By Renfrey Clarke
MOSCOW — When the bright young reformers around Russian President Boris Yeltsin quit their Communist Party membership years ago and turned to building capitalism, they were acting from deep-seated ideological conviction. We have their word for it.
But let's not suppose they've been building capitalism for nothing, or for their scanty government salaries. On the contrary, some of them have contrived to be very well paid indeed. The details of how prosperous these people have become while in top state posts, and of how they have enriched themselves, are now providing a string of scandals.
Take, for example, former first deputy prime minister Oleg Soskovets. Until sacked last June in one of Yeltsin's periodic purges, Soskovets oversaw all of Russia's industrial production.
During 1994 he and his son Alexei were reportedly given American Express corporate account cards by an obscure Irish-registered company. On January 12 this year, while concluding a three-part exposé of corruption in Russia's aluminium industry, the highly regarded television program Itogi showed a copy of Oleg Soskovets' American Express statement.
In the first six months of 1994, Itogi revealed, the then teenaged Alexei Soskovets used his card to spend a total of US$103,532. Most was spent in luxury shops in Moscow, Zurich and Lugano, though it included $724 for a dinner in Moscow's Metropole Hotel.
Soskovets senior was more modest in using his card, though in November and December 1996, after being sacked by Yeltsin, he managed to spend $5000 on groceries.
Soskovets' duties in the cabinet included overseeing the dividing up and selling off of Russia's huge aluminium industry. According to Itogi, Soskovets and former sports and tourism minister Shamil Tarpischev provided patronage to a western-based company named TransCIS Commodities. As Itogi put it, this was "possibly not for free".
During the early 1990s, TransCIS Commodities bought aggressively into Russia's two largest aluminium plants, in the Krasnoyarsk Territory in Central Siberia. Meanwhile, the television program noted, the national aluminium market "became ridden with the corpses of Russian businessmen who fell victim to contract hits".
Flying to Israel on a private visit last year, Itogi reported, Soskovets was met on arrival by one of the TransCIS chief executives and by a notorious leader of Moscow's Izmailovo criminal gang. Presents allegedly given to Soskovets by the TransCIS chiefs included not only the two American Express cards, but also a London apartment for Soskovets' daughter.
Price of re-election
Soskovets has now been sacked from his state posts. But the probity of the people around Yeltsin remains a ticklish point nonetheless. Anatoly Chubais, the figure at the heart of another scandal, is one of the dominant individuals in the Kremlin apparatus. As presidential chief of staff, Chubais vies with Prime Minister Viktor Chernomyrdin for the status of the second most powerful person in the country.
Russians were bemused during the presidential election campaign last June when two Yeltsin campaign aides were arrested as they left the House of Government in Moscow carrying $500,000 in US currency in a cardboard box.
The incident confirmed what everyone had assumed — that the Yeltsin campaign was flagrantly breaching the legal restrictions on campaign spending. Heading Yeltsin's re-election effort at the time was Chubais.
Criminal charges against the two campaign aides now seem likely to be dropped. But meanwhile, Russians have learned how much of the lavish funding for Yeltsin's re-election went into Chubais' pocket.
In an article published in the newspaper Novaya Gazeta on January 13, investigative journalist Aleksandr Minkin reported that for heading the campaign between April 15 and July 15, Chubais was paid no less than US$278,000.
This, Minkin noted, was about 10 times as much as the US president earned in the same period. A local comparison might be more apposite: to earn as much as Chubais received for helping put Yeltsin back in the Kremlin, a Russian schoolteacher would have to spend 200 years in the classroom.
Did Chubais pay income tax on this trifle? The question is especially pertinent, since Chubais in August was appointed by Yeltsin to head a special emergency commission to improve tax collection.
Minkin relates that on January 9 he contacted Chubais' office and asked whether the presidential chief of staff had paid his own taxes. Chubais, it seemed, had not, but planned to do so in the next few days.
Under the law on state service, a person who takes up a state job, as Chubais did when he became presidential chief of staff on July 15, must file a tax declaration. Did Chubais submit such a document, Minkin asks in his article. If so, was the $278,000 reported? So far, there does not seem to have been a reply.
Neither Soskovets nor Chubais would seem to be in much danger of facing charges. Itogi anchor Yevgeny Kiselev on January 12 accused the state authorities of turning a blind eye to evidence of high-level corruption, noting that after two earlier exposés of corruption in the aluminium industry, program executives still had not been contacted by the Interior Ministry's economic crime department.
State Tax Service
The likelihood of tax inspectors calling Chubais to account might be greater if leading tax officials were not themselves at the centre of another corruption scandal.
The Moscow weekly Argumenty i Fakty reported recently on the results of an inquiry into the State Tax Service by the parliament's accounting chamber. Top tax officials, the investigation found, had plundered a "social development fund" created to improve working conditions for their employees.
In addition to spending 6.6 billion roubles (more than US$1 million) from the fund to buy and renovate apartments for themselves, the tax chiefs also allegedly dipped into the fund to pay part of their own income taxes. Half of the social development fund money earmarked for regional tax employees never left Moscow.
Perhaps the most remarkable feature of the recent scandals is that they have stirred barely a ripple in broader political life.
High-level corruption in Russia goes unpunished and often unremarked for a number of key reasons, of which one is simply that it is expected. Government leaders might use their posts to cream off undeserved privileges, but how many Russians can recall when things were different?
Top officials have shady pasts and criminal associations, but would they have been given their jobs if they were honest? A central element in Russia's political culture is kompromat — compromising information. A subordinate on whom one has kompromat can be controlled; an honest functionary is an unpredictable quantity.
Corruption is also endured because a demoralised population has little reason to think that efforts to punish high-placed crooks would be successful. Law enforcement bodies act even on highly publicised complaints only with reluctance, and in Russia the profession of investigative journalist is notoriously risk-laden. For people who press really hard against the interests of criminal capital, there are shallow graves waiting in the forests.