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Russia Seeks To Repatriate $100 Billion From Corrupt Officials

By on August 21, 2012

Russian lawmakers loyal to President Vladimir Putin submitted an anti-corruption bill they hope will lead to the repatriation of $100 billion in assets held by officials, the lead author said.

“We are introducing new and very strict rules of the game,” State Duma Deputy Vyacheslav Lysakov said by phone in Moscow today. “People shouldn’t go into state service to become rich, but to serve the country.”

The bill would ban officials, their wives and minor children from owning property, stock or bank accounts abroad, said Lysakov, a leader of People’s Front, the movement Putin created for December’s parliamentary elections that now caucuses with the ruling United Russia party. The bill applies to all state employees, including lawmakers, bureaucrats, prosecutors and police officers, though the list may be expanded to include senior management of state-run companies such as OAO Gazprom (GAZP) and OAO Rosneft (ROSN), he said.

Putin has made the fight against corruption a priority in his third term as president, saying in April that he supports a plan to monitor personal spending by senior officials. Russia is the world’s most corrupt major economy and ranks alongside Nigeria at 143rd of 182 countries in Berlin-based Transparency International’s 2011 Corruption Perceptions Index.

National Security

Alexander Lebedev, the billionaire newspaper owner under investigation for hooliganism in Moscow, said this month that he has evidence of Russian officials stealing tens of billions of dollars that he plans to share with investigators in countries including Russia, the U.S. and U.K.

Lebedev helps fund Alexey Navalny, an anti-corruption activist and opposition leader who published documents on his website last month alleging the country’s top investigator,Alexander Bastrykin, held Czech residency from 2007 to 2009 and bought property in the country, raising concern foreign agents could exert influence over his work.

Putin’s spokesman, Dmitry Peskov, said July 28 that the attorney general would look into the claim. Bastrykin said in an interview with the Izvestia newspaper that he didn’t violate any laws. An analysis of personal income declarations published in the Vedomosti newspaper today showed that more than 100 senior officials own property in at least 26 countries.

Russians spent $12 billion on foreign property last year, compared with $5.5 billion a year in 2007 and 2008, central bank Chairman Sergey Ignatiev said April 5. Net capital outflows more than doubled last year to $80.5 billion, central bank data show.

‘More Loyal’

“This law is populist and may calm down public opinion,” said Olga Kryshtanovskaya, a Moscow-based political analyst who’s also a United Russia member. “It makes officials more loyal because they would know that they could be prosecuted if they aren’t loyal.”

Prohibiting officials from having overseas assets would improve national security by making them more independent and less susceptible to pressure from abroad, Lysakov said.

“Decisions will be fully independent because there won’t be anything with which to punish the people who make them,” Lysakov said. “People in power should invest in the motherland and not in foreign countries.”

Violators of the legislation would face as many as five years in prison or a fine of as much as 10 million rubles ($310,000), Lysakov said, adding that the bill may be voted on in the fall session. Offering an amnesty for officials and business people who repatriate ill-gotten gains is also being considered, he said.

“We can return a colossal amount of money to Russia,” Lysakov said.


Source: Bloomberg

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