The other day, something deeply, deeply disappointing happened: President Medvedev (the one who said fighting corruption was one of his top priorities) declared that he is against monitoring government officials’ spending. And here is the United Russia party website happily reporting it:
Requiring officials to declare their spending could lead to a new system of corruption, Medvedev says At the same time, the president stressed that, in his view, expense declarations “could, in our conditions, turn either into a tool for settling scores or into a system that itself provokes corruption: share with us, or else we’ll hound you for the rest of your life over your large expenditures.” So now the answer to the question that concerned all of us is clear: will Russia ratify Article 20 of the UN Convention against Corruption? Article 20. Illicit enrichment Subject to its constitution and the fundamental principles of its legal system, each State Party shall consider adopting such legislative and other measures as may be necessary to establish as a criminal offense, when committed intentionally, illicit enrichment, that is, a significant increase in the assets of a public official that exceeds his or her lawful income and that he or she cannot reasonably explain. will Russia introduce its own national laws against the illicit enrichment of officials? The answer is no, it will not. The chief “anti-corruption fighter” does not approve. He thinks the focus should be on monitoring income. Well, we focused on it: here is my post from April 10, 2009: Marina Entaltseva, head of protocol for the President of the Russian Federation, owns a Bentley Continental GT Speed worth more than 8 million rubles (about $260,000 at the time), despite an official salary of 3 million rubles a year.
So we established that Marina Entaltseva earns 3 million rubles a year. So what? We cannot possibly track every envelope of cash that may have been delivered to her during that period. We cannot monitor offshore companies in the BVI (British Virgin Islands) registered in her name. Which question would be more appropriate for a hypothetical Marina Entaltseva:
Marina, are you absolutely sure you received 3 million rubles a year? You’re not lying, are you? or Marina, could you please explain where you got the money for a car worth 2.5 times your annual salary? Yes, Article 20 of the UN anti-corruption convention has not been ratified by every country. But Russia needs it, because nothing else works. Some countries have functioning courts. Some have a free press. Some have competitive elections. In most normal countries, a hypothetical Marina Entaltseva would have been kicked out of public service the moment a Bentley was found in her personal possession. So maybe they can manage without monitoring spending, but we cannot. The whole point is that the “anti-corruption fighter” not only “doesn’t approve” — he is afraid of introducing such rules. Read the interview with former Bank of Moscow head Andrei Borodin. It is absolutely essential reading: ...if you analyze everything that has happened to Bank of Moscow since September of last year, it becomes clear that behind the whole story was a political decision — to take control of the bank. And the people carrying out that decision were VTB Management Board Chairman Andrei Kostin and Igor Yusufov, a man close to the top. Yusufov told me outright that he was acting in the interests of, and on instructions from, President Dmitry Medvedev, who made the decision for the state to take control of Bank of Moscow. This was a politically motivated seizure of property, and in the West there is a very negative attitude toward those who make such decisions. — Why did you believe Yusufov right away? — At the time he held the post of the president’s special representative for energy cooperation. I have been in business long enough to cross-check information through other sources. My acquaintances, who also hold fairly senior positions in government, confirmed that Yusufov belongs to the president’s circle of trusted associates. At that point I had every reason to believe that Yusufov represented Medvedev’s interests. He appeared in the negotiations almost simultaneously with Kostin. Yusufov was present at all the key meetings, and Kostin confirmed that Yusufov had a mandate from Medvedev to acquire shares in Bank of Moscow. — And that was enough? — Yusufov confirmed his authority in other ways as well. From what he said, it appeared that he and the president shared profits and assets, and that he was one of the people authorized to hold assets within Medvedev’s sphere of interest. For example, Yusufov said he represented Medvedev’s interests in Osnova Telecom, which holds a license for 4G mobile broadcasting, Uralkali, and other projects. Yusufov cited the Uralkali deal as an example. With Yusufov acting as intermediary, Medvedev instructed VTB to issue a $5 billion loan to Suleiman Kerimov for the purchase of Uralkali. In return, Yusufov received an option on 8–10% of Uralkali shares at the same price Kerimov had paid Rybolovlev for that stake. Since Uralkali’s market capitalization has doubled since then, by my calculations Yusufov’s potential profit from exercising that option could be around $500 million. In addition, Yusufov often talked about his ability to arrange meetings between businessmen and Medvedev. In the winter of 2011, Medvedev received a major businessman in Sochi through Yusufov’s mediation. Another case: in February–March of this year, Yusufov brought my first deputy Akulinin to the then head of the Investigative Committee under the Interior Ministry, [Alexei] Anichin, and said: “Here is Mr. Akulinin. You are conducting a criminal investigation against him, but he and Borodin are ready to cooperate with us and do everything we want. Keep that in mind in your investigation.” Tell me, can some random person off the street with no authority get in to see the head of the Investigative Committee? I very much doubt it. Every newspaper in the country wrote about the inexplicable oddities surrounding the transfer of 4G licenses to some obscure outfit. Every newspaper also wrote about the inexplicable oddities in the VTB–Bank of Moscow deal and Yusufov’s role in it. Here, for example, are letters from former MTS president Vasily Sidorov. Borodin has simply, at last, said out loud what the business community has been whispering about for the past three years. Putin has Gunvor, the Kovalchuks, and the Rotenbergs.
And our anti-corruption Medvedev has Yusufov, Kerimov, and various other Bilalovs instead. That is why this “anti-corruption crusader” does not want anyone asking him the same question: excuse me, but where did all this wealth come from?