VZCZCXRO7834
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