Coverage of issues surrounding expropriation of business by the Russian state

The Kremlin’s game with Alexei Navalny


David Satter, advisor to Radio Liberty and fellow of the Hudson Institute and John Hopkins University, writes for CNN that Russia is playing a cat and mouse game with anti-corruption campaigner Alexei Navalny. Satter writes that in his blog, Navalny provided detailed reports on corruption in state-controlled companies, including the theft of $4 billion from the state-owned pipeline company Transneft.

Soon after the protests during the December 2011 parliamentary elections, Navalny emerged as a leader of popular opposition, and was seen by many as a potential future presidential candidate. But on 18 July, Navalny was sentenced to five years imprisonment for misappropriating around $500,000 of state-owned timber – charges he claims were fabricated. Yet merely a day after the conviction, the state prosecutor requested that Navalny be freed on bail so that he could continuing campaigning for the mayoral candidacy of Moscow.

Yet Satter implies that this seemingly generous act may hide an ulterior motive. He highlights that successful candidates generally win support by intimidated or bribing voters, bussing voters to polling stations that are closely watched by their supervisors. Satter claims that it was this corrupt system that elected Russian President Vladimir Putin and the United Russia Party – denounced by Navalny as the ‘party of swindlers and crooks’ in the last parliamentary elections.

By allowing Navalny to campaign as a candidate for mayor, the authorities effectively ‘prove’ allegations of corruption and election-fixing to be wrong. It will also be more difficult for Navalny to make such an argument now that he has been convicted of corruption himself. And if he does prove to be an electoral threat, a higher court could uphold his conviction at any time, simply terminate his candidacy and place him in jail.

Satter points out that this isn’t the first example of a cat and mouse game within the Russian legal system; the former head of Yukos Oil, Mikhail Khodorkovsky, was convicted of tax evasion and fraud after supporting opposition political parties. Sergei Magnitsky, the lawyer who exposed the theft of $230 million in tax fraud by senior officials, was beaten in prison and found guilty of tax evasion posthumously.

The Russian authorities profit immensely from corruption, thought to be worth over $300 billion each year – more than a quarter of the GDP. It’s also estimated that Putin and his associates control 10% to 15% of Russian gross national product. But the Russian people are becoming increasingly frustrated with the bribery and corruption that has become part of everyday life under the Putin regime, despite intermittent announcements by officials that they are cracking down on these practices. Reformers such as Navalny and Khodorkovsky are seen by the authorities as threats that need to be dealt with swiftly, but it may be that Russia’s failure to address its corrupt system will lead to a far deeper crisis in the years to come.

Read the full article here.

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