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RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHMO #1643/01 1620728
ZNR UUUUU ZZH
R 100728Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 8518
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 MOSCOW 001643 
 
STATE FOR EUR/RUS 
 
DOJ FOR OPDAT/LEHMANN, NEWCOMBE AND ALEXANDRE, OIA FOR BURKE, OCRS 
FOR OHR AND OTT 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL RS KCRM KJUS SNAR
SUBJECT: ANTI-CORRUPTION PROGRAMS 
 
THIS CABLE IS SENSITIVE BUT UNCLASSIFIED, NOT FOR INTERNET 
DISTRIBUTION 
 
¶1. (SBU) Summary: In response to President MedvedevQs rhetoric about 
the rule of law and anti-corruption, the EmbassyQs Law Enforcement 
Section (LES) and Resident Legal Adviser (RLA) conducted two 
programs last week focused on strengthening RussiaQs capacity to 
combat corruption.  The first, a roundtable at Moscow State 
University, addressed corporate criminal liability, an important 
tool in combating corruption, white-collar crime and organized 
crime.  The second, a training program for 70 Russian prosecutors, 
focused on the skills needed to draft and argue motions in criminal 
cases, with a special focus on corruption prosecutions.  While the 
programs advanced the ball on both issues, they also highlighted the 
obstacles that Medvedev will face in combating corruption.  End 
Summary. 
 
---------------------------- 
CORPORATE CRIMINAL LIABILITY 
---------------------------- 
 
¶2. (SBU) Legal provisions allowing for the criminal prosecution of 
corporate entities are an important component of any anti-corruption 
program.  For example, the UN Convention Against Corruption (UNCAC) 
requires that member states pass legislation sufficient to hold 
corporations liable for corruption offenses and several other 
international conventions contain similar recommendations. 
Moreover, certain crimes, such as foreign bribery, commercial 
bribery, restraint of trade, money laundering and environmental 
offenses, are committed almost exclusively by corporations, and the 
absence of corporate criminal liability makes it exceedingly 
difficult to prosecute such cases. 
 
¶3. (SBU) Currently, Russian law provides only for administrative, 
rather than criminal, liability for corporations, a remedy which 
appears completely inadequate.  For example, punishments are limited 
to small fines, insufficient to deter businesses from potentially 
lucrative wrongdoing. Moreover, the absence of criminal liability 
means that almost no criminal cases are brought under RussiaQs 
environmental and restraint of trade statutes and hampers IPR 
enforcement, as many pirate organizations, such as the website 
www.allofmp3.com, operate through corporate entities. (In the U.S., 
by contrast, corporations are regularly prosecuted for all of these 
offenses.  More importantly, knowing that a violation could result 
in an indictment, most companies have implemented rigorous internal 
compliance programs to prevent violations in the first place.) 
 
 
¶4. (SBU) To promote discussion of a possible amendment to Russian 
law, on May 30, LES held a seminar at Moscow State University for 
approximately 100 Russian criminal law scholars and practitioners. 
Anatoly Naumov, one of RussiaQs most famous criminal law scholars, 
began the program by discussing the history of debates in Russia 
over this subject and explained that a similar proposal in the 
1990Qs had been defeated by traditionalists who argued that a 
corporation cannot legally form criminal intent (a view that was 
abandoned in the U.S. and England in the middle of the 19th 
Century.) (N.B. A senior legal advisor in the Presidential 
Administration told RLA that, in fact, the proposal had been 
defeated because too many Duma Deputies use corporations to hide 
assets and launder money and could not risk subjecting them to 
criminal prosecution). 
 
¶5. (SBU) After Naumov, U.S. representatives addressed the seminar. 
RLA spoke about the history of corporate criminal liability in the 
US.  Ben Campbell, US Attorney for the Eastern District of New York, 
and one of the lead prosecutors from the Enron case, spoke about 
current US practice and new DOJ guidelines designed to prevent 
abuse. Adam Safwat, a prosecutor with DOJQs Fraud Section and one of 
DOJQs leading experts on international bribery spoke about corporate 
criminal liability in Europe.  Finally, a representative of the 
Business Software Alliance (BSA) spoke about the importance of 
corporate criminal liability in combating intellectual property 
violations and discussed recent legislative amendments in Latvia. 
Other speakers discussed corporate criminal liability in France and 
Lithuania. 
 
¶6. (SBU) These presentations were followed by an open discussion in 
which Russian experts argued vehemently among themselves about 
whether corporate criminal liability could be introduced in Russia. 
Some took the position that such a revision is long overdue and 
resolved to draft proposed amendments and submit them to the Duma. 
Others passionately supported the traditional view that a 
corporation cannot form criminal intent.  Still others argued that 
the structure of the Russian court system, in which cases involving 
corporations are heard in the commercial arbitrazh courts, cannot 
 
MOSCOW 00001643  002 OF 003 
 
 
accommodate criminal cases against corporations and pointed out that 
such an innovation would require a major revision of the court 
system.  On the whole, the discussion highlighted the extent to 
which formalistic jurisprudence and complicated court structures 
will continue to pose an obstacle to serious legal reform. 
 
---------------------- 
PROSECUTORIAL TRAINING 
---------------------- 
 
¶7. (SBU) Immediately after the corporate criminal liability program, 
RLA conducted a week long training program for 70 Russian 
prosecutors at the St. Petersburg Procuracy Training Institute. The 
program focused on drafting and arguing motions in criminal cases, a 
task which Russian prosecutors often perform extremely poorly, doing 
little more than ritualistically invoking statutory language with 
little supporting argumentation or evidence. 
 
¶8. (SBU) The program was significant in that it brought together a 
number of top U.S. and Russian prosecutors as instructors.  U.S. 
instructors included the Chief of the Securities Fraud Unit of the 
New Jersey U.S. AttorneyQs Office; a New York prosecutor currently 
prosecuting a mob boss who solicited the murders of a federal judge 
and a federal prosecutor; a distinguished Wisconsin prosecutor with 
thirty years experience; and a federal magistrate judge with 
extensive federal prosecutorial experience. 
 
¶9. (SBU) Russian instructors included the head of the General 
Procuracy Public Prosecution Section; one of the prosecutors from 
the famous Tri Kita (Three Whales) case, a major corruption and 
smuggling case which has figured  prominently in the siloviki wars; 
a prosecutor from the so-called Werewolves in Uniform case, which 
involved the prosecution of police officers who were operating a 
racketeering and extortion gang within the police; and a prosecutor 
who recently convicted several members of a notorious murder for 
hire gang. (In other joint training programs, Russian instructors 
have usually been academic lecturers, rather than prosecuting 
prosecutors, and as far as we are aware, this is the first time that 
so many high profile Russian prosecutors have participated in any 
prosecutorial training program.) 
 
¶10. (SBU) Following a format that has proven successful in other LES 
training programs, Russian and U.S. instructors lectured in pairs on 
various skills, included drafting written motions, arguing motions 
in court and drafting and arguing appeals.  These lectures were 
followed by demonstrations in which instructors simulated situations 
drawn from real cases to illustrate how they would argue a 
particular motion.  The demonstrations were followed by work in 
breakout groups in which students practiced the relevant skills and 
received critique from both Russian and U.S. instructors and other 
students.  The program concluded with a mock proceeding in which 
students played the prosecutors, defense lawyers and witnesses. A 
practicing judge from St. Petersburg District Court presided. 
 
¶11. (SBU) Throughout, the program emphasized the skills needed to 
prosecute corruption cases, as most of the case demonstrations drew 
on situations from real corruption and white collar cases and the 
mock trial drew on a real case involving the prosecution of two 
Customs officers who extorted a bribe from a businessman in order to 
let a shipment of furniture clear Customs. The program proved highly 
successful.  Students who, at the beginning of the week, appeared 
nervous and inarticulate speaking in court situations, were, by the 
end of the week, arguing motions forcefully and persuasively. 
Student reviews were uniformly enthusiastic and the General 
Procuracy has asked RLA to do a repeat program in Irkutsk for 
prosecutors from Siberia and the Far East. 
 
---------------- 
AN UPHILL BATTLE 
---------------- 
 
¶12. (SBU) Although the program was successful and the Procuracy 
appears to committed to continuing to work with us in this area, it 
also contained disturbing indications of just how widespread 
corruption is in the Russian legal system and the obstacles that 
Medvedev will have to overcome in combating corruption.  For 
example, one of the Russian prosecutors boasted to RLA about how he 
collects blackmail material on judges to coerce them into reversing 
what he termed illegal decisions.  (Although he claimed this was a 
necessary anti-corruption measure, it is clearly illegal and 
contains enormous potential for abuse. Moreover, his claims do not 
appear to be idle. In one academic survey, 11% of Russian judges 
said that they had been pressured to reach certain decisions in 
cases.  75% of them said that the pressure had come from 
prosecutors.) He also openly admitted to Qmaking problemsQ for 
witnesses who try to change their testimony at trial. 
 
MOSCOW 00001643  003 OF 003 
 
 
 
¶13. (SBU) Similarly, in one of the breakout groups, a Russian 
prosecutor proposed (only half-jokingly) altering a document in 
response to a defense motion to exclude it, a comment which prompted 
a question to RLA as to whether American prosecutors QalsoQ engage 
in this practice.  In the mock trial, one student created a scenario 
in which the defendant offered fabricated evidence, which drew 
applause from the audience members, suggesting that the practice is 
quite common. (This reaction appears to be justified. According to 
the survey cited above, 30% of Russian defense lawyers admitted to 
knowingly presenting false information in court, while 50% said that 
they thought it was acceptable to offer evidence of dubious origin.) 
 
 
 
RUSSELL