Corruption in the Duma of the Russian Federation

Tuesday, May 10th

Today is my last day of break, and what else is there to do but get all my homework and essays completed? For my political structure class, I had to write an essay, once again on my choice. I had no idea what I wanted to write about, so my professor, having considered my last paper, mentioned that I should write about the corruption of the Duma. While this topic is fascinating in my opinion, it also freaks me out...especially since I'm still in the country. I figured that as long as I use articles that have already been published, then there is no way harm could come to me. All of my articles came from The Moscow Times, and other sources you'll see all the way at the bottom. If you have read my previous essay and already understand how the Duma operates, then you might want to scroll down a little bit. I hope you enjoy this one, I promise it's much more interesting then the last one.

Corruption in the Duma of the Russian Federation

Corruption in Russia has been known and even feared by the world.  There is not a day that goes by in Russia that someone is not telling a story about how he bribed a cop to get away with a traffic violation or some other broken law.  While the topic of corrupted police is widely known and spoken about, it is necessary to dig deeper into where it matters the most, inside the government.  For years now the Duma has had politicians taking advantage of the perks of being a chairman by pocketing money, and leaving the citizens of Russia to suffer.  Who are these people within the Duma, how is it affecting the future of the government, but most importantly, what is being done to prevent the spread of corruption? 

Before we discover who the corrupted officials are in the Duma, it is important to understand what the Duma can and cannot do, and whom it involves. Russia likes to argue that they are more democratic than America, because they offer more political parties for people to be part of.  It is true that people will have more areas to express their views on, but who has more power?  In almost all aspects of life, the majority rules and that does not exclude the world of politics.  According to current statistics, United Russia has the most seats in the State Duma taking up 315 out of the 450 ("State Duma"). Next follows the Communist party with 57, the Liberal Democratic Party of Russia having 40 seats, and that leaves Fair Russia with 38 seats ("State Duma"). 

A term in the Duma lasts for five years.  In order to be elected to the State Duma as a deputy, a Russian citizen must be at least twenty-one years of age, however it is impossible to be both a member of the Federal Council and the Duma.  It is also not possible to be a deputy of other representative bodies of state authority and local self-government, if said person is already a deputy of the State Duma.  In order to be a deputy of the Duma one has to accept that their duties as a deputy is a permanent and full time position. ("State Duma") They are not allowed to work for other parts of the state, or engage in paid activities. Deputies can only participate in teaching, or scientific and creative work.  As a member of the Federal Assembly, during the time of their mandate, they hold immunity, and are not to be searched, arrested, or detained unless they are at the scene of a crime, and the safety of other people is in jeopardy. ("State Duma")

Both chambers elect a chairman and his deputies.  Their duties include internal routine work of their specific chamber.  Since December 2001, the chairman of the Federal council has been Sergey Mironov, of the political party of Fair Russia, ("About Us")  which has only 38 seats in the Duma. The chairman of the state Duma is Boris Gryzlov, from United Russia. (“State Duma”)  The Council and the Duma both have to set up committees and commissions to hold parliamentary hearings in order to solve issues in their authority. With that in mind, both chambers need to come up with procedural rules to follow when it comes to hearings, or events which call for procedures. ("State Duma")  In order for the Assembly to control the federal budget, they create another branch called the Accounting Chamber.  The composition of the Accounting chamber, and it’s rules of work are already fixed by the federal law.

The Federal Assembly has the ability to decide on quite a few different subjects.  When it reaches a jurisdiction its boundaries lie in all of the following:  approval of changes in borders between subjects of the Russian Federation; approval of the decree of the President of the Russian Federation on the introduction of a martial law; approval of the decree of the President of the Russian Federation on the introduction of a state of emergency.  In times of a threat or national emergency they decide on the possibility of using the Armed Forces of the Russian Federation outside the territory of the Russian Federation. The Federal Council not only decides on the appointment of elections of the President of the Russian Federation, but also on his impeachment.  They appoint judges of the Constitution Court, of the Supreme Court, and of the Higher Arbitration Court.   Appointment and dismissal of the Procurator-General of the Russian Federation and of the Deputy Chairman and half of the auditors of the Accounting Chamber, is also within the Federal Council’s power.  The Federal Council can only form resolutions based on the majority vote, unless otherwise stated in the Constitution.

The State Duma holds power in jurisdiction as well. The President has the ability to appoint the Chairman of the Government of the Russian Federation, but the Duma has to give their consent.  If the Duma does not like the appointed person, they have the ability to tell the President no, who then has to search for someone else. ("State Duma")  This is a decent bit of power for the Duma, especially for a specific political party.  If a certain political party gets a chairman who supports them, then they have a helpful deciding vote on future decisions. The Duma has the jurisdiction in deciding the issue of confidence in the Government of the Russian Federation. ("State Duma")  In other words, if they think that the President is not doing a good job, they can put up a vote of no confidence up which if passed would start new elections.

It is the Duma’s right to hear annual reports from the Government of the Russian Federation on the results of its work, including on issues raised by the State Duma.  The Duma has the ability to appoint and dismiss people as well; they include: the Chairman of the Central Bank of the Russian Federation, the Chairman and half of the auditors of the Accounting Chamber, the Commissioner for human rights, who acts according to the federal constitutional law. ("State Duma")  The Duma does not have as much power in the impeachment of the President as the Federal Council, but they can in fact advance charges against the President of the Russian Federation for his impeachment.  The State Duma, much like the Federal council, can only form resolutions based on the majority vote, unless otherwise stated in the Constitution. ("State Duma")

It is sad and unfortunate to say that corruption is found in all branches of the government.  It is not only senators and politicians that are found guilty of corruption.  A well known and still controversial problem that Russia had was the former mayor of Moscow, Yuri Luzhkov.  Luzhkov was the mayor for eighteen years starting back in 1992, and it is said that his rule was as imminent as Stalin’s. (Harding)  He was a former leader of United Russia, and felt that the party was abandoning him.  Luzhkov was a very powerful politician and had been able to survive multiple attempts of the Kremlin trying to unseat him.  At stake was control over Moscow city council's $35 billion budget, lucrative building and development tenders, and the highest profile political platform in Russia behind the presidency and prime minister's office. (Harding)  Not to mention Luzhkov’s own fortune which is believed to be linked to his wife.  His wife, Yelena Baturina, is a property developer and is Russia's only woman billionaire. (Harding)

Supporters of Luzhkov say that he has saved Moscow from falling apart post-Soviet era, and turned it into an exciting and modern metropolis. He has paid pensions on time, ensured working hot water, and rebuilt Christ the Savior Cathedral. (Harding)  On the other hand, critics say that he is a soviet-era throwback, and is nothing but a populist kolkhoznik  or collective farm worker.  Activists were upset about his ban on gay rights parades, but were hoping to see it overturned in the near future. (Harding) With all of this said, it is not surprising to hear that  Municipal corruption is not unusual in Russia. According to opposition leader Vladimir Ryzhkov, it is an essential part of Putin's power vertical. (Harding) However, when Putin arrived in the Kremlin in 2000, he  took away Luzhkov's presidential ambitions, only to find corruption in the capital flourishing even more. (Harding) Another opposition leader by the name of Boris Nemtsov went so far as to claim that there are two versions of Luzhkov.  The one in the 90s was great, he supported small business and was for progression. Now however, he says that he is terrible. “Traffic is disastrous, environment is neglected, and real estate prices are among the world's highest because of monopolisation and corruption." (Harding)

Baturina, Luzhkov’s wife, rejected all claims that pointed toward her husband’s job helping her to gain a great fortune.  However, last year a former business partner, Chalva Tchigirinski, in a deposition to the high court in London alleged: "Ms Baturina's sphere of influence is such that no major project can succeed [in Moscow] without her backing." (Harding)  Tchigirinski offered evidence of corruption from handling a bill for maintenance of Baturina’s private jet. He said that Baturina kept a Swiss safety deposit box with secretive documents, in which Baturina of course denied. (Harding)

People accuse Luzhkov of bulldozing Moscow's architectural heritage, and replacing it with mock-palaces. In the place of the cultural buildings, Luzhkov was building housing complexes in their place.  “"Luzhkov represents the interests of building companies," protester Sergei Akeev said, speaking on the picket line.” (Harding)  When Luzhkov was removed from office in September of 2010, Medvedev and Putin both say it was because the president and the mayor were not getting along the way they should. It has been stated that the mayor has lost the trust of the president of Russia. The story was partly covered up by making it sound like his removal wasn’t due to corruption, just a relationship problem.  Putin praised Luzhkov as a symbolic modern image of Russia, but backed Medvedev up on his decision to remove him from office.  Reaction from Russian citizens ranged anywhere from gratitude to not understanding why they got rid of him now when he has been taking money for years.

On the topic of money comes that of the central bank of Russia.  As mentioned previously, the Duma has the ability to appoint the chairman of the central bank of Russia and of the accounting chamber.  A scandal recently unrolled on April 13^th 2011. In court, Andrei Borodin was removed as president of the Bank of Moscow. A VTB executive, Mikhail Kuzovlyov, took over from Borodin as acting chief of Bank of Moscow, locking in VTB's hold on the smaller lender. (Medetsky)  VTB had recently bought half of the Bank of Moscow for $3.5 billion from city hall.

             Interior Ministry investigators asked that Borodin and his deputy Dmitry Akulinin be disposed of, which Moscow’s Tverskoi District Court ruled in favor for.  (Medetsky) The court’s decision was to suspend the executives for an indefinite time.  Law enforcers state that the real problem laid in how Borodin and Akulinin abused their powers which led to the detriment of their bank and its previous major shareholder, City Hall. (Medetsky) Court spokeswoman Yekaterina Ilina claimed that “Borodin and Akulinin assisted in the issuance of a loan by the bank using as collateral property that has questionable liquidity.” (Medetsky)

            There is still more to this scandal, in which Yelena Baturina, the wife of the sacked mayor of Moscow, is involved. Borodin said that his status in the case of the 12.8 billion ruble or $454.7 million loan, which the Interior Ministry said ended up in the personal bank account of Yelena Baturina, had been changed from witness to suspect. A spokesman for Baturina said she did not commit any wrongdoing. (Medetsky)

            At the time, Borodin had been summoned from questioning, but quickly flew to London saying he had a medical condition.  While in London, he took an interview with Ren-TV and said, “that he could ask for political asylum if the other choice were to "end up on a prison bunk" in Russia.” (Medetsky)  He later said that he would return to Russia only if he could reach an agreement with the people who were forcing him to be in London.  Borodin went on by saying that the ruling was government interference in corporate affairs. This decision in his eyes created an "extremely dangerous precedent that opens the way to the takeover of any company or bank by corporate raiders." (Medetsky) From there on he  said that “A decision by investigators can remove executives from the management of any company."  By saying this he called upon the big business lobbying group Russian Union of Industrialists and Entrepreneurs (RSPP), and other business groups to take an interest in what he believed to be "lawlessness." (Medetsky)

            While this was all going on Borodin was also involved in the investigation in which he was negotiating to sell a 20.3 percent stake in Bank of Moscow.  This was an interest he held jointly with Lev Alaluyev, to VTB.  (Medetsky) Over the course of a weekend, it transpired that the bankers sold the stake to Vitaly Yusufov, son of former Energy Minister Igor Yusufov and co-owner of the companies Nordic Yards and Osnova Telecom. Borodin seemed to be unhappy about the price, but he would not say how much it was.  (Medetsky)

            It is known that Yusufov currently owns more than 26 percent of Bank of Moscow, having bought shares from other minority shareholders. (Medetsky)  A special meeting was brought about by the Bank of Moscow’s board of directors after the court ruling.  They decided to appoint Kuzovlyov interim chief executive. In a statement, Kuzovlyov said that he would do his best to increase efficiency and transparency at Bank of Moscow. (Medetsky)

            Over the years blogs have been getting more and more popular, it’s not just travelers and teenage girls using them, but the political spectrum has taken an intense interest in it.  The world of politics is now using blogging and other sources of social networking to appeal not only to the younger generations, but are themselves keeping up with the technologically advancing world.  On the sixth of April an attack was launched on Novaya Gazeta which completely paralyzed the site from use. A few days later on the eleventh of April, LiveJournal a blogging website for uncensored discussion on political platforms was also hit with a similar attack.  “The attacks involved a flood of computers all trying to connect to a single site at the same time, which overwhelm the computer server that handles the traffic.” (Associated Press)  Novaya Gazeta receives about 70,000 to 120,000 visits per day, during this attack however, it became so powerful that it was receiving 70,000 visit requests every 14 seconds.  (Associated Press)  It took two days to get it working back to normal. “Muratov said the attacks aim to "discredit the public platforms which express alternative points of views." He said he believed the attacks are linked to State Duma elections in December and the presidential vote in 2012.” (Associated Press)         

            LiveJournal is the most popular blogging site in Russia.  President Dmitry Medvedev himself uses it, and declared this attack as outrageous and illegal. (Associated Press)  Ilya Yashin, an opposition leader also believes that the attack was aimed at the upcoming vote for 2012.  "It's quite possible that those people who have ordered the attack are planning the complete crash of LiveJournal in the heat of the 2011-2012 election campaign," he wrote on his blog Friday.” (Associated Press) 

The beginning of the attack on LiveJournal started with the blog of Alexey Navalny, who is a anti-corruption activist.  (Associated Press)  Maria Garnayeva, an analyst with computer security company Kaspersky Lab confirmed that the attack on Novaya Gazeta started at the same place.  Bloggers believe that the authorities were behind the LiveJournal attack, saying that no one else has the resources to stage them. (Associated Press)  If authorities are truly behind it, can it be that those within the Kremlin do not want to see change, and would prefer to have the same tandem for the next six years? At this point it can only be assumed so, or at the least of trying to deny people their freedom of speech.  What is even stranger is the fact that the President is involved with LiveJournal and appeared to have taken personal offense at the attack. It could be quite possible that Putin’s men were involved and want there to be less communication between blog readers and President Medvedev.  While the possibilities are endless, it is safe to say that whoever these people are, they were not successful in shutting down the websites for more than a day or two. However, that alone is a mockery to Medvedev’s anti-corruption campaign, for even being able to shut down Medvedev’s connection with the blog for even a short time.  This could put a damper on his political platform and things could be looking up for Putin or perhaps a different candidate.

With so many problems with corruption in Russia today, one cannot help but wonder, what is being done about it?  It is well known that when Putin was president he shut-down the oligarch’s participation in government matters, and threatened them well enough to keep them at arm’s length.  Part of Medvedev’s campaign has been on anti-corruption, and due to recent events, it is possible to see that he is following in similar foot prints as Putin.  President Medvedev has taken recent steps against some of the most powerful men in the government including Deputy Prime Minister Igor Sechin.  Igor Sechin would appear to be the closest figure to the prime minister, and was chairman of Rosneft, Russia’s largest oil firm. (Tsyvinski and Guriev) Medvedev already signed a decree removing Sechen from his chairmanship in the oil firm, and is working towards stripping others of their chairmanships from some of Russia’s largest state-owned companies. The decree stated that the purpose was to improve the country’s investment climate, however, some believe that this purge reflects other goals. (Tsyvinski and Guriev)

With the idea of improving the investment climate, Medvedev has taken into account just how important foreign investment is.  He has already outlined specific measures to be taken and set deadlines for implementing them, which will no doubt meet for battle among powerful opposition.  During this time, it will be possible to see just how powerful Medvedev is, and if he succeeds, even just a little bit, he can run off another anti-corruption and transparency campaign. (Tsyvinski and Guriev)

There is a person that Medvedev has taken great interest in, his name is Alexander Navalny, who is an anti-corruption activist.  It is plain to see that Medvedev is working off of some of Navalny’s suggestions such as: removing government officials from the boards of state-owned companies, ensuring access to corporate documents for minority shareholders and developing a way to respond to whistleblowers on corruption. (Tsyvinski and Guriev)  Navalny has asked for the minutes of the state-owned companies, and multiple times the chairmen have tried to get a law rejecting the information to shareholders.  The argument persists that those who fear transparency, are those who have something to hide.  Medvedev has taken  measures to remove key bureaucrats from corporate boards. (Tsyvinski and Guriev) His plans include to remove from the board chairmanship of 17 state-owned companies and the powerful ministers and deputy prime ministers by July 1. A longer list will be available to the public by October. (Tsyvinski and Guriev)

The logic of his plans is really straightforward and makes sense.  If someone is both a chairman of an oil company or bank, and a government official, they are facing inherent conflict of interest. (Tsyvinski and Guriev) As a government official one needs to serve the needs of the public which includes preserving a competitive environment in the oil or banking industry, but as a chairman of an oil company he must serve the needs of the company. (Tsyvinski and Guriev)  Before this purge began, there was not a single state-owned company with an independent chairman.  As chairman, one has the duty to create an agenda and handle meetings, like any president of a company would.  This runs into a problem of its own accord, because government officials cannot made annual meetings due to their time needed in the Kremlin.  (Tsyvinski and Guriev) Meetings are made without much time given in advanced, which causes conflict of interest with foreign investors, who are less likely to make it to a meeting if there is no set date.  There is no mention as to who is going to replace the new chairs, and some say that Medvedev doesn’t even have a team put together yet.  (Tsyvinski and Guriev) Depending on when the new chairs are implemented and how they run or do not run the company will be the deciding factor.  The new chairmen will need the necessary skills and integrity in order to run it appropriately, however there is no say whether they will run it independently or just take the orders from the Kremlin. (Tsyvinski and Guriev)

Aside from President Medvedev’s attempts of anti-corruption other figures of power are starting to slowly jump on the bandwagon.  Governor Oleg Chirkunov, from Perm, became the first senior official to publicly donate money to anti-corruption project Rospil.info, lead by Navalny. (“The Moscow Times”) There have been other donations by governors, but they had asked to remain anonymous, because they fear the backlash from Prime Minister Putin.  Chirkunov donated $890, which was his pay from lecturing at a college in Moscow.  He also went on to say that he would pay greater attention to what is going on in Perm, and keep a close eye out for signs of corruption. (“The Moscow Times”)

Multiple times now Alexei Anatolievich Navalny has been brought up, so who is this mystery activist and what is he doing in the fight against corruption? Navalny has earned quite a name for himself by becoming an avid blogger on his page on LiveJournal.  He has gained popularity through the means of mass media, and his work as a social and political activist. (“Alexey Navalny”) He uses LiveJournal not only to blog about issues he is concerned about, but he also creates large-scale petitions in relation of corruption where officials seem to have ignored the law.  He even has had the opportunity to write about some of the issues in Forbes magazine. (“Alexey Navalny”) As I mentioned previously Navalny had asked for the minutes of state-owned companies, which the companies met this with much distaste and went as far as to try to create a law against it.  Navalny, a minor stockholder in several major Russian state-related corporations, (“Alexey Navalny”)  has been trying to create transparency in the companies area of financial property. Even though law states that transparency is necessary, there have been allegations which say that managers of the companies have been active in theft and have been obscuring transparency. (“Alexey Navalny”)

His activity in the fight against corruption is not at all simply talk.  “In November 2010, he published confidential documents about Transneft’s auditing. He claims that the published scan is the one of original document. According to Navalny's blog, about four billion dollars were stolen by Transneft's leaders, and their fraudulent activity was coordinated by Vladimir Putin.” (“Alexey Navalny”) 

Navalny believes that United Russia, the political party that Putin belonged to, is a group of swindlers and liars. (“Alexey Navalny”) It has been proven that United Russia is indeed losing popularity, and many are beginning to believe that it is time for change.  Fair Russia, another political party that is relatively new will in fact be putting out their own candidate for the upcoming presidential election.  Fair Russia agrees with Navalny in believing that United Russia had its time, and may have at one point been uncorrupt, however, now it is time for a change.

Corruption comes in all shapes and sizes, whether it is through power alone, money, or influencing who the next ruler of the country may be.  Fighting corruption in the Duma is certainly no easy task.  Russia’s government is one that is difficult to control and understand considering all of the abrupt changes over the years. It is near impossible for corruption to be completely annihilated from any type of government, including Russia’s. Russia needs a president who is head strong, has a lot of influence, and a lot of power in order to win the battle against corruption.  Whether this person is Dmitri Medvedev, no one can say for sure, but only time will tell.  As long as there are people like Medvedev, Alexey Navalny, and other officials who want to see an end to corruption, there may be a chance to purge most of it from the Duma. 

           

Works Cited

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"Governor Donates to Navalny." Moscow Times (2011). Web. 2 May 2011.

<http://www.themoscowtimes.com/news/article/governor-donates-to-navalny/434895.html>.

Harding, Luke. "Yuri Luzhkov, Moscow mayor with an iron grip, may be out of time."

guardian.co.uk (2010). Web. 2 May 2011. <http://www.guardian.co.uk/world/2010/jun/11/yuri-luzhkov-moscow-mayor-scandal>.

Medetsky, Anatoly. "VTB Banker Takes Over for Borodin at Bank of Moscow ." Moscow Times

(2011). Web. 2 May 2011. <http://www.themoscowtimes.com/business/article/vtb-banker-takes-over-for-borodin-at-bank-of-moscow/434928.html>.

Odynova, Alexandra. "State Blamed in LiveJournal Attack." Moscow Times (2011): n. pag. Web.

2 May 2011. <http://www.themoscowtimes.com/news/article/state-blamed-in-livejournal-attack/434552.html>.

"State Duma." Wikipedia. Wikipedia, the Free Encyclopedia, 2011. Web.

<http://en.wikipedia.org/wiki/State_Duma>.

Tsyvinski, Aleh, and Sergei Guriev. "The Purge of the Kremlin Chairmen." Moscow Times

(2011). Web. 2 May 2011. <http://www.themoscowtimes.com/opinion/article/the-purge-of-the-kremlin-chairmen/434935.html>.

Справедливая Россия. About Us. Moscow.  Web. 29 March 2011.

<http://www.spravedlivo.ru/international/party_english/english_foreword/>.