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Putin deals another powerful blow against corruption

April 03, 2013, 17:20 UTC+3 Alexandrova Lyudmila

Russian President Vladimir Putin has made one more long stride in his crusade against corruption towards what some have already called “nationalization of the elite” - in fact, moral and patriotic purification of the ruling class. Putin has signed decrees specifying the procedure civil servants will be obliged to follow to declare not only their incomes, but also spending. Also, the decrees establish control of its enforcement in the context of a ban on having bank accounts abroad. Russians support the president in his initiatives by and large, although they fear at the same time that these rules may begin to be applied selectively.

Putin on Tuesday signed two decrees establishing the rules by which civil servants will have to present accounts of their spending, as well as the deadlines for doing that. This year they will be entitled to a postponement till July 1. By that date they will have to present accounts of their spending and close all foreign bank accounts.

The law establishing control of whether the spending of persons holding civil service jobs corresponds to their incomes was adopted last year and took effect on January 1, 2013. However, no specific rules of declaring spending have been established since.

Putin’s initiatives are associated with the idea of “nationalization of the elite” - the unofficial name given to the presidential bill prohibiting civil servants from owning accounts in foreign banks, shares of foreign firms and securities. So far it has been approved by the State Duma in the first reading, but its adoption in general is expected later this month.

Under the presidential decrees the civil servants have a three-month transitional period to bring their declarations in line with the new requirements. “If they have foreign accounts today, they will be able to get rid of them over the next three months. By July 1 they will have to report that and to show that in a declaration,” the chief of the presidential staff, Sergei Ivanov, said on Wednesday.

The officials working for the government will also have to present accounts of the properties they own. “The income statements all such persons are obliged to present will for the first time show information about foreign accounts, securities and real estate,” Ivanov said. At the same time he recalled there was nothing wrong about owning properties in other countries. “But the one who files such a declaration is obliged to mention the source where the money paid for the asset came from. Failure to comply with this requirement is punishable with dismissal for loss of credibility.”

Besides, the decrees expand the range of persons obliged to declare incomes and spending. Declarations are now to be filed by the top officials of the Bank of Russia, state-run corporations and companies in which the state owns prevailing stakes, the chiefs of the Mandatory Medical Insurance Fund, the Pension Fund and the Social Insurance Fund.

Checking the authenticity of the presented declarations will be the job of Sergei Ivanov and the presidium of the presidential council for resistance to corruption he leads. Putin and the chief of his staff will be able to study the declaration of any official. Sergei Ivanov is to report the completion of the declaration filing campaign - the civil servants’ income and spending statements - by October 1.

On Tuesday Ivanov speculated that the measures might trigger an exodus from the civil service.

“New rules of the game have been established. The officials will have to accept them irrespective of whether they like them or not,” a source in the presidential staff has told the daily Kommersant. “It is up to the people to identify priorities and realize what is more important to them - civil service or everything else. Some will have to say good-bye to their accounts and properties, but it is already clear that some will prefer not to wait for Ivanov to report the findings of the declarations checks to Putin and tender their resignations.”

The response from the community of experts to the president’s anti-corruption initiatives is varied but generally favorable.

Originally, the idea of a ban on having foreign bank accounts was regarded by many civil servants “exclusively as an act of political propaganda, which was unlikely to have major effects from the officials’ point of view,” the president of the National Strategy Institute, Mikhail Remizov, told Itar-Tass. “But, as we have seen, the president has issued instructions at the level of the presidential staff and demonstrated his readiness to verify compliance with this law. Apparently, this is a law to abide by,” he said.

“There is a great variety of ways of re-registering properties in the name legal entities, relatives or children of age. Many will surely not miss the chance of taking advantage of this opportunity. So the success or failure of this law will depend on whether this rule becomes part and parcel of the corporate culture of Russian officialdom, or remains on paper, while many will be trying to sidestep it in some way,” Remizov said.

“The crusade against corruption is a harsh reality, and the people who are unprepared to work in this context will probably find it reasonable to tender resignation statements,” the director of the International Institute of Political Expertise, Yevgeny Minchenko, told ITAR-TASS.

A member of the science council of Moscow’s Carnegie Center, Nikolai Petrov, is quoted by the daily Nezavisimaya Gazeta as saying Putin’s decrees on the declaration of incomes sound an unequivocal message to the elites: “The president wants the elites to calm down somehow and realize the new rules of the game.”

“Each official must feel a certain risk, which may become real for him, should he refuses to toe the line. The point at issue is not punishing officials who live beyond their means. The real purpose is to not leave the slightest chance of ever having a thought of betraying and getting away with it.”

In the meantime, as a Levada Center opinion poll has found, by declaring the onslaught against corruption Putin hit the nail on the head. Russians believe that the president “is restricting the greedy bureaucracy, which has been trying to use Russia’s wealth exclusively in its own interests,” but at the same time they doubt that abuse by legislators and officials will be investigated impartially.

According to a March poll by the Levada Center the people place the struggle against corruption among the top three priority issues for the president to address. The adoption of the law that would prohibit officials and legislators from owning assets outside the country is seen by 34 percent of Russians as an attempt to put a firm obstruction in the way of laundering incomes of obscure origin, and by 26 percent, as protection of the country from the risk of its policy being influenced by threats against the properties and money of civil servants in the West.”

At the same time Russians believe that the law will be applied selectively. A tiny 12 percent are certain that the bans will work at full capacity, 41 percent suspect that some will have a hard time, and others, certainly not. And another 37 percent believe that “everybody will forget about the new law in several months from now.”