Wednesday, 19 September 2012

Politics of Business or Business of Politics? Russia's MPs scrap over corruption and illegal business activity

Russia's lower house of parliament, the State Duma.

Before opposition Duma deputy Gennady Gudkov was dismissed from the Duma, which has raised fears of more deputies being turfed out, his son Dmitry Gudkov and Ilya Ponomaryov from the A Just Russia party have started publishing information on the assets and income of members of the ruling United Russia party.

It's a strike back at United Russia who they say have been trying to sling mud at opposition figures.

In June 2012 details of the business activities of Gennday Gudkov (Dmitry's father and also a Deputy of Just Russia) were investigated. The documents, say Russia's Investigative Committee, show that in 2008 Gudkov bought a stake in the company OOO "Kolomenskyi stroitel" by a deed of gift (65.72%). They are also claimed to show he ran the company whilst a deputy, as well as another firm, "Roshan", being part of the management.

It is illegal for Russian MPs to start or run businesses due to the potential for conflicts of interest and corruption.

Gudkov junior and Ponomarev say that the investigation against Gudkov senior was fabricated and is really punishment for his support of opposition protests after the parliamentary elections of December 2011 which brought allegations of mass vote rigging. United Russia members are hypocrites, they say, guilty of the crimes they accuse Gudkov Senior of. Specifically their misdeeds include buying shares, starting new enterprises, and managing vast portfolios of assets. 

They are publishing the details from discrepancies between two parliamentary declarations. The first are annual declarations of assets. The second are declarations made before parliamentary elections, the last was that controversial election in December 2011. It turns out, say the two politicians, there are many assets owned that are not listed in one or other of the declarations.

It seems many of these business dealings were done after their electoral declarations, to avoid having to declare them. Gudkov and Ponomaryov say there are an enormous 55 such cases in United Russia. They maintain that four deputies still run businesses. They say it is suspicious that deputies own assets far exceeding what could have been afforded on their salary. They have also highlighted luxury vehicles including Bentleys, Porsches and Lexuses and real estate in Russia and abroad in countries such as Germany. They have named some, ‘brave fellows’ at the centre of this scandal-

Gregory Anikeev: he owns three companies (JSC "Delta", CJSC "Westa" and JSC "Norta"), not mentioned on his election declaration, so which must have been set up after that.

Deputy Ilya Kostunov, according to the register, is the CEO and owner of 40% of the Company "Consulting Management Strategy", in which 30% belong to the former head of Rosmolodezh Vasily Yakimenko.

Deputy Yelena Nikolayeva is listed as the general manager of Company "Zolotoi krendel." [gold pretzel]

And the chairman of the Committee on Labour and Social Policy Andrei Isayev, according to the declaration, while working at the State Duma of the previous convocation became a member of Company "IGP groups." In addition, says Dmitry Gudkov, the deputy made major acquisitions: land in Germany and the Moscow region, two apartments in Moscow with a total of more than 300 square meters. Еven the approximate value of the property significantly exceeds the declared total family income.

The opposition wants each case found to be investigated.

That’s left those accused scrambling for explanations. Ilya Kostunov, who himself is a member of the committee on Security and Corruption, says it was a mistake in the databases. So do other deputies. Many point out that they did own or managed companies but that those companies no longer operate or that they are no longer in charge.

MPs in Russia are formally allowed to acquire shares and assets, but they must be in a trust.

Kirill Kabanov from Russia's National Anti-Corruption Committee says that business activity is rife throughout Russia's political class.

Ivan Ninenko from Transparency International commented, in Russia it is very hard to legally define what qualifies as a business. However he added, why would you establish a presence in a business in the first place, except to do business.

Vladimir Yuzhakov from the Institute of modernisation of Public Administration says, involvement in a business does violate essentially both the letter and the spirit of the law.

Further investigation will be necessary into each individual case, but the hope is that in the meantime this mudslinging within parliament will lead to real improvements in the clarity and transparency of regulation in this area.

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