Chapter 1 a Theoretical Framework for Understanding the Role of Corruption in Post-Soviet Transitions

Notes Chapter 1 A Theoretical Framework for Understanding the Role of Corruption in Post-Soviet Transitions 1 For an appreciation of the return of institutional analysis to political science, see Karen Remmer (1997). For two excellent summaries of neo- institutionalist approaches, see Thomas Koelble (1995), as well as Peter A. Hall and Rosemary C. R. Taylor (1996). 2 Although Luis Roniger (1994) mentions the role of coercion, Paul Hutchcroft (1997) rightly points out that the literature on clientelism rarely acknow- ledges the role of coercion, which plays an important role in some forms of corrupt behavior (e.g. extortion). 3 Syed Alatas (1968, 1990) strongly rejects this assumption, arguing that friend- ship and family relations in developing countries have nothing to do with theft and fraud. My research in Georgia and Armenia, on the other hand, strongly confirms that some forms of corruption (e.g. appointments to public offices) are strongly influenced by Georgians’ reliance on friends and family. 4 This empirical conclusion is closely related to findings of scholars who argue that clientelism often serves as ‘glue’ that ties society together. Lemarchand and Legg (1972, p. 153), for instance, argue that clientelism creates ‘vertical solidarities which cut across and, for a time, mitigate cleavages of caste and ethnicity.’ 5 The two indices are taken from the World Bank, ‘World Development Indicators 2005’, [Internet], <http://devdata.worldbank.org/data-query/>, covering the years 1996 through 2002; accessed 13 February 2005. Chapter 2 Armenia and Georgia Since Independence 6 Both in Armenia and Georgia, heydays of relative prosperity, peace, and cul- tural achievements date back to the period between the 9th and 13th century, though often interrupted by foreign invasions and internal rivalries. 7 Interview with Vakhtang Khmaladze, chair of the Constitutional Protection League (Tbilisi: 4 December 1998). 8 During Soviet times, Ioseliani was a powerful clan leader, heavily involved in Georgia’s black market activities. Although well connected to the Soviet leadership, he was eventually sentenced to several years in prison for robbery (Slider 1997, p. 165). 9 Interviews with Khmaladze (supra note 7) and George Khutsishvili, director, International Center on Conflict and Negotiation (Tbilisi: 15 April 1999). 10 Interview with Khutsishvili (supra note 9). 11 Interview with Arthur Drampian, Anahit Karapetyan, and Mayis Vanoyan, resident advisors of the Urban Institute’s Armenian Local Government Program (Yerevan: 20 June 2003). 184 Notes 185 12 Informal conversation with Gerard Libaridian, history professor at the University of Michigan and former senior advisor of President Ter-Petrosian (Shepherdstown, WV: 27 March 2004). Chapter 3 Systemic Corruption in Transition 13 Although the leading strata of the state-party apparatus had grown large and powerful under Stalin, enjoying special status and privileges, they lacked ‘security of position and, even more, of life. Stalin’s terror inflicted one demographic trauma after another’ Stephen F. Cohen (1991). Brezhnev’s ‘continuity of cadres’ doctrine freed the Soviet elites from this insecurity (p. 65). Formal institutional arrangements (e.g. party and state officials could only be prosecuted with the explicit consent of the high party officials) and mutual cover-up strategies secured that the cadres’ ‘jobs, their influence, and their prerequisites would not be touched’ (Clark 1993, p. 127). 14 ‘Political patronage can be defined as an informal network of personal, political relationships, which are at the same time both asymmetrical and interdependent. They are an informal mechanism that provides security and direction to the career ambitions of a nation’s political elite.’ (Willerton 1992, p. 7) 15 The insider reports of two émigrés Simis (1982) and Vaksberg (1991), reveal that collaboration between party and state officials was not only taking place at the local level, but reached into the highest level of the Soviet system. For example, several of Brezhnev’s loyalists were involved in corrupt activities. 16 Simis (1982) reports about a similar case in the Ustye district, where the director of a timber factory had virtually enslaved his workers with the tacit consent of the district party apparatus. 17 Interviews with Peter Mamradze, First Deputy State Minister of Georgia (Tbilisi: 20 May 1999); Nana Japaridze-Chkoidze, chief of the Georgian parliament’s Department of International Relations (Tbilisi: 2 and 16 March); and Oniani, fellow at the Corruption Research Center of Georgia (Tbilisi: 8 October 1999); as well as private conversations with Armenian and Georgian citizens. 18 Interviews with Mamradze (supra note 17) and a retired official of the Georgian Ministry of Interior (anonymous) emphasized these economic causes of corruption in Georgia. 19 The motives of Shevardnadze for undertaking this massive purge against the ruling elite are not entirely clear. Michael Voslensky (1984, p. 195) claims that Shevardnadze was not driven by moral ambitions but by his desire to place himself into a position that allowed him the same level of wealth. Indeed, in 1972 Shevardnadze replaced Mzhavanadze. In contrast, Konstantin Simis (1982, p. 53) argues that ‘he was at least in part motivated by ambition, but he apparently did feel genuine hatred for corruption and was truly pained by the decadence he witnessed.’ 20 Interview with Mamradze (supra note 17). 21 Vorozheikina refers here to the top party leaders who indeed left the political stage. Their departure was however less related to a conscious attempt 186 Notes of reformers to remove them from power than to the age of these leaders. The communist leadership since Brezhnev was often correctly called a ‘gerontocracy’. 22 In the summer of 2000, I conducted several interviews with Uzbek human rights activists who wished to remain unnamed. All of them agreed that corruption in Uzbekistan had changed neither in form nor in extent. Chapter 4 Political Transitions and Systemic Corruption in Armenia and Georgia 23 Informal conversation with Libaridian (supra note 12). 24 Interview with Bagrat Tunyan, public sector management specialist at the Armenian office of the World Bank (Yerevan: 10 June 2003). My own ex- periences support Tunyan’s observation. Every time I traveled between Tbilisi and Yerevan, I encountered numerous police and customs officials on the Georgian side who routinely demanded bribes. On the Armenian side, I was almost never harassed and an official government letter usually sufficed to clear the road. 25 Interviews with Roman Gotsiridze, head of the Budget Office of the Georgian parliament (Tbilisi: 25 March 1999); Alexander Rondeli, senior research fellow at the Ministry of Foreign Affairs of Georgia and former professor at Tbilisi State University (Tbilisi: 13 October 1998 and 13 May 1999); and Emil Adelkhanov and David Losaberidze, fellows at the Caucasian Institute for Peace, Democracy and Development (CIPDD) (Tbilisi: 18 May 1999). 26 Interview with Hunter Monroe, resident representative of the Interna- tional Monetary Fund in Georgia (Tbilisi: 4 March 1999). The resident representative of the World Bank in Georgia, Joseph Owen, came to the same conclusion in an interview with the author (Tbilisi: 9 June 1999). 27 Interview with Maka Gureshidze, senior fiscal analyst, Barents Group, USAID Fiscal Reform Project and former chief accountant of Grandi Molini Italiani (Tbilisi: 29 March 1999). 28 Interviews with American, British and German diplomats in Armenia (anonymous). See also Adrian Karatnycky, Alexander J. Motyl, and Amanda Schnetzer (2001, p. 80). 29 This was also the almost unanimous opinion of all analysts that I inter- viewed in Armenia. For example, James McHugh, resident representative of the IMF in Armenia (Yerevan: 5 June 2003); an analyst at the European Bank for Reconstruction and Development (anonymous); Tunyan (supra note 24), and Alexander Iskandaryan, political analyst, Caucasus Media Institute (Yerevan: 18 June 2003). 30 Interview with Ara Sahakyan, president of the Center for Democracy and Civil Society Development (Azmat) and former high-ranking member of the Armenian National Movement (Yerevan: 17 June 2003). 31 Interview with Teimuraz Kartvelishvili, director of the World Bank Power Sector Privatization project (Tbilisi: 3 June 1999); further supported by Khmaladze (supra note 7), and Gotsiridze (supra note 25). Notes 187 32 Among those ‘revivalists’ were Niko Lekishvili, Bakur Gulua, and Vazha Lortkipanidze who became government ministers under Shevardnadze. On the other hand, the revival of the former nomenklatura was somewhat offset by the president’s promotion of young reformers to key government positions such as Zurab Zhvania and Mikhail Saakashvili. 33 For instance, the founders of the United Georgian Bank, one of the biggest banks in Georgia, were several individuals in their 30s and 40s who rapidly moved into key government positions. These individuals were relatives of former directors of Soviet Georgia’s National Bank who allegedly embez- zled millions of rubles in the 1980s. Interviews with Zaal Anjaparidze, public relations officer of the Georgian office of the Barents Group and independent journalist (Tbilisi: 29 March 1999); a retired high official of the Ministry of Internal Affairs (anonymous); and Kote Wishnianidze, journalist (Tbilisi: 12 May 1999). 34 Interview with Rondeli (supra note 25); and Sahakyan (supra note 30). In Georgia, several former high-ranking Komsomol members became top

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