they can. Like any law, Law 94 is imperfect, and cheating is possible. But because all the data is open and the procurement procedure is standardized, we have the ability to detect, expose, and overturn these schemes. That is exactly the principle behind the RosPil project: any of us can go to the government procurement website and inspect absolutely any tender. If it seems to you that kickbacks are being taken on semolina purchases for schools in your region—and most likely they are—you can investigate it yourself (or bring in an expert on semolina supply contracts), file a complaint, and make life difficult for the people taking those kickbacks. Obviously, the crooks taking kickbacks do not want a difficult life. All these RosPils and Law 94s are a bone in their throat. That is why, over the past couple of years, a powerful lobby has formed to abolish all of this. The main lobbyists are large construction companies, major regional suppliers, a number of corrupt governors, and so on. The lobbyists need allies in government and academia. After all, the call to abolish electronic auctions shouldn’t come from a red-faced crook—it should come from a bespectacled professor. That sounds much more convincing. And allies were found:
In the government, that ally is Economic Development Minister Elvira Nabiullina (which is especially disappointing, since our sexy minister, Elvira Sakhipzadovna, had seemed like a decent woman).
In academic circles, it is the Higher School of Economics. Its rector, Yaroslav Kuzminov, happens—by a strange coincidence—to be the husband of Minister Elvira Nabiullina. So in the end, HSE writes the concepts and draft laws, and the Ministry of Economic Development pushes them through the government. So what are the cheerful spouses Kuzminov and Nabiullina offering us? Their idea for a law "On the Federal Contract System" would repeal 94-FZ. In essence, it would introduce prequalification for participants in government tenders, abolish the large-scale use of electronic bidding, and return all powers of sole decision-making to the hands of officials. This is not an exaggeration. HSE states the ideological basis of the concept quite openly and with little embarrassment: "When drafting the concept, we proceeded from the presumption of the customer’s good faith." How lovely. They are seriously trying to convince us that a modern Russian official deciding whether to buy something for 1 billion rubles is thinking about us and the country’s future—not about how to skim off 250 million of that billion. I am not trying to say that the public administration system is made up entirely of thieves. But the harsh truth of life is that, after 20 years of negative selection among officials in Russia, in 90% of the places where money is allocated, there really are crooks sitting there. That is an objective fact. Let me give an example that personally stunned me to the core. Here is the proposed list of procurement methods. It has been "expanded." The idea is: right now it’s mostly electronic auctions, but supposedly "we need more flexibility."
Point 8 absolutely killed me: "Competitive negotiations." Well then, let’s call things by their proper names and add a new category: "Awarding a contract by sitting in a restaurant and sketching the kickback scheme on a napkin." That’s competitive negotiation too. One side offers a 25% kickback, but by bank transfer, so you need a shell company. Another offers 18%, but in cash and immediately. The Kuzminov-Nabiullina concept allows contract terms to be changed after the contract is signed, which in our experience is the most commonly used method of cheating. (For example, something is tendered at price X, all competitors are squeezed out, and then the price is raised to Y. Everyone’s happy.) And so on and so forth. It feels as if this was copied from an unofficial manual titled "How to Steal from Government Contracts." As the ideological basis for all this, they cite foreign experience—"they don’t do this in the U.S.," "things are different in the UK"—or simply manipulate the data outright. For example, the concept states:
Exactly! How terrible! If 94-FZ doesn’t work, then why do we need it at all? Now let’s look at the real data (source: the website of the Federal Antimonopoly Service, FAS).
Yes, indeed. If you look at the number of contracts, most government procurement is awarded without a competitive process. But if you look at the money, 83% goes through competitive procurement. It’s easy to see why. The government buys both pencils and highway interchanges. There are simply more contracts for pencils. Office supplies are bought through a "request for quotations" procedure—that is, basically like buying from a store, but under separate contracts. So why are the Ministry of Economic Development and HSE manipulating the data? As for this "advanced foreign experience," the answer is simple. Yes, things are arranged somewhat differently in the U.S. and the UK. But they have a functioning judicial system and political competition. Any bidder who is unfairly excluded from a tender will go to court and tear the contracting authority apart. Through RosPil, we have had obviously corrupt tenders worth 284 million rubles canceled. How many people were fired? One. How many were jailed? Zero. In the U.S. or Europe, any one of our cases would have led to a minister’s resignation. That is why there are no RosPils there. They don’t need them. Instead, they have a free press, law enforcement, and a functioning court system. And one final argument. Everything Nabiullina and Kuzminov are proposing—more flexibility and a contract system—already exists. Procurement at Russian Railways, Gazprom, Transneft, and so on is already conducted under this "flexible system." They are not subject to 94-FZ. So we have an excellent opportunity to compare. We know how at Gazprom, pipes are supplied by the wife of the deputy chairman of the management board Remember how at Transneft, under the supposedly "competitive contract system," billion-ruble contracts were awarded to firms registered using stolen passports. So the principle of the presumption of the customer’s good faith should be sold to a more naive audience. Unfortunately, the chances of the Ministry of Economic Development’s draft law being adopted are quite high. Over the next couple of years, enormous sums will be spent on construction projects, major procurement, and so on. The crooks’ lobby will do everything it can to keep us out of their nice cozy business. We need a joint response. This information needs to be spread. I call on the media to join the public discussion of these proposals. Participants in electronic trading platforms are already collecting signatures. A public lobbying campaign must be mounted against this campaign of crooked lobbying. As a first step, I would suggest that anyone interested make their voice heard by our main characters: Elvira Nabiullina Phone: 694-52-77, 650-53-38 E-mail: detjantsevaav@economy.gov.ru Yaroslav Kuzminov Phone: 628-80-03, 628-86-06 E-mail: kouzminov@hse.ru Don’t shout into the phone, "we’ll hang all of you" or "burn in hell!" You can calmly and reasonably express your disagreement with their strange ideas. After all, these people—whether knowingly or not—want to make it easier to steal our 5 trillion. We have the right to object. And one last thing. Thanks to user zak**upki_news, we** at RosPil examined HSE’s desire to spend 2.14 million budget rubles on the pointless and idiotic placement of 7 online advertising banners on such powerful and popular advertising platforms as "Unified Education" and "Unified Window of Access to Educational Resources." This procurement is quite obviously tailored to a certain Federal State Institution, the State Research Institute for Information Technologies and Telecommunications "Informika." RosPil lawyer sob**ollubov, in** just one hour, established the following strange links between the banner placement sites and the potential "winner" (excerpt from our complaint to the FAS): ..a*ccording to information from the official websites of the federal portal "Russian Education" and the information system "Unified Window of Access to Educational Resources" on the internet, these resources were developed by the Federal State Institution State Research Institute for Information Technologies and Telecommunications "Informika," which also holds the copyrights to them (www**.edu.ru/db/portal/proect_info/project_info.htm, http://window.edu.ru/window/about#providers), and it is precisely the Federal State Institution State Research Institute for Information Technologies and Telecommunications "Informika" that edits and maintains the "Russian Education" portal (www.edu.ru/db/portal/proect_info/redactor_info.htm, http://www.informika.ru/projects/infotech/eduru/), ** the** chief editor of the information system "Unified Window of Access to Educational Resources" is Alexander Dmitrievich Ivannikov, who is at the same time the first deputy director of the Federal State Institution State Research Institute for Information Technologies and Telecommunications "Informika" (www.informika.ru/about/topman/, http://window.edu.ru/window/about#providers), ** the managing editor of the information system "Unified Window of Access to Educational Resources" is Maria Borisovna Bulakina (win**dow.edu.ru/window/about#providers), who is at the same time an employee of the Federal State Institution State Research Institute for Information Technologies and Telecommunications "Informika" (www.informika.ru/about/persons/), ** the** editorial email address of the information system "Unified Window of Access to Educational Resources" is listed as "window@informika.ru," directly pointing to the Federal State Institution State Research Institute for Information Technologies and Telecommunications "Informika" (window.edu.ru/window/about#providers). ** Thus, the services with the requirements specified by the customer in the open auction documentation can in practice be provided by only one legal entity—the Federal State Institution State Research Institute for Information Technologies and Telecommunications "Informika"—because it holds the copyrights and it alone edits and maintains the federal portal "Russian Education" and the information system "Unified Window of Access to Educational Resources." So there you have it, our dear spouses Elvira Nabiullina and Yaroslav Kuzminov. We will give you the right to change the government procurement system and lecture us about the "good faith of customers" only when your own Higher School of Economics stops handling budget money in such... uh... suspicious ways. For now, this "good faith" is hard to believe in. UPD Anton Nosik on the same topic (we didn’t coordinate it).