Russia opposition: Corruption worsened under Putin

March 28, 2011

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MOSCOW—Opposition leaders alleged on Monday that corruption in Russia has worsened under Vladimir Putin's rule, and his friends and relatives have abused their positions for personal gain.

Ex-Prime Minister Mikhail Kasyanov, former deputy premier Boris Nemtsov, and two other opposition figures presented a report alleging corruption under Putin, who became prime minister in 2008 after serving two presidential terms that began in 2000.

Former lawmaker Vladimir Ryzhkov cited data by the respected think-tank Indem, saying corruption in Russia increased tenfold between 2001 and 2005 to well over $300 billion, or a quarter of Russia's economy.

"Corruption is killing the country's economy, welfare, hurts its morals, political system and robs Russia of a future," Ryzhkov told reporters.

President Dmitry Medvedev, who has focused his first two years in office on a campaign against corruption, said last year that some 1 trillion rubles ($35 billion) of governmental funds was stolen in state contracts in 2010 alone. Medvedev repeatedly lamented that his campaign has brought no visible results.

The report says a handful of Putin's friends and relatives -- all relatively obscure until the 2000s -- have accumulated fortunes with the help of state companies.

In one of the examples, widely publicized in the Russian business press, Putin's friends came to control a small bank, Rossiya, which received a handful of lucrative assets from gas monopoly Gazprom in the mid-2000s.

The report also highlights the activities of Gennady Timchenko, a low-profile Russian oil trader with Finnish citizenship.

His declared fortune shot up from euro1.5 million (about $2.1 million) in 2000 to $2.5 billion in 2008, according to the Forbes magazine. While paying taxes in Switzerland, his company Gunvor exports at least one-third of Russian oil, buying it from state oil companies at preferential rates, the report said.

"All of them got rich at the state's expense," said former deputy premier Nemtsov, referring to Timchenko and Putin's friends involved in managing Gazprom's assets.

There was no official response to the claims. Asked about the allegations in the past, Putin has denied that he has abused his position or helped his friends to accumulate fortunes.

The opposition leaders also decried high spending on maintaining 26 state residences, which according to the report, are at the president's and the prime minister's disposal.

Nemtsov said their lawyers did not find anything defamatory in the report, but he and his colleagues are ready to stand trial for their allegations.

The chairman of Russia's Supreme Court said earlier this month that 85 percent of those charged with corruption in Russia receive suspended sentences. Doctors, teachers and police officers are among the most frequent offenders. But experts say corruption involving state officials goes largely unreported and unpunished. top stories on Twitter

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