STOLYPIN: Russia’s new rules dictate “steal a bit less, do your job a bit better”

STOLYPIN: Russia’s new rules dictate “steal a bit less, do your job a bit better”
Moscow International Business Center. / Photo by CC
By Mark Galeotti of the Institute for International Relations Prague July 25, 2016

On July 19, officers from the Federal Security Service (FSB) swept into the headquarters of the Moscow branch of the Investigative Committee (SK), arresting deputy branch chief Denis Nikandrov, head of its Internal Security Directorate Mikhail Maximenko, and his deputy Alexander Lamonov. The charges relate to payment of $1mn, the first tranche of a $5mn bribe from notorious gangster Zakhari Kalashov (aka Shakhro Molodoi, ‘Young Shakhro’). Needless to say, excited speculation about inter-agency turf wars, political manoeuvres and struggles to control illegal business at once boiled up.

However, this was actually not like past political hits. Might it be possible that, for once, and perhaps as part of a subtle shift of policy, that this was actually what it seemed to be – some corrupt officials being brought to book? And if so, what does this tell us about the changing rules of the game applying to the Russian elite?

Doing it by the rules

At first glance, the raid looked like so many political ones in the past: the high-profile operation, the open discussion of the (alleged) crimes of the detainees, the strategic leaks to LifeNews, the TV channel that seems to be the FSB’s outlet of choice.

However, significant differences quickly emerged. First of all, it was made clear that SK head Alexander Bastrykin, traditionally something of a rival of the FSB’s, had initiated the investigation and – given Maximenko’s role – turned to the FSB to handle it. His spokesman, Vladimir Markin, called the operation as “self-cleansing”.

Meanwhile, there has been a striking lack of the kind of strategic leaks from the FSB that we would expect to have seen undermining Bastrykin’s claim or otherwise trying to turn this into an embarrassment for the SK as a whole. The FSB’s website merely ran a very restrained press release that the operation was carried out with the full cooperation of the SK and by mutual agreement with Bastrykin.

In short: so far at least, this doesn’t feel like the usual kind of political or economic struggle conducted under the guide of law enforcement. Of course, this takes place in an environment dense with business and personal connections. Directorate M of the FSB’s Economic Security Service, which carried out the raid, has been connected with murdered criminal godfather Aslan Usoyan (‘Ded Khasan’), with whom Kalashov had a partnership that later became a rivalry, for example. However, nothing has emerged yet to challenge with any authority the official account.

Furthermore, this takes place in a context of a series of corruption cases being brought against senior officials. Most striking, at the end of June a dramatic purge saw 50 senior officer of the Baltic Fleet dismissed or arrested, including fleet commander Vice Admiral Viktor Kravchuk and chief of staff Rear Admiral Sergei Popov. This was a serious case, which if nothing else means that the fleet will be in disarray for months to come as new commanders find their place, and audits are made to determine what was stolen.

New rules

Of course, none of this means that the Kremlin has decided that corruption must be stamped out throughout the system. Putin’s cronies will continue to fill their pockets and build their dachas at the Russian public’s expense. Embezzlement, taking bribes and trading favours will remain perks of the official’s job.

Likewise, corruption charges will remain a common means of bringing down political rivals and rustling geese that lay golden eggs. The arrest in June of Nikita Belykh, governor of the Kirov region, allegedly taking a €400,000 bribe, is a classic example of a case that seems rooted more in politics than legality. Belykh claims the money was “financial support for a non-budgetary foundation intended for reconstruction in the region”. Although there are some inconsistencies in his account, nonetheless the corruption of regional governors is notorious and profligate. That Belykh and not others was targeted probably owes as much to his well-known liberal sympathies as to the facts of the case.

Even so, there is emerging a gradual awareness that the Kremlin, if not changing the social contract with the elites, is at least ‘editing’ it. Put at its most basic, the new line is that you can be corrupt (within certain bounds) and you can be incompetent (but not so much so as to embarrass the Kremlin). However, the acceptable levels of corruption and incompetence have been gently and quietly reduced. More to the point, it is impermissible to be both.

Nikandrov and his cohorts were taking cash payments from an old-school gangster, and in return grossly and openly manipulating the legal process in a way that was obvious and embarrassing. Kalashov’s henchman, Andrei Kuchuykov (‘the Italian’), was simply released through Nikandrov ‘forgetting’ to renew his detention order, for example. (The police immediately re-arrested him.) In an age when organised crime now is much more likely to wear a suit, this was blue-collar corruption of the worst sort, and considered both greedy and foolish.

Likewise, Kravchuk was not just allegedly embezzling money hand over fist, this was having a serious impact on the operational readiness of a fleet likely to have a crucial role if the current geopolitical tensions with the West worsen. He stole too much – and he didn’t do his job well enough. Much the same can be said of other recent high-profile targets, such as Igor Pushkarev, mayor of Vladivostok, who was arrested in June.

In hindsight, perhaps the harbinger of this new line was the dismissal of Russian Railways head Vladimir Yakunin in October 2015. While close to Putin, his high-rolling lifestyle had become notorious, and he was demanding ever greater subsidies to keep the trains running. Not enough competence, too much enrichment, so he had to go.

“Steal a bit less, do your job a bit better” is hardly an inspirational rallying cry. Nor is it anything but the most grudging and pragmatic of responses to the mess in which Russia finds itself in today. Nonetheless, it does seem to be the new line, as the Kremlin, engaged in its nationalist project, comes to see the elite it built as increasingly being a problem rather than an asset. As this begins to be applied more broadly, will it bring a little greater loyalty and efficiency into the system? Or will it, as is perhaps more likely, only serve further to drive a wedge between Putin and his handful of true believers, and a wider elite who may pay lip-service to the struggle to reassert Russia’s place in the world as a great power, but who are really more interested in a life of easy kleptocracy?

Mark Galeotti is an incoming senior research fellow at the Institute of International Relations Prague, a visiting fellow with the European Council on Foreign Relations, and the director of Mayak Intelligence. He blogs at In Moscow’s Shadows and tweets as @MarkGaleotti.