Extent of Corruption and Organized Crime

According to Prosecutor-General Vladimir Ustinov and Alexander Kulikov, the deputy chair of the Duma Committee on Security, Russia loses about 15 billion dollars every year as a result of corruption (ITAR-TASS 23 Mar. 2001; AFP 28 Jan. 2001), which equals twice Russia's defense budget in 2001 (ibid.). However, Irina Khakamada, a Duma member representing the Union of Right-Wing Forces (SPS) claimed that the corruption flows "in cash terms" total $US20 billion per annum in Russia (Segodnya 7 Mar. 2001). Another figure provided by Segodnya indicates that corruption in Russia amounts to 4 per cent of gross domestic product (GDP) (RFE/RL Newsline 19 Jan. 2001).

According to official statistics quoted by Nikolai Kovalev, the chair of Duma Anti-Corruption Committee, 10 per cent of organized crime groups "receive assistance" from civil servants while a survey conducted in St. Petersburg revealed that 98 per cent of businesspeople had been victims of extortion attempts and 96 per cent had resorted to bribing civil servants (RFE/RL Newsline 2 Feb. 2001a).

At a national conference of prosecutors in early 2001, Vladimir Ustinov claimed that the government apparatus was "marred with bribery and abuses of power as never before" (Interfax 12 Jan. 2001). In an interview published in Rossiiskie Vesti on 22 March 2001, Deputy Prosecutor-General Vladimir Kolmogorov described corruption in Russia as "increasing in all strata of society and in all branches of the state" (RFE/RL Newsline 23 Mar. 2001). Novaya Gazeta claims that corruption also prevails in the ranks of the Federal Security Service (FSB) (RFE/RL Newsline 6 Feb. 2001).

According to Kirill Kabanov, a representative of the Russian National Anti-Corruption Committee, the extent of corruption within law-enforcement agencies is in keeping with police's loss of prestige, insufficient funding and a disappearing sense of responsibility (RFE/RL Newsline 12 Feb. 2001b).

Speaking about the situation of organized crime in Russia, Vladimir Ustinov claimed that the number of criminal groups has multiplied by 17 over the last five years (AFP 28 Jan. 2001) and that "almost eveywhere federal and regional elites have become closely associated with financial-industrial and criminal groups" (Interfax 12 Jan. 2001). According to Alexander Kulikov, 40 per cent of private companies, approximately 60 per cent of state enterprises and between 50 and 85 per cent of the banks operating in Russia are controlled by criminal groups (AFP 28 Jan. 2001), though, in a 23 March 2001 Itar-Tass dispatch, Vladimir Ustinov was quoted as saying that more than one-third of Russia's banks are under criminal groups' control.

Government Initiatives to Address Corruption and Organized Crime

There are references to a bill addressing corruption (RFE/RL Newsline 25 April 2001; Segodnya 7 Mar. 2001; RFE/RL Newsline 7 Mar. 2001) which was prepared by a group of Duma members sitting on the Duma Security Committee (ibid.). According to Duma officials, the bill contains a list of activities falling under the definition of corruption and provides for the punishment of both corrupters and corrupted (RFE/RL Newsline 25 April 2001). Commenting on the bill, Azaliya Dolgova, the chair of the Russian Criminology Association spoke of a "law on the purity of our skies" (Segodnya 7 Mar. 2001) while Kirill Kabanov claimed that "there is no need to expand our legislation. The countries where corruption is marginal, such as Denmark, do not have a special law on corruption" (ibid.). Voicing her opinion on the bill, Irina Khakamada stated that

the law may be adopted if the government has the political will to do it, but this law is unlikely to work. In Russia, corruption is the only method of existing, both for officials (who earn low salaries) and for businessmen (due to the lack of free access to market and clear rules of the game). ... Economic liberalization is what would really fight corruption. This entails adopting a package of deregulation laws, reforming government bodies, reducing tax burden, introducing the presumption of innocence for taxpayers, and finally, liberalizing currency control. All those measures are fiercely opposed by the bureaucrats because the state still stands above all in Russia. In such conditions, the law on corruption will simply not work (ibid.).

The Russian National Anti-Corruption Committee was said to have drafted a bill establishing a special agency to fight corruption , which has so far lacked support (RFE/RL Newsline 12 Feb. 2001b). For example, Kirill Kabanov, a representative of the Russian National Anti-Corruption Committee, referred to a conversation he had had with officials of the Russian Security Council in which they said that a special agency mandated to fight corruption was not necessary in Russia (ibid.).

On 28 March 2001, Interfax reported that President Vladimir Putin had appointed Vyacheslav Soltaganov as a member of the Security Council and put him in charge of fighting corruption and money-laundering. During a visit to Austria on 9 February 2001, President Vladimir Putin stated that the Russian government would fight corruption (RFE/RL Newsline 12 Feb. 2001a).

On 2 March 2001, Economic Development and Trade Minister [German] Gref announced that the World Bank would assist the Russian government in its efforts to identify "centres of corruption" and eliminate them (RFE/RL Newsline 5 Mar. 2001).

Echoing federal efforts, Vladimir Yegorov, governor of Kaliningrad (western Russia), committed himself to protecting investors from corruption (RFE/RL Newsline 25 January 2001).

On 3 April 2001, the Ingush government announced on its website that it had created an interdepartmental commission with the tasks of protecting citizens' rights, of guaranteeing public security, and fighting crime and corruption (RFE/RL Newsline 4 Apr. 2001).

On 6 March 2001, President Vladimir Putin officially asked the Duma to ratify the convention on combating money laundering, which Russia had signed on 7 May 1999 (RFE/RL Newsline 7 Mar. 2001). Earlier in 2001, Vremya MN reported that the Federal Tax Police was setting up a special division for preventing money-laundering (ibid. 2 Feb. 2001b). However, according to the newspaper report carried by RFE/RL, this move may have just reflected Russia's effort to change its image on the eve of the international Anti-Money Laundering Commission meeting in Paris (ibid.).

Legal Proceedings

According to Prosecutor-General Vladimir Ustinov, 8,000 cases of alleged bribery and corruption were brought to court in 2000 (RFE/RL Newsline 12 Feb.2001c). However, he criticized the quality of investigations into corruption and blamed law-enforcement officers, including his subordinates, for focusing mainly on low-ranked officials, such as regional inspectors, teachers or doctors (Interfax 12 Jan. 2001).

On 8 May 2001, Itar-Tass reported that the Prosecutor-General had initiated criminal proceedings against Sergei Antoshin, Head of the Information-Analytical Department of Bryansk Oblast's administration (western Russia) on suspicion of bribe-taking (RFE/RL Russian Federation Report 9 May 2001).

On 1 March 2001, RFE/RL, quoting Interfax, reported that the Investigation Committee of the Interior Ministry was "supervising" an investigation into 30 cases of corruption involving Moscow city officials. According to the Committee, several officials accepted bribes worth thousands of American dollars. On 28 February 2001, investigators arrested City Property Head Dmitrii Malyshev on suspicion of having taken a US$70,000 bribe (RFE/RL Newsline 1 Mar. 2001). In its 17 April 2001 issue, Kommersant Vlast indicated that the investigations into the 30 cases were on-going (RFE/RL Russian Political Weekly 23 Apr. 2001).

On 11 April 2001, Kommersant-Daily reported that Federal Security Service (FSB) officers had arrested Nikolai Voskresov, local prosecutor in Novocherkassk (southern Russia), suspecting him of bribe-taking and abuse of office (RFE/RL Russian Federation Report 9 May 2001). The source added that the previous prosecutor had also been convicted for bribe-taking four years ago (ibid.).

On 28 February 2001, Maj-Gen Mikhail Zotov, first deputy head of the Interior Ministry's Committee for Investigations, announced that a high-ranking Moscow city official was arrested on 27 February 2001 while he was taking several thousand American dollars as a bribe (RIA 28 Feb. 2001).

On 15 February 2001, former justice minister Valentin Kovalev was brought before the Moscow City Court charged with embezzlement, bribe-taking and unlawful possession of firearms (ITAR-TASS 15 Feb. 2001).

A criminal investigation initiated in October 2000 by Nizhnii Novgorod's Department for Combating Organized Crime led to the arrest of Yurii Petrov, the Chair of the Election Commission in the Republic of Marii El (western Russia) (RFE/RL Russian Federation Report 14 Feb. 2001). The investigators suspected him of receiving "large" bribes, such as a car, while he was head of the Presidential Administration under Marii El's President Vyacheslav Kislitsyn (ibid.). As of 9 February 2001, Yurii Petrov was being held in "isolation" in Nizhnii Novgorod (ibid.).

According to a 16 January 2001 Interfax North-West report, charges of money-laundering and "appropriation of another's property" were laid against Mikhail Karetnyi, the former deputy governor of Kaliningrad Oblast (RFE/RL Russian Federation Report 24 Jan. 2001).

On 22 January 2001, Interfax-Eurasia reported the arrest of Aleksandr Kurtukov, Deputy General-Director of the Sverdlovsk Oblast-based state enterprise SINPO which supervises the distribution of non-residential office space (ibid.). According to Yurii Zolotov, deputy prosecutor-general for the Urals federal district, Aleksandr Kurtukov was suspected of accepting a US$200 bribe (ibid.).

For background information on corruption in Russia, please find attached an article by Andrei Dakhin, Andrei Makarychev and Alexander Sergounin entitled "Corruption in Russia: Political, Legal, Social and International Aspects" and described as

a result of the research which was carried out in 2000 by the Center of Socio-Economic Expertise (Nizhny Novgorod) within the framework of the project "Public Hearings as a Major Element of Regional Anti-corruption Practices", supported by the LGI program of Open Society Institute (Budapest).

This article was posted on 14 December 2001 on the Washington-based Transnational Crime and Corruption Center's discussion group at http://www.egroups.com/files/traccc/.

This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.

References

Agence France Presse (AFP). 28 January 2001. "La corruption fait perdre 15 milliards de dollars par an à la Russie." (NEXIS)

Interfax. 28 March 2001. "Russia's Putin Appoints Security Council Member to Combat Corruption." (FBIS-SOV-2001-0328 28 Mar. 2001/WNC)

_____. 12 January 2001. "Prosecutor General Sounds Alarm Over Scale of Corruption in Russia." (FBIS-SOV-2001-0112 12 Jan. 2001/WNC)

ITAR-TASS. 23 March 2001. Andrei Kuzminov. "Russia Law Enforcers Confer Over Corruption Fight." (NEXIS)

_____. 15 February 2001. "Russia: Ex-Justice Minister Kovalev on Trial for Embezzlement." (FBIS-SOV-2001-0215 15 Feb. 2001/WNC)

Radio Free Europe/Radio Liberty (RFE/RL). Newsline. 25 April 2001. "Anticorruption Bill Defines Corruption. " http://www.rferl.org/newsline/2001/04/1-rus/rus-250401.html [Accessed 18 May 2001]

_____. 4 April 2001. "Ingushetia Sets Up Rights Commission." http://www.rferl.org/newsline/2001/04/1-rus/rus-040401.html [Accessed 18 May 2001]

_____. 23 March 2001. "Prosecutor Says Police Not Reporting Crime Accurately." http://www.rferl.org/newsline/2001/03/1-rus/rus-230301.html [Accessed 18 May 2001]

_____. 7 March 2001. "Putin Sends Money-Laundering Convention to Duma." http://www.rferl.org/newsline/2001/03/1-rus/rus-070301.html [Accessed 18 May 2001]

_____. 5 March 2001. "World Bank to Help Moscow Fight Corruption." http://www.rferl.org/newsline/2001/03/1-rus/rus-050301.html [Accessed 18 May 2001]

_____. 1 March 2001. "Federal Officials Focus on Moscow City Corruption." http://www.rferl.org/newsline/2001/03/1-rus/rus-010301.html [Accessed 18 May 2001]

_____. 12 February 2001a. "Putin Asks Why Russia Alone Should Pay Soviet Debt." http://www.rferl.org/newsline/2001/02/1-rus/rus-120201.html [Accessed 18 May 2001]

_____. 12 February 2001b. "Kremlin Lukewarm on Anti-Corruption Body." http://www.rferl.org/newsline/2001/02/1-rus/rus-120201.html [Accessed 18 May 2001]

_____. 12 February 2001c. "Courts Considered 8,000 Corruption Cases in 2000." http://www.rferl.org/newsline/2001/02/1-rus/rus-120201.html [Accessed 18 May 2001]

_____. 6 February 2001. "FSB Losing Best Officers to Private Firms." http://www.rferl.org/newsline/2001/02/1-rus/rus-060201.html [Accessed 18 May 2001]

_____. 2 February 2001a. "Duma Committee Chairman Urges Serious Fight Against Corruption." http://www.rferl.org/newsline/2001/02/1-rus/rus-020201.html [Accessed 18 May 2001]

_____. 2 February 2001b. "... As Anti-Money Laundering Service Set Up." http://www.rferl.org/newsline/2001/02/1-rus/rus-020201.html [Accessed 18 May 2001]

_____. 25 January 2001. "Kaliningraders Protest Moscow's Policies." http://www.rferl.org/newsline/2001/01/1-rus/rus-250101.html [Accessed 18 May 2001]

_____. 19 January 2001. "Bribes Amount to 4 Percent of GDP." http://www.rferl.org/newsline/2001/01/1-rus/rus-190101.html [Accessed 19 May 2001]

_____. Russian Federation Report. 9 May 2001. "Corruption Watch." http://www.rferl.org/russianreport/2001/05/17-090501.html [Accessed 18 May 2001]

_____. 14 February 2001. "Corruption Watch." http://www.rferl.org/russianreport/2001/02/7-140201.html [Accessed 18 May 2001]

_____. 24 January 2001. "Corruption Watch." http://www.rferl.org/russianreport/2001/01/4-240101.html [Accessed 18 May 2001]

_____. Russian Political Weekly. 23 April 2001. "How the Mighty Mayor Has Fallen?" http://www.rferl.org/rpw/2001/04/12-230401.html [Accessed 18 May 2001]

RIA. 28 February 2001. "Russia: Police Official Says High-Ranking Moscow City Official Arrested While Taking Bribe." (FBIS-SOV-2001-0228 28 Feb. 2001/WNC)

Segodnya [Moscow, in Russian]. 7 March 2001. "Official, Activists Comment on Anticorruption Bill." (BBC Summary 10 Mar. 2001/NEXIS)

Attachment

Dakhin, Andrei, Andrei Makarychev and Alexander Sergounin. N.d. "Corruption in Russia: Political, Legal, Social and International Aspects." http://www.egroups.com/files/traccc/ [Accessed 14 Dec. 2000].

Additional Sources Consulted

IRB Databases

Internet sources including:

The Anti-Corruption Network for Transition Economies

Anti-Corruption Ring Online (ANCORR Web)

Business Information Service for the Newly Independent States (BISNIS)

Corruption in Post-Communist Societies: Central Europe and the Former Soviet Union

European Institute for Crime Prevention and Control

The Moscow Times

Nathanson Centre for the Study of Organized Crime and Corruption

OECD Online Anticorruption Unit

Transitions

Transparency International

The World Bank Group