Corruption - Bribery

According to former NPR Moscow correspondent Gregory Feifer's book “Russians, The People Behind the Power”, the bribes ordinary businessmen must pay simply to operate have increased more than six-fold from an average $23,000 a year when Putin took office to $135,000. Corrupt officials and oligarchs have spirited much of this cash abroad; Feifer cites figures of between $49 billion and $70 billion in capital flight each year.

Business Environment and Enterprise Performance Survey (BEEPS), developed jointly by the World Bank and the European Bank for Reconstruction and Development, is a survey of over 4000 firms in 22 transition countries conducted in 1999-2000 that examined a wide range of interactions between firms and the state. The BEEPS survey reported that Russia was in the middle of the pack for comparative countries with respect to the frequency of bribe paying for licenses; better than most comparator countries with respect to bribes paid to gain government contracts; and towards the high end on estimates of the size of administrative corruption.

Police corruption in Russia remains a major problem. While police coverage of major cities is fairly comprehensive, with dozens of substations, and radio cars trolling almost every street; woefully poor pay, passivity and corruption greatly undermine the effectiveness of law enforcement. Motorists routinely bribe their way out of traffic violations and victims of crime are likely to find themselves confronted by bureaucratic and unmotivated detectives. Crimes committed under color of authority, that is, crimes committed by police officers or those dressed as police officers, also continue to be a major problem. Russian police conduct frequent documents checks, especially of minorities and foreigners. Document problems are a frequent source of police harassment for foreigners and leave foreigners open to the solicitation of bribes by police officers.

By the end of 2006 roughly three-quarters of the Russian economy had been privatized, although the state continues to hold blocks of shares in many privatized enterprises. The privatization of remaining state holdings is scheduled to continue. Foreign investors participating in Russian privatization sales often are confined to limited positions and face problems with minority shareholder rights and corporate governance. The rights of Russian citizens to own and sell residential, recreational, and garden plots are now clearly established, with over 40 million properties of this type under private ownership.

Corruption remained a serious problem in Russia, with the country ranking 121th on Transparency International's (TI's) 2006 Index. Russia's score of 2.4 remained statistically flat from 2005 to 2006, indicating that the perception of corruption level in Russia stayed the same over the past year. US firms identified corruption as a pervasive problem, both in number of instances and in the size of bribes sought.

The Government of Russia has repeatedly designated the fight against corruption and the enforcement of law as priorities. However, initiatives to address the problem, either through regulation, administrative reform or government-sponsored voluntary codes of conduct, have made little headway in countering endemic corruption. While there are prosecutions related to bribery, the lack of enforcement in general remains a problem. There have been few dismissals and prosecutions of high-level corrupt officials that would send a clear deterrent message. In addition, bribery and other corruption issues are investigated by the Ministry of Internal Affairs and the Federal Security Service, both of which are themselves widely perceived as corrupt.

Transparency International published its annual report in September 2008 looking at how officials in various countries abuse their public office for private gain -- that is, by accepting bribes, demanding kickbacks, or simply embezzling funds. It found that corruption in Russia was at its worst for eight years, puttin Russia in joint 147th position with Bangladesh, Kenya, and Syria.

A senior Russian prosecutor estimated earlier in 2008 that corrupt officials were pocketing $120 billion annually, a sum equivalent to one-third of Russia's federal budget. Nikita Krichevsky, head researcher for the National Strategy Institute, cited data from the Investigative Committee in the Prosecutor-General's Office that said the annual corruption-based turnover (that is, the amount of bribes, skimming, and the like) in Russia amounted to some $480 billion. That is about one-third of Russia's gross domestic product.

Corrupt bureaucrats in state offices not only trade access to state funds and resources, but also sell government positions. And those who buy those positions immediately begin playing the same game at their own level. Thus the system reproduces itself. This was an open secret in Russia until Medvedev, unveiling his anticorruption drive, admitted publicly that it is possible to buy government positions for money. Almost as soon as these words left his lips, the newspapers were full of stories about how almost every post in Russia -- with the exception of the five or six highest ones, are available for sale to anyone in a position to buy them. According to one report, is costs about $2 million to $5 million to buy a place on a party's list of Duma candidates and about $250,000 to introduce a bill in the legislature.

The war in the Caucasus and its foreign-policy consequences put into doubt many of the ambitious plans laid out in the early days of President Dmitry Medvedev's term of office. Prominent among these plans was his high-profile program to combat corruption. On July 31, 2008, the National Anti-Corruption Plan announced that "Despite the measures, corruption, as the inevitable consequence of excess administration by the State, still seriously hampers the normal functioning of all social mechanisms, prevents social transformation as well as improvement of the national economy, raises in Russian society serious concern and distrust to public institutions, creates a negative image of Russia in the international arena and is rightly regarded as one of the threats to security to the Russian Federation."

On 10 September 2008, "Rossiiskaya gazeta" published a presidential decree on boosting efforts against corruption, economic crime, and extremism. The essence of this decree is that the Interior Ministry would create specialized units that will work exclusively in these areas. Until now, that work had been concentrated under one roof -- in the organized-crime department. However, the branches of this department themselves had become compromised to such an extent that it was no longer possible to pretend they are not. Now, under the new decree, this department will lose most of its functions.

In his Opening Address at the Meeting of the Anti-Corruption Council on September 30, 2008, President Dmitry Medvedev said "I am once again forced to repeat a simple but no less painful thing: corruption in our country has taken on not only massive dimensions and occurs on a massive scale, it has also become commonplace and routine - something that characterizes the lives of our citizens. And as you know, it is not banal bribes - regardless of their size - that I am referring to, but rather a serious illness which affects our economy and corrupts all of society."

On 19 July 2016 a Moscow court issued arrest warrants for three high-ranking Investigative Committee officials who were suspected of corruption. The officials were detained in connection with a bribery case, in which they allegedly patronized a criminal lord. Russia's Federal Security Service (FSB) requested the arrests of the first deputy chief of Moscow's Investigative Committee, Denis Nikandrov, the head of internal affairs of Russia's Investigative Committee, Mikhail Maksimenko, along with Maksimenko’s deputy Aleksandr Lamonov. A judge later issued arrest warrants for all of them until September 15, with one of the defendant’s lawyers announcing that a complaint in connection with the arrest will be filed. The officials were suspected of being involved in a case of large-scale bribery and face from between eight to 15 years in prison if found guilty, as well as a fine of up to 70 times the amount of the bribe. There have been reports that the criminal network which officials allegedly patronized wanted to offer them some $1 million