VZCZCXRO2345
RR RUEHCHI RUEHDBU RUEHFK RUEHHM RUEHKSO RUEHLN RUEHNAG RUEHPB RUEHPOD
RUEHYG
DE RUEHVK #0073 1880452
ZNR UUUUU ZZH
R 070452Z JUL 09
FM AMCONSUL VLADIVOSTOK
TO RUEHC/SECSTATE WASHDC 1167
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 1271

UNCLAS VLADIVOSTOK 000073 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON PGOV RS
SUBJECT: ANTI-CORRUPTION BOSS JAILED ON TRUMPED-UP CHARGES 
 
Summary.  After a three-year investigation and a pre-trial 
detention of twenty months, a Vladivostok court on June 22 
convicted former Far Eastern Customs Directorate Chief General 
Ernest Bakhshetsyan on charges of abuse of office and sentenced 
him to five years in prison.  Bakhshetsyan served as Chief of 
the Far Eastern Customs Service Directorate from 2004 to 2007 
and was tasked with strengthening his office's fight against 
smuggling and corruption and to increase tariff revenues.  Most 
observers believe that the charges were spurious and pushed by 
local businessmen who were threatened by Bakhshetsyan's genuine 
crackdown on smuggling.  Bakhshetsyan's attorney said after the 
conviction that he will file an appeal to a higher court in 
Russia and the European Court of Human Rights in Strasbourg 
following that. 
 
Pressure From the Inside 
------------------------ 
His fight against corruption pitted his office against an 
organized group of smugglers that controls a significant portion 
of goods entering Russia from China and reportedly included 
former Primorye Duma Deputy Vladimir Khmel, current Deputy 
Gennadiy Lysak and his son-in-law, and former Federation Council 
Senator for Primorye Igor Ivanov.  The task was made more 
difficult by the fact that many of his own subordinates were 
also involved in smuggling.  His efforts posed a serious 
challenge to those local officials and businessmen who had 
managed to make `special arrangements' with Customs officials, 
law enforcement, and politicians for easier importation of goods 
at reduced tariff rates.  According to Bakhshetsyan, former FSB 
Regional Director Yuriy Aleshin and Primorye Regional Prosecutor 
Aleksander Anikin tried to pressure him into easing up on the 
crackdown, but he refused to accept the bribes offered.  When 
the carrot approach proved unsuccessful, smugglers attempted to 
use their Moscow patrons to have him removed from his position. 
When that also failed, they accused Bakhshetsyan of illegally 
allowing three companies to import goods through Nakhodka's 
customs without inspection or oversight. 
 
Problems for Being Effective 
---------------------------- 
Bakhshetsyan proved effective with both of his taskings -- 
prosecuting corruption and increasing revenues.   On his 
initiative, several high-ranking Russian Far East Customs 
officials, including the head of Customs in Nakhodka, were 
relieved of their duties in 2005 and some faced prosecution. 
The Russian General Prosecutor's Office brought charges against 
Ivanov and Gennadiy Lysak, who subsequently fled the country and 
were wanted by Russian law enforcement agencies.  Revenues to 
federal coffers from his Customs Directorate increased during 
his tenure.  By reducing corruption, smuggled goods, and 
fraudulent customs claims, revenues increased from 48 billion 
rubles the year before his tenure, to 74.5 billion during his 
first year and 100.5 billion during his last full year in 2006. 
 
Naming Names 
------------ 
At a May press conference in Moscow Bakhshetsyan and former RFE 
Customs' Analytical Department Chief Oleg Yeliseyev specifically 
named those high-ranking officials who played a role in his 
prosecution.  Since his initial arrest, Primorye's FSB Director 
Yuriy Aleshin was promoted to an executive position with the FSB 
in Moscow; Primorye Prosecutor Aleksander Anikin was promoted to 
the General Prosecutor's Office in Moscow; the two men whom 
Bakhshetsyan's office investigated -- Gennadiy Lysak and Igor 
Ivanov -- have since returned to Russia and been acquitted of 
all charges. 
Comment.  Bakhshetsyan's case was mentioned in the State 
Department's Human Rights Report in 2007 and 2008.  PolOff 
offered to meet with him during his trial to discuss the case, 
but Bakhshetsyan decided it would be imprudent for him to meet 
at that time.  Power politics and political maneuvering remain 
the keys to advancement and survival in the Far East.  The rule 
of law is still weak and champions of civil society, like 
Bakhshetsyan, are hard pressed to accomplish their missions 
without an unequivocal message from Moscow that corruption will 
no longer be the way that business gets done. 
 
ARMBRUSTER