20 years under Putin: a timeline

In April 2012, the Russian president, his cabinet, the Prime Minister, the Deputy Prime Ministers, regional representatives and senators all made their declarations of income public. Caterina Innocente discusses how the vertical power structure invalidates the very institution of declaring income, mocks the credulity of the Russian people, and finally, fails to fight corruption, which is what it was intended to do.

 

The declaration of state officials’ income is a key tool for fighting corruption in the West. This is not the case in Russia, where declarations are a mere formality that has no real consequences outside of the sarcastic and angry comments on the Internet.

 

 

The Russian government and presidential administration live by the unwritten laws of their own political ethics. On one hand, Russia's leaders are trying to look modest—President Dmitry Medvedev drives a 1948 GAZ-20 Pobeda and a 1962 GAZ-21 model; his wife, Svetlana Medvedeva, only has 26 rubles in the bank (less than 1 U.S. dollar); Vladimir Putin drives an old (although collectible) 1960 GAZ-M21, a 1965 GAZ-M21P, and a 2009 VAZ-21214 Neva. On the other, the Ministers, senators, and Duma representatives all have a lot more to brag about: luxury automobiles, newly-built palaces, and billionaire wives.

Although the institution of declaring income has existed in Russia since 1997, it was not enforced until 2008. When Dmitry Medvedev announced that the war on corruption was his top priority and initiated the passage of an entire complex of anti-corruption legislation. It’s unlikely that Medvedev knew that he would meet with such strong resistance from basically the entire civil and Duma corps, and that his fight would not have the support of his patron, Vladimir Putin. Medvedev ought to be given his due: his idea for the law on declaration of state incomes was progressive. However, in the end, this initiative, like so many of his initiatives, turned out toothless and ineffective. The Duma, which is controlled by the party in power, simple redrew the law and swept aside Medvedev’s insistent demands that the legislation be passed in its original form.

At first, Medvedev had demanded that declarations of income also be provided by officials’ “family members”—this was how it was stated in the draft of the law that was introduced to the Duma at the end of 2008. According to the Family Code of the Russian Federation, family members include all children, brothers, sisters, and parents. Medvedev’s logic is easy to understand: as a rule, officials register their property under the names of their children and other relatives, which allows them to waive responsibility and hide their wealthy. In response to the draft law, the United Russia Party decided to limit the definition of “family member” to spouses and minor children. Officials agreed to this compromise. The majority of them had adult children, and thus, this definition suited them. As a result, the Russian public was given the opportunity to learn about he income and property of officials and their spouses only. But even these limited data proved amusing reading.

First of all, we should note the dumb luck top government officials have when it comes to their wives. And not because, as one of the Russian favorite movie lines goes, these ladies happen to be “athletes, Komsomol members, and beauties”. No, it's because they are billionaires. A great number of them earn many times more than their husbands, including the wives of Deputy Prime Minister Vladislav Surkov, the First Deputy Prime Minister Igor Shuvalov, the governor of the Moscow region and the former Minister of Emergency Situations Sergey Shoygu, and Minister of Defense Anatoly Serdyukov. Where these spouses work remains a mystery, and what’s left unsaid leaves ample room for the imagination. At the same time, the majority of Duma representatives have chosen to not declare the incomes of their wives at all in order to avoid questioning. Now this is a matter for the Prosecutor General’s Office, but no serious consequences for failure to submit these documents are provided for by the law.

Secondly, the modesty and humble living conditions of many government officials are astounding. The majority of them simply do not own cars. Fortunately, according to a poll conducted by Levada-Center, only 2% of Russians surveyed believe in the complete veracity of the officials' declarations; 32% believe top officials disclose only "meager portions" of what they actually earn and own; and 38% believe the officials are disclosing the "lesser part" of their earnings and property, writes Kommersant newspaper.

“Pedestrian” officials include Chief of Staff Sergey Ivanov, Secretary of the Security Council of Russia Nikolai Patrushev, First Deputy Chief of Presidential Staff Vyacheslav Voronov, Presidential Aide Arkady Dvorkovich, Deputy Prime Minister Vladislav Surkov, among others. Presidential Advisor Alexander Abramov, Presidential Envoy in the Northwest Federal District Nikolai Vinnichenko, Minister of Finance Anton Siluanov all have the kind of cars we might call “lemons.” The old Soviet vehicles supposedly serving as the transportation for so many high-placed officials have long been the butt of jokes in the domestic and international media.

Third of all, it’s hard not to notice the stark contrast between the practically poverty-stricken officials and their billionaire colleagues driving Bentleys (Igor Shuvalov, руководитель протокола президента Марина Ентальцева), Jaguars (Governor Alexander Khloponin and his wife both own cars of both makes), Porsche Cayennes (the wife of the Presidential Envoy to the Central Federal District Oleg Govorun), and many others. Khloponin has the best car collection of them all: in addition to a Bentley Arnage and a Jaguar, he also owns a Mercedes-Benz СL 65 AMG, a Harley Davidson motorcycle, and a Phantom 46 yacht.

The reason for this disparity between state officials’ income is simple. The surprising numbers they declare are practically meaningless outside of their implications for the reputations of these officials. Some want to show off their wealth, and others don’t. It’s simply a matter of ethics, or even political correctness: for example, for Putin and Medvedev, as political leaders, it’s inappropriate to be too rich. They need to maintain images of “humility” and being “close to the people,” at least for appearances’ sake. For the rest, it’s a matter of personal choice whether or not to publicize a significant portion of what they actually own, depending on the veracity of the information.

It would seem strange if the Ministers of Education or Social Development or Healthcare declared too much. As some of the most unpopular officials in the Russian government, it’s better for them to come off as modest. On the other hand, someone like Igor Shuvalov (whose income is a mere 9.6 million rubles compared to his wife’s 364 million rubles), or Yuri Trutnev (211 million rubles), or Alexander Khloponin (484 million rubles)—they can afford to flaunt their wealth. There are not well-known among the general population, and in the Kremlin, officials can always point to the billions that were declared and use them as proof that the declarations at large are all honest.

 

Deputy Prime Minister Igor Shuvalov (on the left) who, according to his 2011 declaration of income, earns 36 time less than his wife, and Alexander Khloponin, the Presidential Envoy for the North Caucasus Federal District, whose declared income for 2011 was 484 mil. rubles.

 

The meaning of the amounts is also nominal because the declaration documents don’t provide information on the sources of income. While the order was being developed (then Chief of Staff Sergey Naryshkin had been put in charge of this process), it was even proposed that the makes of automobiles would not need to be included. However, at least this proposal didn’t go through.

The most unpleasant fact is that the wealth of the Russian government officials doesn’t actually tell us much; first of all, because of the lack of regulation regarding the information in the declaration. Judge for yourself: the Prime Minister, officials in the administration, and the President submit their declarations to the Federal Tax Service (where the information then goes to the presidential administration), while the rest of the top officials (governors, ambassadors, justices of the higher courts, and so on) declare their incomes directly to the Kremlin. Civil servants thus submit their documents to the human services divisions of the department they work in, which is to say, they account for themselves to themselves. In the majority of developed countries, a separate government agency is responsible for this.

The most internationally prominent example is the U.S. Office of Government Ethics, which was initially created specifically for the purpose of administering the process of accounting for the incomes and property of government officials. In Australia, officials submit their declarations to agencies capable of conducting administrative investigations and imposing disciplinary actions. In some countries, the collection and analysis of declarations is performed by the agencies responsible for general financial control over the state administration, for example France’s Commission for Financial Transparency in Politics.

Finally, an important step in the direction of developing the institution of the declaration of income in developing countries involves eliminating conflicts of interests, when officials get jobs in departments that regulate the industries where they previously worked. In aims of fighting this kind of “secret” corruption, various countries have developed new forms of legislature called Post-Employment Laws. In the U.S., civil servants now need to include information on where they worked previously to having their position, list all other places they work, and notify the state on whether they have contracts with future employers. Nothing like this exists in Russia today, and won’t be introduced any time soon.

In the Russian law “On Preventing Corruption,” it states that verifying the information in declarations is the “independent” responsibility of the employer, or can be performed “in accordance with the procedure determined by the Russian President, by submitting a request to law enforcement or other government agencies that exercise control functions.” However, when the anti-corruption plan was being developed, special commissions for doing this were being discussed. These commissions were included in the law on civil service and in presidential decrees signed in 2007. At that point, it was being proposed that the commissions would perform the mechanism of confirming the veracity and completeness of the documents comprising the declarations of income. But, as Medvedev himself admitted, these commissions never even started their work. “Refusing to cooperate with such a commission or ignoring legal demands would unconditionally result in being terminated from a position in the civil service,” Medvedev said three years ago at a meeting of the Anti-Corruption Council. Unfortunately, as a result of the Decrees regulating furnishing information on income, nothing else of the sort has been said.

Sergey Naryshkin has also said that if they were to provide incorrect information, officials may be fired and candidates for positions would not be appointed. However, it is unclear how this practice would be instituted and enforced, since Naryshkin himself has said that regular audits would be too expensive. According to the expert community and the media, this approach would be inadequate since no one would actually do the audits. This is why in Russia head of presidential affairs Vladimir Kozhin can declare owning a property of almost 8 hectares of land [about 20 acres—Ed.] in the prestigious Odintsovsky region of the Moscow Federal District (where both the president and prime minister also reside), purchased in 2009 for 1, 080, 786 rubles [$36,610—Ed.] Which is to say that he paid 50 dollars per hundred square meters when the market price was at 50,000!

 

Head of presidential affairs and Moscow landowner Vladimir Kozhin

 

"Vladimir Kozhin's Guide to Buying Land Dirt Cheap", goes one joke in the Russian Internet community. As for Kozhin, he knows that the only difficult questions anyone will ask him will come from the independent Novaya Gazeta, which doesn’t pose any danger for him. At least not yet.

It does not go unnoticed that the Russian anti-corruption legislation does not implement or define the politically exposed person, a standard base postulate of all Western anti-corruption law defining civil servants responsible for declaring their income and property. In its present state, the Russian legislation on declaring income remains underdeveloped, raw, and actually breeds corruption. It is only useful in so far as it provides some information for independent media outlets and experts to analyze. However, the fact remains that tsocial, parliament, and party regulation has been essentially killed by the regime that is controlling democracy; where all important media outlets, the Duma, Audit Chamber, and the Prosecutor General’s Office are still under the Kremlin’s thumb. The vertical power structure makes the institution of declaration useless, a mockery that does not in the least fulfill its intended function of fighting corruption.

In conclusion, one positive thing can be attributed to the current system of declaring income. Despite the stability that is the source of Vladimir Putin’s pride and the backbone of his regime, the political system is nonetheless vulnerable. Falling world energy prices, falling approval ratings for politicians, and the collapse of inter-party support can completely destabilize the regime. Then the dummy institutions that Medvedev attempted to create to varying degrees of success may suddenly find themselves more or less functional.

The information on income is inconsequential while Putin retains control over the political system. Once his control weakens, the currently decorative institutions may come alive and the bureaucrats and representatives will have to face legally legitimate questions about their Jaguars and Bentleys, their giant plots of land, and their wives with their princess’ fortunes.

Russia under Putin

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