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Cablegate: Medvedev's Anti-Corruption Package: Two Views

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PP RUEHLN RUEHPOD RUEHSK RUEHVK RUEHYG
DE RUEHMO #3775/01 3661138
ZNR UUUUU ZZH
P 311138Z DEC 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 1401
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 003775

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON PINR SOCI EAID RS
SUBJECT: Medvedev's Anti-Corruption Package: Two Views

1. (SBU) Summary: Transparency International Director Yelena
Panfilova praised President Medvedev's anti-corruption bill that was
signed into law on December 25 as an "extremely valuable" first
step, while recognizing the deep flaws in its content and how it was
promulgated. Arguing that waiting for the perfect legislation had
left Russia without a legal definition of corruption for the last 15
years, Panfilova said the focus should now shift to formulating a
national anti-corruption strategy, defining the implementing
instruments for the bill, and establishing a legal concept of
"public servant," with the U.S. one possible source of assistance on
developing a governmental code of ethics. Taking a more skeptical
view, prominent TV and radio personality Vladimir Solovyev detailed
the blowback to his public campaigns against corrupt officialdom,
concluding that the economic crisis was likely to exacerbate
corruption, with perhaps "revolutionary" effect. In meetings with
Russian officials and NGO leaders, we will examine additional
opportunities for targeted U.S. assistance in supporting the
anti-corruption legislation. End Summary

Welcome the Bill; Improve its Quality
-------------------------------------

2. (SBU) Transparency International Director Yelena Panfilova
urged us on December 30 to welcome the fact of the anti-corruption
measures, signed into law by President Medvedev on December 25 after
they passed their third reading by the Duma on December 19, while
reserving judgment on their quality. Medvedev's initiative, she
stressed, was "extremely valuable," because it provided Russia for
the first time with a legal definition of corruption and a basis for
legislators and activists to further refine anti-corruption laws.
The bill signed by Medvedev, which includes 25 amendments to current
laws, aims to define, prevent, and reduce corruption by: increasing
public control over and transparency of government functions,
promulgating new disclosure requirements and tightening restrictions
on gratuities, facilitating whistle-blowing, instituting new
requirements to enhance the independence and quality of judges, and
increase the criminal liability and administrative sanctions for
corruption.

3. (SBU) Panfilova made no excuses for the process used by the
Kremlin to pass the legislation and publicly has spelled out the
legislation's deficiencies. Noting there was as much opportunity
for outside experts or Duma members to influence the legislation as
there was in "stopping an avalanche," Panfilova nevertheless
insisted that "something was better than nothing" and that "Russia
had been waiting for the perfect anti-corruption legislation for 15
years." Among the bill's deficiencies, Panfilova iterated: its
vagueness (including its silence on which agency will serve as the
coordinating body, and apparent exclusion of state corporation
employees), financial-based definition of corruption (excluding
"non-material" blandishments such as favors, job promotion, access,
etc) and absence of provisions for prosecuting transnational
corruption (although the legislation calls on Russia to join all
international efforts), lack of implementing instruments, and
failure to define "public trust" or "public service." Despite the
bill's flaws, Panfilova noted with satisfaction that it was
sufficient to set nerves on edge, with Medvedev forced to publicly
chastise Duma members over attempts to gut the legislation,
including a stillborn initiative to delay its implementation by two
years. (As passed, the bill's financial reporting requirements
start in 2009, which mean that the first forms will be filed by
officials in January 2010 for the previous year.)

4. (SBU) Concluding crisply that "what's done is done," Panfilova
outlined a three-pronged approach to ensure the bill is adequately
implemented:

-- Formulate a national anti-corruption strategy: While the
legislation refers to a strategy, none has been promulgated, which
in a December 6 meeting the Council of Europe's Group of States
Against Corruption (GRECO) gave Russia 18 months to complete.

-- Define the implementing instruments: None of the mechanisms
specified in the legislation yet exist, including the monitoring
bodies, the legal instruments, or even the forms for officials to
complete. While Medvedev used meetings with FSB Director Bortnikov
and General Procurator Chaika to impress upon them the importance of
enforcing the new bill, Panfilova noted that coordination of the
legislation could fall to a host of other agencies, including the
Ministry of Justice, MVD, or Presidential Chief of Staff Naryshkin
(in his capacity as chair of Medvedev's anti-corruption committee).

-- Establish the concept of "public trust" and "public service:"
The legislation bases its punishment on violations of the public
trust by public workers; however, Russian laws don't define that
term, with public employees referred to by their specific job
function (e.g., militia, health worker). By defining who
constitutes a state worker, the lacunae of exempting state
corporation employees can also be closed. Panfilova said the U.S.
could play a role in educating Russian legislators about its concept
of ethics in government service and the mechanics of enforcing the

MOSCOW 00003775 002 OF 002


legislation, although acknowledging that opponents of the
anti-corruption legislation had painted it as an initiative of
"outside forces." Noting that she would be in the U.S. on an
Eisenhower Fellowship in the spring to consult on this issue,
Panfilova said that an initial ruling party draft was "hilarious" in
conflating loyalty to United Russia with sound public morals.

Ground Realities Remain Grim
----------------------------

5. (SBU) A December 23 meeting with prominent radio and television
personality Vladimir Solovyev (ranked the 25th most influential
person in Russia by Kommersant for his political show "To the
Barrier," public appearances, and books) provided a reminder of the
ground realities of battling corruption. Seating himself with his
back to the restaurant window ("so I won't see them when they shoot
me"), Solovyev presented a dark, if self-flattering, portrait of
fighting corruption in Russia. His reward for hounding Chair of the
Moscow Arbitrazh Court Lyudmila Maykova, he argued, was her
reappointment, the cancellation of his other television program
"Sunday Evening with Vladimir Solovyev," pressure from his radio
station's owner to tone down his anti-government criticism, an
increase in death threats against himself and family members,
continued tailing and telephone monitoring, and "pranks" such as the
throwing of paint and oranges both during and after his public
performances. The fact that he continued to have allies in high
places ("Putin has supported me until now") accounted for his
continued freedom, he maintained.

6. (SBU) Solovyev, who recently has engaged in a high level
crusade against Transport Minister Levitin for his conflict of
interest in sitting on the Aeroflot Board and heading the
Sheremyetovo airport while determining the fate of government
subsidies to rival airlines, posits a leadership environment where
Putin is chary of anti-corruption efforts. While not directly
thwarting Medvedev's initiatives, Putin's loyalty to cronies or
protection of his own interests, is exploited by others to weaken or
render still-born real efforts to limit feeding at the government
trough. (While insisting that his white knight reputation was
deserved, Solovyev was clearly on the defensive over leaked
transcripts of his cell phone conversations, suggesting that his
radio attacks on corrupt officials were rewarded with favors or
compensation from the victims' bureaucratic or economic rivals.
Solovyev maintained the improbable line that he had purposely held
the suggestive conversations in order to lure the "services" into
publishing the transcripts, thereby "proving" his charges that he
had been monitored all along. "You'll hear more nasty stuff about
me," was his parting comment at the end of the meeting.)

7. (SBU) The lack of transparency, Solovyev charged (and Panfilova
agreed) would become increasingly politically salient as the
economic crisis deepened. Russians, Solovyev argued, for the first
time "have something to lose" in an economic contraction, unlike in
the 1990s, creating a "revolutionary" atmosphere. Reflecting upon
Rosnanotech Director and former Deputy Prime Minister Anatoliy
Chubais' public speculation that Russia had a 50-50 chance of coming
out of the economic crisis without fundamentally changing the
political and economic system developed over the last 15 years,
Solovyev countered that the "economy is dead" and the leadership
already panicked. Despite the anti-corruption legislation, he
maintained, the increased role of the state in resolving the
economic crisis and meting out subsidies to critical sectors of the
economy was likely to accelerate the spread of corrupt practices.

Comment
-------

8. (SBU) Medvedev's albeit imperfect anti-corruption package
provides an opening for targeted U.S. technical assistance. Post
has previously provided examples of US and foreign conflict of
interest legislation and regulation to members of the President's
Anti-Corruption Commission and has organized roundtables on various
anti-corruption topics, in addition to supporting the work of
Transparency International. We will continue to explore ways to
work with the Public Chamber, Duma, NGOs, law enforcement agencies,
and the Presidential anti-corruption committee, as Russia refines
its legislation. Specifically, we anticipate conducting programs on
corporate raiding and transnational bribery this spring. Ambassador
Kislyak's earlier solicitation of Washington consultations on
combating corruption by members of the Presidential Administration
reflects the high-level Russian interest in working with the U.S.,
which we should capitalize on.

BEYRLE

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