The Kremlin is deciding about the bill On Fight Against Corruption. The bill was created by inter-agency working group headed by Assistant President Viktor Ivanov. It is expected that the document will be examined in the Security Council.
After ratification in 2006 International Anti-Corruption Convention and joining by Russia the Group of States Against Corruption, or GRECO, the bill in question is to improve Russian legislature. It contains strict norms, and the members of the development group say they feel resistance by some officials.
The resistance is quite natural. If the bill gets approved, the time will come when public servants and members of their families will be obliged to declare their property.
And while this practice has not become general and, at least, made in public, Novaya Gazeta continues monitoring of the business activity by high ranking officials’ relatives, their employment, connections in the business world and various services received by them from big business members.
We have already examined cases of Assistant Chief of President’s Administration Igor Sechin and first-vice premier Dmitry Medvedev (number 58), also Assistant President Viktor Ivanov and first vice-premier Sergei Ivanov (number 63). Now we are setting to deal with no less significant figures of vice-premier, ministry of finance Alexei Kudrin and Assistant Chief of President’s Administration Vladislav Surkov.
Pipes “haut couture”
Finance minister Alexei Kudrin got the status of vice-premier in the Viktor Zubkov’s cabinet. He is in charge of the entire financial economic block and natural monopolies. Kudrin is considered to be an old acquaintance of Vladimir Putin. They used to work together in St Petersburg city hall. Putin headed External Ties Committee, while Kudrin ran Finance Committee.
Business interests by Kudrin’s wife Irina Tintyakovskaya are rather broad. She’s not only the president of Social, Charity and Cultural Programs Fund named Severnaya Corona (fittingly Northern Crown). In spring 2002, she got to be co-founder of Valentin Yudashkin Group together with the famous couturier. Earlier, in July 2001 Tintyakova was one of the founders of a Moscow company Ambi XXII that was planning to be engaged in making artificial sapphires. That business failed to be established, though.
Elena Voitsekhovich is another founder of the Severnaya Corona Fund that actively helps children. Former adviser to the Prime Minister, Konstantin Voitsekhovich is vice-premier Alexander Zhukov assistant.
As for the famous couturier, whose services are used by many members of state and business elites, the Investment Financial Company Business Technologies, run by the pipe-manufacturer Alexander Karmanov, is another founder – along with finance minister’s wife – of Valentin Yudashkin Group. In 2006 the Company had 51,33% of the Group’s stock. Karmanov used to run the firm Leman Pipe, exclusive supplier of large-diameter pipes made by Ukrainian Kharzys Plant for the Gazprom system. The plant belongs to System Capital Management Group, or SCM, owned by the richest man in the Ukraine Rinat Akhmetov. Polish magazine Vprost estimates his wealth at $18.7 billion dollars.
Alexander Karmanov is running the Russian Eurasian Pipeline Consortium, or EPC-Holding, at the moment.
Press service of the Ukrainian MetInvest Holding - that manages mining and smelting business of SCM - confirmed that EPC-Holding is one of their customers and one of the players in the Russian pipe market. It was stressed, though, that SCM and EPC-Holding have only independent seller-buyer relations and they don’t know anything about Valentin Yudashkin Group.
Karmanov didn’t answer the question if his participation in the world of haut couture, along with finance minister’s spouse, promotes his main business. Not all the experts consider it a simple diversification of business. Valentin Yudashkin withheld comments.
It is Murtazali Rabadanov who tried to engage Irina Tintyakova in the business related to artificial sapphires. Until recently he has been the chair of the laboratory of X-ray structural analysis at the Institute of crystallography at the Russian Academy of Sciences. The Institute is run by Mikhail Kovalchuk who is the brother of the chair of St Petersburg Bank named Russia Yuri Kovalchuk. Yuri Kovalchuk was the person with whom Vladimir Putin organized dacha cooperative named Ozero (fittingly, Lake).
In 2001, Professor Murtazali Rabadanov, Irina Tintyakova and expert in artificial sapphires Bagomed Alaudinov founded a firm Ambi XXII. The artificial sapphire is second only to the diamond in terms of hardness. It is used in medicine, optoelectronic and jewelry industries, and also in lighting technology. The demand for this product was rather big at that moment. Murtazali Rabadanov told to the Novaya that business failed to be arranged due to some reasons. Bagomed Alaudinov got invited to work in Switzerland. Besides, the market got deluged with Chinese product.
Rabadanov recalled that he invited Irina Tintyakova to participate in the project because he knew her as a competent economist and an honest person. According to him, her status of the finance minister’s wife did not matter and they didn’t intend to use the administrative resource. Rabadanov also noted that Director of the Institute of Crystallography Mikhail Kovalchuk had no relation to that firm.
Irina Tintyakova did not give any comment. Alexei Kudrin did not response the Novaya’s request.
Reference by the Novaya
Putin’s and Kudrin’s names appeared in the materials of the criminal case #144128 about the building corporation Dvadzaty Trest (fittingly, Twentieth Trust). According to the report of the audit made by MVD Investigative Committee (the copy of the document is in the Novaya’s disposal), Kudrin signed the agreements for state credit granting in favor of the corporation for the amount of several million dollars, while the corporation transferred the money to more than 20 firms’ accounts in Spain, Finland, Sweden, Germany, Belgium, Ireland and USA.
As for Putin, the audit’s report says that being acting mayor of St Petersburg he ordered to appropriate money for the corporation upon the pretext of arranging a rest for the veterans. The criminal case was quitted in 2000. Kudrin’s colleagues in the finance committee Nadejda Savolainen and Dmitry Pankin, who were mentioned with him in the materials of the case (they signed payment orders), came to work in the finance ministry later. Savolainen held the position of deputy director of the ministry’s administrative department, while Pankin headed the department of foreign financial relations, national debt and financial assets.
Finance ministry did not comment the situation.
The former senior investigator, one of the leaders of the investigative group in the Dvadzaty Trest case Andrei Zykov told to the Novaya that investigation was unprecedentedly pressurized. The operative Oleg Kalinichenko, who collected information on that case, later retired to a monastery. Zykov put a civil action against Putin, but the court received a letter from the President’s Administration notifying that Putin could not be party litigant.
Puppets and metallurgy
Assistant Head of the President’s Administration Vladislav Surkov is considered to be the main Kremlin’s propagandist. He gives a shape of well-built doctrines to domestic Russian policy (which is made by people with more powerful resources). The advocate of sovereign democracy and strong centralized power, Surkov is in charge of political parties who were allowed to exist by the President’s Administration. Actually, he is the main PR manager in the country.
Vladislav Surkov’s wife, a scenic artist Yulia Vishnevskaya lives in London. She is known for founding Museum of Unique Puppets in Moscow. The museum’s collection features Russian, French, German, English, Dutch and Japanese puppets. Some of the exhibits are as old as 400 years. The Museum is a non-commercial organization and a constant participant of various charity actions. For example, in 2000, working together with ORT (main channel of Russian television) and Health Care Ministry, the Museum realized the project named Puppet by a Star which ended in exhibition and charity auction.
In 2005, Ferro-Stroi Group aided the Museum, building for it a mansion with the area of 120.5 square meters on Pokrovka Street. The estate market participants estimate that that time such a mansion could have the price up to a million dollars. The Group did not give any comment. But the source close to the Company informed that the costs were much less and the project was socially oriented. The Company had been engaged before in construction of social objects, so the museum’s mansion building just fit their general policy. The source also noted it was done by the city’s hall request.
Ferro-Stroi Group was founded in 2002. It constructs business centers, high-class housing and is engaged in management and selling realty. According to the newspaper Business, the Group was founded by top managers of metallurgic and mining EurazHolding. Later on, the Group was included in the direct investment fund organized by Board member and co-owner of Euraz Group Alexander Abramov.
Ferro-Stroi Group neither denied nor confirmed the information. Euraz Group explained that personal businesses of its managers and share holders have no relation to the Group.
A former employee of the President’s Administration gave an anonymous opinion that aid given to the Museum belonging to the wife of Assistant Chief of the President’s Administration within the frames of a social program in the amount less than one million dollars can be considered just as small attention or demonstration of loyalty.
In 2003 Yulia Vishnevskaya got revenue out of Moscow Palace of Youth, or MPY. The Palace is known as a large entertainment center where popular KVN games are held and famous musicals are staged. MPY also rents its room to restaurants, cinemas, a bank and several shops. During the period of January-September 2003 the revenue by Yulia Vishnevskaya out of the Palace amounted about $170,000.
Vishnevskaya didn’t comment the situation and didn’t say what kind of job she did for MPY. Her revenue was second to the General Director’s of the Palace Pavel Zabelin who got over 10,000,000 rubles in 2003.
Zabelin is wanted now. He is suspected of fraud and stealage of MPY’s shares worth of 500 million rubles. Investigation believes he stole MPY’s shares belonging to Intalia firm headed by Zabelin himself. Known on YUKOS case Volna company was a founder of Intalia. Former heads of Volna Andrei Krainov and Platon Lebedev were sentenced to long terms in prison in their time. (Vladislav Surkov was related to Menatep – another company run by Lebedev – from 1991-1996).
Zabelin’s assistant Elena Bilei and senior company lawyer Osman Pliev are also charged with stealing MPY’s shares. Legal proceedings are going on in Khamovnichesky Court. However, Zabelin’s case is placed in separate proceedings by the Prosecutor General’s Office.
Elena Bilei’s lawyer Dmitry Pankov told to the Novaya that Yulia Vishnevskaya was not mentioned to be among the management staff of MPY or among founders of the companies-shareholders of the Palace. She doesn’t have any relation to the case. The lawyer assumed receiving money by her might have been related to some services by Vishnevskaya. Pankov said MPY didn’t pay any dividend for 2003 as all the earned means were used for offset of debt to the state budget.
Vladislav Surkov didn’t respond to the Novaya’s request.
Russian public servants seldom report of their money, property and business connections. Their official reports are rather formal. If not only officials, but also their relatives will be obliged to declare their property – such regulation is provided for in the new anti-corruption bill - that will make the situation more transparent. However, experts say the society accepts the existing rules of the game at the current stage, and the question is not that of laws, but ethic restrictions that are not expressed enough yet.
“Such conflict of interests might come under close examination in the West. As for us, we are working under conditions of immature market economy and democracy. We deal with thin layer of effective managers, with a narrow bench of those who are considered to be authorized and “proven”, which creates such situations. Civil society which is the measure of what is accepted and what is not, agrees to all that. There is no breach of law here. I think we are talking about moral standards which are low yet” believes vice-president of the Russian Union of Industrialists and Entrepreneurs Igor Yurgens.
Reference by the Novaya
In the 90s, Yulia Vishnevskaya was among co-founders of Metapress, the Agency of Market Communications that was headed at that moment by Surkov (it was before he started working in Menatep Bank). Industrial commercial society Avancorp was other co-founder of the Agency. Avancorp was created by Vladislav Surkov, Alexander Kosyanenko and Andrei Ivanitsky. First assistant Director of the GUM Trade House and one of the founders and directors of the Perekrystok Trade House Kosyanenko was parliamentary candidate from Agrarian Party in 2003. Later on he became the member of Observing Committee at X5 Retail Group that manages retail networks Perekryostok and Pyatyorochka. Main shareholders of X5 Retail Group belong to Alpha Group consortium. Surkov worked in Alpha Group bodies in 1997. As for Andrei Ivanitsky, he is assistant to general director of Industrial Enterprises Group Russian Starch Products that includes several plants producing – besides the main line of production – barley malt, butter, cheese and condensed milk.
According to the report for 2006, co-founders of Metapress Sergei Astanin and Andrei Uraev are co-owners of some enterprises belonging to Industrial Enterprises Group. Andrei Uraev is also a founder of the cultural fund Aegis. With support from Vladislav Surkov, the fund promotes theatrical projects and educational programs, also awards grants and stipends.
Expert opinion
Mikhail Grishankov is the chair of the State Duma Panel on fight against corruption. He took part in working out the bill about control over property and incomes by government employees and their relatives. He is sure today there is political will for decisive actions. He commented general situation without consideration of the above mentioned cases:
The bill on Fight Against Corruption has incorporated the groundwork by President’s Administration, Rosfinmonitoring, our panel and some other agencies.
The bill appeared as the result of working by Inter-agency working group created in accordance with the President’s decree dated 3 February 2007. The group is headed by Assistant President Viktor Ivanov. His positive attitude allowed preparing a number of bills passing of which will make it possible to implement into our legislation the regulations described by anti-corruption conventions.
The bill on Fight Against Corruption is going to become one of the important parts within the system of anti-corruption steps that are developed in Russia after 2006 year ratification of international anti-corruption conventions and entering GRECO by Russia. The bill will reflect not only main principles and approaches to organization of systemic combat against corruption; it will also fix the provision for creation of national anti-corruption body.
Significant changes are expected and I am sure many officials won’t like this. Even now we feel resistance, for example, in respect of obligatory declaration of one’s property not only by officials, but also by their family members. Restrictions for passing of government employees to private business after public service, toughening requirements to behavior by public servants in the field of conflict interests and introduction of liability by juridical persons are among other steps resisted.
Having joined GRECO, Russia entered the system of international anti-corruption monitoring which in its turn is to accelerate taking complex measures by authorities on prevention and fighting corruption. Anyway, the experience of interaction of Russia and the international body for combat against money laundering has proved that, political will provided, we can find quick and quality solution to any difficult problem.
I realize that it will take time to reduce corruption drastically. It won’t go away by itself. But I prefer concrete actions and successive steps and not reasoning about unwillingness or inability by authorities to combat corruption.
When we fought for ratification of Europe Council Convention about criminal liability for corruption, no one believed it would happen. And we did it. I’m convinced that authorities and society are ready for further steps in this field.
