Category Archives: Crime and Corruption

For Most Corrupt . . .

The winner is . . . the Ministry of Defense.  Novaya gazeta assembled respected independent experts to judge which of the Russian government’s 35 ministries and departments is most corrupt.

The Defense Ministry edged out the Transportation and Economic Development Ministries.  The experts said the five most corrupt (Health and Social Development is fourth and Finance fifth) have the opportunity to “saw off” 100 million to 1 trillion rubles per year (including budget money, and money that doesn’t reach the budget).

A little context.  Recall Defense Minister Anatoliy Serdyukov arrived four plus years ago promising to bring the Armed Forces’ notorious “financial flows” under strict control.  But corruption scandals have only continued to flare around the Arbat Military District.  Just a casual recent look:  the Main Military Prosecutor says 20 percent of GOZ money is being stolen, Lipetsk highlights widespread premium pay extortion, the Chief of the Main Military-Medical Directorate is arrested for corruption.  The list could go on.

Look at the Novaya story in the vernacular for links to its original sources.  Its experts focused on the closed nature of the defense budget, the impossibility of accounting for money allegedly spent on military R&D, the inability to confirm that work was actually performed, inflated prices, and a high rate of kickbacks.

But they also focused on the simple fact that no one is officially in charge of significant amounts of defense money in the federal budget.  Just by looking at budget lines, it’s clear to them that 600 billion rubles in defense spending (and perhaps much more) are simply unaccounted for.

They also focused on Defense Ministry FGUPs that haul in enormous profits but remit little into the budget.  And lastly they noted that fake health deferments from Voyenkomaty amount to an illicit 150-billion-ruble business every year. 

This is how they summarize the corruption situation in the Defense Ministry (below распил or saw cut, a share or cut of illegally obtained money, is translated as sawed off): 

“1.  Anatoliy Serdyukov’s Defense Ministry is the richest and also the most closed of Russian ministries and departments.  This is precisely why the experts considered it the ‘goldmine of the corrupt,’ that is absolute leader in the volume of money which it’s possible to write off  without supervision as ‘expenses,’ the reality of which society doesn’t have the slightest chance of verifying.  The first corruption scandal in the new (Yeltsin-Putin) Russia is directly connected with the Defense Ministry – the plunder of Western Group of Forces property which broke out in 1992-93.”

“In the opinion of experts polled, ‘today’s army purchases and especially ‘development,’ ‘research and development work’ for the army is that sphere where it’s possible to put up to 90% or more of state financing in your own pocket peacefully and where there’s no kind of limit at all.  Not even comparable is civilian construction done at state budget expense, where it would seem there should be the greatest percentage of corruption, but there is a limit there:  in construction it’s necessary to present a final result – a finished facility, therefore here it’s possible to put a maximum of 70% of state resources in your pocket without punishment.  In army ‘development’ there’s no accounting, everything’s classified, and this means it’s impossible to check, therefore in the Defense Ministry they ‘lose’ fantastic sums.  This comes to light only rarely, when military journalists make note of ‘new developments’ at Defense Ministry exhibitions which they already saw several years before.  Meanwhile, the Defense Ministry objects to this:  no, this isn’t old, it’s new, but meticulous military journalists show photos from previous years in which even the serial numbers are the very same as in the new exhibition.”

“Such expert evaluations are largely supported by the not numerous checks of the Main Military Prosecutor when they conduct them.  So, not long ago, the results of checks into the Defense Ministry’s 13th GNII and the Main Military-Medical Directorate, where ‘large-scale thefts of financial resources’ were revealed, were substantiated.  ‘Just in several instances of criminal activity by officials of the 13th GNII and ZAO ‘Kulon’ the theft of more than 40 million rubles was revealed – this is the amount of work which was never fulfilled.  A criminal case in relation to a group of Defense Ministry Main Military-Medical Directorate and State Order Directorate personnel was launched:  they concluded a state contract with a commercial firm to supply medical equipment for more than 26 million rubles, the cost of the equipment purchased from the businessmen was inflated more than 3 times, and the state took a loss of more than 17 million,’ acknowledged the Chief of the Second Directorate of the Main Military Procuracy General-Major of Justice Aleksandr Nikitin.”

“In Kirill Kabanov’s estimation, ‘the figure of 1 trillion rubles which the budget loses in purchases could be understated.  Kickbacks in our state procurement system are 30-40%, in open areas kickbacks are 20%, but in closed, monopolistic ones they go up to 60% — in the Defense Ministry, for example.’

“‘The Defense Ministry, of course, is the kingdom of the fearlessly corrupt.  The ability to classify everything in the world powerfully helps in ‘sawing off’ activity,’ – states Aleksey Navalnyy.”

“The potential corruption of ‘defense expenditures’ lies not just on the fact that society can’t concretely check the designation of every billion of military spending, but it doesn’t even have chances to find out precisely which ministry or department exactly bears responsibility for a good half of ‘defense’ expenditures.  For example, in 2010, the expenditures of the RF federal budget were 10.116 trillion rubles – both the Finance Ministry official site and the Rostat official site attest to this.  But of these only 9.052 was officially distributed among ministries and departments, and more than 1.06 trillion rubles was used by someone unknown, meanwhile more than half of them (0.6 trillion) went to ‘defense expenditures!’  An even more outrageous situation was planned in the RF budget laws for the following years:  in 2011, expenditures are 10.65 trillion, only 9.35 of which are signed off to a departmental structure, in 2012 — 11.3 trillion and 9.4 trillion, in 2013 — 12.2 trillion and 9.5 trillion accordingly, that is with every year the share of ‘no one’s’ expenditures will grow even larger . . .”

“In 2010, budget expenditures ‘on defense’ were 1.28 trillion (!) rubles.  Meanwhile, the Defense Ministry spent 0.98 trillion, of which 0.64 trillion were ‘on defense,’ but the remaining 0.34 trillion — on communal services, education, health, film, TV and pensions.  Spending of the remaining departments ‘on defense’ was in the amount of 0.041 trillion (Minpromtorg –32.4 billion, Rosatom –3.7 billion, Roskosmos — 0.9 billion, Rosaviatsiya — 0.6 billion, etc.; the Defense Ministry’s departments:  Spetsstroy — 1.8 billion, Rosoboronpostavka — 0.5 billion, Rosoboronzakaz — 0.3 billion, FSVTS — 0.3 billion, FSTEK — 0.0 [sic] billion rubles), the total expenditures of all departments ‘on defense’ — 0.68 trillion rubles.  But it’s unknown who — unknown even which ministry or department spent all of 0.6 trillion rubles ‘on defense!!’  It’s understandable that they were spent on the Defense Ministry’s business, but why hide this (no ‘military secret’ really suffers, if the Defense Ministry acknowledges that it spent not 1 trillion, but an entire 1.6 trillion in a year), isn’t it because it’s so much easier to steal ‘no one’s’ 600 billion in defense money?”

“It’s not known which departments spend not just 0.6 trillion in expenditures ‘on defense,’ but also 0.46 trillion of other spending — a number of experts believe they are almost all under the Defense Ministry’s control, the real budget of which is twice as much as the official one and amounts to 2 trillion a year.  So half of this (or even more), in experts’ opinions, gets ‘sawed off.'”

“However, the ‘fat’ life of the Defense Ministry leadership doesn’t end with this.  It turns out to be unknown how and why 15 thousand pieces of property belong to the Defense Ministry.  Where and to whom the proceeds from the use of them go – God only knows.  But on the other hand it is known that they are still also gathering up money for housing construction on these Defense Ministry lands from simple people who then turn into deceived investors.”

“Moreover, the Defense Ministry directs 352 FGUPs (Federal State Unitary Enterprises), from which even in the crisis year 2008, the Defense Ministry received 39.3 billion rubles in proceeds, but there are problems with remitting the profits into the federal budget:  it remitted only 0.092 billion of them.  Another 126 FGUPs are directed by Defense Ministry subordinate Spetsstroy and there’s the same situation with it:  proceeds in 2008 were 62.4 billion, and only 0.017 billion in profits remitted to the federal budget.  Defense Ministry subordinates FSTEK and Rosoboronzakaz direct 4 and 3 FGUPs respectively, their proceeds are 0.8 and 0.2 billion respectively, profits remitted to the budget are 0.001 and 0.0002 billion respectively.”

“The Defense Ministry and its subordinate Rosoboronpostavka glorified themselves with outrageous expenditures of dozens of budget millions to buy furniture for their leadership – certainly made of gold, beautiful wood and natural buffalo hide.  The main defender of the Motherland wouldn’t sit or work on any other furniture . . .  Just three such orders for the leadership cost the budget 60 million rubles, and at the same time 7 million was spent for furniture for average Defense Ministry and Rosoboronpostavka personnel. The Defense Ministry made it known that it also wrote off 45 million on ‘media monitoring’ in 2010(!).”

“The Defense Ministry’s subordinate Spetsstroy has been highlighted in corruption scandals:  in 2010, just one of its FGUPs tried to ‘con’ four banks out of more than 500 million rubles, by not returning credits taken from them and attempting to organize the ‘bankruptcy’ of Spetsstroy FGUPs . . .”

“Besides, in the experts’ opinion, ‘the main preoccupation of voyenkomaty in the last two decades has become the collection of bribes from conscripts,’ since ‘from 80% to 90% of deferments for health are given by voyenkomaty for bribes – exactly for this reason the Defense Ministry is demanding the lifting of student deferments, lifting deferments for the fathers of newborns, but never demands lifting deferments for health.’  Every year nearly 600 thousand deferments ‘for health’ are issued, almost all are for bribes which run in various RF regions from 200 to 400 thousand rubles, so, the overall trade in voyenkomat bribes is nearly 150 billion rubles a year, the experts believe.”

Lipetsk Scandal Update

Let’s update the action.

It’s rare when a single incident like Lipetsk is deemed serious enough to warrant a quick public response.  But that’s what’s happening.

Defense Minister Anatoliy Serdyukov has ordered checks for corruption in large formations, formations, and units [i.e. army-level down].  His press-service says they’ll look specifically for premium pay kickback schemes.  And servicemen and their families are urged to fill out electronic complaint forms on Mil.ru if they know about extortion rackets.  They don’t need to observe the chain of command either.

Newsru.com has a good recap.  VVS Deputy CINC, General-Major Bondarev has confirmed the existence of a kickback scheme at Lipetsk.  But he also called Sulim and others cowards for not refusing to pay.  He also denied putting any pressure on the men.

As Newsru notes, MK has audio of Bondarev indicating otherwise.  Talking to Sulim, Bondarev claims he’s just angry he wasn’t promoted, his father illegally got him into the elite Lipetsk unit, and warns him that his fellow servicemen will kill him when they lose their premium pay.  The tape also showed that Sulim only wants to resign because of the corruption, not for personal reasons, as Bondarev claims. 

In fact, Sulim hopes to continue serving.

Gazeta.ru focused on Bondarev’s comment that it’s possible violations at Lipetsk are administrative rather than criminal [which would make Kovalskiy no more guilty than Smirnov or Sulim].  Bondarev claims Major Kubarev retracted his support for Sulim [Kubarev’s also being reported as Kubyrev].

Gazeta then talked to Sulim, who points out Bondarev only investigated in the 3rd squadron, not in the 1st or 4th squadrons, because the leadership is trying to limit the damage, and to make it look like it’s one squadron’s problem, and not a base-wide scheme.

You can see Bondarev’s own words in his 24 May interview with Ekho moskvy.

The RVSN actually moved out on this scandal before the Defense Ministry:

“Taking into account the recent events in one of the RF Defense Ministry’s units,  connected with the illegal collection of money from servicemen, and to preclude the occurrence of similar situations in RVSN units, RVSN Commander, General-Lieutenant Sergey Karakayev has decided to establish permanently functioning commissions in every missile army to prevent similar legal violations.”

The press release said commissions will conduct anonymous surveys of officers and their families, and also look for this during inspections.  But there might already be a lot of work to do.

Look at the impassioned comment a retired RVSN lieutenant colonel left on the webpage for Olga Bozhyeva’s interview with Sulim and Smirnov:

“Such kickbacks go on THROUGHOUT Russia’s VS [Armed Forces]!!  It would be possible to jail ALL commanders of ALL units in Russia in good conscience!!”

“I live in the military town of an RVSN division.  Many of my acquaintances are still serving.  Previously they included ONLY SELECTED ‘RELIABLE’ officers in the order for the annual receipt of this mad money (extra MONTHLY pay up to 160-200 thousand rubles!!!) — but not more than 30% of the unit’s officers.  EVERYONE knows that they collect ‘tribute’ from this money paid according to MO RF Order № 400:  and who gets it, and who doesn’t, and their wives, and the osobisty (FSB), and the prosecutors, and even conscript soldiers [know who gets it]!!  And such corruption arranges EVERYTHING — it’s clear that both prosecutors and osobisty get it!  And it also arranges the officers who give the most ‘tribute’ — refuse to pay, they find a reason and deprive you of this mad, undeserved money!!!”

“Of course there’s hostility among officers, and their wives because of the payment of this money!  You bet!  Of two similar officers fulfilling similar duties, one gets SEVERAL TIMES more!!  Not 2, 3, 5, 10, or 20 thousand rubles a months more, but several times more!!!  Meanwhile, it’s usually not the best, but the ‘reliable’ one who will ‘kickback’ money without a fuss!!”

“THIS UNDERMINES ALL FOUNDATIONS of the Russian Army and its COMBAT READINESS!!  ONLY AN ENEMY OF RUSSIA could think up such a thing!!”

Loss of Fear or Loss of Faith?

Senior Lieutenant Sulim

Olga Bozhyeva has a great interview with the protagonists of the Lipetsk premium pay extortion scandal.  Essentially, Major Smirnov and Senior Lieutenant Sulim detail a farcical investigation, and what looks like a wider-ranging criminal conspiracy.  The entire Air Forces, not just the Lipetsk center, are in serious damage-control mode.

Bozhyeva introduces the piece as showing that even elite units suffer from corruption, and points out the center’s chief, General-Major Aleksandr Kharchevskiy, gave Vladimir Putin a test flight, and led combat aircraft that overflew Red Square on Victory Day 2010.  The two young aviators told her they had to talk immediately because time is against them.

Smirnov described his experience with the extortion scheme.  He said those refusing to pay got reprimands that could be used to force them out, and, with many officers being cut already, this threat was especially serious.  Or, he says, higher-ups would simply take away their “400” pay, and give it to someone willing to pay tribute.  Smirnov says the extortionists also collected as much as 240,000 rubles a year from conscripts.  He also recalled seeing Sulim’s draft complaint about corruption, and agreeing to support the younger officer.  Their ex-squadron commander, Major Yevgeniy Kubarev, joined them.

The VVS sent Deputy CINC, General-Major Viktor Bondarev to investigate, but, as Smirnov says, everyone who wanted to see him had to talk to the center’s Chief of Staff, Colonel Eduard Kovalskiy (the scheme’s ostensible organizer), Kharchevskiy, the new squadron commander (a Kovalskiy crony), zampolit (and bag man) Colonel Sergey Sidorenko, and FSB man Major Zatsepin first.  Afterwards, Kovalskiy already knew all details of what they told the VVS investigator.  Kovalskiy apparently talked to the father of one officer in an attempt to pressure him against supporting Sulim and Smirnov.  The squadron CO reportedly told one officer, if he talked openly, he’d be the first dismissed.

Sulim confirmed that his father is a VVS one-star general.  Bondarenko asked Sulim, don’t you think they’ll dismiss your father after this?  Then Sulim sums it up:

“So it’s hardly possible to talk about any real observance of legality.  Now you understand why we came to you [Bozhyeva].”

Sulim and Smirnov don’t accuse Kharchevskiy, but Smirnov says he’s afraid the extortion scheme goes higher, up to the VVS Glavkomat, because, if this involved just one colonel and one air group, it would’ve been cleared up quickly.

Smirnov says he and Kubarev have sent their families away from Lipetsk, as a precaution.

At the end, Bozhyeva asks Sulim and Smirnov what results they want from the interview.

Smirnov says:

“Our goal is for a fair, independent commission, a fair prosecutor to come.”

Sulim adds:

“Not from Tambov, but from Moscow.  That is, those people to whom I, in essence, wrote on the Internet.  Otherwise, they’ll choke all of us here with these kinds of investigations.  We’re standing before such a precedent now!”

Smirnov then says, “All the Armed Forces are watching us.”

Then with the wisdom of someone twice his age, Sulim concludes:

“If they manage to strangle us now, then those men that rob officers will lose their fear completely, and those they rob, — they will finally lose their faith in their commanders.  The consequences will be terrible.”

Where’s the Head of the Snake?

A Defense Ministry commission has established some facts of extortion and kickbacks alleged by Air Forces Senior Lieutenant Sulim, according to Interfaks.  The military prosecutor also says the investigation thus far confirms what Sulim charged in his Internet address, and cases are being brought against some officers.

RIA Novosti identifies Colonel Eduard Kovalskiy as a “unit” commander, and Colonel Sergey Sidorenko as his deputy for socialization work.  Yesterday, it looked like Kovalskiy was Sidorenko’s deputy.  But both men are too senior in rank for a squadron.  The two made 2 million rubles off the premium pay extortion scheme since 2010, and will be prosecuted for exceeding their authority.

RIA Novosti cited officials saying Sulim continues to serve, and has not resigned as other media sources claimed.

Lifenews.ru reported five officers from Sulim’s squadron have given statements confirming his allegations.

Yesterday various sources provided excerpts from a long Moskovskiy komsomolets interview with Sulim, and with his deputy squadron commander, Major Anton Smirnov, who’s supporting him. 

Smirnov says he was told he had to participate in the collection of tribute, or his career was over.  He anticipates criminal charges against himself since he had to handle kickbacks.

Of the official investigation thus far, Smirnov says the Defense Ministry and VVS commission was no more than a “fire brigade” sent to “extinguish the scandal.”

 The two officers say officials from all power ministries, the military prosecutor and counterintelligence, have come to their unit, and pressured officers to contradict Sulim’s charges.

According to the MK interview, Sulim tried to resign, but his request lacked all necessary signatures.

We have to look closely at Sulim’s and Smirnov’s long interview, but one issue is salient . . . in this particular scheme to extort premium pay from subordinates, and funnel it upwards, where’s the head of the snake?  And how many schemes like it exist in other units and formations?

Premium Corruption

Senior Lieutenant Igor Sulim

Senior Lieutenant Igor Igoryevich Sulim joins the ranks of new media whistleblowers (most recently, MVD Majors Matveyev and Dymovskiy).

This 24-year-old senior flight-instructor of the Air Forces’ elite 4th Combat Employment and Retraining Center in Lipetsk has gone public complaining of corruption, specifically his commander’s systematic extortion of premium pay from his subordinates. 

Sulim made the charges in an open letter to Defense Minister Serdyukov, Investigative Committee Chairman Bastrykin, and VVS CINC General-Colonel Zelin, which he also placed on the Internet.

Recall that premium pay – aka Order No. 400 or 400-A – is the stopgap measure Serdyukov instituted early in his tenure to raise military pay [for the best performers] until a new, higher pay system could be introduced starting next year.  Premium pay’s allowed the officers to double, triple, or even quadruple their pay, but it’s also been plagued by problems and scandals from the very beginning.

According to Sulim, every month when officers receive their premium pay, they have to give their commander, Colonel Sidorenko, a specific sum.  In Sulim’s case, 13,600 rubles every month.

Life.ru printed excerpts from Sulim’s letter:

“In January of last year, Colonel Kovalskiy got unofficial information on the amounts servicemen needed to hand over after getting their premiums to each sub-unit commander.  Commanders couldn’t refuse this because all were threatened with dismissal during requalification [pereattestatsiya].”

Sulim says every month officers were picked to collect the money which went to Colonel Sidorenko.

“Every month from 140 to 185 thousand rubles were collected from sub-units.  I know that just from the four squadrons of unit 62632-A nearly 7 million rubles were collected in a year.”

“I tried to go to the Tambov Garrison Military Prosecutor.  But evidently Colonel Kovalskiy has good connections there because the commander [Sidorenko] became aware immediately about all those who want to get out from under the yoke of extortion.  And all our efforts led to the start of an investigation into the facts of slander against the unit commander.”

And Sulim’s command took him off flight status in retaliation.

Now a host of investigators — from the VVS, the SK, prosecutors — have flocked to check out Sulim and his allegations.

Where are we on this one?

It may take a while to play out.  If experience is a guide, young whistleblower Sulim may become target rather than hero of the story.  The Russian military [political, or bureaucratic] system doesn’t care much for those “sweep dirt out of the izba.”

Uncontained by the Defense Ministry, this latest scandal could undercut the much-heralded launch of the new pay system next year.  The draft law due for Duma consideration provides for continuing premium pay.

Extortion and theft damaged efforts to use combat pay as a motivator for service during the second Chechen war.  There have always been problems with commanders and finance officers handling pay in cash.

Commanders have used control of cash as a mechanism of control over their subordinates, as a zona-type obshchak for meeting unit needs or meting out a rough social justice, or, at worst, as a source of personal enrichment.  For some time, the military’s talked about electronic funds transfer to avoid pay-related criminal activity.

And Igor Igoryevich Sulim is apparently not just any young pilot.  His father is General-Major Igor Vadimovich Sulim, just relieved of duty in early March as Chief of the VVS’ Directorate of Frontal and Army Aviation.  It’s entirely possible that this personnel action has some connection to his son and his revelations, or vice versa.

Finally, the national angle to the Sulim story.  And what will it, like many other corruption stories, say about Russia’s national struggle against corruption (if there really is one)?

For additional info on Sulim, see Lipetsknews.ru or his complete letter here

There are many infamous cases of premium pay machinations . . . for summary articles see Svpressa.ru or Baranets in Komsomolskaya pravda.

Naginskiy at Spetsstroy

The dust’s settled a bit on this story . . . in a 22 April decree, President Medvedev replaced Nikolay Abroskin as Director of the Federal Agency for Special Construction (Spetsstroy), putting Deputy Defense Minister Grigoriy Naginskiy in Abroskin’s place.

Grigoriy Naginskiy

What does the change at the top of this large, government-financed construction firm — nominally under Defense Ministry control — indicate?

Ending Abroskin’s 13-year tenure in the Spetsstroy empire took four years. According to Kompromat.ru, Defense Minister Serdyukov’s wanted Abroskin out from beginning, but, unlike in other personnel situations, it took him a while to win out.

The media says the anti-Abroskin operation was methodical.  On his 60th birthday, four-star Army General Abroskin was dismissed from the Armed Forces, but left in his civilianized post.  This created the convenient precedent to have another civilian succeed him.  Then Medvedev dismissed Abroskin’s long-time deputies and allies. 

According to Kommersant, Spetsstroy’s annual collegium in late March was a solemn affair, devoted mainly to talk about order, discipline, and anticorruption efforts.  But the Main Military Prosecutor wouldn’t tell Kommersant whether it was investigating Abroskin or anyone else at Spetsstroy.  Then the final stroke on Abroskin came three weeks later.

Spetsstroy’s a semi-militarized agency with ranks and, until this spring, conscripts, under formal Defense Ministry control, but traditionally and generally acting as an independent federal agency.  As its name suggests, Spetsstroy is responsible for special government construction projects – in the Soviet and Russian past, it built secret industrial, defense, and specialized facilities, but has also built more mundane military housing, bases, garrisons, road, and electrical power projects.  It also builds major state infrastructure like hydroelectric stations, dams, and bridges. 

Most of Spetsstroy’s work is no longer for the Defense Ministry.  Kommersant says only 26 percent of its 2010 work was for the Defense Ministry.  A Defense Ministry official told Vedomosti the territorial divisions of Spetsstroy, in particular, work essentially like private construction firms and contractors.  Kompromat put its 2009 revenue at 67.7 billion rubles, making it a large company, even a market leader, by Russian standards.

Its most recent controversy revolves around the alleged “Putin palace” on the Black Sea.  According to Newsru.com and other media outlets, Spetsstroy is building a billion-dollar residence for Prime Minister Putin’s personal use.  The money for the elaborate Italianate mansion allegedly came from Putin’s rich business cronies.

Now about Naginskiy . . . you remember his arrival at the Defense Ministry in early 2010 to be Serdyukov’s deputy for housing and construction.  The 52-year-old Piter native’s a construction magnate who got rich renovating nuclear power plants, and then entered politics.  He joined United Russia in 2002, and served in the Leningrad Oblast assembly before representing his region in the Federation Council.

According to Forbes, he’s the richest official in the Defense Ministry, but he’s only 45th on the list of millionaires in government service.  His family income was over 100 million rubles in 2009.  Finans places him as the 163rd richest Russian. 

But Argumenty nedeli makes the point Naginskiy didn’t exactly cover himself with glory while directing military housing acquisition.  An unnamed Defense Ministry official tells Argumenty:

“The state program to provide housing to all officers and retirees is 15-20 percent complete.  Billions have been absorbed, but more and more are needed.  Deputy Minister Naginskiy, who directed it [military housing] last year, during construction site visits by the president and prime minister vowed and swore that everything would be done on time.  Now instead of the planned 2011 when they promised to provide housing, the authorities are forced to talk about the end of 2013.”

Recall also that Naginskiy went without portfolio starting in mid-2010, and his colleague Deputy Minister Shevtsova found housing in her lap.

All the good journalistic coverage of the Spetsstroy story agrees on one, well two, things.  Getting rid of Abroskin was all about controlling an agency that was too independent and, more importantly, controlling its money.  As Kompromat concludes, it’s natural for Serdyukov to want his man to have his hands on these large “financial flows.”  Kompromat suggested Serdyukov may have also had his eye on selling some of Spetsstroy’s expensive Moscow real estate. 

But this isn’t all there is to the story . . .

  • Argumenty makes the point that Serdyukov has holes in his top management team.  Six months without a main finance officer has left the Defense Ministry behind on placing armaments contracts (again threatening a bad year for GOZ fulfillment).  And now Serdyukov’s lost First Deputy Defense Minister Popovkin to Roskosmos.  Popovkin’s replacement will be a huge story.  Even if Shevtsova has the housing issue, Serdyukov absolutely has to replace Chistova and Popovkin.  And Nezavisimaya gazeta suggests Serdyukov will soon appoint a new deputy primarily responsible for establishing aerospace defense (VKO).
  • Ruslan Pukhov tells Vedomosti the whole situation proves Serdyukov still has carte blanche from the country’s leadership, and NG claims Serdyukov’s political position has never been stronger.
  • Kommersant makes a point of saying that Abroskin doesn’t appear on the list of Russia’s richest bureaucrats, suggesting of course that this career serviceman might have amassed a fortune, but can’t report it because it was obtained through graft.  Perhaps the paper’s larger point is that appointing a wealthy executive from a private firm is the only chance for avoiding corruption in a high-level post.

Malfeasance, Mayhem, and Murder

We haven’t looked at the military crime blotter for a while.  And the last two weeks have been particularly rich with various types of incidents.  The sentences handed down in recent days are, of course, for crimes committed earlier.  While some criminals in shoulderboards are getting caught, it leaves one wondering how many offenses go unknown and unpunished.

  • A conscript named Sergey Avdeychik was beaten severely on the parade ground of the Pechenga-based  200th Motorized Rifle Brigade (v / ch 08275).  The Murmansk School of Music graduate’s had surgery twice, his spleen removed, and he’s still too critical to relocate to a better hospital.
  • A negligence case is being brought against the ex-commander of the Space Troops’ Command Center, Colonel Aleksandr Karpenko.  He apparently forwarded the name of an officer with a “severe reprimand” along with a list of other officers slated to receive monthly bonuses [i.e. Order 400A premium pay] for excellent performance.  As a result, Karpenko’s subordinate received 470,000 rubles illegally last year.
  •  Conscript Nikolay Dorin apparently died of meningitis in Vladivostok.  He complained of a headache, and medics treated him with some pills, but they wouldn’t admit him to the military hospital in Vladivostok because it was already overflowing with patients.
  • The Eastern MD military prosecutor tells the media he’s worried about the rise in “nonregulation relations” [i.e. dedovshchina and other violence and crime], and the deaths of servicemen.  He says his experience shows it’s not the shortening of the service term that’s to blame, but rather the more than doubling of the number of conscripts [actually, two sides of the same coin], as well as serious shortcomings in the work of some commanders.
  • Then there’s the somewhat stunning case of the former chief of the Defense Ministry’s Main Directorate for Indoctrination Work (GUVR or ГУВР), General-Lieutenant Anatoliy Bashlakov.  Now Bashlakov wasn’t some old washed-up political officer.  He’s an ex-RVSN missile regiment commander turned Space Troops officer.  Apparently while commanding the Defense Ministry’s Plesetsk cosmodrome, Bashlakov accepted a 700,000-ruble bribe from a company interested in getting the base’s radioactive waste disposal contract.  Bashlakov received a pretty steep 7-year sentence.
  • An officer of the Chelyabinsk voyenkomat got caught taking a 200,000-ruble bribe for falsifying someone’s military service record.
  •  A conscript got crushed under BMP treads in Amur Oblast.  The armored vehicle’s commander has been charged with “violation of the rules of armored vehicle operation resulting in the death of a person through carelessness.”
  • A VDV Warrant Officer named Ayrat Akbashev received a 3-year sentence for killing of one of his subordinates, a contract soldier named Artem Ovechkin.  While they were repairing a BMD, the two argued, and Akbashev threw a log being used as a prop in Ovechkin’s direction.  It hit the latter in the head, and he never regained consciousness.
  • A cellphone video showing two Khabarovsk conscripts abusing a third made its way to the Internet.  You can view the somewhat sanitized version here.  Or the grittier original here.  The two guys are apparently from the Eastern MD headquarters’ security company and the guy whose head they put in the floor urinal is a conscript cook who hadn’t paid back money they lent him.  A little military loan sharking.
  • A conscript from Dagestan, one Esedulla Navruzbekov, got 3.5 years for killing another conscript in the unhappy 200th Motorized Rifle Brigade in Pechenga.  Both men were in the hospital at the time, and got in a fight when Navruzbekov butted in line in the dining hall.
  • A former VDV company commander in Ryazan (v / ch 41450, the 137th Parachute-Assault Regiment), Captain Mikhail Sevastyanov received a 60,000-ruble fine for extorting money and valuables from his subordinates in exchange for not reporting them to military investigators.
  • A soldier named Aleksey Samokhvalov got a 50,000-ruble settlement from a court for damages after being beaten by his sergeant in a unit in Novosibirsk last year.  He originally asked the court for 400,000.

Corruption and the GPV

This morning’s press included various accounts of statements from Igor Korotchenko or in the name of the Defense Ministry’s Public Council, on which Korotchenko serves, about mitigating the impact of corruption on the State Program of Armaments (GPV), 2011-2020.

RIA Novosti quoted Korotchenko to the effect that the rearmament program will only be successful with strict financial accounting and effective measures against corruption in the State Defense Order (GOZ or гособоронзаказ).

He said Defense Minister Serdyukov is taking steps to ensure that resources are used as intended, including the establishment of a Military Products Price Formation Department and the resubordination of the Federal Arms, Military, Special Equipment and Material Resources Supply Agency (Rosoboronpostavka) to the Defense Ministry.  But the latter step was done over six months ago, and not much has been heard about it since.

Novyye izvestiya and Novyy region quoted the Public Council’s statement:

“But for the army to receive all this [equipment in the GPV], money is simply not enough – it’s necessary to make things so that Defense Ministry generals, who to this point were occupied simultaneously with orders and purchases of weapons, don’t get access to money, are occupied only with formulating lists of everything needed for the conduct of modern war, but the function of monitoring prices and purchases should be transferred to other departments.  Otherwise, government resources allocated to the GPV will get ‘sawed off,’ placing this program in jeopardy.”

Those are, of course, the jobs of the new Price Formation Department and Rosoboronpostavka.  Serdyukov’s tax service veterans are supposed to free the payments system from graft, and use their experience to uncover complex theft schemes.  Military prosecutors are also expected to be more active here.  Main Military Prosecutor (GVP) Sergey Fridinskiy told Novyy region about prosecutors’ work in uncovering the theft of 6.5 billion rubles’ worth of military budget.  He claimed his prosecutors have stopped 240,000 violations, suspended 12,000 illegal actions, held 40,000 people to account, and returned 4 billion rubles to the treasury.  But it’s not clear what time period he’s talking about.

RIA Novosti recounted Korotchenko’s comments about preventing corruption in military RDT&E:

“Special control needs to be provided on scientific-research work and justification of expenditures on it, but also on the development of new types of armaments, since it’s precisely here that opportunities for different types of financial machinations and abuse exist.”

Of course, reminds RIA Novosti, RDT&E only amounts to 10 percent of the GPV.  Bigger chances for theft exist in procurement, which is supposed to be 78-80 percent of the rearmament plan.

According to Novyye izvestiya, on the procurement side, Korotchenko says, in past years, a minimum of 45-50 percent of money for arms simply ended up in someone’s pocket.  For this reason:

“For the very same money, Russia buys 14 tanks a year, and India 100.  This led the country’s leadership to the kind of thinking reflected in the Defense Minister’s authority to reorganize the entire purchasing scheme.  This time [the new GPV] 19 trillion rubles are at stake.  Can you imagine with what interest the ‘market players’ are waiting for them?  But the state machinery is running: many OPK directors are already being removed, in the case of the director of one of the system-forming design bureaus, suspected of stealing money from a state order through offshore shell companies, an investigation is being conducted, and other criminal cases in orders-purchases from previous years are also possible.”

The nongovernmental National Anticorruption Committee says the average kickback in civilian contracting is 30 percent, but, in defense, it’s 60 to 70 percent.  Because arms prices are secret [and hard to determine anyway], no one knows how much this is.  But common sense says this makes everything cost nearly twice what it should.

Serdyukov’s Anniversary

Putin Welcomes Serdyukov as Ivanov Looks On

The fourth anniversary of Anatoliy Serdyukov’s appointment came and went quietly enough on 15 February.  But WikiLeaks has come through as if to mark the occasion.  

On Friday, it posted an Amembassy Moscow assessment of Defense Minister Serdyukov a month and a half after he arrived in the “Arbat Military District.”  Mindful of hindsight bias, one can’t judge this cable too harshly.  But it’s an interesting retrospective on what was expected of the man going in, and what has happened since.

As stated all over the Russian media, Amembassy anticipated Serdyukov would impose discipline on the “Ministry’s notoriously loose financial control system,” and not otherwise initiate major changes.

Aleksandr Golts told Amembassy:

“Serdyukov’s inexperience on military issues would undermine his credibility with the General Staff and other senior officers, hindering his ability to push through needed reforms.”

A bit silly in retrospect.  Yes, he had no credibility with the Genshtab, nor it with him.  But he didn’t care and pushed right through the Genshtab, cutting the Genshtab (it suffered first in the reforms) and building his own bureaucratic machinery in the Defense Ministry.

Amembassy claimed that Serdyukov dismissed then-Chief of the Main Directorate of International Military Cooperation (GU MVS) General-Colonel Anatoliy Mazurkevich, and that Serdyukov’s auditors might be driving other corrupt officers into resignations or dismissals.

The cable describes the Defense Minister aptly as a “detail-oriented micromanager and ruthless policy administrator.” 

But what it doesn’t note (and what has become patently obvious over the last four years) is that the Defense Ministry, and the Russian military, is an unwieldy and untidy establishment not well-suited to micromanagement.  Talk about trying to turn an aircraft carrier on a dime . . . not gonna happen here. 

A couple stories come to mind . . . Serdyukov trying to put new uniforms on the troops, one of his first initiatives.  Now maybe only 20 percent of the troops have them, and the parents of those that do say the new uniforms aren’t as good against the cold as the old ones.

Also, Serdyukov talking about one new brigade commander who didn’t implement his directives.  It’s a big country and a big army.  What Moscow says isn’t always relevant in Chita, etc.

Next, Amembassy summarized the views of Ivan Safranchuk this way:

“He thought the Ministry establishment would try to ‘outlast’ any reforms that Serdyukov sought to impose, with the brass counting on Serdyukov to adjust to their way of thinking — or at least to stay out of their way.  Safranchuk told us that former DefMin Ivanov ultimately had not made a significant impact on how things functioned within the Ministry, despite his reform efforts, and predicted the same fate for Serdyukov.”

This one turned out to be pretty wrong, didn’t it?  There may still be some elements awaiting Serdyukov’s departure and a return to the way things used to be, but too much has changed.  The military establishment can’t ever be exactly what it used to be.  And the brass was definitely no match for Serdyukov, and he didn’t stay out of their way, but rather sent many of them down the highway.  And this Defense Minister has had a greater impact in four years than Sergey Ivanov in nearly six.  Ivanov’s fate was not to be Putin’s successor, and to muddle around in his next job, i.e. First Deputy PM.  As for Serdyukov’s fate, we’ll have to see.  As for his impact, at least some is likely to be lasting.  How long?  Only until the next determined reformer arrives.  None of this is to say Serdyukov’s impact is all positive, mind you.  Some changes may have messed things up worse than they were.  But he got reform off the dime in a way Ivanov never dreamed.

Here’s video of Putin’s meeting with Ivanov and Serdyukov on 15 February 2007.

The cable continues:

“Sergey Sumbayev, a former journalist with Krasnaya zvezda (Red Star), told us that management and accountability within the Ministry were dysfunctional and fostered inefficiency and corruption.  He referred both to financial accountability and responsibility for policy implementation.  Sumbayev thought the Ministry’s entrenched bureaucracy resisted, mostly successfully, institutional change, which generated considerable waste and delayed delivery of modern weapons systems to the armed forces.”

Sumbayev also told Amembassy:

“. . . management experience and tenacious work ethic make [Serdyukov] the ideal ‘technical’ manager that the Ministry needs.  While acknowledging Serdyukov’s political connections, Sumbayev did not think Serdyukov harbored any political ambitions.  He was chosen mainly for his managerial expertise, loyalty, and willingness to please his political bosses.  Serdyukov could probably make progress in streamlining the Ministry’s management structure, reducing waste, and exerting more control over its financial accounting systems.  One year, however, would not be sufficient to accomplish these tasks.”

“Sumbayev speculated that keeping the General Staff off-balance and focused on internal matters over the next year was one of Putin’s objectives in appointing Serdyukov. In this respect, he suggested that Serdyukov had a mandate to shake things up in the Ministry without sparking too much discontent.”

Amembassy concluded that:

“Serdyukov has his work cut out for him in bringing order to a Ministry badly in need of reform.”

Serdyukov’s made progress, but this final assessment probably remains true four years on.

Blaming Yudashkin

Aleksandr Kanshin has reemerged . . . late of the Public Chamber, he’s now Deputy Chairman of the Defense Ministry’s Public Council, and he blames new army uniforms designed by fashion mogul Valentin Yudashkin for the recent outbreak of illnesses among conscripts in the Central Military District.

Vesti.ru and Newsru.com picked up what Kanshin told Interfaks:

“Judging by documents I’ve been made familiar with, one of the causes of illnesses among the young reinforcements in the troops, particularly in the Central Military District (TsVO), is manufacturing defects in the new winter field uniform supplied to conscripts at the assembly points of the military commissariats.  In other words, the new type uniform ‘from Yudashkin’ doesn’t defend soldiers against freezing in low temperatures.”

“At times, TsVO servicemen have to wear warm things under the new winter uniform.”

Kanshin also said he’s talked with TsVO Commander, General-Lieutenant Vladimir Chirkin who recognizes the new uniform needs improvement, but he also indicates 80 percent of his personnel are dressed in the old field uniform which is much warmer.

Vesti.ru reported the majority of the district’s servicemen are negative about the Yudashkin uniform because the air temperature is -20° (-4° F) and the wind blows through it outside.

Newsru.com pointed back to several scandals over the Yudashkin uniform, including last December when it said 250 soldiers became seriously ill in their unit in Yurga.  It was proposed at the time that they became sick because the new uniform didn’t protect them against the cold.

These new digital cammies were developed between May 2007 and 2010.  Besides fashion designer Yudashkin, specialists from the Central Scientific-Research Institute of the Garment Industry and the Defense Ministry’s Central Clothing Directorate participated in creating them.

Gzt.ru claims Yudashkin isn’t to blame.  The winter uniform was changed and sewn in defense industry factories with cheap materials.  Perhaps these are Kanshin’s “manufacturing defects.”  Sounds like corruption though, if someone substituted inferior materials.

Doctors told journalists that Yudashkin’s boots don’t keep out the cold either.

According to Gzt.ru, the military prosecutor is checking the situation in the TsVO.  Meanwhile, the military officially denies the uniforms are to blame, and maintains the emergency situation is just a seasonal outbreak of illness.