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Russian corruption takes on a life of its own

By Will Englund
Washington Post Foreign Service
Tuesday, October 26, 2010; 7:39 PM

MOSCOW - In Russia, the greased palm has overtaken the strong hand. For the past decade, Vladimir Putin, now the prime minister, has been building a tightly centralized, practically unaccountable political structure - a structure that tolerates and is highly susceptible to corruption. But now that corruption appears to have expanded beyond the Kremlin's control.

The current president, Dmitry Medvedev, is anxious to deepen Russia's economic relations with the West after the battering of the 2008 financial crisis. He has brought Russia to the doorstep of the World Trade Organization. This month, he led California Gov. Arnold Schwarzenegger (R) and an American delegation to a new school of management that he hopes will spawn Russia's version of Silicon Valley. On Tuesday, he chaired a meeting in the central Russian city of Naberezhnyye Chelny on ways to improve the country's economic efficiency.

But corruption ties an anchor to all his plans.

"Corruption is not a disease, it's a pain. It's a signal that something is not working efficiently," Georgy Satarov, head of the Indem Foundation in Moscow, said Tuesday.

That signal grew stronger Tuesday with the release of the 15th annual Transparency International report on corruption perceptions around the world, ranking nations from least to most corrupt. Russia slid from 146th place to 154th, out of 178 countries, and into a tie with Tajikistan, Papua New Guinea and several African nations.

"How can a country claiming to be a world leader be in such a position?" asked Yelena Panfilova, director of the Moscow office of Transparency International. "It's a situation of national shame."

There is, she said, a "catastrophic gap" between civil society and "state sabotage." Corruption is everywhere - in hospitals and in schools, in utilities and courts, and especially in the ranks of the traffic police - but she said Russia is falling ever more deeply down the international list because of a sense of immunity in the higher levels of government.

According to the report, Russia was the most corrupt among the G-20 nations. The United States, because of financial scandals, dropped out of the top 20 least-corrupt nations for the first time since Transparency International began issuing its annual list 15 years ago. The United States fell from 19th place to 22nd, behind Chile.

In October, Medvedev launched a "Forward, Russia" campaign to fight corruption. But in July, he acknowledged that it had achieved no results. He laments that government ministers do not carry out his orders - the direct consequence, according to Yuli Nisnevich, chief researcher for Transparency International in Moscow, of a corrupt bureaucracy over which the external controls no longer hold sway.

There is no shortage of laws, instructions, orders or publications against corruption, Panfilova said. "But they don't work."

Russian government officials and officeholders routinely list only their government salaries on financial disclosure forms, and yet, Panfilova said, more than a few are able to afford villas abroad and Ferraris at home.

Nearly 80 percent of Russians say that corruption is a major problem and that it is much worse than it was 10 years ago, said Denis Volkov, who analyzes polling data for the Levada Center in Moscow. A majority say Medvedev is right about the problem of corruption and think he is sincere about it. But 71 percent in the most recent poll say any government efforts to fight corruption will amount in the end to window dressing.

Russia has a long history of pulling strings and trading favors. "What do you mean by corruption?" asked Yevgeny Kovtun, a 48-year-old businessman. "I can help one man; after that, he helps me. Is that corruption? No, that's business."

But now corruption has been monetized. Satarov calculated in 2005 that corruption amounted to $316 billion that year, or more than Russia's federal budget. He thinks it has grown since then.

Corruption has become a nearly insurmountable obstacle to Russia's economic development, he said. "We need real political competition, strong opposition, restoration of the separation of powers, influential media and social organizations that are free to operate. In the current political situation, Medvedev is doomed to failure."

Sergei Markov, a political analyst and member of the lower house of parliament from the ruling United Russia party, said Russia's leaders have been tentative about fighting corruption because they don't want to upset the stability that the country has finally achieved. "Instability is the main threat to economic growth," he said. "And corruption is not contradictory with economic growth."

Medvedev should fire the most corrupt governor every month, he said - imagine how that would concentrate the minds of the others. But Markov was disdainful of global rankings and skeptical about the costs of corruption.

"Investors won't pay attention to Transparency International," he said. "They pay attention to their own experience. Some of them are quite cynical. For some of them, corruption is good."

Special correspondent Alexander Tsymbal contributed to this report.

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