The Kremlin has redoubled efforts to fight graft and corruption as President-elect Vladimir Putin prepares to return to the Kremlin for at least six more years. Last week, local media reported a dramatic escalation of a crackdown on organized crime groups and white-collar criminals amid high-profile arrests and police raids on local banks. The intensified police operation comes after tens of thousands of middle-class Russians took to the streets in recent months to demand government action against rampant corruption and greater democracy.
Armed police swooped down on Moscow banks last week as investigators pursued a number of possible suspects who unlawfully siphoned $3.4 billion abroad. "The Interior Ministry's personnel have intercepted and terminated the illegal activity of an organized group whose members are suspected of illegal financial transactions," Denis Sugrobov, the head of the Interior Ministry's economic security department, told Interfax on Friday. Sugrobov said his department had conducted about 30 searches at both residences and places of work of suspects in the case. Investigators have also raided the premises of some commercial banks, he said, including Sudostroitelny Bank, Strategia Bank, Master Bank and Zolostbank. The deputy chairman of Zolostbank's Board of Directors, Alexander Kryukov, was arrested on Friday.
The latest anticorruption campaign appears to be picking up steam following the Kremlin's endorsement. President Dmitry Medvedev dissolved the Interior Ministry's Economic Security Department last summer after widespread allegations that it obstructed corruption investigations. It was replaced by the main directorate for economic security and action against corruption, which has carried out some notable anti-corruption busts. Sugrobov, the department's new chief, fired 40 percent of the staff after it failed background checks. He also tightened discipline, saying he takes responsibility for the actions of every member of his department.
Earlier, Sugrobov's deputy, Andrei Zdor, said that the management teams at some Russian banks are suspected of unlawfully sending over $3.4 billion abroad, warning that the ministry plans to arrest the leaders of several Russian banks, Prime news agency reported. "They may soon be detained," Zdor said, adding that he was referring to an organized criminal group. The department said on Friday that it has arrested a suspect, Artyom Sisaakyan, who is accused of illegally withdrawing $2.38 billion in cash from an unnamed bank. Sisaakyan is also being investigated as a member of an organized crime group that has regularly defrauded the state, police sources told the Prime news agency.
In its latest anticorruption drive, the freshly-emboldened police department went after several financial institutions, including FundServiceBank, which maintained the accounts of those suspected of conducting the unlawful remittance transactions. FundServiceBank, formerly an obscure bank, has become one of the most mentioned credit organizations in Russia since it hired Anna Chapman, a former Russian spy busted by the FBI, as an advisor to the bank's president. FundServiceBank is now under investigation for breaking the law while providing financial services to some state-funded entities, RBC Daily reported. A preliminary analysis of the documents withdrawn during an investigation of FundServiceBank showed that each of the 50 firms suspected of illegal transactions had a minimum turnover of one billion rubles ($34.02 million).
Earlier this month, the Deputy Chairman of state development bank VEB, Anatoly Ballo, was arrested and charged with fraud, Interfax reported citing the Moscow department of the Interior Ministry. "Ballo and his accomplices embezzled $14 million (349 million rubles) on September 24, 2008. That was part of the loan VneshEconomBank granted to the Evraziyskiy Company, a water supply operator, for acquiring a 100-percent stake in the authorized capital of Yugvodokanal," the ministry said. His arrest came after Putin, who is the chairman of the bank's supervisory board, ordered state-controlled companies to fight corruption. The prime minister also criticized the asset-stripping schemes discovered at some state-owned corporations and ordered them to review their operations.
Putin's first term in office was remarkable for his crackdown on corruption and illegal business practices, analysts say. He embarked on a crusade against those he called "robber barons," resulting in the high-profile and controversial arrest of Mikhail Khodorkovsky, whose Yukos oil firm was bankrupted by back-tax claims and then bought by state oil firm Rosneft. While such attacks may have broken the power of the oligarchs, however, they have also drawn criticism for leading to the consolidation of power in Putin's hands. Oligarch-turned-politician Mikhail Prokhorov, who ran on a liberal platform against Putin for president, thinks the Yukos case and jailing of Khodorkovsky set "a very bad precedent." "A lot of small businessmen suffered from the same methods all over the country," Reuters quoted Prokhorov as saying. "It was a key signal for the lower-ranking policemen, or judges, or ex-KGB guys to do the same."
Yelena Panfilova, director of Transparency International in Russia, said the current wave of arrests and detentions may or may not be connected to a sustained fight against corruption. "What's certain is that state-owned companies must be cleaned up, however painful that process would be," Panfilova said. "It's still too early to say whether the government's actions are purposely targeted at removing the symptoms rather than curing the disease altogether."
Keywords: Russia, Corruption - Russian News - Russia
The Kremlin has redoubled efforts to fight graft and corruption as President-elect Vladimir Putin prepares to return to the Kremlin for at least six more years. Last week, local media reported a dramatic escalation of a crackdown on organized crime groups and white-collar criminals amid high-profile arrests and police raids on local banks. The intensified police operation comes after tens of thousands of middle-class Russians took to the streets in recent months to demand government action against rampant corruption and greater democracy.
Armed police swooped down on Moscow banks last week as investigators pursued a number of possible suspects who unlawfully siphoned $3.4 billion abroad. "The Interior Ministry's personnel have intercepted and terminated the illegal activity of an organized group whose members are suspected of illegal financial transactions," Denis Sugrobov, the head of the Interior Ministry's economic security department, told Interfax on Friday. Sugrobov said his department had conducted about 30 searches at both residences and places of work of suspects in the case. Investigators have also raided the premises of some commercial banks, he said, including Sudostroitelny Bank, Strategia Bank, Master Bank and Zolostbank. The deputy chairman of Zolostbank's Board of Directors, Alexander Kryukov, was arrested on Friday.
The latest anticorruption campaign appears to be picking up steam following the Kremlin's endorsement. President Dmitry Medvedev dissolved the Interior Ministry's Economic Security Department last summer after widespread allegations that it obstructed corruption investigations. It was replaced by the main directorate for economic security and action against corruption, which has carried out some notable anti-corruption busts. Sugrobov, the department's new chief, fired 40 percent of the staff after it failed background checks. He also tightened discipline, saying he takes responsibility for the actions of every member of his department.
Earlier, Sugrobov's deputy, Andrei Zdor, said that the management teams at some Russian banks are suspected of unlawfully sending over $3.4 billion abroad, warning that the ministry plans to arrest the leaders of several Russian banks, Prime news agency reported. "They may soon be detained," Zdor said, adding that he was referring to an organized criminal group. The department said on Friday that it has arrested a suspect, Artyom Sisaakyan, who is accused of illegally withdrawing $2.38 billion in cash from an unnamed bank. Sisaakyan is also being investigated as a member of an organized crime group that has regularly defrauded the state, police sources told the Prime news agency.
In its latest anticorruption drive, the freshly-emboldened police department went after several financial institutions, including FundServiceBank, which maintained the accounts of those suspected of conducting the unlawful remittance transactions. FundServiceBank, formerly an obscure bank, has become one of the most mentioned credit organizations in Russia since it hired Anna Chapman, a former Russian spy busted by the FBI, as an advisor to the bank's president. FundServiceBank is now under investigation for breaking the law while providing financial services to some state-funded entities, RBC Daily reported. A preliminary analysis of the documents withdrawn during an investigation of FundServiceBank showed that each of the 50 firms suspected of illegal transactions had a minimum turnover of one billion rubles ($34.02 million).
Earlier this month, the Deputy Chairman of state development bank VEB, Anatoly Ballo, was arrested and charged with fraud, Interfax reported citing the Moscow department of the Interior Ministry. "Ballo and his accomplices embezzled $14 million (349 million rubles) on September 24, 2008. That was part of the loan VneshEconomBank granted to the Evraziyskiy Company, a water supply operator, for acquiring a 100-percent stake in the authorized capital of Yugvodokanal," the ministry said. His arrest came after Putin, who is the chairman of the bank's supervisory board, ordered state-controlled companies to fight corruption. The prime minister also criticized the asset-stripping schemes discovered at some state-owned corporations and ordered them to review their operations.
Putin's first term in office was remarkable for his crackdown on corruption and illegal business practices, analysts say. He embarked on a crusade against those he called "robber barons," resulting in the high-profile and controversial arrest of Mikhail Khodorkovsky, whose Yukos oil firm was bankrupted by back-tax claims and then bought by state oil firm Rosneft. While such attacks may have broken the power of the oligarchs, however, they have also drawn criticism for leading to the consolidation of power in Putin's hands. Oligarch-turned-politician Mikhail Prokhorov, who ran on a liberal platform against Putin for president, thinks the Yukos case and jailing of Khodorkovsky set "a very bad precedent." "A lot of small businessmen suffered from the same methods all over the country," Reuters quoted Prokhorov as saying. "It was a key signal for the lower-ranking policemen, or judges, or ex-KGB guys to do the same."
Yelena Panfilova, director of Transparency International in Russia, said the current wave of arrests and detentions may or may not be connected to a sustained fight against corruption. "What's certain is that state-owned companies must be cleaned up, however painful that process would be," Panfilova said. "It's still too early to say whether the government's actions are purposely targeted at removing the symptoms rather than curing the disease altogether."