Russia’s Ruling Elite Engulfed in Anti-Corruption Scandals

Publication: Eurasia Daily Monitor Volume: 10 Issue: 33

United Russia MP Vladimir Pekhtin (Source: BBC News)

This week, the Moscow political elite was shocked by the resignation of three Duma deputies from the ruling United Russia (UR) party: chairman of the Duma ethics committee Vladimir Pekhtin as well as deputies Anatoly Lomakin and Vasiliy Tolstopyatov. All were previously accused by opposition politicians and journalists of failing to declare their real estate holdings and vast business interests. Lomakin, whose personal fortune is estimated to be worth some $1.2 billion, resigned together with Tolstopyatov without any public statements. Sources from inside the UR Duma faction told journalists that Lomakin, who helped finance the UR parliamentary election campaign in 2011 and was granted Duma membership by the governing party last August, resigned because of unspecified health problems and “because he did not find the time or the desire to be a deputy.” Tolstopyatov, a Duma deputy since 2007, resigned allegedly because he will become an executive in the state-controlled natural gas monopoly Gazprom (Kommersant, February 21).

Pekhtin (62), a parliamentarian since 1999 and considered a prominent UR member—unlike backbenchers Lomakin and Tolstopyatov—was accused by the anti-corruption campaigner and pro-democracy protest leader Alexei Navalny of owning real estate in Florida worth some $1.8 million that he did not declare as demanded by law. Pekhtin denied the accusation, announcing last week “I practically do not have any foreign real estate.” Pekhtin provisionally resigned his committee chairmanship last week, pending an investigation. On February 20, in an emotional five-minute speech from the Duma podium, Pekhtin announced he “never did anything illegal” and will fight to clear his name; but since legal procedures are “complicated and lengthy,” he is resigning so as “not to undermine the good name of the UR party and [Duma] faction.” Pekhtin’s son Alexei resides, since 1998, in Florida and may have “by mistake,” included his father in the ownership title deeds of his real estates in Florida, according to Vladimir Vasilyev, the UR party leader in the Duma. Vasilyev told journalists that Pekhtin “intends to go to the United States to find with the help of local lawyers proof he has no US real estate,” which may require months. According to Vasilyev, United Russia will fully support Pekhtin in his quest and may somehow reinstate him when his name is cleared (Intarfax, February 20).

According to independent cable-TV channel Dozhd (“Rain”), Pekhtin was summoned to the Kremlin and ordered to resign hours before he made his announcement. Previously, President Vladimir Putin never disowned his loyal supporters, while the authorities ignored any publications of compromising materials by the independent press or by opposition bloggers like Navalny. Now the situation is changing somewhat; Pekhtin seems to have made the fatal mistake of secretly owning real estate in the US, Putin’s declared archenemy—a misdemeanor, though legally not a felony. Yet, in present-day Putin’s Russia, such an offense is treated as close to treason (http://tvrain.ru/articles/do_chasa_nochi_sidel_v_administratsii_kto_poprosil_pehtina_sdat_mandat-337128/).

Another important factor that may have worked against Pekhtin is his alleged long-time (since 1999) personal feud with former UR leading deputy Vyacheslav Volodin who is now the highly influential first deputy chief of Putin’s administration in charge of internal politics and ideology. Volodin was appointed to his present post in December 2011 to formulate the government’s reaction to the mass pro-democracy demonstrations in Moscow and was chief of Putin’s presidential reelection staff in 2012. Volodin is considered in Moscow the prime architect of Putin’s new internal and foreign policy ideology based on aggressive nationalism, anti-Americanism and on the concept of “nationalizing” his ruling elite to eliminate foreign (US) influences that may be used in a presumed regime-changing conspiracy (see EDM, February 14; Kommersant, February 21).

Sources in the Kremlin have told journalists that other UR deputies and government officials may follow Pekhtin, Lomakin and Tolstopyatov out of the Duma and government. At least six more UR parliamentarians may soon go, maybe including the famous Cold War–era ice hockey goalkeeper Vladislav Tretiak, who allegedly also may own real estate property in Florida (Vedomosti, February 21). Some UR deputies have expressed apprehension that Putin might effectively dissolve the UR party and also the Duma, call new snap elections and capture a renewed majority, using the populist All-Russia People’s Front formed in 2011 as a base for a successful election bloc. At present, the Front has 82 seats in the Duma as part of the UR’s 238-seat faction (out of a total of 450 seats in the Duma). The UR has been branded by Navalny as “the party of thieves and crooks” and seen by many in Russia as an alliance of corrupt officials and tycoons (Kommersant, February 21).

The rules of the political game are changing in Russia: Putin’s foremost rule since 2000—that top loyalists are exempt from any form of prosecution and that corrupt officials and friendly businessmen may line their pockets with impunity—seems to not be entirely true anymore. Anti-corruption investigations are pursuing a growing number of former “untouchables,” beginning with the ousting of former Defense Minister Anatoly Serdyukov last November. Many extremely rich members of the Russian elite have invested graciously to buy Duma membership as legal cover, and now there is growing confusion since this cover is slipping, the rules are changing and no one seems to know for sure what the new rules may be (Vedomosti, February 21).

The “cleansing” of the United Russia party and government of apparently corrupt officials is presented by Kremlin-connected sources as a move that will boost Putin’s public support together with aggressive anti-American nationalism. But pollsters disagree. According to independent Levada Center chief Lev Gudcov, “The disgrace of selected officials is seen by the public not as a cleanup, but as evidence of the total degradation of the ruling elite.” The public wants to see arrests and convictions, not simply ousters and the retirement of disgraced top officials. These expectations, and the possibility that the Kremlin may indeed decide to sacrifice some of its loyalists to please the public, are further unnerving the ruling elite, since no one feels entirely safe. Political and social instability in Putin’s Russia is growing and may be reaching crisis proportions (Kommersant, February 21).