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Russia: Still Number One

Russia: Still Number One

After a week of Oligarch wars, Medvedev-Luzhkov sniping, spy-plagiarism and a Victor Bout guilty verdict, it’s good to know we can still lead the world, even if it is in the corruption stakes.

It’s unclear how much the Kremlin paid Transparency International to take China’s crown (or whether it was more or less than the price of hosting the 2024 World Cup), but one thing is certain: “Unfortunately… there are no islands of integrity in Russian public and business life,” according to TI’s Russian director Elena Panfilova.

The key message from the study is that “bribe-paying was seen as much more common by businessmen from countries whose governments were also considered to have the least integrity.” And presumably, the more bribes are offered, the more likely they are to be taken.

If Russia is this corrupt now, imagine what it was like in the mid 90s?

Well, some unflattering details have emerged, including the use of disabled people as economic human shields!

Abramovich used a series of opaque intermediary companies to reduce Sibneft’s tax bill by hundreds of millions of dollars. After Sibneft won control of an oil company and refinery he “inserted” third party legal entities between the two.

These entities bought oil from Sibneft, then sold it back to Sibneft for “two or three times” the price, siphoning off the difference.

The court heard these intermediary companies qualified for tax exemptions because they employed disabled people – a common, and legal, tax avoidance ruse in Russia at the time. “I don’t recall why it was done,” Abramovich admitted. He insisted, however: “These were real people. We paid them salaries.”

At least Abramovich should get points for being among the only people in Russia paying anyone any salaries during those years. See? He’s not all bad!

 

Author

Vadim Nikitin

Vadim Nikitin was born in Murmansk, Russia and grew up there and in Britain. He graduated from Harvard University with a thesis on American democracy promotion in Russia. Vadim's articles about Russia have appeared in The Nation, Dissent Magazine, and The Moscow Times. He is currently researching a comparative study of post-Soviet and post-Apartheid nostalgia.
Areas of Focus:
USSR; US-Russia Relations; Culture and Society; Media; Civil Society; Politics; Espionage; Oligarchs

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