Cancerous Corruption Pervades Russia’s Defense Sector

Publication: Eurasia Daily Monitor Volume: 10 Issue: 203

(Source: RIA Novosti)

Since President Vladimir Putin appointed Sergei Shoigu to be Russia’s defense minister in November 2012, the defense ministry leadership has resorted to Soviet-era “snap inspections” of its Armed Forces to raise combat readiness and gain additional insight into the condition of various units. Such an approach, however, long abandoned by the member militaries of the North Atlantic Treaty Organization (NATO), illustrates the total absence of a culture of continuous assessment and professional development within Russia’s armed forces (see EDM, November 5, October 28). Nonetheless, the motif of a “snap inspection” is also being applied as part of a wider effort to understand or try to curb the dangerously high levels of corruption within the Russian defense sector.
 
On October 18, Shoigu approved the “Concept for the Management of Property of the Russian Federation Armed Forces,” which defines the strategy for property policy. Partly aimed at mitigating corruption tied to military property, the concept also tries to frame policy geared toward optimizing state costs on surplus assets (Ministry of Defense website, October 18). While his predecessor Anatoly Serdyukov ran aground on the scandal in the defense ministry–linked holding company Oboronservis, Shoigu attempts to present himself as a self-styled Russian superhero, battling corruption wherever he finds it. Yet, burgeoning levels of corruption represent such a deep-rooted ailment within the political and social fabric of the Russian Federation that it arguably leaves little scope for improvement based on the actions of individual political personalities.

In October, a Military Prosecutor’s Office inspection was conducted in relation to the Joint Stock Company Voentorg, which provides ablutionary and laundry services to the military. A source in the prosecutor’s office told Izvestiya that losses resulting from corruption are estimated at 1.5 billion rubles ($45.7 million). Jointly with Rosoboronzakaz (Federal Service for Defense Contracts) specialists, military prosecutors conducted the inspection of the company and found, based on a random sampling, losses to the Federal Budget by the organization amounting to around 24 million rubles ($734,495). A defense ministry source said that if the figures obtained are multiplied across all military units, the total loss will be in the billions of rubles. Voentorg’s violations were described during a Rosoboronzakaz collegium session on October 29. The company is believed to have been involved in “economic violations” in the first nine months of the year totaling 3.13 billion rubles ($95.79 million) (Izvestiya, October 31).

Of course, the legacy of the Oboronservis scandal continues to hang over the defense ministry. In February 2013, the overall cost of the corruption from its illegal sales of defense ministry property was estimated to be 13 billion rubles ($433 million). Investigators had initially believed the scale of the corruption to be around 3 billion rubles ($91.81 million), but discovered fresh instances of fraud and numerous suspects as the inquiry advanced. Indeed, the head of the investigative committee, Aleksandr Bastrykin said that embezzlement had become deeply rooted in the defense ministry as a result of its inefficient control over spending by its financial bodies (RIA Novosti, February 22).
 
Damage to the state budget caused by corruption in the military exceeded 7 billion rubles ($23.3 million) in 2012. Sergey Fridinskiy, the chief military prosecutor, said that one in five crimes in the military were “corruption-related violations.” “Instances of bribe-taking rose more than one-third; the number of misappropriations and embezzlement instances doubled; and instances of fraud increased by 20 percent,” Fridinskiy said (Interfax, March 11, 2013). In 2012 alone, three generals, 210 senior officers, including 64 commanders of military units, were convicted of corruption-linked crimes. “Mercenary motives were and remain the main reason for the majority of registered crimes.  Hence, major financial damage was caused to the state budget as well as to the budgets of ministries and agencies and totaled 11 billion rubles ($366.6 million),” Fridinskiy added (Interfax, March 11).
 
The Kremlin also discovered earlier this year that corruption in the defense sector is so pervasive that the country’s strategic rocket forces (Raketnye Voyska Strategicheskogo Naznacheniya—RVSN) and the Aerospace Defense Forces (Vozdushno Kosmicheskaya Oborona—VKO) are experiencing a rise in such nefarious activities. Corruption was reportedly increasing in the RVSN, the defense ministry’s 12th Main Directorate (the organization responsible for the country’s nuclear weapons) and the VKO. In the RVSN alone, 55 senior officers were prosecuted in 2012, marking a 1.5-fold increase year-on-year. Their activities resulted in estimated damage of 180 million rubles ($6 million) (Interfax, February 25).
 
In late December 2012, Lieutenant-General Valery Ivanov, Deputy Chief of the VKO, was suspended from office on suspicion of causing the state an estimated $1 billion ($30.6 million) in damages by organizing an illegal dumpsite in the Moscow region. Allegedly, Ivanov signed with a private company several contracts pertaining to defense ministry land north of Moscow meant for reclamation and restoration; instead it became an illegal garbage dump. The dump scandal, involving several retired and serving officers, witnessed a five-fold growth of the site to reach nine acres (RIA Novosti, January 1, 2013).
 
However, measures undertaken to stem military corruption or statements from leading political figures will do little to lessen the scale of the problem. In a recent article in Nezavisimoye Voyennoye Obozreniye, acknowledging that Putin takes seriously the issue itself, corruption was highlighted as the main threat to all types of Russian security, including military and food security. Mikhail Remizov, the president of the National Strategy Institute, stresses that a real effort to combat corruption is impossible without intensifying its political component. In other words, Russia’s leading government ministers must become real political figures with a high premium placed on their reputation in public office. “Nothing will happen in the sphere of the fight against corruption unless there is an institution of reputation within the political class, the ruling class, in the country. Reputation is important when there is a healthy, normal political process. That is, when people who lose their reputation also may lose power, a political career, and an administrative career. In our country now this is perceptibly lacking,” Remizov asserts (http://www.ng.ru/politics/2013-10-31/1_three.html).
 
Thus, in this context of pervasive corruption, Shoigu is no more likely to succeed where Serdyukov failed precisely because a key dynamic is missing. Critically, corruption is such an organic part of the system that it will demand more than cosmetic surgery to mitigate its relentless metastasis. But unless its impact is more coherently managed by the defense ministry, corruption is likely to limit any efforts to develop a modern, combat-capable force.