In TASS special project Top Officials Russian Audit Chamber chief Tatyana Golikova speaks about corruption, irresponsibility, fears, limited resources, geography and Russian literature classic.
— Everybody now seems to understand the ‘affluent years’ are long gone and the time to tighten our belts is round the corner. In the meantime, the national economy is still very slow to readjust itself to the new realities. Do you have any plausible explanation why?
Let me see, that’s a really hard nut to crack… As far as the federal agencies are concerned, the current state of affairs is really critical only for two government ministries – those of economic development and of finance. Both gauge the status quo with reliance on objective parameters. Both are well aware of the degree of the responsibility for what is going on. They will be the first to be brought to account. The other government ministries and agencies that use federal resources, and not only federal ones, haven’t yet realized well enough the landscape has changed. In principle, this is easy to explain, too. For the time being the economy has enough money to push ahead with development processes, the processes the funding had been accumulated for. But mind you, “for the time being” is the key phrase. People go on living the usual way as if everything remains calm and bright. Many still don’t care a bit about cutting costs. They keep spending with a lavish hand and never care to review and report the previous expenditures.
— What if they have the delusion the budget is a cash cow that will never stop yielding milk?
Yes, I do have this sort of impression. A while ago I hoped the attitude would change. It hasn’t. Possibly, summer time is to blame. Business activity died down for the holiday season. It looks like far from everybody has been able to feel the autumn chill is approaching. In October, one and all will have to recall the responsibilities. Life will turn us that way.
— Was the picture greatly different a year ago?
I wouldn’t say that if the execution of the federal budget is to be used as the yardstick. The government then failed to forecast incomes accurately enough, and the available means were spent not very effectively sometimes. One has to admit, of course, that in September 2014 the crisis was not as deep as it is today, although people in the know already saw the real degree of the risks the sanctions against Russia, slump in the world prices of hydrocarbons and the related processes would entail.
Of late, a great deal has been said about the ineffectiveness of the system. Everybody has got accustomed to the manual control mode, don’t you see, some claimed. To my mind manual control can be very useful at times. Once you have special powers, a clearly set task and the money to handle it, then go ahead and take it to the logical outcome.
Honestly, I do feel certain alarm over the situation in the economy. Most of the expected regulatory acts have been issued by now, while there have emerged some problems with using the material resources earmarked for their implementation. Far from everybody has been invariably effective enough.
— For instance?
Let’s take support for the Russian automotive industry. I am dealing with it closely among other things. Everybody knows car sales in Russia have slumped. You don’t even have to take a tour of local car dealers to see that. Just look at the official statistics. To support this key industry the government has devised a package of measures, such as scrappage programs, trade-in schemes, beneficial lending and leasing. Similar steps were taken during the 2008 crisis, which then brought about the expected economic effects and kept our automobile producers afloat and helped them live through the bad times. In the current anti-crisis plan 40 billion rubles has been reserved for assistance to domestic automotive producers, including 10.7 billion rubles for car fleet renewal. We won’t be discussing now whether this is much or not. The money is there. But! By September 1, 2015 a tiny 1.6 billion of the sum had been spent. The program has been implemented just 5%! Now may I ask you: is this what one calls support? In reality there is none. Sadly, such examples are many.
— How many inspections does the Audit Chamber make a year?
Some five hundred. We aren’t trying to make more. We are obliged to present economic conclusions regarding the previous year’s budget execution and the coming year’s draft budget. That’s standard procedure. All chief managers of government moneys come under scrutiny. Everything else is day-to-day activity. In 2015 the government is implementing its anti-crisis plan. The money for it is disbursed from the National Welfare Fund. Naturally, we keep monitoring the situation online.
— And who decides who will be the next to answer your question: “Where did the money go? What was it spent on?”
It is not me personally who asks such questions, but the Audit Chamber… There are instructions from the president and requests from the Federation Council, the State Duma, and the law enforcement agencies. Also, there are complaints from individuals. The latter are usually considered by the auditing agencies operating at the regional level. Except for certain instances in which the issues raised are of national importance.
— Have there been any inspections that found nothing wrong? Situations where nobody had to be criticized for anything?
Violations exposed are very different. There have been no cases in which we identified not a single flaw or shortfall. But they have to be sorted out, of course. I reckon that some ten percent of our findings can be classified as “light”. In other words, the exposed violations do not lead to either ineffectiveness or misuse of budget money. Such wrinkles are easy to iron out. That’s normal, routine work. As you know, only the one who does nothing makes no mistakes.
— Are you saying that 90% of your probes end up with a Test Failed mark?
Well, it’s not all that bad, of course, but… Yes, that’s right. Regrettably, the scale of corruption remains high. This is one of the main problems. Also, I would add a high level of irresponsibility.
— Before, the cash stashed for a rainy day came in handy. Now the savings are running dry and the problems have begun to surface, right?
In a sense, yes.
— Would it be right to say that theft hasn’t got worse but it has become more eye-catching?
I never use the term “theft.” I’m more cautious in selecting my vocabulary. We expose facts that may indicate likely abuse. Naturally, all our information goes to the law enforcement agencies, and it is up to them to decide what is to be done to the evidence they have from us. When corpus delicti is unmistakably there, the affairs are investigated in accordance with the established procedure and then handed over to a court of law.
But let me say once again, sometimes it is difficult to get rid of the feeling of irresponsibility when using budget money. People may treat the funds as if they were somebody else’s.
— Possibly, it’s the other way round?
No, when it comes to one’s own hard-earned cash, people are very careful whenever they decide if it is to be spent on some things or set aside for the time being.
— You are a great devotee of Russia’s 19th literature classic, Mikhail Saltykov-Shchedrin, a remarkable author and satirist, an equal of Jonathan Swift. I guess that the following quote from this author is well familiar to you: “Has there been a time when at least a single bureaucrat was uncertain Russia is a pie anyone is free to come up to and take a bite at?” That’s just my side thought, a footnote to what you’ve just said about civil servants’ attitude to the state budget. They just come up and take a bite…
Possibly, you’ve got a point there. Sadly, at my previous positions at the Ministry of Finance, and now here, at the Audit Chamber, I can see that expectations of the budget are always very large.
— The rule is “Ask for as much as possible to get at least something in the end?” isn’t it?
No, task number one is to get into the budget somehow on the pretext of performing some official task. Not necessarily a major or important one. At the very beginning the start-up sum may be very small. Let me say once again: it’s all about having a special budget item reserved for oneself. That’s number one objective. The faster you go, the farther you get. The task has been identified. Who will ever care it has not been coped with? It would be wrong to stop halfway. So the finding goes on and expenditures keep snowballing. The things that cost a ruble yesterday now cannot be accomplished for ten. It’s not enough. And then, when everything seems to have been done and no more money has to be reserved in the budget one suddenly feels it’s so hard to say good-bye to this bonanza! So, ever more projects continue to be invented. For not dropping out anything goes.
Regrettably, the budget is getting overburdened with this type of spending with each passing year. The money may have been earmarked for no end of good things, but no effect is in sight. It takes political will to put an end to useless and senseless spending. Sometimes there is not enough such will. One’s got to have the knack of putting the full stop at last. Whether the original undertaking has been accomplished successfully and the desired goal achieved is a different matter. But it cannot be procrastinated indefinitely. Some are still hoping for something, waiting for it to materialize, although everything is already clear to one and all…
— Do you really think the loophole will now be plugged?
There must be certain firmness when a decision is made whether to include this or that spending item into the budget. We may keep talking about this subject days on end, discussing what exactly the government is responsible for, whether it should support the economy, industries and farming or the population. At a certain moment, as you may remember, the prevailing ideology was the free market economy will sort things out and fine-tune all processes on its own, while the government’s realm of responsibility will be confined to pensions, budget-financed wages and social benefits, as well as participation in infrastructure projects that would otherwise be unable to operate. Then we drifted away from this type of approach. The government is now locked in debate over where to move now. Clearly, Russia is entering an austerity budget phase and it will have to be selected what should remain on the list of priorities – the government’s full compliance with the previously assumed social commitments or the possibility of dropping some budget articles to make investment into infrastructures.
The way I see it, this argument is devoid of any sense by virtue of the current money managers’ attitude to the money they manage.
With social benefits it’s far simpler. They are clear and easy to calculate and count. The recipients are well-known. One simple multiplication — and you get the amount of budget resources needed. But many are still reluctant to make a real assessment of how the colossal funds, spent on industries, on support for framing and on infrastructural development, were used at different times. We take it too easy when we learn that the money did not yield anything for the economy but remained idle in the banks or on the accounts of various subcontractors.
As far as social justice is concerned, people deserve to be explained what is being spent and on what. In the meantime, the people see mothballed construction sites, bad roads and the appalling condition of the housing and utilities sector. The people pay taxes and they have the right to know whether somebody will be brought to justice for all that someday. For what I call corruption and irresponsible squandering of funds.
All speculations to the effect we will cut social programs somewhat here and just a little bit there arouses natural questions from the people. Naturally, some restrictions are unavoidable, but they have to be reasonable and explainable. There must be a clear and transparent policy along all lines.
About fears, limited resources, cold shower, taboos, 2014 Sochi Olympics and 2018 World Football Cup
About geography, An American Tragedy, cats and dogs at home and Russian literature classic
— The things you’ve been able to see during the time you’ve spent doing your current job at the Audit Chamber, were they a kind of revelation to you?
I would’ve surely been dumbfounded, but for the so many years I spent at the Ministry of Finance. We, MinFin people were always at the forefront. I mean, each time we painstakingly explained what spending was feasible and what was not. We sparked no end of discussions. We heard many a time each industrial ministry had a far better knowledge what it should develop and how, while the Ministry of Finance was nothing but an accounting agency, its sole task being to disburse funds. Once the money has been given, other people will know far better how to put it to use without our advice. To my mind, these arguments are absolutely wrong. The Ministry of Finance does see the way budget funds are used, and it is in the position to ask why the previously provided funds were misused. In such situations it is far better to make a pause, to suspend financing at least for one year. But such ideas never meet with understanding from those who apply for the funding. Never! At least I cannot recall not a single such incident.
— And yet, now you are on the opposite side of the barricade. Before, your job was to distribute money. Now you are keeping an eye on how it is being spent.
I always say: the Ministry of Finance and my current department are allies. Particularly so in the current adverse conditions. The Ministry of Finance, too, is keen to ensure the disbursed funding should be used effectively. Prudent attitude to money must come first before anything else.
— Did you find the Audit Chamber a great annoyance when your job at the Ministry of Finance was confined to budget drafting and execution?
We were fortunate in a sense. The Audit Chamber is a relatively young agency in modern Russia, although its roots can be traced back as far as the mid-18th century, the rule of Alexis of Russia (father of Peter the Great). Those were the days when Russia established an accounting office, a watchdog commissioned to keep an eye on all incomes and spending of the Russian state. The Audit Chamber emerged in its present shape just twenty years ago. It has lived through the years of infancy when it was gaining its own experience and borrowing knowledge from its foreign counterparts. The Audit Chamber was growing and maturing alongside the other financial institutions of our state.
As for the system of bodies of power and their historical development in modern Russia, I believe that the Ministry of Finance has made the most significant progress over the past two and a half decades. I am saying so not because I worked there for so many years…
— Seventeen.
Right… Updating financial legislation in a bid to adjust it to the current world standards and other such objectives were invariably on the very top of the Finance Ministry’s tasks. Restoring order to this sphere of activity was essential. We all remember the 1990s: at certain moments the country had no budget at all, or a short-term budget drafted only for the coming three months… The processes were to be fit into the civilized framework, tax and budget legislations created and financial control tuned up. I believe that the Russian Ministry of Finance made a rapid headway.
— Whom of the ministers did you find the easiest person to work with?
I don’t think I have the right to make such comments. It would be very wrong if I did. At the ministry I held various positions. In 1990 I joined the then Ministry of Finance of the Russian Soviet Socialist Federative Republic as an economist 1st class. Then I was promoted to chief economist at the State Budget Department… As you may have guessed, the degree of interaction with your superiors depends on where you stand on the career ladder. I believe that my cooperation with the minister was the tightest when I became deputy chief of the Finance Ministry’s budget department.
— When was that?
Under Vasily Barchuk, Yegor Gaidar’s successor. To my recollection, it was in the autumn of 1992. I was in close contact with Alexander Livshits, Mikhail Zadornov and Mikhail Kasyanov… The longest period of joint work was with Alexey Kudrin. I was his deputy for seven years.
— I hear people say Kudrin began his working day with this phrase: “Tea and Golikova, please.”
It was exactly like this. It was a kind of tradition or habit… He asked his secretary to bring him some coffee, not tea. And he did invite me, that’s true. Over that rather long period of time we developed mutual understanding, and – to a certain extent – the ability to substitute for each other. In any cases, I felt that in professional matters Kudrin had full confidence in me and I was doing my utmost to never let him down.
— Are you still in touch with each other?
We certainly are. Although the mode of relations is not the one we had when we worked together and the doors of our rooms at work faced each other. These days we talk by telephone more often and we do meet in person once in a while.
— I suspect it’s not the weather you prefer to discuss.
We never touch upon the specifics of the state of affairs in the economy or the budget, although this theme is certainly present in our conversations. We still see eye to eye very often.
It is nakedly clear that enforcing the budget is entirely the government’s responsibility, its exclusive competence. It seems to me… No, I would even say I am absolutely certain that today’s way of doing the job right should be far harsher and more to the point. It would be wrong to take the liberties that were permissible during the affluent years, when oil prices were high and mammoth incomes were pouring in.
— Are you talking about someone personally?
I am talking about the government in general.
— But the finance minister’s responsibility must be a special one?
The way I see it, Anton Siluanov has been trying to do something. To the extent the firmness of his character allows for. But efforts by just one government agency are not enough. Apart from tighter financial discipline there is to be strict administrative control of how government instructions are translated into reality and whether the established deadlines and parameters are observed.
— Are you satisfied with the reactions that follow Audit Chamber inspections?
It would be a gross injustice to complain and to say that somebody ignores something. It has to be admitted, though, that correcting the identified flaws may take much time. Say, for instance, when it comes to changing laws or the government’s regulatory acts.
Some measures can be taken right away, when some misuse of budget funds has been exposed and those being inspected confess and agree to give the money back without waiting for a corresponding act to be signed and the Audit Chamber’s board to meet in session.
Ever more often we prefer not to ‘cut to the bone,’ contrary to what some business people say, but to put the emphasis on preemption. This facilitates timely response to likely violations in the future. This is how we monitor the execution of the budget and of the anti-crisis plan. We are obliged to present information regarding all decisions quarterly, so there always remains a chance to correct something, to prompt something, to forestall things.
Although I might agree that I still bear the imprint of my long presence inside an executive body of power.
— In what sense?
I am trying to anticipate things to ensure my colleagues have fewer problems. Some officials still think that laxity in handling budget funds is no big deal. They may act first and stop to think whether they breached the law only afterwards. In fairness I must say that violations occur not at the level of government ministries, but one tier lower – at their subordinate structures. And in some regions, as we can see, some amazing things do happen once in a while.
— By the way, have you scrutinized the Komi Republic or was the detention and arrest of its governor, Vyacheslav Gaizer, a shock as strong as it proved for Federation Council Speaker Valentina Matviyenko, who said she had come round only two days after learning the stunning news?
The Audit Chamber inspected that territory back in 2012, when a different person was in charge of the AC…
— Do you make other people feel fear? What do you think?
Nobody feels great pleasure, when we show up on the doorstep, that’s for sure. Possibly, there is a shade of fear. But we never set ourselves the task of unearthing some compromising evidence at any cost. It is most important for us to ensure budget money be used properly.
The law tells us when we are to look into the draft budget and when to review budget compliance. The people always know in advance that Audit Chamber inspectors will come calling soon. As for the all other control measures, our plan is drawn up at the end of the fiscal year and it is based, as I’ve already told you, on messages from parliament, law enforcement agencies and individuals.
— But, I reckon, the most thrilling experience of yours was with the film industry. Just recently the Audit Chamber inspected the Cinema Fund. The Mosfilm concern was next…
Incidentally, what the media said about the auditing of Mosfilm did not quite agree with what was actually pronounced at the Audit Chamber’s meeting. When Mosfilm was on the agenda, the studio’s CEO, film director Karen Shakhnazarov came to us. We had the strongest impression that Mosfilm was well aware where they were at the moment and where they would be moving tomorrow. True, there were certain shortcomings, but nothing irreparable. On the contrary, I would address words of thanks to the Mosfilm people for preserving the studio, for not letting others ruin it altogether. Of course, film-making these days is way below what we saw in the Soviet era, but all film production was then government-financed. It would be wrong to compare these two situations. It’s all very different today. One has to proceed from the realities, to learn to live by one’s means. Any harsh criticism of Mosfilm would’ve been unfair.
— Just recently the Audit Chamber set its eyes on TASS…
It was a routine inspection. As I’ve just said all those who get money from the federal budget at a certain point are inspected by the Audit Chamber. It’s good if everything is good. The imperfections we identified at TASS largely stem from the general situation in the country. We still have many inconsistencies from the standpoint of legislation and its execution. In this particular case the focus is on what does not entail ineffective use of budget funds or their misuse…
Let me say once again. Our inquiries proceed in accordance with a plan approved by the Audit Chamber’s board. Some unscheduled inspections do take place from time to time, but you’ve got to understand that our human resources are rather limited.
— Has the Audit Chamber undergone any staff cuts?
I’d put it this way: a new law on the Audit Chamber was adopted in 2013. We were given many new functions but there followed no staff increase. The Audit Chamber still has a little more than 1,000 employees.
— You also control the Bank of Russia, don’t you?
To the extent we are obliged to on the basis of the laws describing the operation of the Audit Chamber and the Central Bank. We are invited in the capacity of experts, when the Central Bank proposes monetary and credit policy guidelines. These are published alongside the draft budget. Now work is in progress on the 2016 budget, but the Bank of Russia is working on its proposals for a three-year period – in accordance with the government’s considerations and forecasts by the Ministry of Economic Development and Trade. When the document takes final shape, we will present our own opinion of it and of the draft budget as well.
— Does it make sense to produce three-year forecasts while the budget is drafted only for the coming year and eventually has to be revised, too?
We had it the same way before, when we previewed the outlook for coming three years while drafting a twelve-month budget. This gives more certainty to both businesses and the population, although ordinary people are not in the habit of following such matters in detail. The government has now suggested restoring one-year budgeting to avoid breeding unrealistic commitments, but I am certain that the socio-economic development forecast, its main parameters and monetary and credit policy guidelines for three years to come are absolutely reasonable. At least in order to have an opportunity to compare expectations with the real outcome.
— How do you feel, have we hit the bottom or is there still room for further fall?
As it appears to me, there’s no space for a further dive. The government and the Central Bank are now taking steps to start a rise to the surface.
— But doesn’t this run counter to what you told us just an hour ago? About low effectiveness, inconsistency, corruption and lack of a hard line…
Those who keep an eye on the economic parameters published by the federal state statistics service Rosstat have already been able to feel the cold shower effects. I believe that the parameters of a new budget and development forecasts should be more realistic than those proposed just several months ago.
— Do you believe that the current team is capable of addressing the tasks on the agenda?
I am not in the position to judge the government’s performance, but I believe that this team, just as any other, is capable of achieving a lot, on the condition of proper consolidation and the readiness to work effectively and in concert. As a matter of fact, mobilization was achieved at a certain point, but then many unbraced themselves in a sense, for it seemed that the worst was already in the past. Now it’s time to gather force again…
— Does your job imply many taboos? Places you should steer clear of or things not to be said aloud?
Our rules are simple: we make no comment as long as the inspection is in progress. Then there follows a board meeting, which makes a decision whether to disclose the results or leave them for office use only. Over the two years I’ve worked at the Audit Chamber the “Office Use Only” cases have been very few. Most of them were classified in compliance with the state secrets law, when the inspectors saw confidential documents. Naturally, we do not disclose budget items that are secret or top secret.
As for the “dos” and “don’ts”, we’ve never been advised on where we can go and where we shouldn’t. Never ever! The list of my employers is too long for some of them to draw up some list of the “untouchables.” The State Duma, which endorses the Audit Chamber’s chief, is represented not by United Russia only. There are other political parties, too.
— But we all do remember about the vertical chain of command and where that chain ends at the very top.
The law says: once more than a quarter of legislators have addressed the Audit Chamber with a request, we are obliged to do the auditing. As a rule, this is public act. There is the request and the corresponding political forces have said about it public. No way of hushing up the affair.
— What was it people’s deputies asked you for last time?
Before the summer recess the legislators asked us to look into the operation of the research cluster Skolkovo. We’ll do that in October or November. There have been requests concerning Rusnano. The government guarantees granted to that company were included in the State Duma’s budget resolution, so the Audit Chamber will certainly check it all. There are quite a few such themes.
Now a few words about the “don’ts”… That’s a question about common sense, and not official bans. None of us wishes to rock the boat or paint things black. Why doing that when it is possible pause for a while and then take steps to straighten out the situation? If the people are told on and on that everything is bad and terrible, nobody will be eager to improve the current state of affairs.
— A few words about high-profile probes… Say, the recent one into the operation of the government-run road-building company Rosavtodor and the project for laying the Central Circular Road – a future modern highway designed to circle Moscow at a distance of about 30-40 kilometers to ease the strain on the current decades-old road. Was it launched at somebody’s request or had it been on your original schedule?
It had been planned in advance. Probably, we would not be holding inspections so often, but after the money for building the circular road around Moscow we have been instructed by the president and the State Duma to monitor the spending of these funds.
— At a certain point you were strongly against tapping the National Welfare Fund reserves.
Yes, I was. The odds are I will never change my point of view. We’ll see the way the money is spent first, and then make the final conclusion. For now I am not very optimistic about the way this work is proceeding. At the same time it would be wrong to say that this is an absolutely new mechanism of using budget money. It has to be tuned up over a certain period of time. Let’s wait at least for a year until the project gains pace, and then we’ll see how effective it is. I would refrain from any harsh statements for now.
— Have you closed the theme of whether the spending on preparations for the Sochi-2014 Winter Olympics was reasonable enough?
I took over the Audit Chamber when most of the facilities in Sochi had been finalized already. At the end of 2013, by agreement with the government we launched a probe to see whether there was any lagging behind and who was to be hurried with putting the final touches. I’ve never liked to comment on what had been done under my predecessors. I did not intervene and, honestly, I did not check what had been examined in Sochi before. Our second inquiry was held last autumn and was dedicated entirely to the analysis of measures to eliminate violations in preparing for and holding the Sochi Olympics. We found that the Organizing Committee had returned to the federal treasury more than one and a half billion rubles of unused subsidies and made some adjustments to cut budget spending. True, there were certain flaws and when the procedure was over, Deputy Prime Minister Dmitry Kozak issued specific instructions regarding the corrections to be made. That’s normal. It’s hard for me to judge the process of preparations for the Olympics, because I had not seen the original projects, including budget documents.
— Not so with the forthcoming 2018 World Football Cup finals. Everything related to it is unfolding in front of your eyes. The chief of the Federal Antimonopoly Service (FAS), Igor Artemiev, has already declared that the stadium in St. Petersburg is more costly than all of the world’s Wembley stadiums…
This theme enjoys our unflagging attention. There’ve been two checks. The first began before I took over but ended when I was already in charge. The stadiums’ likely costs were the focus of attention. The subject has not been closed to this day. More inquiries are needed. Artemiev is right. And the second probe was into the performance of individual regions, because it is the regional authorities that are responsible for construction and for creating infrastructures in cities that will host the World Cup. Some have to be asked to hurry up. In fact, we’ve published our specific recommendations.
Such inspections will be annual, up to 2018, when the competition is due.
— What is it about your current job that you find the hardest to bear?
Honestly? Too few positive emotions. I would like to see more probes that produce findings which don’t have to be handed over to the law enforcers or reported to the president, the prime minister or the State Duma as evidence of gross violations. That’s part and parcel of the human nature: everybody wants to see good things, and not bad things. As for today’s realities, of course, I do understand and share the problems the government is faced with every day. Clearly, to work in such a situation is far harder than in a comfortable environment, where everything is good and there is enough money for both new projects and the old ones… These days choices have to be made. And identifying priorities is never easy. I’m well aware that criticism is the easiest job of all. It is important to propose constructive solutions, and although you won’t find such duties on the list of my functions each time some complex matters are discussed the Audit Chamber’s board meetings, we don’t just state who failed and where, but also voice recommendations in a very mild form what in our opinion might be done to change the situation for the better.
— Do you ever have the feeling yours is a Sisyphus piece of work?
I believe that we keep moving forward, although not as fast as we would like to. I have certain tactical and strategic tasks. I try to cope with them as an official appointed to do my job for a very certain period of time – in strict conformity with the law. That’s the tasks I set to the auditors and the entire Audit Chamber staff. I will say this again and again – it is most important to right a wrong, and not mechanically identify violations.
— If I understand you correctly, the worst ill that hinders the normal development of the economy and the country in general is corruption, right?
In principle, yes.
— After you left the Ministry of Finance you were Russia’s health minister for several years, so I’ll use medical terminology for comparison. Obviously, corruption is a grave ill. A nasal spray won’t help. A surgery is needed.
The scalpel is not a universal cure, either. We are talking not about a time-serving campaign, but about systemic work, aren’t we? Each of us has one’s own area of responsibility to be taken care of. Otherwise, what are we appointed to various important posts and leading positions for?
— Do you have anything to say about an alliance of the Russian Orthodox Church and the Audit Chamber in the cause of fighting against corruption? This arrangement looks rather extravagant to an outsider.
That’s the mass media interpretation of our agreement, which in reality points to the need for preserving morality in society, for participating in the restoration and development of the historical and cultural heritage, and for resisting extremism, alien spiritual expansion, and corruption, too, among other things. We agreed that Russian Orthodox Church clerics may join our control and analysis activities in the capacity of guest experts. This is about all. One should realize that interaction with the Russian Orthodox Church began much earlier than yesterday. The Audit Chamber and the ROC have had an agreement on interaction much longer than I’ve been in office. I won’t break any secret if I say that inside the Audit Chamber’s building here in Zubovskaya Square there is House Church of St. Sergius, of Radonezh. It had existed long ago. Then it was ruined and a while later restored and consecrated again.
— That’s fine, but under the Russian Constitution the Church is separated from the state.
Yes, it is. But the government does provide support for cultural heritage sites, run by the Russian Orthodox Church. The Church is given funds to restore monuments of architecture and culture. That means that the Audit Chamber is obliged to see how the money is spent. We’ll go ahead with such checks. The rules are the same for all.
— Aren’t you going to invite non-governmental organizations to join your efforts? The Fund for Struggle against Corruption, for instance?
I would start with the All-Russia People’s Front. Last year we established very tight interaction, in particular, in the sphere of activity that the APRF calls For Fair Procurement. The Front’s activists brief us on the findings of their raids. That does not necessarily mean that we will rush to look into all cases we are informed about, but we do take into account all facts that are reported to us. Practically all of the APRF complaints are confirmed. We also keep in touch with other non-governmental organizations and the expert community, although not on such a regular basis. There is no vacuum around the Audit Chamber. We are absolutely open and available to any organization that may address us.
— I recall you told TV host Vladimir Pozner in an interview that it is important for you to derive pleasure from the job you are doing. Are you successful in this respect?
I feel I belong with the group of civil servants who prefer to excel at work there where they are at the moment. This may sound highfalutin to some, but it is really so. That’s my attitude to what I am doing. True, I have my enormous experience of work at the Ministry of Finance. It is really enormous. Seventeen years of one’s lifetime aren’t easy to forget. Those were very hectic years for Russia. We’ve already discussed that today…
I suspect you must’ve had an impression I’m trying to stay aloof somewhat. Please, remember, that there was a pause. At a certain point I drifted away from finance-related matters. For nearly five years I led the Ministry of Health and Social Development. I spent a whole year as a member of the presidential staff. Then I thought that enough time had passed since then for some visible changes. I was appointed to lead the Audit Chamber. I plunged into what was going on in detail and to my great regret I saw that in some specific areas nothing had changed for the better in our system of management. Nothing! We are still discussing the very same problems and loopholes in our financial legislation we were debating on six years ago. Moreover, when budget projections are being drafted, I have the impression we were saying the very same things at the Finance Ministry at the beginning and in the middle of last decade!
— That sounds like a verdict. Stagnation in the economy is tantamount to lagging behind.
In a sense yes. I must acknowledge: this is really so… The system demonstrates its ineffectiveness in some areas. Possibly, there is some reluctance to resort to administrative measures, to take hardline approaches.
— What’s behind these words, what’s the gist of your message?
We are talking about the financial system, aren’t we? I can say that I would’ve long cut some budget spending items and made a decision that certain expenditures should not be made any more.
— For instance? The presidential decrees of May 2012?
No, not at all. I am talking about very specific things. I’ve said this so many times that some may already find it boring. At a time when we have receivables standing at 2.7 trillion rubles, in other words, the money taken out of the budget that has not yet repaid itself with implemented projects (construction sites mostly), I believe it would be appropriate to say that the system is running at idle. Say, a certain construction project has been financed in advance, but nothing significant is happening. Then any further financing should be canceled or at least suspended. But pushing out some of those who had secured budget entries for themselves and gained a foothold is a really daunting task. It’ll be an ordeal! Many see a suspension of financing as a lethal threat.
— The logic is simple: a holy place is never empty.
Yes, in common parlance this is really so. Somebody else, who is smarter and craftier, will have you pushed away and you’ll have nothing to do but to bow out… But just take a look at the figure I’ve just mentioned: two trillion seven hundred billion! We are discussing whether the spending should be kept at the 2015 level or increased a little bit. The debate is revolving around a figure of five hundred billion or so. But wouldn’t it be more logical to take care of the debts to the budget first? Clearly, the whole sum will fail to be recovered, but why not trying to get back at least part of it?!
Now, the problem has another side to it. The incomes. Officially the unpaid fines to just one federal body of state power currently stand at 1.1 trillion rubles. How is that?
— What’s that agency in question?
Rosfinnazdor, the financial watchdog. The fines I’m talking about were charged mostly for currency legislation abuse. The fines keep piling up. The heap is growing on and on by $300-400 billion a year. Are we to just watch and wait for this Everest of non-payments to soar higher and higher? Our legislation envisages nothing else. That’s how it is arranged. I cannot but wonder whether not a single person has ever had the wish to address the problem. Was everybody just waiting for the president to issue instructions on the basis of our inquiries? Now something may change at last.
— And what if it doesn’t?
It’s hard for me answer this question of yours. I’m at a loss for words… If we really wish to make the budget a tool to support the national economy, to draw investments again, to keep the launched projects going, and to ensure the infrastructure facilities continue to be built, let’s address these tasks in earnest. But apparently somebody is not very eager to work well enough: “May it remain as it is.”
Or it has to be admitted that under the current system no decision can be made at all.
— It is important to realize whether we are unable or unwilling to do so.
There are things we are unable to do, but the main thing is that amid the endless chain of problems we fail to embrace the unembraceable. This takes us back to the need to correctly identify and arrange priorities. If the snowball of unresolved problems keeps growing larger and larger, something has to be done about that, right? This is part and parcel of a civil servant’s functions. Once you’ve been appointed to do your job, go ahead and take some steps.
Many do so, but the desired result remains unachieved.
Are the things I am saying sound too harsh? I just speak what’s on my mind. It is to be hoped that now, within the framework of the new budget we’ll get past the dead point.
— Haven’t you ever told yourself: why on earth did I get involved with this economic science? Geography would’ve been a whole lot better. It’s so thrilling and romantic! And far less harmful to the nervous system.
A good profession, by the by. Who knows, I might’ve well displayed my potential, had I selected it. But in those days, when I applied for the Geography Department of the Moscow State University, I could’ve hardly achieved what I was dreaming about. I thought I might join a foreign expedition to study other countries and their populations. I was really interested in that. I was reading many special books. Ours was a good home library. I had a great teacher from the University’s Geography Department helping me to get ready for entrance examinations. The things I learned from her went far beyond the bounds of the secondary school’s geography curriculum. But then a friend of our family harshly intervened with my life. That lady worked for the Soviet Union’s Committee for Standards. She kept telling me that I picked the wrong time for a science career and that I would end up as a school teacher. At best! “This isn’t exactly what your dreams are about, is it?” she asked.
I was persuaded and made a sharp turn towards economics, a field of knowledge that was opening up the widest prospects in the new conditions. I withdrew my papers from the Moscow State University and applied for the Plekhanov economics institute. I found the entrance examinations surprisingly easy. I did everything myself, without any outside help, let alone important connections or cronyism.
I’ve never regretted I chose economics as my profession. Generally speaking I always try to feel no regrets.
Born November 8, 1959 in Luhansk, Ukraine. In 1982, Andrei Vandenko graduated from the Kiev National University of Taras Shevchenko specializing in journalism. Since 1989, he lives and works in Moscow. Vandenko has more than 20 years of experience in the interview genre. He was published in the major part of top Russian media outlets and is a winner of professional awards.