Of Foreign Arms and Furniture

Defense Minister Serdyukov

Defense Minister Serdyukov is looking at a mini-scandal over a tender for new office furniture for the military’s headquarters.  The 14 April tender called for 125 pieces of furniture worth 18.3 million rubles to be delivered in 15 days, but also included agonizingly detailed specifications for each item, leading Russian furniture industry representatives to conclude a specific supplier has been picked in advance.  Moreover, the list of acceptable models, fabrics, and materials makes them assume the furniture will be Italian-made.

Of course, Defense Minister Serdyukov knows the furniture business.  He started in it in 1985, working his way from a department manager of a Lenmebeltorg store to general director of the St. Petersburg ‘Furniture Market’ company, before entering the federal tax service in 2000.  And for his past employment, he’s still derided as mebelshchik—‘furniture man.’

For now the mini-scandal is confined to more liberal papers and websites, and hasn’t resonated in other media.  It is a handy opportunity to take a shot at Serdyukov, but, ironically, it results from the Defense Ministry’s effort to be more transparent about defense procurement by publishing tenders. 

Still, none of this makes the story is insignificant.  It’s emblematic and may foreshadow more serious criticism to come in the burgeoning area of arms imports.  If this is how the management operates when the issue is minor, not affecting anything the least important or serious, how will it operate when turning abroad to buy Mistral, UAVs, armored vehicles, submarines, sniper rifles, or soldier systems?  A little malfeasance, or even just the appearance of something wrong, can spoil even the most sensible policy.

At any rate, more to the story itself . . .  Svpressa.ru says Russia’s furniture manufacturers are offended that the Defense Ministry leadership decided to furnish its offices with Italian cabinets and tables.  

Aleksandr Gordeyev, director of the ‘TNP Furniture World’ factory group, says:

“We regard the striving of such a large and influential state structure to buy furniture abroad as a sign of disrespect toward Russian furniture makers.  Why then all these declarations and announcements of the authorities about the need to support the domestic manufacturer, that is the most real sector, the real taxpayer, particularly in the crisis period?”

Rbcdaily.ru says domestic furniture makers are launching their own organization—the “All-Russian Furniture Union”—to represent 200 manufacturers in 40 regions.  Its first step will be an appeal to Prime Minister Putin on the unacceptability of placing state orders with foreign producers.

According to Novyye izvestiya, the appeal says:

“At this moment, when Russian furniture manufacturers are struggling with the consequences of the difficult economic crisis, the decision of the state’s representatives to make a unilateral financial gesture to foreign competitors looks, at the very least, illogical.”

Gordeyev continues:

“We aren’t insisting on having some kind of preference over foreign competitors, but rights and chances need to be equal for all.  But in effect, in essence, they aren’t even allowing Russian producers access to the competition.”

He tells Rbcdaily.ru, “In Russia, there is a big real sector ready to fulfill similar orders, however, all the big orders from state structures go past us.”  The Defense Ministry’s order is a month’s production for a medium sized furniture factory.

Novyye izvestiya points out that Russian furniture is the equal of Italian models and the Russian furniture market was bigger than Italy’s, at least before the economic downturn.

It also points out, in fairness, that it inspected the tender at http://www.zakupki.gov.ru/ and saw nothing specifically about Italian manufacture, but concluded that, since many of the specs insisted on certain models and fabrics, what domestic furniture makers are saying is not exactly far from the truth.

Andrey Radukhin, General Director of the RF Association of Furniture and Woodworking Industry, said:

“A serious specified supplier made these specifications and, most likely, the furniture is already in Moscow.  It’s a shame such an order passes over our office furniture producers.  Their labor utilization is a minimum of 30 percent, to at most 50.”

Another industry figure told Novyye izvestiya, it would take a Russian firm 3 months rather than 15 days, as specified in the tender, to make the furniture order to specification.

Then he added:

“No one in Italy could take such an order for half a month.  This was all arranged for a specific supplier, most likely, Italian.”

Gordeyev and another industry source were quoted in Newsru.com to the effect that the Defense Ministry’s order must be for the delivery of furniture already made and in-stock.  Russian producers could not meet such a specific order on short notice, so this effectively froze them out of the competition.

Viktor Ilyukhin, head of the KPRF faction in the Duma, told Svpressa.ru:

“Furniture-mania turns out to be characteristic of many ministries, not just the Defense Ministry.  So acts the Internal Affairs Ministry as well as the Finance Ministry:  expensive cars, offices, furniture, hotels, service staff.”

“I’m not surprised at the situation around the military department.  Our Defense Minister Serdyukov has the mentality of a businessman, a big bureaucrat, who is accustomed to good service, luxury, expensive furniture.  He brought this style to the armed forces.  In fact, the armed forces have become a platform for big business.”

“Today practically all military unit and sub-unit commanders are occupied with business.  This gets done proceeding from the Defense Minister’s guidelines:  sell everything you don’t need.  It’s a misfortune for Russia that such a Minister heads the Defense Ministry.”

“Among the military there is great dissatisfaction with Serdyukov’s policy.  Only because of this one thing, the country’s political leadership should think carefully where Serdyukov should be.  Whatever brilliant ideas he’s put forward, his proposals won’t be accepted because of his insignificance and lack of authority in the military.”

“Today the army needs a sufficient quantity of modern military equipment and arms, in management, [it needs] discipline and organization.  Finally, as never it needs to resolve issues of social protection of servicemen.  Today military men are socially protected less than civilians and government officials.  Minister Serdyukov needs to concentrate here on these areas.  And not on buying Italian tables and chairs.”

Gennadiy Gudkov, deputy chairman of the Just Russia faction in the Duma, commented:

“The Defense Ministry tender, in my view is a direct violation of the law on state procurement. I recall the law prohibits excessive detail in the order which narrows the boundaries of the tender.  Only general requirements should appear in the technical specifications.”

“I have seen similar tenders for the purchase of luxury cars that were tailored specifically for one model of Mercedes. All this says that no tender is really being conducted, that there, possibly, we may have a serious corruption incident in the form of a large kickback.  If I were the Prosecutor General and the SKP [Prosecutor’s Investigative Committee], I would conduct an anticorruption analysis of this tender.

“If I were Serdyukov, I would launch a serious investigation, because this tender, by the highest standard, casts a shadow personally on the Defense Minister.”

The editor-in-chief of Kompaniya writes:

“A greedy man with poor taste would not spend 18.3 million budget rubles for 125 pieces of furniture for the offices of the Motherland’s defenders (approximately 146,000 rubles each).  Behind a solid-beech table with natural olive-wood veneer with a top upholstered with natural dark-green buffalo leather sits an intelligent and refined man.  Such a man, for example, as Defense Minister Anatoliy Serdyukov, who’s proposed a new variant of army reform.  The Minister plans to optimize the military’s service time, liberating them from noncore housekeeping functions.  Soldiers will receive weekends off, and contractees—officer’s pay.  Anatoliy Serdyukov’s words are like ‘drinking honey’ in a kitchen ‘of solid maple and cherry veneer with an individually soldered stained-glass ‘Beatrice’ by Arte del Vetro (Italy).’  But it won’t happen.  Generals and bureaucrats still don’t share such things as ‘the beautiful life’ and it doesn’t due to hope for more than ‘serving.’”

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