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No Foreign Money for Russian NGOs
December 7, 2005
By Yuri Mamchur <yuri@discovery.org>

Next week new legislation will likely be approved to prohibit any Russian NGOs (non-government organizations) from receiving money from abroad. The law was approved by Parliaments majority in the first reading last month.

Many foreign media outlets see this bill as another example of the Putin regime's oppression. Personally, I dont support the bill, but I would like to offer a different opinion from an educated Russian on the non-profits funded from abroad, and Putins regime in general.

There are 450,000 NGOs in Russia, and these organizations represent all the aspects of Russian life religious organizations, charities, think tanks, etc. The idea of prohibiting non-profits receiving funding from abroad seems almost insane to Westerners, but not many foreigners know the following facts about Russian churches and charities...

The Russian Orthodox Church, which is supposed to be separate from the government (but never has been) has traded oil, liquor and tobacco. Almost every single so-called charity ends up running big-time electoral campaigns; this would not be legal in the U.S. I dont think if George W. Bush's reelection had been sponsored by Saudi Arabian foundations, or Kerrys campaign had been sponsored by France, we would have been ok with it in America.

Many non-profits in Russia, without even knowing it, have hired intelligence officials of foreign countries (the author personally knows few examples). After some increased activity of this kind in recent months, Putin came up with the bill. Though this is not nearly enough.

Another question regarding non-profits: why does the Open Russia Fund, sponsored by jailed oligarch Khodorkovsky, get their money comes from overseas bank accounts? If he is a Russian businessman, shouldnt the money be coming from some Siberian bank? Can you imagine if the Heritage Foundation were getting checks or wire transfers from the Maldives or Cyprus? I dont think the fundraising/development staff would even consider that. I understand that in the Russian banking system transparency is almost non-existent, since there are thousands of banks, each serving the separate semi-legal purposes of its personal owner. But wasnt it the job of the richest Russians to create in the 1990s a trust-worthy banking system? They have failed even after 15 years to do it.

And if Khodarkovsky had billions of dollars (anywhere between 8 and 20, depending on where you read about it), why was his charity directed only at bashing Putin, who was in the way of doing his business, and not at multiple social projects (there were just a few of them that foundation was managing). If someone young in his late 30s made a fortune from oil by getting lucky and smart during the privatization period, wouldnt it be more ethical to consider larger giving to charity than a lousy 50 million dollars a year? The Gates Foundation in contrast gives out a billion dollars to charitable causes all over the world each year.

The existing social projects in this extremely poor and discouraged country are there only because of their PR value (see Abramovich's buying the Governor's seat in the poor Siberian state of Chuhotka). Its easier to fight government prosecution and get support from Western media, when you have couple foster homes around.

After all, Russian oligarchs arent Sam Walton or Bill Gates, they didnt invent anything, they didnt even build anything; they appropriated (legally stole) Soviet resources during the mess of the 1990s, and have been raking in the profits from Stalins factories since then, without returning capital investments back into their own country. The perfect example is Mr. Abramovich, who simply bought a few castles in Britain, three Boeing planes, a few yachts, and invested over a billion dollars into a British soccer club. Would that be well received in America, if ChevronTexaco takes its money to Germany and invests every single penny there, without investing anything into America, or even giving it a chance to see the glorious profits, profits that are possible only because of American natural resources and workers?

The subject of Russian non-profits is very opaque to foreign observers. My father is a president of the oldest charitable foundation in the country, and in his opinion there are only about 1,000 non-profits which are doing what they are supposed to be doing. And usually for their causes Russian businessmen can always find money to support certain projects. The question is: what are the other 449,000 NGOs doing? Money laundering?

Russia is a country, where its very easy to forge any document or fact. Within 12 hours, the author of this article could show you multi-million accounts and big projects which look very real. And even if an American donor showed up to check on whats going on with the money he gave to the author in real life in Russia, I wouldve filled the biggest city hall with few thousand students and banners of my NGO. After all, it takes only a gift card to a nice bar or coffee shop to get a student to participate in an event, and few more hundred bucks and some kind of connections to forge bank statements and federal government documents.

So where does your money go, foreign donors? Are you sure you know how your money is being invested? Theres a common Russian joke when two NGO executives meet, and one of them is driving a brand new Mercedes. How did you get a new $100,000 car? asks the first guy. I just received donation for my homeless children shelter from the silly Americans!

The issues of the Russian non-profit sector are very complex and politicized, just like everything else in Russia, and Putin is doing what he has to he doesnt have time to re-write the countrys legislation while theres the Chechen war going on, and 80 % of the countrys population is barely making a living. This bill seems to be a temporary solution, but it's not seen by most Russians as a pressing issue anyway. The 1,000 genuine charitable foundations and think tanks will suffer, but the other 449,000 crooks will be out of business. If the bill is 99.8% successful, doesnt that mean that it isnt so bad?

In the meantime, I think those who are concerned with the Russian civil society and democracy would do much better sponsoring Russian democracy projects that already exist abroad, even here in America. The legal system is stable, and I am personally 100% accountable for how I spend the money given to Discovery Institute to promote the democracy in Russia. Im not going to buy a Mercedes, because I dont even see the money.

Many foundations argue that its way more important to support civil society on the ground, in Russia. I disagree. Yesterday I talked to 50 years old Ukrainian Christian refugees, who live in Seattle, and they stated that the only hope for Russia these days is another "good" Stalin! I dont think any money invested in education of older people could dramatically change their point of view, or direction of development the country takes. It is very important to target the youth, and thats where foreign investors are failing.

You can send billions of dollars to Russia, and even if spent properly, it will not have that much impact. Ive come on exchange programs to America for many years, before I decided to live in the U.S. and work with Russia. But before that I had participated in every possible civil society project back in Moscow. I can testify that its impossible to explain why America works the way it does; and someone born in Russia will never understand it, no matter how much he reads or listens. However, it took only 4 months of my first trip to fall in love with America and embrace true democratic values and free market ideals.

Maybe world leaders should be less concerned with Putins bill, and do more to open up their borders for the brightest Russian youth. Young Russians won't join jihad groups to blow up your planes and buildings, neither will they stay here illegally to wash dishes. But they will take ideas about democracy back home, and spread it among their peers. And with much smaller investments, foreign donors could see incredible results, which they would have never achieved investing and educating on the ground; the only losers in this game are the foreign intelligence services.

I dont think Putins bill eliminates the ability to promote democracy and free market in Russia, it only reminds foreigners of other, better ways to do it.