Corruption and Organised Crime in Putin's Russia

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Corruption and Organised Crime in Putin's RussiaLeslie Holmes a

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Corruption and Organised Crime in Putin’s

Russia

LESLIE HOLMES

IN HIS LONG FINAL PRESS CONFERENCE AS PRESIDENT OF RUSSIA (14 February

2008), Vladimir Putin somewhat smugly claimed that he had basically accomplished

all he had set out to when he became president, and that there had been no ‘serious

failures’. While he did achieve much, including a marked improvement in Russia’s self-

image and economy, there were also a number of real problem areas. Here, just one

will be considered: the fight against corruption and organised crime. The former was

one of the few relative failures Putin acknowledged in his February speech; indeed, he

described corruption as ‘the most wearying and difficult to resolve’ of all Russia’s

problems while he was president.1

When the 2007 Transparency International (TI) Corruption Perceptions Index

(CPI) was published in late September 2007, sections of the Russian media claimed

that Russia was plummeting in terms of its level of corruption.2 This was a gross

exaggeration. Russia’s score in 2007 was 2.3, compared with scores of 2.5 in 2006 and

2.4 in 2005.3 In short, the situation appeared to be relatively stable; at worst, there had

been a modest deterioration. This is not to deny that Russia’s score in the CPI declined

during Putin’s second term in office; but the decline was marginal, and Russia’s

corruption levels are in fact no worse now than they have been for much of the post-

communist period. But having noted this, Russia does appear to have had consistently

high levels of corruption throughout the post-communist period, and the problem is a

relatively serious one—as Putin himself acknowledged.

Overall crime rates have been rising in post-Soviet Russia, despite a small

improvement in the early 2000s that has now been reversed. But in the particular case

of organised crime, the (less than robust) available data suggest a decline in some types

of activity. However, this was from a high base-level. Moreover, as will be

demonstrated, some aspects of organised crime have become more of a problem in

recent years, especially for legitimate businesses. Thus, like corruption, organised

I am indebted to the Australian Research Council (ARC) for funding that has greatly facilitated the

research for this project (ARC Large Grant No. A79930728 and ARC Discovery Grant

No.DP0558453).1See http://www.kremlin.ru/eng/speeches/2008/02/14/1011_type82915_160266.shtml, accessed 19

February 2008.2For example, Kommersant, 27 September 2007.3See note 2 to Table 1 for an explanation of these scores.

EUROPE-ASIA STUDIES

Vol. 60, No. 6, August 2008, 1011 – 1031

ISSN 0966-8136 print; ISSN 1465-3427 online/08/061011-21 ª 2008 University of Glasgow

DOI: 10.1080/09668130802161249

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crime remains a significant economic and social problem, and to some extent even a

political one in Russia.

Despite the significance of corruption and organised crime in Russia, the research

and literature on both has been less abundant in recent years than it was in the

1990s and at the start of the Putin era (Williams 1997a; Frisby 1998; Webster et al.

2000; Finckenauer & Voronin 2001; Varese 2001; Galeotti 2002).4 The following

analysis is intended as a modest contribution to a correction of this mismatch. It

provides a critical overview of the data available on corruption and organised crime

in Putin’s Russia, and an analysis of the medium-term trends. It will be argued that

the situation on both fronts could improve in the coming years, but for somewhat

different reasons. In the case of corruption, it would be as much because of external

as of internal factors; in particular, Russia’s growing interaction with the global

economy may have a positive impact. In the case of organised crime, the

opportunities for increased activity are enhanced as globalisation spreads and

boundaries become ever more permeable—suggesting an increase in such activity.

But against this is the likelihood that organised crime in Russia could emulate a

trend elsewhere, becoming less violent and seeking to engage more in ‘semi-

legitimate’ or even legal activity. Two closely related variables common to the future

of both corruption and organised crime, however, will be the political will of the

post-May 2008 Russian leadership team, as well as the state capacity available to

that team.

The material focuses more on corruption than on organised crime, for three reasons.

First, far more information is available on corruption than on organised crime; much

of that on the latter is of an essentially anecdotal and sensationalist nature better

suited to readers of crime fiction or the popular press than to scholarly analysis.

Second, organised crime is less significant to Russia’s politics than corruption is, and

the approach here is primarily that of a political scientist. Finally, while it is accepted

that organised crime and corruption are interactive, the relationship is not treated here

as a ‘chicken and egg’ one. Rather, a corrupt state is seen to encourage, or at least

facilitate, organised crime.

Organised crime

In the immediate aftermath of the collapse of communist power in Russia, organised

crime appeared to grow like mushrooms after the rain. Although there had been

organised crime during the Soviet era, with the so-called thieves-in-law (vory v zakone)

4A good example of the slowdown in comparative empirical research generally in the area of

criminality is the delay in what should have been the 2004 International Crime Victim Survey (ICVS),

run by the United Nations Interregional Crime and Justice Research Institute (UNICRI). This

eventually became the 2004–2005 ICVS. Parts of this, including the Australian section, have been

completed and the results published (http://www.aic.gov.au/research/projects/0088.html, accessed 28

January 2008)—whereas the main official website for the whole project includes data and statistics only

for the 1989, 1992, 1996 and 2000 surveys (http://www.unicri.it/wwd/analysis/icvs/data.php, accessed

28 January 2008 and checked again 20 March 2008). However, for a detailed overview of some of the

2004–2005 survey results see Van Dijk et al. (2007); unfortunately, this contains no results for Russia.

1012 LESLIE HOLMES


being the best-known example of this (Gurov & Ryabinin 1991; Razinkin 1995; Varese

2002), the near anarchy and weak state of the early post-Soviet period, coupled with a

disastrous economic situation, created ideal conditions for the growth of most types of

crime, including organised. There were three particularly disturbing aspects of the

growth of Russian organised crime in the 1990s.

First, it appeared to be more violent and indiscriminate in its use of this violence

than its more established counterparts elsewhere, such as the Italian mafia,5 the Hong

Kong Triads (Yiu Kong Chu 2000) or the Japanese Yakuza (a.k.a. the Boryokudan—

see Hill 2006); in the words of the then head of Interpol, Raymond Kendall, referring

in the mid-1990s to Russian organised crime, ‘. . . unlike western mafias, they resort

immediately to violence’ (cited in Tillier 1996, p. 4).

Second, it rapidly became a transnational phenomenon, so that its negative impact

was felt far beyond Russia’s boundaries (Williams 1997b). This problem was perceived

in parts of the United States to be so serious that special units were established to deal

specifically with Russian organised crime gangs, notably the New York-centred Tri-

State Commission (Williams 1997a, pp. 177–226; Shelley 2002).

Finally, it involved far more individuals with past or continuing connections to the

state’s control agencies, notably the police, than is typical of other organised crime

movements. The November 2007 conviction of four Russian police officers for their

involvement with organised crime—so-called ‘turncoats in uniform’—was yet another

example of this.6 Many former police officers who had lost their positions with the

transition to post-Soviet Russia were desperate for income, and thus susceptible to

temptation. Moreover, they had been a relatively privileged group during the Soviet

era, but in many cases now found themselves being treated as second-rate unemployed

citizens. Their level of resentment against the new state was thus probably even higher

on average than that of other citizens who had lost out in the early stages of transition.

At the same time, they enjoyed several advantages over others attracted to organised

crime. One was that they frequently had access to weapons that would otherwise have

been more difficult for gangs to acquire. Another was that they possessed insider

information of various kinds that was potentially valuable to crime gangs. In addition

to knowing exactly how the police conduct investigations, mount sting operations,

etc., many retrenched officers also knew who among their former and still employed

colleagues were most likely to succumb to bribes. In short, they could often act as the

primary linchpin between organised crime gangs and corrupt state officials. One of the

most serious implications of all this was that, as Russian citizens became increasingly

aware of this phenomenon, so their faith in the state and the concept of the rule of law

was undermined. As one Russian analyst of police criminality has expressed it, there

developed a ‘legal nihilism in the country’ (Altukhov 2001, p. 9). This is hardly

surprising, given that at least one—disturbing—survey indicates that many Russian

5The term mafia is used here in the technically inaccurate but more common way, to refer not only to

the true, Sicilian mafia, but also to other major organised crime groups in Italy, such as the Calabrian

’Ndrangheta (Paoli 2000), the Neapolitan Camorra (Di Fiore 2005) and the Puglia-based Sacra Corona

Unita (Massari 1998). On the Sicilian mafia see Gambetta (1993) and Hess (1998).6Moscow News Weekly, 27 November 2007.

CORRUPTION AND ORGANISED CRIME IN RUSSIA 1013


police officers consider corruption to be perfectly acceptable in certain circumstances

(Beck & Lee 2002).

How did the situation develop under Putin? On a formal level, it was symbolically

significant that Russia ratified the UN’s Convention against Transnational Crime

(sometimes called the Palermo Convention) in May 2004; while this was a little later

than many other states, it was still earlier than, for instance, Australia, the USA or the

UK. But signing such documents does not per se mean very much; actual

implementation is always far more important than formal declarations.

One positive development was that the Russian government under Putin at least

appeared to take money laundering—a favoured activity and method of organised

crime gangs—more seriously. During the 1990s, Russia had often been criticised by

the OECD’s Financial Actions Task Force (FATF) for being too lenient towards

money laundering. FATF produced its first ‘Non-Cooperative Countries and

Territories’ report in 2000, which included a blacklist of 15 countries and territories

it considered to be uncooperative in the fight against money laundering; Russia was on

that list, in part because it did not have a law against money laundering. But the Putin

regime responded promptly to this blacklisting, introducing a new law against money

laundering that was adopted in August 2001; this was sufficiently impressive to the

FATF for it to remove Russia from its blacklist in October 2002 and even to grant

Russia full membership in June 2003 [Davison 2007, p.73; more generally on money

laundering see Masciandro (2004), while a recent if rather technical analysis is

Masciandro et al. (2007)].7

One of the more encouraging aspects of Russian organised crime is that it appears

to have become somewhat less violent in the 2000s than it was in the 1990s—so that

Albanian organised crime has, according to some analysts, replaced it as the most

violent strand of this type of crime in Europe (Hysi 2006, p. 546; see too Arsovska

2006). While these figures include killings other than those committed by organised

crime gangs and cannot be disaggregated on the basis of publicly available data, this

inference about a marginal improvement in Russia is compatible with the fact that the

overall annual number of murders and attempted murders has, according to official

statistics, been in decline since 2001. According to Rosstat (the Russian Federal State

Statistics Service), the number of murders and attempted murders in 1992 was 23,000;

this figure rose to 31,700 in 1995, and peaked at 33,600 in 2001. Since then, the figure

has more or less steadily declined, to 27,500 in 2006. While the latter figure is still

higher than that for 1992, it represents an improvement on the situation pertaining in

the second half of the 1990s, even allowing for population decrease.8 Finally, the

Russian authorities claim that they are solving more of the crimes committed by

organised crime groups. Thus the 2007 clear-up rate was some 15% higher than the

2006 rate, according to Interior Minister Rashid Nurgaliyev.9

Unfortunately, while the crime statistics and legislation suggest a possible

improvement in some aspects of organised crime, other areas are far from encouraging.

7An amendment to the 2001 law became effective in July 2004.8All available at: http://www.gks.ru/wps/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/7_0_332/_th/J_0_CH/_s.

7_0_A/7_0_FL/_s.7_0_A/7_0_332, accessed 21 January 2008.9ITAR-TASS, 6 February 2008.

1014 LESLIE HOLMES


In his February speech just cited, the Russian Interior Minister acknowledged that,

overall, the measures being taken by the police to combat organised crime were still

inadequate.10 One of the areas of most concern is drug-dealing. The number of

registered crimes relating to this in 1992 was less than 30,000. The figure then climbed

steeply to almost 80,000 in 1995, and a staggering 244,000 in Putin’s first full year in

office (2000). The trend line then started to decline—bottoming at 150,000 in 2004—

before beginning to rise again; by 2006, it was back up to 212,000.11

Another disturbing finding is that, according to surveys of Russian businesspeople,

organised crime has been exerting increasing pressure on legitimate businesses in the

Putin era. Thus, in the 124 pages (total) of Anticorruption in Transition 3 (which

examines corruption in all Central and East European and Central Asian states and is

considered below), there are only two references to organised crime, suggesting that it

is not seen as a major aspect of corruption in most post-communist states. Of these

two references, one is to positive measures being adopted by Slovakia to combat it,

while the other is to the fact that one of the ‘most notable’ findings from Russia was

the ‘increase in the burden of organised crime on business’ between 2002 and 2005

(Anderson & Gray 2006, pp. 38, 56).

Finally, the First Deputy Head of the Interior Ministry’s Department for the

Struggle against Organised Crime and Terrorism made it clear in August 2007 that the

trend for Russian organised crime to become transnational had increased since

the late-1990s.12

Corruption

In terms of major policy statements against it, passing laws and adopting other

measures designed to combat corruption, both the Washington-based organisation

Global Integrity (2004, 2006) and Freedom House rate Russia comparatively well.

Among the many measures that could be listed is the law adopted in 2004 that

required all state officials to declare both their incomes and their property. In January

of the same year, the Council for the Struggle Against Corruption, which Putin

established, held its inaugural session.13 In February 2007, a presidential decree

established an interdepartmental working group to combat corruption. And when he

started work as Russia’s new prime minister, in September 2007, Viktor Zubkov

declared that the fight against corruption was one of his government’s top priorities.14

Since Zubkov had devoted much of his time and energy in the previous six years to

fighting fraud and money laundering, his appointment appeared to be sending a

message of continuing—possibly strengthening—commitment of the Putin govern-

ment to fighting corruption. But how effective were all these measures? Did they

represent little more than rhetoric?

10ITAR-TASS, 6 February 2008.11All available at: http://www.gks.ru/wps/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/7_0_332/_th/J_0_CH/

_s.7_0_A/7_0_FL/_s.7_0_A/7_0_332, accessed 21 January 2008.12Interfax Russia and CIS General Newswire, 20 August 2007.13For Putin’s speech at this meeting see: http://www.kremlin.ru/appears/2004/01/12/

1844_type63374type63378_58986.shtml, accessed 14 March 2008.14See http://en.rian.ru/russia/20070914/78778373.html, accessed 14 March 2008.



Despite significant advances over the past 15 years in the methods used for

measuring it, it remains impossible to obtain or generate accurate data on the level of

corruption in any country. The most that can be aspired to is an impressionistic

picture; if several diverse methods are adopted (‘multi-angulation’) and yield similar

results, we can be reasonably confident that the picture bears a resemblance to reality.

At present, four principal methods are used for assessing levels of corruption—official

statistics, perception indices, experiential (or proxy) indices, and tracking surveys;

since the last of these methods does not appear to have been applied to Russia [for

details of their use elsewhere see Reinikka and Svensson (2003, esp. pp. 1–8) and

Sundet (2007)], there remain three main ways in which the country’s corruption level

can be and has been measured.

In 2002, Interpol ceased publishing national crime statistics on the Web. One reason

for this decision was that official statistics can be highly misleading. For example, most

people who have visited these countries would find it hard to believe that the overall per

capita crime rate in New Zealand in the early 2000s was—according to official

statistics—almost 185 times higher than that in Albania, or that Sweden’s per capita

rate was some 216 times higher than Indonesia’s (Holmes 2006, p. 92). This is not the

place to examine the reasons for such apparent conundrums; they are mentioned simply

to make the point that official crime statistics—on the number of alleged cases reported,

investigations, prosecutions and convictions—need to be treated with extreme caution.

At the most, they only ever represent the tip of an iceberg, though the balance between

what is visible and what is below the surface varies substantially from country to

country. Despite this, it is worth noting that the Russian Ministry of the Interior

revealed that more than 8,500 officials were charged with corruption in the first 10

months of 2007, and more than 37,000 cases of corruption were uncovered, including

10,000 cases of bribery (Yakovenko 2007, p. 2). The absolute number of cases

uncovered was thus much higher than it was in the 1990s (for statistics see Holmes 2006,

pp. 93–96). Unfortunately, there is no way of determining whether the much higher

number of prosecutions and cases uncovered reflects a more efficient law enforcement

process in Russia, or a higher rate of corruption, or a combination of the two.

Given the problems involved in both accessing and using official statistics, many

analysts have turned to perception indices. The most widely cited of these—indeed, of

any index of corruption in Russia and elsewhere—is the Transparency International

(TI) annual Corruption Perceptions Index (CPI).

Table 1 suggests that Russia was relatively corrupt at the time of the first TI

assessment (1996), steadily deteriorated through 2000 (bottoming at 2.1), but then

clearly improved during Putin’s first term of office, peaking at 2.8 in 2004. The

TABLE 1RUSSIA’S SCORES IN THE TI CPI (1996–2007)

Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Score 2.6 2.3 2.4 2.4 2.1 2.3 2.7 2.7 2.8 2.5 2.4 2.3

Notes: (1) The scores for 1996 and 1997 have been rounded to one decimal place.

(2) The TI CPI is scaled 0–10; the higher the score, the less corruption there is perceived to be.

1016 LESLIE HOLMES


situation began to worsen again in Putin’s second term, however, so that Russia’s

perceived level of corruption in 2007 was exactly the same as it had been a decade

earlier. While the term ‘plummeted’ is inappropriate, the TI CPI indicates that Russia

has been seen as one of the world’s more corrupt countries for many years, and that

the situation is currently deteriorating again.

The TI CPI has been criticised from many perspectives [Sık 2002; Galtung 2006; for

a more wide-ranging critique of most of the methods and surveys available see Knack

(2006)], but remains the most influential international corruption index. Nevertheless,

and in line with the advocacy here of multi-angulation, it is worth considering the

results of other perception indices and methods of gauging the scale of corruption in

Russia, as well as—importantly—the trend line.

Another popular assessment of corruption levels in different countries, again based

largely on perception, is Freedom House’s (FH’s) Nations in Transit.15 According to

the 2006 edition, ‘Several independent research groups found that corruption

increased in Russia in 2005’.16 FH has been assessing the corruption levels in Russia

using its current scaling system only since 1999, so it is not possible to provide trend

lines from deep within the Yel’tsin era,17 but Table 2 provides the FH ratings since

1999.

While the trend line of the FH ratings is not identical to that of the TI CPI, common

features can be found in these two forms of assessment. Thus both suggest that

corruption levels fell somewhat in the early 2000s in comparison with the late-Yel’tsin

era, but then began to increase again in Putin’s second term of office.

A different methodology from the TI CPI and FH assessments is that developed by

the World Bank and the European Bank for Reconstruction and Development in their

attempts to assess the impact and experience of corruption specifically in the business

sector. These are the Business Environment and Enterprise Performance Surveys—

better known by their acronym of BEEPS—that have now been conducted on three

occasions (1999, 2002, 2005); they are a subset of the World Business Environment

Survey (WBES). These are particularly useful for the present purposes, since they span

TABLE 2RUSSIA’S CORRUPTION RATINGS IN THE FH NATIONS IN TRANSIT (1999–2007)

1999 2000 2001 2002 2003 2004 2005 2006 2007

6.25 N/A 6.25 6.00 5.75 5.75 5.75 6.00 6.00

Notes: (1) There was no rating for 2000.

(2) The FH ratings are scaled 1–7; the lower the score, the less corruption there is perceived to be.

15Unfortunately, FH’s method for assessing a country’s corruption level varies over time. In the 2007

edition of Nations in Transit, the rating is based on ‘public perceptions of corruption, the business

interests of top policy makers, laws on financial disclosure and conflict of interest, and the efficacy of

anticorruption initiatives’, available at: http://www.freedomhouse.hu/images/fdh_galleries/NIT2007/

nit%2007%20methodology.pdf, accessed 21 January 2008.16See http://www.freedomhouse.org/template.cfm?page¼47&nit¼406&year¼2006, accessed 21 Jan-

uary 2008.17For a pre-1999 FH rating, which uses a different form of scaling, see Karatnycky (1999, p. 13).



the late-Yel’tsin period and both of Putin’s terms in office. In these surveys,

businesspeople (enterprise owners and managers) are invited to report on their

experiences of bribery and corruption. However, since this needs to be done in such a

way that respondents cannot be identified, and hence face possible legal problems, the

questions are often indirect. This means that although these surveys are often

described as experiential, in fact they straddle the line between experience and

perception. Nevertheless, the methodology is different from that used by either TI or

FH, and the results are worth considering.

The first BEEPS (BEEPS I) involved interviewing 550 managers and owners in

Russia. It suggested that the share of annual revenue devoted by Russian businesses to

bribe-paying (the so-called ‘bribe-tax’) was 2.8%—a figure below the average of the

CIS as a whole (3.7%), but above the average for Central and East European states

(2.2%). Unfortunately, the method used in BEEPS II—which involved surveying 500

firms—for calculating the ‘bribe-tax’ was slightly different from that employed in

BEEPS I (it was based on the share of sales rather than revenue), so that it is not

possible to provide a direct comparison. The authors of the 2002 study—whether

justifiably or not—concluded that their overall results were ‘mixed but somewhat

encouraging’ [Gray et al. 2004, p. xii; for reasons to question this guarded optimism

see Holmes (2006, pp. 118–19)]. This was a general assessment of the post-communist

states, however, not an explicit reference to Russia. But the authors did single out

Russia as one of the countries in which there had been a ‘significant’ decline in the

perception of corruption between 1999 and 2002 (Gray et al. 2004, p. xii).

The leading analysis of the 2005 BEEPS—which was based on a survey of almost

600 Russian firms—is explicit in arguing that the bribe tax in Russia as a proportion of

sales declined between 2002 and 2005 (Anderson & Gray 2006, p. 16). This is

consistent with the findings of FH, but might initially appear to be at odds with the TI

findings (which suggested a worsening of the corruption situation in 2005). However,

this apparent discrepancy could partly be explained by the slightly different time-

frames of the two studies. More significant is the BEEPS III analysts’ own overall

assessment of the situation in Russia. They point out that while the proportion of sales

spent on bribes appears to have dropped between 2002 and 2005 (from 1.4% to 1.1%),

the fact that the economy grew at an impressive rate means that the actual ruble sums

spent on this increased; in their Executive Summary, Anderson and Gray (2006, p. xii)

state unambiguously that ‘corruption was seen as a bigger problem for business in

2005 than in 2002 in Azerbaijan, the Czech Republic and Russia’. Thus, the TI and

BEEPS findings both point in the same direction. An analysis by well-regarded

Russian NGO the INDEM Foundation further endorses this image; a survey of

Russian businesspeople conducted in 2005 indicated that there had been a marked

increase in their corruption-related expenses between 2002 and 2005.18 And it seems

18Kommersant, 31 October 2006. A newspaper report on this survey is presented here because the full

report was still not available electronically on the INDEM website at the time of writing (but see for

example, Georgy Satarov’s presentation of 18 October 2006 available at: http://www.anti-corr.ru/

cipebc2.htm, accessed 17 March 2008). For a slightly earlier (2004) and fuller report see

Golovshchinskii et al. (2004); survey results are mainly on pp. 22–34.

1018 LESLIE HOLMES


that the corruption burden on business in Russia may have increased still further

between 2005 and 2007, according to a survey by PricewaterhouseCoopers.19

A final source of relevance to the present topic is the TI Global Corruption

Barometer (GCB), which has appeared annually since 2003. The GCB has at least two

advantages over the CPI. First, the methodology is (almost) uniformly applied across

all countries analysed, so that cross-country comparison is more valid and reliable

than in the CPI.20 Second, while all editions include purely perceptual questions (for

example, ‘Do you expect the level of corruption in the next three years in this country

to change?’), all except the first also include experiential ones (for example, ‘In the past

12 months, have you or has anyone in your household paid a bribe in any form to any

of the following institutions/organisations?’).21 How does Russia fare in this?

The first observation is that, in terms of the actual experiences of ordinary citizens,

Russia does not appear to be as corrupt as many other countries. Table 1 in the 2007

GCB groups countries into five categories (quintiles), according to the percentage of

respondents reporting they had paid a bribe in the previous 12 months to obtain a

service; Russia is in the third—middle—quintile. In order to render the quintiles of

equal size, the break points appear somewhat arbitrary (52%; 2–6%; 6–18%; 18–

32%; 432%). Moreover, Russia is right at the top of its quintile (i.e. it is the worst in

its group), at 17%. Nevertheless, 20 countries and territories—one third of the total—

are rated worse than Russia, of which nine are post-communist (Albania, Cambodia,

Kosovo, Lithuania, Republic of Macedonia, Moldova, Serbia, Romania, Ukraine; for

readers curious to know, the worst countries were Kosovo at 67%, Albania at 71%,

Cambodia at 72% and Cameroon at 79%). And it appears from these surveys that

slightly fewer Russians had paid a bribe during the previous 12 months in 2007 than in

2004, when the figure stood at 21%.22

Second, in 2007, more Americans and Britons than Russians (at 59% and 72%

against 45%) believed that the level of corruption would increase in their own country

over the next three years, while more Russians than Americans (15% compared with

6%; the Russian figure is exactly the same as the British) believed it would decrease.

19‘Corruption in Russian Business Worsens: Survey’, Reuters, 18 October 2007. Unfortunately, the

Reuters article from which this information is taken treats corporate crime and corruption

interchangeably, and I was unable to locate this survey on the PricewaterhouseCoopers website.

Thus it is not possible to be absolutely certain that the survey indicated an increase in the number or

scale of bribes to state officials, despite the article’s wording.20The number of surveys used in the 2007 CPI varied from three in countries such as Cyprus, East

Timor and Vanuatu to 11 in Indonesia, while the confidence range varied from 0.1 in East Timor to 3.1

in St Vincent and the Grenadines. Conversely, and as an advantage of the 2007 CPI over the 2007

GCB, the former assessed 179 countries and territories, whereas the latter evaluated only 60.21I have slightly modified this question from the actual wording in the GCB Report, since the

original is incorrectly worded (it says to each [emphasis added—LTH] of the following institution/

organisation [singular]; it is highly unlikely that anyone anywhere paid a bribe to all of the 11

institutions listed). I have—perhaps naively—assumed that the intended meaning was included

whenever the English version was translated into another language and/or that respondents were

intelligent enough to assume that they were being asked about any one or more of the 11 institutions.22The year 2004 was the first in which the GCB asked this directly experiential question. It is also

noted here that only 8% of respondents admitted that they or members of their household had paid a

bribe in 2006; this made Russia look much better than in other years compared with many other

countries.



Finally, the percentage of Russians expecting corruption to increase over the next

three years was almost exactly the same in 2002 (surveyed for the 2003 pilot GCB, at

46%) as in 2007, while the percentage expecting it to decrease was actually lower (at

8.0%) in 2002 than in 2007. Thus, using this measure and the percentage of

respondents acknowledging that they or someone in their household had paid a bribe

in the previous 12 months, the corruption situation in Russia does not appear to have

been worse during Putin’s second term than it was in the first, and Russians were

slightly more optimistic about it in 2007 than in 2002.23

The use of different sources and methods all point to the conclusion that corruption

is a real problem in Russia, and most, though not all, indicate that the situation

worsened in Putin’s second term of office. This is the conclusion of the authors of the

study based on BEEPS III—‘. . . corruption in Russia may have improved somewhat

in the early 2000s, but has grown as a problem in recent years’ (Anderson & Gray

2006, p. 38). Even though a comparatively high proportion of Russians believe the

situation will improve, the question still arises as to why this deterioration occurred as

a putatively order-oriented Putin appeared to consolidate power.

The demise and rise of corruption under Putin

Assuming that our imperfect methods for measuring corruption more or less

accurately portray the corruption situation in Russia, it is important to attempt to

identify the factors causing this. There are many reasons for the demise and then rise

again of corruption in Putin’s Russia, but just four will be outlined here: re-

nationalisation; elite complacency; the weak state and president; and trends towards

authoritarianism.

Re-nationalisation

Although much of the Western mass media claims that Putin favoured a return to a

Soviet-style state-owned and state-run economy, this is misleading. Rather, Putin

appeared to favour state control of what he perceived to be key sectors of the

economy, notably energy. This policy was wholly compatible with the argument that

the former Russian President was anxious to improve the living standards of ordinary

Russians while also raising Russia’s standing in the international community. By

increasing state control over the energy sector, Putin could increase the amount of

energy-related income accruing to the Russian state; this could then be used to

improve the lot of citizens, whether through better provision of collective goods, or the

knock-on effects to individuals of strong growth in GDP, or both. In short, Putin’s

approach to ownership can on one level be seen as a way of enhancing eudaemonic

legitimacy (that is, based on performance). At the same time, the president was in a

better position to exercise either energy leverage or energy blackmail, depending on

one’s perspective and the particular country being considered, as a way of enhancing

23All results cited from the various editions of the GCB are from Galtung et al. (2003, p. 28), Hodess

and Wolkers (2004, p. 22), Hodess and Lavers (2006, pp. 7, 18), and Transparency International (2007,

pp. 4, 21, 23).

1020 LESLIE HOLMES


Russia’s image of strength in the world.24 Other things being equal—and this is an

important caveat—the more a state is involved in the economy, the more opportunities

there are for state officials to engage in corruption; this particularly applies if the state

is highly regulatory yet leaves much to the discretion of its officers.

Elite complacency

During his first term of office, Putin sought to distance himself from his predecessor,

and to show both his own constituency and the world beyond Russia that his country

was no longer headed by a weak, corrupt and often humiliating president. He

consciously cultivated an image of a strong, clean and dynamic leader; his penchant

for martial arts and disdain for alcohol abuse were metaphors for this political

image.25 Following an ambiguous start—Putin’s first act as acting president was to

grant an amnesty to his predecessor, who had been accused of corruption and was

often inebriated—the fight against corruption became a significant component of this

clean and fit metaphor. But Putin appears to have been less concerned to display his

personal leadership qualities during his second term—topless photos in rivers

notwithstanding!—at least to his domestic audience. He focused less on Russia’s

dirty underbelly, and more on its economy and international image. While success in

both of the latter two was important to Putin for continuing to appeal to his own

population, the orientation was somewhat different from that in his first term.

One of the clearest signs of complacency relating to corruption is that there is still

no law specifically targeting corruption. This has been ‘on the books’ since the early-

1990s, but was constantly blocked by Yel’tsin for being too draconian and wide-

ranging. Putin might have been expected to take a different—more supportive—line

on the corruption law than his predecessor did, and this appeared to be the case when

the draft law was passed at its first reading by the Duma in November 2002. But this

remained a draft law because of inadequate support.26 Admittedly, it was confirmed in

late-2007 by the Chair of the Duma Commission on Corruption, Mikhail Grishankov,

that the presidential administration had produced a new draft law that was to be

considered by the Federation Council in October 2007;27 but not only had this taken

almost five years since the earlier rejection of a draft law, but it was not passed in late-

2007 anyway. Putin acknowledged this in his February 2008 ‘farewell’ press conference

referred to above: ‘There is no miracle anti-corruption tablet that the state can swallow

and cure its corruption woes overnight. What are needed are legal measures . . . we will

definitely pass an anti-corruption law’.28

24According to the Energy Information Administration, Russia was the world’s second largest oil

producer and second largest oil exporter in 2006, in both cases behind Saudi Arabia.25Though for evidence that Putin was not as anxious as might be expected to address the alcoholism

that is one of Russia’s worst social problems see Parfitt (2006).26For criticism of this situation by the head of INDEM, Georgy Satarov, see Moscow News, 11–17

January 2006; see too Aslakhanov (2004, p. 403).27Kommersant, 27 September 2007.28See http://www.kremlin.ru/eng/speeches/2008/02/14/1011_type82915_160266.shtml, accessed 19

February 2008.



The weak state—and a weak president

It might seem ironic, contradictory even, to argue that a leader who appears to have

been so popular precisely because he was perceived to be strong had been heading a

weak state and had himself been politically weak. But Lilia Shevtsova (2001, pp. 99–

101 and 106) argued shortly after Putin came to power that he was much weaker than

most of the world assumed, and that he soon accepted that the only way in which he

could secure a certain level of stability was by tolerating cosy (and corrupt) patron–

client relations. Certainly, an analysis of the implementation of several of the measures

Putin adopted to strengthen the Russian state demonstrates that this was less

successful than had originally been hoped for; space limitations mean that just one will

be cited here.

For a state to be effective, it must generate sufficient revenue adequately to finance

the agencies of control and defence, notably the police and the military. While many

have argued that the fight against corruption anywhere requires above all political will,

this is only a necessary, not a sufficient condition: there must also be adequate state

capacity, especially if any initial success based mainly on political will is to be

sustained. This point about state capacity is all too often overlooked when Singapore

is cited as the best example of a state substantially reducing corruption levels because

of (Lee Kwan Yew’s) political will; Singapore was prosperous, and could afford

measures not feasible for other states. In other words, there was adequate long-term

state capacity as well as political will.

When Putin assumed power, he soon acknowledged that the Russian state was

generating insufficient income to fund many of its most basic tasks.29 It was in this

context that Russia followed the lead of Estonia and other Central European states in

introducing flat income tax rates (2001). Since most Russians were unused to paying

income tax, Putin hoped that a simple system would encourage more citizens to

acclimatise to this relatively new development, while at the same time generating a

larger and steadier income flow for the state. Until Putin’s rise to power, income tax

had been a relatively minor component of state revenue (at least in comparison with

most EU states—Gavrilenkov 2003, p. 47), and the new president hoped to change all

this. But the early results of the new flat tax regime were disappointing. By June 2004,

according to Russian Deputy Prime Minister Aleksandr Zhukov, the average annual

increase in tax collection since the introduction of the new policy stood at

approximately 40%;30 this sounds impressive until it is borne in mind that fewer

than two million of the more than 120 million adult Russian citizens had been paying

income tax prior to the change. In sum, the Russian state was not adequately

increasing its potential capacity, in terms of revenue raising, from personal

income taxation. The situation was not improved by the March 2007 tax amnesty,

designed to enhance the salience of income tax in overall state revenue, but which

29The problem was so acute that one Western commentator argued that the inability of the Russian

state to raise taxes was by the late-1990s ‘. . . rapidly becoming the greatest threat to economic and

political stability in Russia’ (Treisman 1998, p. 55).30Johnson’s Russia List, 6 June 2004, item 6.

1022 LESLIE HOLMES


appears to have been a relative failure too.31 The state therefore had to look elsewhere,

or else remain essentially underfunded. One of the most obvious areas was the

corporate sector.

Until the early 2000s, Russian corporate taxes had been comparatively high, which

can encourage corporations to seek to reduce or circumvent them through bribery of

state taxation officials. In Putin’s first term, corporate taxes were reduced from 35% to

24% (2002); ceteris paribus, this should have reduced the incentives for companies to

offer bribes to officials, and might have been one of the factors explaining the apparent

improvement in the corruption situation in the early 2000s. But it is not clear that this

generated sufficient additional income to the state coffers; it is impossible to determine

whether or not the reduced income a state might expect from lower corporate taxes

was compensated for by the receipt of higher income that would otherwise have gone

into the pockets of corrupt officials. This is another reason why Putin sought greater

control of the primary generator of wealth in Russia, the energy sector.32 But this is a

precarious approach; while the energy appetites of relatively new major consumers,

notably China and India, have led many economists to assume that the price of oil and

gas is unlikely to decline significantly for some years, a global recession could change

all this very rapidly. It is never wise for a state to put all or most of its eggs in one

basket.

The relative lack of success in combating corruption and organised crime,

particularly in his second term as president, can thus largely be explained through

Putin’s weakness of will, or the weakness of the Russian state, or a combination of

both. Putin’s acknowledgement that he had less control over key elements of the state

apparatus than might be assumed can be seen in his statement to journalists in June

2006, with reference to the so-called ‘Three Whales’ (Tri Kita) case, that he could no

longer trust the central apparatus of Moscow’s law enforcement agencies (Yasmann

2006).33 This is in line with the argument that, under Putin, the siloviki replaced the

oligarchs as the most influential group in the Russian system. Even though some

members of the FSB were purged, it remains more powerful and venal than it should

be, at the expense of other parts of the state apparatus.

31See the January 2008 criticisms of it by Speaker of the Federation Council Sergei Mironov, in

Johnsons Russia List, 4 January 2008, item 9. The amnesty was effective March–December 2007, and

raised less than 3.7 billion rubles (approx. $150 million)—a small sum relative to the size of the Russian

economy (figures from RIA-Novosti, 25 January 2008, available at: http://en.rian.ru/russia/20080125/

97747716.html accessed 17 March 2008).32Gazprom, Russia’s main gas-producing company, is the world’s largest gas production company,

and accounts for approximately one quarter of all tax revenues to the Russian Federation.33The Three Whales case is complex, and cannot be examined in detail here. It centred on a furniture

import company (‘Three Whales’) that was accused of weapons and oil smuggling, as well as money

laundering, in which senior members of the FSB and Customs were alleged to have been involved.

Senior FSB and Procuracy officials halted an investigation into the matter by more junior officers, in an

alleged cover-up. This eventually came to light, and resulted in a string of resignations by senior FSB

and Customs officers and the former Prosecutor General between June and September 2006.

Moreover, a number of people related to the case were murdered or died in mysterious circumstances,

while others received death threats or lost their jobs. For details see Yasmann (2006).



Trends towards authoritarianism

According to democracy minimalists such as John Mueller (1996), ‘real world’

democracy is about little more than regular, genuinely contested elections. Using this

criterion, post-Soviet Russia was and remains a democracy,34 but most observers

agree that true democracy involves far more than simply elections. Among the many

additional variables to include are the rule of law, respect for human rights, and state

recognition of an active civil society. Thus, while Russia under Putin continued to

meet the democracy minimalists’ requirements, in most areas it reversed whatever

moves towards a fuller conception of democracy were taken prior to 2000, even

allowing for the fact that such moves under Yel’tsin are often exaggerated. This is not

the place to consider Russia’s moves towards authoritarianism in detail; rather, the

primary concern here is the impact of these on corruption.

While correlation does not prove causality, it is worth noting that, by almost any

method of assessing the level of corruption in various countries, there is a general

pattern in which established democracies appear to have the lowest levels, while more

authoritarian states—together with so-called failed states—generally have the highest.

One frequently cited reason for this is that authoritarian states and dictatorships

typically do not permit a free press that could independently engage in genuine

investigative journalism. In a study of scandals in Australia, Rodney Tiffen (1999, pp.

206–39) used canine metaphors to suggest that there were five models of the role of the

media in reporting scandals and corruption—the watchdog, the muzzled watchdog,

the lapdog, the wolf and the yapping pack. In a truly democratic society, at least

sections of the media play the role of a ‘vigilant watchdog for the public good against

social abuses and official wrong-doing’ (Tiffen 1999, p. 206); this is the best role for the

media. But in many countries, the media are muzzled through overly restrictive

defamation laws (the muzzled watchdog); in others, they play either a tame,

subservient role to those in power (the lapdog), or else a destructive, overly critical

role (the wolf) in which they are ‘sloppy about accuracy’ (Tiffen 1999, p. 207) and

often make unsubstantiated accusations that can serve to undermine regime and even

system legitimacy. Finally, the media in some countries tend to follow each other, and

to focus on trivial issues rather than significant political ones; in this situation—the

‘yapping pack’ metaphor—the role of the media can be seen to be marginal to

mainstream political activity.

How does Russia fare in terms of this typology? Under Putin, the Russian media

came under increasing state control, and in this sense became more like lapdogs. One

way of tracking this is to use the Freedom House ‘Freedom of the Press’ index. The

Washington- and New York-based Freedom House has been producing an annual

assessment of the level of press freedom in most countries of the world since 1980; this

is now scaled 0–100, where a higher number means that a country has less press

34One aspect of corruption not considered in this essay is electoral fraud, which, in the Russian case,

deserves its own detailed study. Here, it can be noted that despite many claims of widespread fraud (see

for example,Moscow News, 27 November 2007, p. 1), proven cases remain relatively few in post-Soviet

Russian elections. Questionable practices, on the other hand—such as highly unequal and inequitable

amounts of campaign funding and airtime—are common.

1024 LESLIE HOLMES


freedom. Countries are classified under three headings—Free (score 0–30), Partly Free

(score 31–60) and Not Free (score 61–100). In its 2007 assessment of Russia’s media

during 2006, Freedom House assessed Russia’s media as ‘Not Free’, a classification

that had first been applied to post-Soviet Russia in 2003; prior to that, Russia had

been in the ‘Partly Free’ category since it was first assessed in 1993.35 In that first year,

the country was assessed only in general terms; no precise score was given. But

numerical scores have been available since 1994, when Russia was assessed at 40—a

score much closer to the ‘Free’ than to the ‘Not Free’ category.

In the first three years of the Putin presidency, Russia’s press freedom scores were

steady state (at 60 in 2000, 2001 and 2002), right on the cusp between Partly Free and

Not Free, though just on the better side of the dividing line. But the situation changed

in 2003, when Russia slipped to 66, and hence into the Not Free category. Since then,

it has deteriorated further, at 67 in 2004, 68 in 2005, 72 in 2006 and 75 in 2007. This is

both depressing and cause for concern, but two points must be noted if a balanced

evaluation of the press media situation is to be made. First, Russia has never been in

the Free category. Indeed, it deteriorated markedly in 1995, dropping from a score of

40 to 55 in just one year; it then worsened marginally in 1996 (to 58), improved again

slightly in 1997 and 1998 (both 53), before dropping again to 59 in Yel’tsin’s last year

as president. Second, it must also be noted that the media often acted as a wolf, in

Tiffen’s terms, prior to 2003, especially with regard to corruption allegations. Thus,

many allegations against high-ranking politicians and other public officials appear to

have been made on the basis of either hearsay or outright mischief-making, often

relating to particular political parties. In general, there have been fewer apparently

arbitrary accusations of corruption in the Russian media in recent years than there

were during the 1990s; by many criteria, and certainly in terms of enhancing regime

legitimacy, this represents an improvement. Unfortunately, at least some of this

improvement might be attributed to tighter censorship. For example, the amendments

to the Law on Fighting Extremist Activity that Putin signed into law in July 2006

rendered it far more difficult for the media to criticise public officials.36 It would be

better had the improvement been the result of the media becoming more responsible

than of tighter censorship.

Thus, at least as it relates to corruption, the media situation in Putin’s Russia is

more complex than would be inferred using only the FH assessment.37 Conversely—

and reiterating the point that correlation does not prove causality, let alone the

directionality of causality—it is interesting to note that the worsening media freedom

situation corresponds closely with the apparently worsening corruption situation. It

can therefore be tentatively suggested that, as indicated by the increasing state control

35Until 1992, Freedom House ranked the USSR, but not individual component parts. The USSR

had been ranked Not Free until 1991, but then Partly Free in 1991 and 1992.36See for example, ‘Putin podpisal zakon o protivodeistvii ekstremizmu: ‘‘Reportery bez granits’’

opasayutsya, chto eto privedet k napadkam na svobodu slova’, Reporters Without Borders, 27 July

2007, available at: http://www.rsf.org/article.php3?id_article¼23077; ‘Report: Press Freedom Declines

in Russia’, The Other Russia, 7 May 2007, available at: http://www.theotherrussia.org/2007/05/07/

report-press-freedom-declines-in-russia/, both accessed 16 March 2008.37For a wide-ranging set of analyses of various aspects of the Russian media see the recent special

section of Europe-Asia Studies dedicated to this topic (59, 8, December 2007).



of the mass media, the moves under Putin away from the limited and very imperfect

democracy Russia had experimented with in the Yel’tsin era were partly to blame for

the recent worsening of the corruption situation in the country.

One of the most disturbing aspects of the Putin period regarding corruption and

organised crime is that, as in the Yel’tsin era, relatively high numbers of journalists

and other investigators who focused on one or both of these continued to be

murdered. High-profile cases to have been widely reported in the Western media

include the killing of Forbes editor Paul Klebnikov in July 2004 and of leading

investigative journalist Anna Politkovskaya in October 2006. Not only are these

examples of violent lawlessness disturbing in themselves, but they reveal the failure of

Putin’s much-vaunted ‘stability’ policy to reduce this political aspect of violent crime

to any meaningful extent.

Organised crime and its connections with corruption

Many of the reasons for the rise of organised crime in the post-Soviet era—including

the weak state—are essentially the same as the reasons for the rise of corruption.

However, one factor that needs to be highlighted, and that is typically either

downplayed or else overlooked altogether in most analyses, is the impact of corruption

and organised crime on each other, and their frequently close connections. It is only

recently that states and international organisations have begun explicitly to recognise

the connections, both conceptual and actual, between the two. This applies in the

Russian case as much as elsewhere. Yet most security analysts are by now acutely

aware that corruption and organised crime—and particularly the links between them,

as well as between both of these and terrorism—are significant dimensions of the new

soft security paradigm (Kaldor 1999, p. 2). There is certainly a great deal of evidence

of collusion between corrupt officials, including high-ranking members of the law

enforcement agencies, and organised crime; the Three Whales case referred to earlier is

a significant recent example (for further examples see Holmes 2004, 2007b).

International factors

From the available soft data, it appears that the corruption situation in Putin’s second

term worsened somewhat, after having improved in his first term. The picture

regarding organised crime is more complex; while the overall levels of violence and

arms smuggling appear to have declined, other crimes typically associated with

organised crime, notably drug dealing and protectionism, increased markedly. What

are the prognoses for these two types of anti-social and potentially delegitimising

activities? We begin by considering international factors.

In the case of corruption, other post-communist states have been forced by the EU

to address the issue; one of the conditions for joining the EU in the two most recent

rounds (May 2004 and January 2007) was that applicant states demonstrate a serious

commitment to bringing this problem under control.38 Since Moscow apparently has

38In its June 2007 assessment of Bulgaria’s and Romania’s first five months of membership of the

EU, the EU Commission was highly critical of the two countries’ lacklustre efforts against corruption,

1026 LESLIE HOLMES


no interest in applying for EU membership, one of the external forces that has had

some effect in other post-communist states cannot operate effectively in the Russian

case.39 However, this does not mean that Russia is immune to outside pressure.

Moscow’s rapid response to the FATF blacklisting in 2001 is clear evidence that it will

sometimes take external criticism seriously. Since the carrot of EU membership does

not apply, what other external forces might be able to exert pressure on Russia?

First, there are international organisations. The UN introduced what has been

widely heralded (Eigen 2003a; Naım 2005) as a landmark treaty, the Convention

against Corruption, in December 2003. Russia ratified this in May 2006. However, this

is not only very new (it did not enter into force until December 2005), but, as a product

of the UN, does not in practice have the heavy sanction capacity necessary to give it

real bite.40 In July 2006, Putin finally signed off on a law that committed Russia to

recognise the Council of Europe’s November 1998 Criminal Law Convention. Not

only did Russia take a long time to ratify this convention, but the Council of Europe is

another international organisation that, unfortunately, often talks above its weight; its

sanction capacities in reality are limited. More recently, the Russian government has

been pushing hard for accession to the OECD, and to its Convention on Combating

Bribery of Foreign Public Officials that came into effect in February 1999;41 even

assuming Russia is admitted to the Convention, however, the point just made about

the effectiveness of international documents pertains here too. Russia is also selective

in its involvement in international projects that could help it to fight organised crime.

Thus it did not participate in the 5th Working Group Meeting on Transnational

Eurasian Organised Crime organised by Interpol in January 2007, despite the fact that

Interpol claims that the group, which is part of Project Millennium, has been convened

above all to fight organised crime in former Soviet states. On the other hand, the WTO

could have real clout, especially since Russia is still pressing for membership that has

so far been denied.42 The one rather large fly in this ointment, however, is that the

WTO has often been identified as the most significant international organisation not to

demonstrate even symbolic or tokenistic concern about corruption (Eigen 2003b). If

the WTO does eventually follow almost all other major international economic

and threatened to impose sanctions in 2008 unless they demonstrated a higher level of commitment. In

January 2008, the EU did freeze Bulgaria’s infrastructure subsidies because of a corruption scandal

(Southeast European Times, 27 January 2008). However, the EU announced in early February 2008

that, despite its ongoing and serious concern about the levels of corruption in both countries, and

organised crime in Bulgaria, it would not impose sanctions at present. See http://euobserver.com/9/

25587/?rk¼1 accessed 19 February 2008.39It is acknowledged that the EU does have projects designed to combat corruption in Russia, such

as RUCOLA-2 that ran from July 2006 to November 2007, but the EU simply does not have the

leverage over Russia that it has had over recent applicants for membership.40It is ironic that, during the negotiations on the UN Convention, Russia endorsed a proposal for

compulsory transparency in the funding of political parties while the US vetoed it. As is often the case,

the United States’ approach to democracy was shown to be at least ambiguous, and arguably

hypocritical.41Yakovenko (2007, p. 3); ITAR-TASS, 28 November 2007.42Russia began negotiations for membership of the WTO in 1993. In April 2006, its chief negotiator

(Maksim Medvedkov) suggested that Russia could well be admitted in March 2007, but this still had

not occurred by early 2008.



organisations in explicitly condemning corruption and using conditionality clauses for

applicant states, it could force Russia to address this issue more seriously.

While, in theory, other states could also introduce various types of sanction against

Russia, until it demonstrates a real commitment to bringing corruption under control,

few are likely to. There are many reasons for this. One is that so many countries have

high levels of corruption that it would be difficult to justify singling out Russia for

punishment. Another relates to Russia’s huge energy reserves. The uncertainty of oil

and gas supplies from the Middle East, coupled with the developed world’s

dependency on oil and its competition for this with huge new markets in the

developing world, means that there are strong disincentives and little incentive to

introduce sanctions.

If neither international organisations nor individual states are likely to act as the

external forces compelling Russia to do more to combat corruption, from where else

might the pressure emanate? In an increasingly globalised and neo-liberal world, in

which states offload ever more tasks to the private sector, the latter can play a

particularly effective role in encouraging the Russian authorities to address

corruption, at least as this relates to officials who demand bribes before they will

assist foreign companies operating or planning to operate in Russia. If this seems

fanciful, it is worth noting that the international homewares corporation IKEA has

successfully resisted demands for bribes in Moscow, and brought this whole issue into

the open.43

Given the argument here that corruption can encourage organised crime and often

interacts with it, a reduction in corruption should trigger a reduction in organised

crime. Moreover, the history of organised crime in other parts of the world suggests

that elements within Russian organised crime will seek greater respectability. If the

state becomes stronger and imposes tougher and more frequent sanctions against

organised crime, this too could reduce its salience. On the other side of the equation, it

is important that Russian law enforcement agencies continue to cooperate with their

counterparts in other countries, including Western ones, in fighting Russian

transnational organised crime. If Russia’s determination to be taken more seriously

by the rest of the world involves more sabre-rattling and confrontation, this type of

cooperation could be relegated to the back burner. This would play into the hands of

organised crime.

Conclusion

It was argued above that political will is a necessary but not sufficient condition for

reducing corruption and organised crime rates. It appears that Putin did demonstrate

a certain amount of political will in his first term, but that he also had limited state

capacity. While the latter may have increased in his second term, this was on a

somewhat precarious basis, and Putin turned his eyes elsewhere anyway.

43Economist, 1 April 2000; Goldman (2005, pp. 316–17); Newsweek, 23 October 2006. There are far

fewer examples of corporations playing this good citizen role than of companies that have been accused

of offering bribes to secure contracts, licences, permits, etc. But other ‘good guy’ examples from the

post-communist world include Motorola in Ukraine and Unilever in Bulgaria.

1028 LESLIE HOLMES


While the role of external agents may impact on corruption, and its own internal

dynamism may reduce the salience of organised crime in Russia, the future of these

two phenomena will also depend to no small extent on the attitudes and capacity of

the new Russian leadership team. Opening his electoral campaign in January 2008,

presidential candidate (and then successor to Putin) Dmitry Medvedev stated publicly

that he was very concerned about Russia’s ‘legal nihilism’, and claimed he would make

the fight against corruption a high priority, since it had now reached an ‘enormous’

scale.44 Unfortunately, there is a real danger here of crying wolf once too often, given

the yawning chasm that eventually emerged between the words and deeds of previous

Russian (and many other post-communist) leaders in this area.45 It can only be hoped

that, for a change, the cynics will be proved wrong as Russia greets a new president. If

they are, though, either Medvedev will have to stand up to Prime Minister Putin, or

Putin will have to raise the fight against corruption and organised crime on his list of

priorities, or civil society’s role will have to be substantially enhanced. As of early

2008, none of these scenarios looked particularly likely, recent speeches by both

Medvedev and Putin notwithstanding. But anyone who has studied Russian politics

knows that one of the few certainties about it is that it is unpredictable.

The University of Melbourne

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