Russian President Vladimir Putin has rolled back some of former president Dmitry Medvedev’s liberalizing thaw of 2008-2012, but he also continues some of his reforms. Even as Putin’s brief and shallow political freeze introduces strict laws that are quick to punish opposition demonstrators, NGOs with foreign ties, and activities deemed espionage, he appears intent on furthering reform of the Ministry of Internal Affairs (MVD) and the fight against corruption. This seems especially true regarding the latter.
In recent weeks and months, Russian investigators have uncovered a cluster of major corruption cases of massive embezzlement. The tempo and reach of these cases have increased since the late Medvedev administration. Now, more importantly, the fight against corruption is reaching the highest echelons of power, though it is likely to stop at the edge of Putin’s closest inner circle.
In late October, it was reported that 15 billion rubles (approximately half a billion dollars) was misappropriated during preparations for the September APEC summit held in Vladivostok and its environs. The summit’s planning and organization was led by First Deputy Prime Minister Igor Shuvalov, who has been the target of corruption allegations before. Authorities arrested former Deputy Regional Development Minister Roman Panov, another key figure in the summit preparations.
At about the same time an official inquiry into the theft of 6.5 billion rubles (approximately $200 million) invested from the federal budget for the troubled Russian GPS or ‘Glonass’ system was announced and broadly publicized. The Glonass project has been overseen until more recently by Putin’s close associate Sergei Ivanov, head of the presidential administration and at one time a contender along with Medvedev to replace Putin in 2008. So far no arrests have come in this case. However, Glonass' general director, Yury Urlichich, chief engineer of the project was fired over the weekend.
Now, in November another embezzlement case has been opened up against chief executives of the state company OboronServis. In addition, Minister of Defense Anatolii Serdyukov and Chief of the General Staff Makarov, have been fired and await likely charges. Serdyukov headed Oboronservis until last year. He was found cavorting in the apartment of Yevgeniya Vasillieva, one of the chief figures in the embezzlement case, when investigators arrived to examine Vasillieva’s property. Documents in the case were shown in a television broadcast this week which exposed new details of the case showing Serdyukov’s signature. Allegedly, Serdyukov, Vasillieva, and others illegally sold $95.5 million rubles (more than $3 million) worth of state-owned real estate, land and shares at below-market rates to temporary shell companies––presumably funneling the holdings back to themselves, their friends, and family members. Vasillieva and several other company executives who were Serdyukov protégés, have been arrested in the case, but so far not Serdyukov himself.
These scandals have gotten broad coverage in the state-owned media. A Tuesday night TV program, ‘Special Correspondent’ on the state’s ‘Kanal Rossiya’ (Russia Channel), should provide some interesting viewing for Russians, most of whom are interested in and appalled by Russia’s rampant corruption. This past Tuesday the program offered a detailed exposure of the OboronServis scandal. The program’s host, Arkadii Mamontov, has been raked over the coals by Russian opposition forces for two previous editions of his other programs in which he documented some of the Russian opposition’s ties to the West and efforts by nationalist opposition leader Sergei Udaltsov to win the support of Georgia’s secret services for organizing revolutionary activity and perhaps even violence in Russia. Now he is promising that the next 20 editions of ‘Special Correspondent’ will cover more corruption cases. It is apparent that a major state campaign against corruption is being rolled out.
Beyond marking a point of continuity between Medvedev’s thaw and Putin’s third term, the intensified anti-corruption drive is important for several reasons. First, the Kremlin’s fight against corruption is getting more serious and appears to be targeting higher level state officials in order to signal to officials, bureaucrats, and business leaders that corruption must be wound down––that corruption on the massive scale that has existed in Russia since the collapse of the Soviet Union will no longer be tolerated.
Second if the policy produces real results they will go a long way to improving the investment climate in Russia and reduce capital flight, thus helping Russia to weather the upcoming global economic storm.
Third, there can be important political ramifications of these pivotal reforms. To the extent that increasing the fight against corruption is a serious effort, it can co-opt the corruption issue from the opposition and undercut potential political threats to Putin coming from the opposition, such as Alexei Navalny among others.
Fourth, there are potential downsides of the battle against corruption for Putin and his innermost circle if it is fully engaged––especially if it gets close to figures like Ivanov, Shuvalov, and others. Victims of the corruption campaign could try to save themselves by exposing those closest to Putin or to Putin himself. Even without this, there is risk of a backlash and exacerbation of regime splitting that has occurred on a limited basis as a result of Medvedev’s reforms and the rise of the new ‘white ribbon’ opposition movement.
This risk will grow as some corruptors are thrown overboard and some favorites go untouched in the corruption fight. Thus, an intensified and thorough anti-corruption policy would have implications for the stability of the regime and the possibility of regime transformation either into a real democracy or… something much less desirable.
Gordon M. Hahn is Analyst/Consultant, Russia Other Points of View – Russia Media Watch; Senior Associate, Center for Strategic and International Studies in Washington DC; Senior Researcher and Visiting Assistant Professor, Monterey Terrorism Research and Education Program; and Senior Researcher, Center for Terrorism and Intelligence Studies (CETIS), Akribis Group. Dr Hahn is author of two well-received books, Russia’s Revolution From Above (Transaction, 2002) and Russia’s Islamic Threat (Yale University Press, 2007), which was named an outstanding title of 2007 by Choice magazine. He has authored hundreds of articles in scholarly journals and other publications on Russian, Eurasian and international politics and founded and writes the CSIS Islam, Islamism, and Politics in Eurasia Report (IIPER) at https://csis.org/node/33013/publication.