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Corruption

It is an open secret that the Russian defense industry is an important trough at which senior officials feed, and weapons sales continue to enrich many. Defense analysts attribute Russia's decision to sell weapons that the Venezuelan military objectively did not need due to the interest of both Venezuelan and Russian government officials in skimming money off the top. The sale of Su-30MK2 fighter-bombers was cited as a specific example where corruption on both ends facilitated the off-loading of moth-balled planes that were inadequate for the Venezuelan Air Force's needs.

According to Transparency International's 2009 survey, bribery cost Russia USD 300 billion a year, or about 18 percent of its gross domestic product. Corruption in Russia is systemic -- it is the rule rather than the exception, unlike in the West or even the Orient, where incidents of corruption are commonplace but are usually fairly quickly exposed by an independent press or uncompromised law enforcement organs. While it is true that corruption stories appear constantly in the Russian press, the authorities, as a rule, do not react to them. There have been no cases in the last decade when a prime minister or even a cabinet minister resigned under public pressure because of corruption scandals, as has happened in, for example, Israel, France, Spain, Germany, South Korea, India, and Pakistan.

The rising corruption in Russia is a most remarkable development. Corruption usually declines as a country grows wealthier, and in most other post-communist countries it has declined. But according to Transparency International, the only country in the world that is both richer and more corrupt than Russia is oil-rich Equatorial Guinea. Evidence indicates the scope and scale of official corruption in Russia have grown markedly in the past several years. The increased role of the state in the Russian economy has been accompanied with rising corruption.

There was a rapid increase in crime and corruption in Russia after the collapse of the Soviet Union. By one 1995 estimate, Russia faced more than 5,000 gangs, 3,000 hardened criminals, 300 organized crime bosses, and 150 illegal organizations with international connections. Approximately 40,000 Russian business and industrial enterprises were controlled by organized crime.

Corruption has been critically high in Russia and only worsened in 2003, according to a report by the Berlin-based corruption watchdog group Transparency International. Russia ranked 88th of the 133 countries included in the group's annual Corruption Perceptions Index, on par with Algeria and Pakistan. Finland held on to the previous year's top spot as the least corrupt country and Bangladesh ranked the last. In the past two surveys, Russia also found itself toward the bottom of the heap, ranking 79th out of 91 countries in 2001 and 82nd out of 99 in 2000.

Whistleblower Sergei Magnitsky died in jail in 2009. Magnitsky, a lawyer who worked for Russias largest Western investment firm, Hermitage Capital Management, claimed he'd uncovered a massive $230 tax fraud scheme involving Russian Interior Ministry officials. Magnitsky, 37, was later arrested on corruption charges by the same officials he accused of tax fraud. He was held in jail without trial until he died of pancreatitis. In 2012 jail doctor Dmitry Kratov was found not guilty of negligence in the death. An investigation by Russias Human Rights Council found Magnitsky was denied treatment and severely beaten before he died. Russian authorities have held no one responsible for Magnitsky's death.

Magnitskys case prompted US lawmakers to pass the so-called Magnitsky Act, which bars Russian entry into the United States if they have been accused of human rights violations. In retaliation, Russia passed legislation banning Americans from adopting Russian children.

The National Anti-Corruption Plan for 20122013 contains guidance and recommendations for the government on counteracting corruption, including the establishment of a legal framework for lobbying and increasing the transparency of state officials personal finances and acceptance of gifts. Specifically, the bill will require all civil servants to declare large expenditures or face termination. These officials must also present information on the expenditures of their spouses and children if the expenditures involve acquisitions of land, vehicles or securities. Expenditures that do not match the declared income will be investigated by law enforcement agencies. If an individual fails to prove that the property in question was acquired legally, the property will be confiscated and turned over to the state. Bribing a public official has been illegal in Russia since May 2011




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