In this week’s Western media highlights, Mark Galeotti argues in Vox that the Panama Papers reveal that the real currency in Russia in not money but political power—if you have power, you can always get the money, which makes it difficult to find Vladimir Putin’s complicity in the exposed offshore operations. And Stephen Blank underscores in his op-ed for the American Interest that it is impossible for the West to expect any kind of strategic cooperation with Putin’s regime. Meanwhile, in the Russian media, analysts discuss the duplicity of the Russian governance system and the sudden law-enforcement reform proposed by the president.


Vladimir Putin's close friend, cellist Sergei Roldugin who was implicated in the Panama Papers investigation (second from the right) is touring the palace formerly owned by the Grand Duke Alexei Alexandrovich Romanov of Russia. Photo: Dmitry Astakhov / TASS


From the West

The Panama Papers show how corruption really works in Russia

Mark Galeotti, Vox

Mark Galeotti of New York University comments on corruption in Putin’s Russia. According to Galeotti, “the real currency in Russia is not money but power—and the latter can buy the former, but not necessarily the other way around. You can be rich today, but the state can impoverish you tomorrow. Conversely, if you have power, you can always get money, as we are likely seeing with the Panama Papers.” Galeotti argues that corruption is so endemic in Russia that it costs the country as much as a third of its annual GDP. Much of this corruption is carried out via “access and favors”; contracts and monopolies are doled out with the understanding that favors will be demanded when the Kremlin calls. It is a tried and true system, Galeotti writes—one that the Panama Papers reveal quite well.


Putin's a Pauper, His Friends Are Rich

Leonid Bershidsky, Bloomberg View

In his latest column for Bloomberg View, Leonid Bershidsky comments on the connections between Putin and the Panama Papers. Even though no direct links have been made to Putin himself, the fact that his inner circle has had access to offshore accounts is enough to raise questions: “Putin is not stealing Russia's vast wealth; he's handing some of it over to trusted individuals to manage. In the process, they are very likely to profit from that wealth… He also controls the business environment so tightly that they can't risk betraying him.” In effect, Putin’s wealth comes from his ability to control his inner circle of “wealth managers.” So long as Putin runs the Kremlin, he will remain a rich man, even if just by proxy.


Dialogue With Russia or Dialogue of the Deaf?

Stephen Blank, The American Interest

In this article for The American Interest, Eurasia expert Stephen Blank discusses Russia’s behavior and its implications for future Russo-American relations. He criticizes pragmatists’ insistence on maintaining a dialogue with the Kremlin regardless of its aggression abroad. Blank argues that constructive dialogue must be “based on facts as well as truly common interests and perceptions”—things which Russia and the US do not currently share. Blank writes pointedly that Russia is “a mafia state through and through… the logic of its foreign policy is that of the shakedown. Give ground today, and there will be more demands tomorrow.” Until Russia's supporters can prove that bilateral cooperation will lead to rule of law in Europe and the Middle East, Blank believes it would be unwise to engage further with Moscow.


From Russia

What the [Panama] investigation actually says about Putin’s offshore friends

Andrei Movchan,

Andrei Movchan, an analyst for Carnegie Moscow, discusses Russians’ involvement in the Panama Papers scandal. Contrary to popular belief, Movchan writes, most offshore business is conducted in full compliance with the law; only a minority of offshore transactions are done to hide bribes or other products of illegal activity. The real question, according to Movchan, is why Russia’s richest feel compelled to conduct legal business outside of the country. The answer, Movchan explains, is because few trust Russia as a safe place for economic growth.


A powerful monster. How the merger of the Ministry of Internal Affairs, the Federal Drug Control Service, and the Federal Migration Service affects Russia’s citizens

Ella Paneyakh,

In this opinion piece for, Ella Paneyakh comments on the merger of three major Russian law enforcement bodies, and their need for reform. Among the issues Paneyakh raises: the organizations’ structural changes do not address systemic corruption or abuse of power. In addition, a new paramilitary force created during this merger—the National Guard—now presents a threat to Russian citizens because the group has little accountability. Ultimately, Paneyakh argues that reforms will have to increase security agencies’ accountability to outside, independent forces—Including the very citizens these agencies are meant to protect.


Double Bureaucracy

Nikolai Kulbaka, Vedomosti

In this piece for Vedomosti, Russian economist Nikolai Kulbaka comments on Russia’s two-pronged system of governance: one side consists of official state agencies such as the parliament or the government, while the other is comprised of “shadow” structures run by informal rules and processes, set in place by the Russian president himself. Among the advantages of such a system, Kulbaka writes, is that the shadow system is not completely beholden to electoral outcomes, and that what is considered corruption in the “official” system is perceived as profit in the shadow system. In reality, bureaucrats in Russia often straddle both worlds, making officials’ true roles hard to define.


This week's roundup was compiled by Daniel Frey.

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