Sometimes you have a “eureka!” moment when a mass of confusing detail gels together and you see through to the heart of a complicated story.
That’s what happened to me when, after a bout of indulging myself in Russian corruption stories, suddenly the truth dawned on me.
We all know that corruption in Russia is run of the mill. Just look at the numbers. Last week, Prosecutor General Yuri Chaika announced that prosecutors initiated almost 4,000 corruption cases in 2011, the very useful Russian Legal Information Agency reported. More than 8,000 corruption cases were referred to courts and more than 7,000 individuals convicted, he said.
A former Russian tax enforcement officer, Ruslan Milchenko, now a corruption watcher at the Federal Analysis and Security Information Center, was reported as saying that last year, 250,000 Russian firms paid no taxes and reported no activities to Russian regulators.
More than $130 billion passed through accounts held by these mysterious companies, Milchenko said. For good measure, he added that more than half of the 5 million companies registered in Russia may be “phantom companies, which don’t conduct any real commercial activities and are aimed only on money laundering.”
If 250,000 front companies laundered 12-figure sums in one year, and those companies are only a tenth of the total of dodgy Russian firms, think of how much dirty cash must be sloshing around Russia!
Mind you, Milchenko was quoted as saying recently (by the always reliable Voice of Russia) that Al-Jazeera is very possibly a tool of the American government to infiltrate Arab countries, so readers may wish to exercise a modicum of doubt about his credibility, or VOR’s, take your pick.
But anyway, the point is that a corruption expert in a Russian federal think tank admits that dirty money makes up a significant amount of the national economy.
That’s when my eureka! moment struck. Suddenly, it all became clear as day – the reason why there is so much corruption-fighting and yet still so much corruption. It’s because the whistleblowers are the bad guys.
This came to me when I saw an infographic published by the Russian Legal Information Agency.
Heade “What to do if a bribe is solicited from you,” the graphic lays out seven easy steps for would-be whistleblowers when an official demands a bribe. Mostly, it’s pretty basic stuff: conduct yourself cautiously and politely, listen attentively, try to arrange a second meeting, then notify the cops.
But one step took me aback. Point No. 5: “ask about guarantees for the solution of your issue in case you pay the bribe.”
Try to imagine what a slick American defense lawyer could do with a prosecution witness who admitted to listening to a bribe offer and then asking for a guarantee. End of prosecution’s case, if they were stupid enough not to negotiate a plea bargain before hand, unless the defendant was as venal as Rod Blagojevich.
This piece of advice was published by RIA Novosti, a state news agency, so presumably it was vetted by lawyers. Clearly, there is a conspiracy here to create a huge net to entrap Russian officialdom and the business community in one tangled mass, a system that ensures the big fish never get caught, because the prosecution’s star witnesses can’t prove they are entirely innocent. Who’d ask for a guarantee if they didn’t think they might accept the bribe, if it was big enough?
I thought of waiting until the first of April before revealing my great insight. Then I thought, what the heck, no one can prove me wrong. But I don’t guarantee that statement.
May 16th, 2012
2 Comments at "2.5 Million Russian Phantoms Can’t Be Wrong"
In the last 12 hours I’ve shown this blog to half a dozen Russian friends who know enough English to read and understand it, and have translated it to about the same number of Russians (including my wife) who don’t know English. Surprise, surprise! The unanimous response was “So what’s new? We’ve always known that?” I admit that, if we take social, economic and cultural factors into account, my respondents aren’t a representative cross section of the population, but I submit that their cynical but resigned attitude is typical of the vast majority of Russians (I should perhaps state that, though not Russian myself, I’m a permanent resident of the Russian Federation where I’ve lived for thirteen years and I think I’m as close to the pulse of Russian life as any foreigner can be.)
Thanks, Laurence. First, a correction: in the last line of the second paragraph from the bottom I should have written, “Who’d ask for a guarantee if they didn’t think they might pay the bribe, if they could get away with it?”
I’d be interested to know what your Russian friends said they’ve always known. That bribery infects the entire economy and government? Or the part about the vast conspiracy to protect the top echelons of the corrupt system by sacrificing some of the minnows? I meant that as a joke, but what I’ve learned in my time in the “former East Bloc” is never to underestimate people’s credence in conspiracy theories.
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