The Political Consequences of the Magnitsky Affair

Thoughts on the Magnitsky affair, and the current state of government in Russia



We seem to have an ongoing rush of scandals and disasters, and Medvedev's response to them is different from Putin's. Firstly, Medvedev at least acknowledges that something bad has happened - the Magnitsky affair got prime time coverage a week after the lawyer's death. It also got oblique coverage almost in real time - the day after Magnitsky died in custody, Medvedev had a meeting with the Minister of Justice . At the time, I thought this was a very good sign, because it implied to me that the prison department would not be made to carry the can for the lawyer's death, and that Medvedev would go after the officials at the Ministry of Internal Affairs (MVD) who had really been calling the shots.

However, last Friday, the Ministry of Justice confirmed that it had fired 20 senior officials, including a deputy Minister, and the Director of Butyrka prison, where Magnitsky died. So the official spin is that there is no problem outside the prison system, and although the seniority of the firings at least implies an understanding that this is not an isolated incident, it falls short of what Magnitsky's supporters hoped for. (See Jamison Firestone's op-ed in Moscow Times). It's not realistic to expect that this would lead to a wide-ranging reform of the criminal justice system (there are very few countries where you would get 1 year's pre-trial detention for a tax case), but there was some hope that this case would at least lead to some serious investigation of why Magnitsky was in prison.

For instance, there is no investigation of Magnitsky's allegation that he was told that he would be freed if he withdrew his testimony against a senior MVD officer on charges of embezzlement. That same officer had got himself appointed to the investigative team, and presumably was pushing for Magnitsky to be kept in pre-trial detention, and to receive minimal medical treatment. This should be a national scandal, and it isn't. Actually, it's worth noting that there was barely any mention of these dismissals on Russian TV over the weekend. Clearly the official line has not filtered its way down to the TV editors, so they kept it out of the headlines. Anywhere else, of course, it would be the single biggest scandal of the week.

The sad thing is that, probably, behind the scenes, there is a huge battle being waged. No doubt Kudrin is on the warpath, because someone in the Ministry of Finance signed off on the disbursement of the tax refund that was essentially stolen through a complex fraud scheme that was discovered by Magnitsky. Or if Kudrin himself signed off on it (not impossible given the size of the transaction), then presumably his enemies are going after him. Big, well-connected companies need to fight tooth and nail to get much more legitimate tax refunds from the government. It's very rare for the Ministry of Finance to pay out within two days of the first court decision. There would be at least one appeal, if not more. But my guess is that Kudrin would not put his name to something so corrupt, but one of his deputy Ministers almost certainly did.

So Kudrin is probably complaining to Medvedev and Putin that the theft was approved by some deputy Minister who was forced on him by some other deputy Prime Minister as part of the endless power games inside the Russian government. And Putin and Medvedev are looking at the situation, and working out the political angles - can they move against whoever is behind this theft, and if not, can they claim a cut of the money? My guess is that the whole scheme was initiated by some senior security minister, probably in the Ministry of Internal Affairs, given that it seems to be an MVD colonel who seems to be running the scheme.

And this is where the politics starts. There was a comment on RFL discussing the Magnitsky affair, and praising the response, but suggesting that any real changes would be minimal, and that any actions would be more the result of political fights, than any genuine improvement in either transparence or accountability. Tantalisingly, though, they did not say anything about what the fight might be. The main battle at the moment seems to surround the MVD, Rashid Nurgaliyev. He has been under fire since a police officer went on the rampage in Moscow, and the attacks intensified when a public protest against local corruption in Krasnodar became a YouTube hit. This even led to a senior Edinstvo party official suggesting that the MVD should be disbanded, and all policemen asked to reapply for their jobs, as in Ukraine and Georgia. No one is taking this seriously, of course, but it's telling that the idea was even aired.

Control of the MVD is very important in Russia. It gives you the muscle on the street that you need in order to shake down businesses - nothing frightens an owner more than a gang of masked policemen turning up for a "search". The FSB can do this, although they are on shaky ground when they do so, and so can the drug police, but it's the police that can do it with impunity, so there are plenty of earning opportunities. Similarly, the police can basically arrest anyone they like, and keep them in "pre-trial detention" for up to a year, which is a strong deterrent to critics. Obviously other agencies and power centres are jealous of this power, so the Minister of Internal Affairs is often under attack, and there's been quite a lot of turnover in the post. The post is rarely a stepping stone to higher things - the Minister is normally put there by a senior political figure, and allowed to occupy the post for long enough to earn his way out, and then is replaced by another figure who reflects the balance of political power at that time.

There's an article in today's RBK daily talking about these sorts of issues. The head of the investigative committee of the MVD is past retirement age. He's a former classmate of Putin's, and there is talk of his being replaced by a former classmate of Medvedev's. The investigative committee is key, because they are the people who start investigations into corruption, or into businesses, or whatever is required. For instance, the investigative committee of the General Prosecutor's office is currently working on a review of municipal construction in Moscow. This is seen in the press as an attempt by the Federal Government to gain controls of the cash flows associated with construction in Moscow, which of course are huge. Two former senior managers of the Moscow City Government are under arrest, and clearly this is a big deal, because of the sums involved.

Is it a real clean-up, or just a diversion from one corrupt group to another? Probably a bit of both, and generally in Russia, it's more likely to be the latter than the former. But you need a blunt weapon like the investigative committee to start the process, which is why control of these is so important. One of the more regrettable aspects of Putin's presidency was the proliferation of investigative committees. In addition to the MVD, and the FSB, who have always had a free hand to do whatever they want, you had the creation of another investigative committee in the General Prosecutor's office. Also, there was a Federal anti-Drugs Committee, which was headed by a close Putin ally, and started poking its nose into all sorts of thing. The logical conclusion of this is a proliferation of private armies, although no one is saying it's going to go that far. There is endless talk of reform, but instead of reform abolishing the old, bad structures, they seem to remain, and some new group acquires overlapping powers, and becomes another unknown in the system of simultaneous equations that is the Russian government.

In this system, each new scandal becomes a weapon to be used by one clan against another. So the corruption in the MVD can be used by the General Prosecutor's office to attack the MVD, and possibly gain more power. The problem is that there is never enough force to say, completely disband the MVD, as was suggested by one Duma deputy. The old MVD still has enough weight, and presumably compromat, to keep its old position, and still cause problems, and the new guys only have enough strength to start up their own competing structure. This means an extravagant duplication of functions, so more government spending, and also a new set of corrupt officials, who buy their positions, and have to find a new way to generate money, which means more attacks on business. This cycle will repeat itself, as long as Russia has plenty of natural resources to finance it all, and only really comes under threat when there's an economic collapse, which seems to come along every 10 years or so.