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Seething Cauldron of Corruption

On Thursday, the world marked International Anti-Corruption Day. President Dmitry Medvedev, who has declared that combatting corruption is one of his most important political and economic programs, should declare it a holiday for all government officials. This way, there will be at least one day a year in which no stealing or bribe taking occurs.

The decision by the world football authorities to award the 2018 World Cup to Russia got a mixed reaction from Russians. True, many people also objected when South Africa splurged on last year’s World Cup, declaring that the billions of dollars it spent on building stadiums, tourist facilities and infrastructure would have been better used to fight poverty. In Russia, nobody talks about poverty relief. Instead, most people fear that preparations for the World Cup will turn into another orgy of pilfering. The construction budget for the 2014 Winter Olympics in Sochi has been blown out of the water with massive cost overruns, which have been blamed entirely on pilfering by politically connected bureaucrats and businessmen.

All government-run construction projects in Russia feature rigged contracts and outright theft by those who control their budgets. Anti-corruption activist Alexei Navalny recently wrote how officials at the state-owned pipeline monopoly Transneft appropriated some $4 billion during the construction of an oil pipeline to China. In return, authorities opened a criminal investigation against Navalny for fraud that he allegedly committed a year ago as an adviser to Kirov Governor Nikita Belikh. Strangely enough, the case was opened at the same time that Russian officials, including Prime Minister Vladimir Putin, criticized the jailing of WikiLeaks founder Julian Assange.

Secret diplomatic cables show that U.S. diplomats regard Russia as a mafia state presided over by the Kremlin. It is a dim view, but it is only partly true. The Kremlin seems to control only the top layer of the pyramid, ensuring access to petrodollars for the bureaucratic, security and business elites. Beyond this relatively thin layer, there is utter chaos in which gangs and factions wage clandestine wars over assets and money. Thuggery is used rarely precisely because government officials are directly involved and they are able to use the state security apparatus to settle scores. Nevertheless, gangland murder does take place as well, the latest example being the November slaying of 12 people in Kushchyovskaya in the Krasnodar region. Officials have said there are gangs like this that control towns all across Russia, seamlessly integrated into the power structure.

Corruption appears to be a factor in the ugly riot of nationalists in Moscow on Saturday. Football fans protested the murder of one of their own, reportedly committed by a North Caucasus native. The suspect’s friends who had taken part in the fatal fight were inexplicably released from police custody — not because they were from the Caucasus, but because they either had powerful protectors in government or criminal structures or simply because the cops got a handsome bribe.

Medvedev has compared the current political situation to the stagnation during the last dying years of the Soviet Union. But back then, the Soviet people had been browbeaten and impoverished. Today, Russia is a seething cauldron of lawlessness, greed, impunity and pent-up hatred. Unlike the collapse of the Soviet Union, a change now could bring that ugly mixture to the surface. Looking at the pictures from Saturday’s riots in Moscow, it almost seems better for the stagnant and corrupt rule by Prime Minister Vladimir Putin to go on.

Alexei Bayer, a native Muscovite, is a New York-based economist.

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