Teaching Comparative Government and Politics

Thursday, March 08, 2012

Part of Putin's "family"

One goal of Putin's early years as president was to take down the Yeltsin oligarchs who had profited and amassed power during the initial privatizations of the 1990s. Since then he seems to have enriched and empowered his own family of oligarchs.

The first comment attached to the article says, "how is it different from any place in the world??????" Good question. It would be interesting to see analyses of corruption like this for Nigeria or Mexico or China or the UK or Iran. Would your students expect different results in those places? Why?

Midas Touch in St. Petersburg: Friends of Putin Glow Brightly

Arkady R. Rotenberg, a former judo coach, is now a billionaire industrialist, having made a fortune selling pipe to the state-owned gas monopoly, Gazprom.

Yuri V. Kovalchuk owned a minority stake in a small bank in St. Petersburg that in recent years won control of a number of Gazprom subsidiaries. He is now worth $1.5 billion.

Gennady N. Timchenko, once the little-known sales manager of a local oil refinery, is now one of the world’s richest men…

What these men share, besides staggering wealth and roots in St. Petersburg, is a connection to Prime Minister Vladimir V. Putin… The three billionaires are members of a close circle of friends, relatives, associates, colleagues from the security services and longtime advisers who have grown fabulously wealthy during Mr. Putin’s 12 years as Russia’s paramount leader.

Critics say these relationships are evidence of deeply entrenched corruption, which they view as essentially government-sanctioned theft invariably connected to Russia’s abundant natural resources: gas, oil, minerals…

Mr. Putin has repeatedly denied any involvement in the enrichment of these and other acquaintances, and he has forcefully dismissed assertions made by his political opponents that he himself is a secret beneficiary of these enterprises and has amassed tens of billions of dollars in bank accounts outside Russia…

The dealings of Mr. Putin and his acquaintances are likely to come under even more scrutiny… To balance its budget, the government intends to transfer $50 billion in assets to the private sector over the next five years. If those assets end up in the same wealthy, well-connected hands, Mr. Putin could find himself struggling to maintain the legitimacy needed to serve out his term.

At the same time, Mr. Putin will be under pressure to repay the loyalty of his associates, who might reasonably want assurances that they will not face prosecution or exile, as has happened in the past to a half-dozen or so members of the first generation of so-called oligarchs in post-Soviet Russia…

The lines between legitimate and illegitimate businesses are often fuzzy in Russia. In some cases, critics say that Mr. Putin’s associates completed deals without the required competitive bidding, and in others obtained properties at hugely discounted prices. But it was not clear that any laws were violated…