OCCRP Weekly News Roundup

It’s not likely Bout will be sent home, but many Russians think he will be in a good company if he were.  The perception of organized crime and corruption’s involvement in daily life continues to rise.  Indeed, it may be a major factor in the projected $70 billion in capital flight this year, double last year’s rate, because investors are uncertain not only about the unstable economy but about losing out to graft.  The estimated flight is worth five percent of Russia’s GDP.

But the announcement this week that Russia is getting closer to membership in the World Trade Organization (WTO) after a compromise with Georgia may be good news for corruption fighters.  Sergei Guriev, head of the New Economic School in Moscow, told the Economist that “it would at least expose corruption and increase competition, deeply alien to Russia’s ruling bureaucracy. …  It will be a sign that Russia is moving towards the civilized world,” he says, “not away from it.”

Earlier we reported Russian businesses are the most likely to bribe other governments and companies in exchange for lucrative contracts, according to a Transparency International.

Even the arts are not immune.  The iconic Bolshoi Theater reopened this week in Moscow after extensive renovations patrons say not only took three years too long but was marred by corruption.  The prosecutor’s office opened an investigation into the first contractor hired for the renovations.  The original price tag was $350 million but it mushroomed to almost $800 million during the course of renovations.

Prosecutors opened the investigation when they found that the original contractor had been paid up to five times the agreed upon price.

The alleged embezzlement didn’t stop patrons, who dropped $14,500 and $56,000 for a ticket to the gala, from enjoying the opening night festivities.

In a semi-nod of the rampant corruption in his land, Russian President-wait, Prime Minister, Vladimir Putin bestowed the country’s most prestigious press award to a journalist who was beaten to the brink of death for reporting on corruption in a Moscow suburb.  Putin named Mikhail Beketov, who can no longer walk or speak in full sentences, one of ten prizes for excellence in print journalism.  Cynics say the award, which is usually given to pro-Kremlin reporters, is purely political, as the men who savagely beat Beketov in 2008 have not spent a single day in court for the crime.

Finally, some positive press for Ukraine after months of the Tymoshenko imbroglio: The Financial Action Task Force (FATF), an international body monitoring and advising countries in anti-money laundering and corruption practices, said it had removed Ukraine from its monitoring list, paving the way for easier international business.  In a statement last Friday the FATF lauded Ukraine’s “significant progress” saying the country had “largely met its commitments” it set out in a 2010 action plan to overcome deficiencies identified by the monitoring body.

However, Ukraine’s government has won no plaudits from the West for its handling of former prime minister Yuliya Tymoshenko’s case.  Calling to mind civil rights activists the world over, Tymoshenko wrote an open letter from her jail cell on Wednesday asking members of her “European family” invoking the 2004 Orange Revolution.  She wrote that in 2011, “freedom is being silenced, jailed, and forcibly exiled from my country,” saying that an authoritarian regime has taken hold in her country.

She beseeched European leaders to come to the aid of Ukraine in the form of political toughness and democracy assistance:

“Though it is hard to accept, that today in Ukraine it will be very difficult for us to stop this mushrooming authoritarianism on our own. Those domestic forces that would protect our country against this evil are very weak: civil society is young; democratic institutions are both young and weak; our courts, our parliament and our media have been fully colonized by the authorities. Now they are in the process of destroying any remaining hope of fair elections

She acknowledged that Ukraine cannot make official steps to joining the European Union until she is released, but implored the EU to sign a free trade agreement, a precursor to EU candidate status no matter her fate. “I cannot allow my personal freedom to be the reason for the death of the European dream of Ukraine’s people,” she wrote.

Tymoshenko was sentenced to seven years in prison for abuse of office, which Western observers see as a politically motivated ploy to remove her from the opposition.

After a week of postponements, , the corruption trial of former Croatian Premier Ivo Sanader (2003-2009) has finally begun.  It is no surprise that he entered a not guilty plea for chargers of corruption and war profiteering.

“I reject with indignation and disdain the accusations of war profiteering. I never asked for or received a bribe for the loan our foreign ministry took from the Austrian bank,” he said before the Zagreb court.

He said that in a probe against the bank, there had been no evidence of wrongdoing on his part.

Sanader, who is known to have a penchant for expensive wristwear (reportedly owning a collection of watches worth over €150,000), was uncharacteristically casual, appearing in the Zagreb courtroom last week with the aid of a crutch (video footage).

Sanader is not the only one sporting fancy wristwear: Former Montenegrim Premier Milo Djukanovic was spotted last weekend donning a Swiss watch with an estimated value oof 106 Euro.  Despite never holding a job before becoming premier, Djukanovic is worth millions.

The former PM stands accused of getting almost €500,000 in kickbacks from Austrian Bank Hypo Alpe Adria for securing the bank’s entry into the country’s market during the turbulent period in the 1990s, when Croatia was at war with rump Yugoslavia.  He is also being separately charged with accepting €10 million from Hungarian energy giant MOL in exchange for selling off parts of a state-owned fuel company, which ensured MOL a significant market share within Croatia.  He resigned abruptly in 2009.

Sanader’s successor, Jadranka Kosor, also from Sanader’s HDZ party, confirmed last week that rumors that the state anti-corruption office USKOK was investigating her party’s finances were true. The admission comes just over a month before the party will compete in Dec 4 parliamentary elections.

Sanader is not the only one sporting fancy wristwear: Former Montenegrin Premier Milo Djukanovic was spotted last weekend donning a Swiss watch with an estimated value of 106 Euro.  Despite never holding a job before becoming premier, Djukanovic sure acts like a millionaire.

Turkey did not fare well on the Bribe Payers Index either.  One in three Turks admited to paying a bribe, higher than the international average of one in four and 57 percent of Turks believe bribery and corruption have increased.

The Serbian anti-corruption council is incensed over the censorship of documents concerning Italian automaker Fiat’s acquisition of a Serbian car factory in the southern town of Kragujevac.  The council, which has been investigating the case since the March acquisition, is disappointed over what it says are pages and pages of official documentation which have been completely blacked out.

Activists in Serbia, a country which recently scored the highest in an international review of access to information laws, are continuing to request full information.

The Bulgarian electorate are fuming over revelations that known mobsters were allowed to vote in last Sunday’s general elections, while hundreds of ordinary, law-abiding citizens were accidentally disenfranchised.

According to the Sofia News Agency, authorities from the Interior Ministry, the same agency that is hunting the mobsters, admitted that they submitted erroneous lists.  Read more about which gangsters, many of whom were tried and convicted in absentia, were invited to vote here.