Corruption in Russia

IMGXYZ2850IMGZYXCorruption exists throughout Russia and the fight against it remains unsuccessful, despite a variety of tools, methods, and proposals in place. Elena Panfilova, director of Transparency International Russia, spoke about the evolving nature of Russian corruption and means to combat it at an event hosted by the Carnegie Moscow Center. Carnegie’s Dmitri Trenin moderated. 

Traditional Approaches to Fighting Corruption  

According to Panfilova, three main approaches to fighting corruption in Russia exist: 

• Restoring competition: Some liberal members of the opposition believe that, in order to effectively fight corruption, competition must be restored in five key spheres: the economy, which must be kept independent from the state; the judiciary; the media; civil society; and the political sphere.
   
• Bureaucratic improvements: Administrative reforms—such as implementing electronic document management systems and using other methods to optimize interactions between bureaucrats and between the state and citizens—might help to eradicate corruption.
   
• Specific anticorruption actions: According to the supporters of this approach, some specific anticorruption measures, which other countries have successfully implemented, such as publicly releasing the income and real estate assets of public officials and executives and imposing high fines, might help to combat corruption in Russia.

Corruption in Russia 

While a number of solutions—including bureaucratic improvements and specific actions—are already being applied in Russia, Panfilova noted that these methods fail to take into account the realities and nature of Russian corruption.  

• Extortion: Only about half of the corruption in Russia is a classic bribe, Panfilova said. The rest of Russian corruption is dominated by extortion. Since corruption in Russia is generally backed by force, a refusal to pay the demanded price can result in physical damage and financial ruin for a citizen or business. Panfilova said that the highest form of extortion that wreaks havoc on the Russian economy is the “corruption raid”—an attack on an enterprise or entity intended to seize its assets and even eventually take over ownership. 
   
• Three phases of the development of corruption in Russia: In the Russian context, corruption went through three phases of evolution, Panfilova said.
  
  
  
  1. State capture: In the 1990s, the businesses began to penetrate the government in order to control the state.
      
  2. Business capture: In the second stage, the government began to seize businesses by using force. It was at this stage that corruption extortion became frequent.
      
  3. Recapture of the state: Finally, between 2007 and 2008, a new phase of corruption gathered strength, as transformed and corrupt businesses returned to positions in the government. One example of this is the situation in the village of Kushchevskaya where, during an investigation into the murder of an entire family, evidence was found substantiating the infiltration of local businessmen, who were also criminals, into the power structures.
      
• Realities of Russian corruption: As Russian corruption continues to evolve, the traditional means of combating it fail to keep pace. Too many anti-corruption efforts are aimed at the first stage—the seizure of the state by business—as the peak of corruption. They are thus unable to propose effective instruments to combat corruption in its subsequent phases, Panfilova asserted.

Ultimately, corruption in Russia is not a symptom of a disease, but the disease itself, Panfilova said. In Russia, corruption does not only interrupt or undermine the existing system; it is the way the system functions.  

Looking Ahead 

• Saturation: The spread of corruption in Russia can lead to what Panfilova described as “corrupt stabilization,” or complete stagnation. It also can lead to situation when national interests are subjugated to the personal interests of corrupt bureaucrats. This behavior was most recently seen during the wildfires that raged throughout the Moscow region and other regions last summer, when officials did not want to interrupt their vacations. Such subjugation of national interests to personal interests of bureaucrats can diminish the state’s ability to control the situation in Russia and threaten the country’s efforts to modernize. To avoid this, Panfilova said, it is necessary to change the very essence of economic relations between businesses and the state.
   
• Anti-corruption sentiment: After years of corruption in the country, ordinary Russians are tired of the system, Panfilova said. The growing popular anger against corruption has been demonstrated in a number of anti-corruption protests, including public reaction to the case of Sergei Magnitsky—a former lawyer of Hermitage Capital Management international investment consultancy who was imprisoned on false charges and died in custody due to bad conditions and lack of medical care—and the recent “blue bucket” protests, where citizens protested against the violation of traffic rules by high officials, whose cars were equipped with special signals. Such protests suggest that a new anti-corruption awareness is maturing in Russia’s middle class. Panfilova concluded that perhaps these “new” citizens, working together, can successfully challenge the corruption in Russia.