Institute of Modern Russia

Systemic Corporate Raids

The theme of the 2011 ASEEES convention was "Authorities." Across disciplines, scholars have long expressed their interest in the characteristics of power during democratizing processes across Eurasian territories and countries. Power manifests itself in different ways depending on the political, economic and social systems in any given country, and authority takes different and sometimes bizarre forms, leading academics to conduct more in-depth analyses of these problems.

As a member of the Association, the Institute of Modern Russia (IMR) also participated by organizing a panel on the "Impact of Authoritarianism in Contemporary Russia." The following experts spoke: Anna Fridman (Ural State University, Russia), Boris Vaynman (Chicago, U.S.A.), Xin Zhang (Reed College, U.S.A.) and Richard Sakwa (University of Kent, U.K.).

Fridman discussed the barriers to small business growth in Russia, namely high level of corruption and a dependence on the government. During her presentation, entitled "Government-Business Relations: No Freedom, Only Obligation," Fridman offered the example of ­­­­­Polyatkin and Zilberg, two entrepreneurs from Sochi who were sued by the city. According to Fridman, the main reason for their trial was their refusal to cooperate with local law enforcement bodies, and, more realistically, their refusal to pay bribes. The lawsuit process aimed to deprive the entrepreneurs’ of their property and business. Friedman concluded that it is necessary to publicize to such cases in order to support the fight against corruption, to protect the rights of Russian businessmen, and to make the Russian market more attractive to foreign investments, which President Dmitry Medvedev encouraged during his presidency.

The second expert was lawyer Boris Vaynman, who discussed violations of the rights of witnesses and independent experts at the trial of Mikhail Khodorkovsky and Platon Lebedev. Vaynman explained that the court refused to hear some witnesses from the defense, while the prosecution’s witnesses did not face such a problem. Moreover, several witnesses were repeatedly detained, threatened or harassed. The cases of Vasily Aleksanyan, former executive director of YUKOS, and Jacque Kosciusko-Morizet, former YUKOS Board member, are examples of witness intimidation by the court and prosecution. According to Vaynman, the Khodorkovsky and Lebedev trial demonstrates the lack of an independent judicial system in Russia.

Professor Zhang conducted an analysis of legal norms in post-Soviet Russia. He came to the disappointing conclusion that the role of the government and law enforcement agencies in corporate proceedings increased after 2002. As a result, decisions in corporate disputes are often made on the basis of factors other than the rule of law.

At the end of the panel, prominent political analyst Sakwa summed up his discussions with young professionals. As the author of the dualism theory in the contemporary Russian state, Sakwa suggested introducing a third element to his theory, that of corporate raids (or reiderstvo in Russian). (The other two elements are the administrative system and the constitutional regime). Corporate raids aimed at capturing people's property by a coalition of criminal, administrative and business groups has intensified in Russia in recent years. It is visible in the YUKOS case, where the Russian judicial and tax systems were used for political purposes. According to Sakwa, corporate raids challenge the constitutionally-mandated rule of law and undermine Russia’s image on the international level.

Illusion of a Tandem

One panel discussion that garnered a lot of attention at the conference was devoted to the topic of the Russian political duo (Putin-Medvedev). As noted by Professor Timothy Colton (Harvard University), the Russian political system currently looks like a tandem of two leaders, however, in reality there is only one leader--Vladimir Putin. The difference between President Dmitry Medvedev and Prime Minister Putin is in their tactics of governance, whereas their overall strategy is the same.

Discussing the topic of this tandem, Maria Lipman, an expert at the Moscow Carnegie Center, described the current situation as "an obsession with power" and a "political monopoly." According to Lipman, this tandem, consisting of formal and informal levels, leads to inefficient management of the country. Lipman also noted the growing gap between people and their government: despite the activity of oppositional bloggers and growing public discontent, the Kremlin continues to impose strict control and ignores signals from its own people. A side effect of this process is the active emigration of the educated population from Russia. However, according to Lipman, nobody tries to reduce this emigration. The way the government sees it, the more people who emigrate, the fewer remain who are dissatisfied and pose a threat to the regime. Furthermore, the regime is thoroughly engaged in attempting to raise levels of loyalty to the government.

Nikolai Petrov, a colleague of Lipman’s at the Moscow Carnegie Center, also criticized this so-called tandem, which he claimed no longer actually exists: "The double-headed eagle has a real head and an imaginary one." According to Petrov, Russia's political system is built on surrogates, including new laws and political parties, which create the illusion of shared power among the population. However, Petrov concluded, the legitimacy of the current government will decrease after the 2012 elections.

Reform by the “Trash Can” Model

Various expert groups at the conference discussed other acute political problems in contemporary Russia. In the panel on xenophobia and nationalism, Ekaterina Romanova (American University, U.S.A.) presented her analysis of nationalist protests and marches in Moscow. According to Romanova, Russia today is in search of its own ethnic identity. However, the search is influenced by external factors, such as “the presence of nationalist organizations in political and social life, [and the government’s] unclear stance…on issues of immigration and ethnic violence.”

Russian methods of governance were the main topic at a panel on charismatic rulers in post-communist countries. As noted by Karen Dawisha (Miami University, U.S.A.), Vladimir Putin is not an inherently charismatic leader like Mikhail Gorbachev and Boris Yeltsin were. According to her, in the beginning of the 2000s, Putin's policy was based on a "routinization," the creation of order in Russian life. However, during recent years his policy has been reduced to the basic promotion of him as a personality. Dawisha called this method of governance "charisma on steroids."

One of the panels concluding the conference was devoted to the analysis of law enforcement in the Eurasian region. Brian Taylor (Syracuse University, U.S.A.) and Gilles Favarel-Garrigues (Centre d’Etudes et de Recherches Internationales, France) discussed police reform in Russia. According to Taylor, 2009 was a critical year for the Russian police: their unprofessional and incompetent behavior, the existence of pervasive corruption, and an increase in crime caused resentment among the population. Thus, the subsequent reform of the police was a mandatory and deliberate step that allowed the country to temporarily solve some of its political problems. However, the reform proved to be ineffective. A good example is the fact that Interior Minister Rashid Nurgaliyev managed to stay in his position until now. During the discussion, Taylor unambiguously characterized police reform as following the "trash can model."

In general, the outcome of the three-day conference was a sense of disappointment for the future of Russia. Most experts concluded that the country as a state had no future if the Russian government continued to follow the current methods of governance.