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Analysis & Opinion
21.04.10 Spring Cleaning For The Power Vertical
By Tom Balmforth

When President Dmitry Medvedev came to power two years ago, he made the “war against corruption” a cornerstone of his presidency. Last week he bolstered that campaign with a fresh “National Strategy.” His anti-corruption crusade has been criticized for not involving the public enough, and since he assumed power corruption watchdogs have registered next to no improvement. Bribes still account for a large portion of the GDP, obstruct modernization and now even stifle the effectiveness of the “power vertical” that Medvedev and Prime Minister Vladimir Putin seek to command.

On April 15 president Medvedev signed a decree “On the National Anti-Corruption Strategy and National Anti-Corruption Plan for 2010 to 2011.” The new decree builds on his “National Anti-Corruption Plan,” which he signed on July 31, 2008, two months after taking office. In its new dual format – featuring a “plan” alongside a “strategy” – the decree is seen as a more practical roadmap than its predecessor.

Sergey Naryshkin, the head of the presidential administration, will now update Medvedev once a year on the progress, and the contents of the anti-corruption plan and strategy will be updated biannually. The new strategy, which calls corruption a “systemic threat” to Russia, stresses the need to mobilize the public. “One of the most important tasks in realizing the state anti-corruption policy is the task of fundamentally changing public awareness and forming in society an atmosphere of strict intolerance toward corruption,” reads a Kremlin statement published with the decree.

In terms of the plan’s strategy, the things that have been announced in the declaration are good and the ideas are right, but the question is again – who is going to carry them out,” said Kirill Kabanov, the head of the National Anti-Corruption Council, and NGO. “There are two components necessary to implement the president’s initiatives. First of all there are the bureaucrats who must put them into place. But the bureaucracy is completely uninterested in doing so because corruption for them is a lucrative business. Secondly, there is society, which should control the bureaucracy…but statistics show that 80 percent of the public believes that society should not have any influence on the state,” said Kabanov.

Medvedev has long called corruption the “number one public enemy facing modern society,” but corruption in Russia shows no sign of abating, according to top international watchdogs. Some 4,500 cases of corruption were brought to court in the first half of 2009, RIA Novosti reported, and 700 law enforcement officers were convicted. Transparency International’s Corruption Perception Index ranks Russia at 146 out of 180 countries.

Yelena Panfilova, the head of Transparency International Russia, said that many of the measures had been implemented from Medvedev’s first plan and that there was a good chance that the new ones would be too. “But of course, in no way do I want to say that the fact that there was a plan and there is a new plan by itself decreases corruption – it doesn’t,” she said.

Panfilova said one of the main problems with the new strategy, like Medvedev’s original 2008 plan, is that it was formulated by the executive on its own and “without the participation of civil society, society at large and the media…In international experience these kinds of legislative measures and institutions, which have been created in the last 18 months, can bring results maybe within five to ten years,” she said.

In two years as president, Medvedev has set up a 24-member anti-corruption council, improved the legal framework for arbitrating corruption and passed a number of anti-corruption laws. However, the efficacy of the latter has been called into question, for instance, in the case of the law stipulating that state officials must publicly declare their annual income. Last week prime minister Putin, who is thought to own a Patek Philippe watch worth $60,000, declared his 2009 income to have totaled just 3.9 million rubles ($135,000).

Masha Lipman, a political analyst at the Carnegie Moscow Center, was skeptical that Medvedev’s strategies and plans would have an impact. “I think new progress and new measures will hardly bring radical change in overall corruption. This is for the simple reason that corruption is a factor of unaccountability, and that, in turn, is a factor of the lack of political competition. In a system that lacks political competition, which lacks an effective political opposition and the regular transfer of authority through elections, any campaign against corruption is easily reduced to settling scores,” said Lipman.

Nonetheless, Panfilova said that Putin’s and Medvedev’s frustration with corruption in the bureaucracy and the toll that it takes on the efficacy of the “power vertical” could become an impetus for a tougher overall anti-corruption campaign. “It’s not just a war against corruption for the sake of war. It’s more about the campaign against corruption in order to win back the system of management where the central powers can be absolutely sure that they control the actions of, for example, the housing authorities,” said Panfilova.

Climbing utility prices were a major contributing factor to March’s Russia-wide demonstrations billed as the “Day of Wrath,” which attracted thousands of anti-Putin protestors. “When prime minister Putin called a meeting on these tariffs with the government, he asked why on earth the tariffs are inexplicably growing. It was actually his idea that probably there are some personal corrupt interests attached to that growth,” said Panfilova.

A number of small proposals have appeared in recent weeks. Today the heads of a range of transnational corporations were scheduled to sign a pledge not to engage in bribery. Panfilova said that similar initiatives, such as the United Nations’ Global Compact strategy, had enjoyed past success when it was a question of beating “good old, classic corruption” (where businesses approach officials with a bribe to get an edge over rivals). “But it is absolutely inefficient to sign such a document in the landscape of corrupt extortion. Unfortunately in Russia we have a pretty serious problem with corrupt extortion – sometimes it’s not the business that comes to the official – it’s the corrupt official who comes to the business…I’m not sure that decorations and pleas like that can help the situation with corrupt extortion,” she said.

Panfilova welcomed plans to up the punishment for corrupt practices because the “punishment that is provided now for corrupt activities by Russian legislation is very low.” But she said that Medvedev should not only increase fines, a step he is currently considering, but also lengthen prison sentences and increase confiscation.

But Lipman said that ultimately any advances in corruption legislation are insufficient in the current political system. “Where corruption really is rampant and ubiquitous, anyone can be accused of corruption and anybody can be exposed. And the lack of political competition means that the choice of who will be exposed belongs with the executive. So there may be any number of officials accused of corruption, prosecuted, and sentenced, but this does not resolve the problem as a whole and can barely reduce the scope of corruption in the country,” said Lipman, pointing to the selective investigation of Russian officials in the Daimler AG scandal.

The German auto giant in March was accused of bribing Russian officials to the tune of $6.7 million over ten years. Although the carmaker has since pleaded guilty to the charges, no investigation has been launched in Russia. “The Russian government, which looks to be preoccupied with anti-corruption, hardly used information [on the Daimler case] to go ahead with the investigation. To me this is evidence that the choice of who will be charged and who will be prosecuted with corruption belongs to the executive,” she said.
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