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Russia's Rotten Core: Money, Politics and the Rule of Law

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Russia's Rotten Core: Money, Politics and the Rule of Law Transcript Q&A Russia's Rotten Core: Money, Politics and the Rule of Law Alexander Lebedev Chairman, National Reserve Corporation; Publisher, Novaya Gazeta; Non-Executive Director, Independent and Evening Standard Mark Galeotti Clinical Professor and Academic Chair, SCPS Center for Global Affairs, New York University Vladimir Ashurkov Executive Director, Foundation for Fighting Corruption Chair: John Lloyd Contributing Editor, Financial Times; and Director of Journalism, Reuters Centre for the Study of Journalism, University of Oxford 20 June 2012 The views expressed in this document are the sole responsibility of the author(s) and do not necessarily reflect the view of Chatham House, its staff, associates or Council. Chatham House is independent and owes no allegiance to any government or to any political body. It does not take institutional positions on policy issues. This document is issued on the understanding that if any extract is used, the author(s)/ speaker(s) and Chatham House should be credited, preferably with the date of the publication or details of the event. Where this document refers to or reports statements made by speakers at an event every effort has been made to provide a fair representation of their views and opinions, but the ultimate responsibility for accuracy lies with this document’s author(s). The published text of speeches and presentations may differ from delivery. Transcript: Russia's Rotten Core John Lloyd: It's question time now. Let me use up my position and ask the first one and preface it by a short anecdote, not an 'anekdot' in the Russian sense. Just a small story about a very, very close friend of mine who had been – since this is on the record, I won't mention his name – he had been a correspondent in Russia for some years. He returned to see some friends, borrowed a car from his colleague who succeeded him as bureau chief, went out to a restaurant and drank a non-alcoholic beer, he tells me. And you who know Russia well, many of you, will know that any alcohol in the blood is an offence when you're driving. He was driving peacefully back, was stopped by a GAI, by a traffic inspector, who leant into the window of the car, smelled his breath, and said he'd been drinking. Having said that, the GAI paused in a marked fashion, and my friend thought, the hell with it, I'm not going to do the usual thing. I didn't have a drink, at least I didn't have an alcoholic drink, I'm going to say, 'So? I've had a non-alcoholic drink'. The GAI then said, you must come with me. He went to a station, a GAI station on the side of the of [inaudible], which I think is the main GAI headquarters, went up a number of stairs, and came into a room where a lady of a certain age wearing a white overall was sleeping. He addressed her as 'comrade doctor', and said, ‘I have arrested this man on suspicion of being drunk.’ She then gave him a test, the result of which she concealed, and then said to the policeman that indeed he was drunk. There was then another significant pause, after which the policeman said to my close friend, it was Friday evening about midnight, you will have to go to the cells, you can't phone anybody. We'll see what the courts will say on Monday. We'll have to give you a blood test. At that point my courageous friend's courage broke. And he said, I'm told, 'Is there a way of settling this now?' And the policeman said, 'there is a way', of $150, which, I was then later told, would have been a good deal less had it been done quickly. The anecdote is still told partly to embarrass my friend, but also to put to you, all of you, especially the two Russians: how possible is it to get by in Russia without bribery? How much, as Mark was saying, is there a system which enfolds everything which with the best possible will in the world, and the cleanest of intentions, you simply cannot avoid? Who wants to start? www.chathamhouse.org 2 Transcript: Russia's Rotten Core Alexander Lebedev: Well, my answer would be very simple: look at Georgia. That was the most corrupt, probably, part of the former Soviet Union. How has it been achieved? It's a pretty simple story. The police doesn't take any bribe anymore. Same as here. Vladimir Ashurkov: Well, I think it's an individual choice for everybody. It's indeed difficult to get by without petty corruption like the one described with the notorious Russian traffic police. But I think the more important things are happening at the high level, where we see, and it's sort of widely recognized fact among the business elite that the corruption happens at the highest level with Putin's cronies amassing billions of dollars through favouritism in the privatisation, through oil trading – we know the scandal with the Gunvor oil trading company. We know that most millionaires in the Russian government are multimillionaires, in some cases billionaires. This is all sort of stuff that's daily in the Russian business news, and nobody does anything about it. So petty corruption is bad enough, but people get by with it. But I think the real starting point for fighting corruption has to be the political will at the top. John Lloyd: Mark, did you want to add to that? Mark Galeotti: Yes, I think I very much agree that, I mean, in some ways Georgia is a good and a bad example. It's a good example, absolutely, in that they managed to purge and cleanse extraordinarily the Georgian police force. However, I don't really think I want to hold up Georgia as an example of a country where there is no corruption. It's almost entirely simply moved up the chain of command from the ordinary copper to the rather more senior figures. Alexander Lebedev: John, that's interesting, and I want to pick up from that. I think the petty corruption, which is in the example you've given, and the kind of corruption www.chathamhouse.org 3 Transcript: Russia's Rotten Core the Russian prosecutor's office reports very often they are fighting, which are doctors and teachers, I mean it is something which is not that important at the moment. And again, I think there are ways how you clean it up by changing the institutions. But the corruption about, say, a thousand people who have misappropriated $700 billion in the recent nine years – this is a lion's share of the $2 trillion which Russia actually received from high export prices in the recent ten years. That is something which is worth being doing. And I would take a bet that we know eight percent of the accounts, numbers, banks, lawyers, names, and we do report it in the paper. But what can we do alone, I mean, our law enforcement agencies are either protecting them or they are ill qualified to do that. They wouldn't even be able to pronounce, say, Credit Suisse or, I don't know, I mean, certain capitals and jurisdictions and lawyers in other banks. Only international effort is something which can help clean that mess. For that amount of money, let's say we do agree with these people at some stage, like Abacha's story in Nigeria, where his family would return part of the money from $5 billion he has pocketed, to the people of Nigeria, $1.2 billion out of $5 billion, if I'm not mistaken. For, say, a third of what has been misappropriated by certain people in the Russian government, you can improve all of the roads in Russia and save 40,000 lives a year we are losing on a yearly basis on roads. Isn't that an interesting task for the opposition to achieve? Partially for [inaudible], partially for cooperation internationally. Just to be more practical, not to go into stratosphere, just to – I've sort of intentionally started from vague pronouncements. John Lloyd: Over to you. Please indicate, and when I call you please give your name. Sir, right at the back. Question 1: I covered Russia for twelve years. Alexander, what you're saying is actually one of the interesting things people are speaking about in Moscow, is if you're going to fight the corruption of the people at the top, then actually you need to give them a 'get out' clause, yeah? Do you think – could you speak a little bit more about that? I mean, is it not a little bit naïve to think that the people who have, as you say, accumulated $750 billion worth of assets are just going to sort of walk away from it? www.chathamhouse.org 4 Transcript: Russia's Rotten Core Alexander Lebedev: Well, in my recent lecture, which incidentally was viewed by 57,000 people, and it's the most boring thing I've ever done in my life, so people looking at it for 45 minutes are professionals, from the banking community, journalists, law enforcement agencies, the government. I made a statement – and by the way, I jokingly asked Alexei why didn't he actually mention it in the blog – maybe because – I mean Navalny – I said I would take a bet that Putin has nothing to do with corruption in the banking sector.
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