May 13, 2011 — Contents

FRIDAY MAY 13 CONTENTS

(1)  EDITORIAL:  Corruption in Putin’s Russia

(2)  EDITORIAL: Russians Love them Some Graft

(3)  EDITORIAL: Russia to HSBC — Drop Dead!

(4)  Russia, Virtually Toxic

(5)  Livin’ La Rooskie Vida Loca

(6)  Corruption is Killing Russia, Literally

(7)  In Russia, they Can’t Even Pick a Mascot Honestly

(8)  In Russia, Even History is Corrupt

(9)  Corruption:  Why Russians have Nothing to Smile About 

(10) Sergei Stepashin, on the Take 

NOTE:  A special issue this week, entirely devoted to documenting the tsunami of evidence showing that Russia is the most corrupt major civilization on this planet under the leadership of proud KGB spy Vladimir Putin.

NOTE:  Julia Ioffe is back as a blogger, now with the Forbes network.  Welcome back Julia! Check out her post on personal corruption by Russia’s rulers, which is a perfect accompaniment to today’s special issue. She writes: “Medvedev’s salary has barely fluctuated in three years but his savings have nearly doubled, from 2.8 to 5 million rubles. His property holdings, have grown, too. This is interesting, since he quit business — he was once the chairman of Gazprom — quite a while ago. Either his savings accounts have really wonderful interest rates, or there’s something missing.” Something’s missing, alright.

EDITORIAL: Corruption in Putin’s Russia

EDITORIAL

Corruption in Putin’s Russia

Political competition is a necessary element for properly structuring any economy. We would like to see more ideas and more political competition in the development of these ideas.

— Russian Finance Minister Alexei Kudrin, April 21, 2011

They say that a fish rots from the head. Nowhere is that more true than in Russia.  The country ranks a genuinely shocking #154 out of 178 world nations when surveyed for corruption, meaning that Russia is the 24th most corrupt country on this planet.  Three people can count on their fingers the number of nations more corrupt than Russia, with more than a whole hand going spare.

It did not get that way by accident. As we document in today’s special issue, Russian corruption is so shockingly extensive and deep-rooted because Russia’s very highest leaders are themselves on the take, and the nation is just following their example.

EDITORIAL: Russians Love them some Graft

EDITORIAL

Russians Love them some Graft

One of the most obvious reasons why corruption rampages like a wildfire in Vladimir Putin’s Russia is that the people of the country would prefer to lap up its “benefits” than to live another way.

For instance, Russians pay far less for gasoline than they otherwise would because of political corruption. Just like in the USSR, the Russian Kremlin controls gas prices to make the privations of the failed neo-Soviet economy more palatable to clueless Russian citizens.  Other prices are controlled too, like transportation and basic foodstuffs, regardless of the fact that it’s not legal.

The result of such a practice is predictable:  Shortages.  The USSR was infamous for them.  Now, the same is happening in Russia.

EDITORIAL: Russia to HSBC — Drop Dead!

EDITORIAL

Russia to HSBC — Drop Dead!

The poster child we choose for our special issue on corruption this week is the Hong Kong and Shanghai Banking Corporation, better known to the world as HSBC — it bills itself as “the world’s local bank.”

But as of this month, it isn’t Russia’s bank any more.

Russia, Virtually Toxic

The Moscow Times reports:

A computer virus controlled by as few as three people in Russia is accused of taking control of more than 2 million computers around the world and perhaps stealing more than $100 million.

The cyber crime ring, which operated for a decade, was shut down this week after U.S. officials got a court go-ahead to seize hard drives used to run the malicious software, the U.S. Justice Department said.

The computer virus, dubbed Coreflood, infected more than 2 million PCs, enslaving them into a “botnet” that grabbed banking credentials and other sensitive data that its masters used to steal funds via fraudulent banking and wire transactions, the Justice Department said Wednesday.

Livin’ La Vida Rooskie Loca

The Moscow Times reports:

Real estate in Dubai and Montenegro. Regular first-class travel. Millions of dollars in Swiss bank accounts. Russia’s second-best country house.

And all made possible with an annual household salary of less than $40,000.

Those are the findings of a private investigation into the assets of Olga Stepanova — the former Moscow tax official who authorized a $230 million payment that no one disputes was embezzled.

The investigation is the latest conducted by supporters of Hermitage lawyer Sergei Magnitsky, who died in jail after accusing senior Interior Ministry officials of masterminding the $230 million fraud.

The Interior Ministry, in turn, accuses Magnitsky and Hermitage in the fraud.

Corruption is Killing Russia, Literally

Kirill Kabanov, head of the nongovernmental National Anti-Corruption Committee and a member of “president” Dmitry Medvedev’s Human Rights Council, writing in the Moscow Times:

In an April 22 comment in Moskovsky Komsomolets, political analyst Stanislav Belkovsky called for the arrest of Health and Social Development Minister Tatyana Golikova and her husband, Industry and Trade Minister Viktor Khristenko, on charges of corruption. In particular, Belkovsky accused the health ministry of pilfering funds for tomographic scanners and recalled that Golikova had promoted a drug called Arbidol that is produced by Pharmstandard, a company believed to have close links to her family.

Russians, suffering from corruption fatigue, have had a rather ho-hum reaction to the Golikova and Khristenko scandal. It is long been accepted as a given that the higher an official’s rank, the more opportunities he or she has to embezzle.

In Russia, they can’t even Pick a Mascot on the Up and Up

Mascot of the Monarch’s Will
Russia has one voter 
February 28, 2011
Gazeta.ru
Translated from the Russian by The Other Russia

The nationally televised election for mascot of the Winter Olympics in Sochi became a telling model for Russian elections in general and a possible repetition in the upcoming Duma and presidential elections.

The elections aired on Channel One for Russians to choose the mascot for the 2014 Winter Olympics in Sochi bore an entirely predictable result, albeit one that directly contradicted the population’s opinion. The winner was the snow leopard, with 28% of the vote. This only happened because Vladimir Putin, while in Sochi, spoke out in favor of the snow leopard right on the day of voting. It’s true that the Olympics had to be split between three mascots, since not one received more than half of the vote – the polar bear (18%) and bunny (16%) were added to the leopard.

In Russia, even History is Corrupt

Brian Whitmore, writing on The Power Vertical:

A Russian leader gives a four-hour speech filled with empty platitudes about imaginary accomplishments, promises of a bright future, and dire warnings about dangerous foreign influences. The speech was interrupted 53 times by applause.

Sound familiar?

Several months back, I blogged about the striking similarities between Prime Minister Vladimir Putin and former Soviet leader Leonid Brezhnev. Each replaced a reformist predecessor who was ultimately seen as bumbling, erratic, and ineffective — Nikita Krushchev in Brezhnev’s case, Boris Yeltsin in Putin’s. Both ushered in an era of stability and relative prosperity thanks to high oil prices. And both perceived a “golden age” that lasted roughly a decade.

But by the late 1970s, the luster began to wear off Brezhnev’s rule as the Soviet economy stagnated, life expectancy plummeted, and social problems like rampant alcoholism, worker absenteeism, and widespread cynicism became endemic.

Corruption: Why Russians have nothing to Smile About

Michael Bohm, writing in the Moscow Times:

It is often said Russians don’t smile much, while Americans smile too much.

In general, the American smile has a terrible reputation in Russia. The campaign started in the early Soviet era. Look at the sinister smiles on old agitprop posters of caricatural “U.S. imperialists” wearing trademark cylinder hats, smoking cigars, salivating and smiling as they relished their piles of money and power over the world’s exploited classes.

Later, starting from the Khrushchev and Brezhnev eras and continuing until the late 1980s, the Soviet print and television media carried regular reports called “Their Customs,” which focused on contemptible bourgeois lifestyles in the United States and other Western countries.

Sergei Stepashin, on the Take

The Moscow Times reports:

The Audit Chamber has threatened to sue liberal activist Marina Litvinovich for implicating its head and his family in a report on government corruption.

But Litvinovich stuck to her findings, saying she relied on various media reports that had never been challenged in court — implying that they were true.

Her report, posted Friday on the web site Election2012.ru, is titled “Power of Families. The Government. Part 1.” It targets the families of 18 senior officials, including Audit Chamber head Sergei Stepashin.