Monthly Archives: March 2013

Serdyukov Speaks to Investigators

Former Defense Minister Serdyukov apparently decided to speak to investigators last week, shifting his previous stance of taking the 51st or providing written statements.  Media outlets said the appearance of “new materials” caused the change in his tactics.

Last Monday, Newsru.com recapped a Kommersant story saying that Serdyukov’s signature was on documents transferring the Bolshoy Utrish property to his brother-in-law Valeriy Puzikov.  But investigators haven’t talked to the ex-minister about that case yet, which they say amounts to large-scale fraud by a group of conspirators.

Recall the Defense Ministry obtained this Black Sea coastal property near Anapa in 2010 to build a radar station, but, with the help of Yekaterina Smetanova, it was excessed for two-thirds of the military’s purchase price to Puzikov. 

According to Newsru.com from Tuesday, Serdyukov was called to the GVSU SKR to meet with investigators about the Zhitnoye dacha.  ITAR-TASS said he provided 11 pages of evidence, and claimed the Defense Ministry participated in this civilian project out of military “necessity.”

On Wednesday, Politkom.ru commentator Tatyana Stanovaya reported that the ex-Defense Minister talked to investigators for five hours.

She believes Putin doesn’t want Serdyukov to sit in jail, and anonymous media sources say he told SKR chief Aleksandr Bastrykin as much early on.  She sees it like this:

“It’s important for Putin to sort out the corruption cases, to intimidate the elite, but generally not to get worn out with real purges.  He recognizes corruption as an evil, but an unbeatable evil which is part of Russia’s historical tradition.  In other words, for Putin thievery is an insufficient basis for ‘sitting’ given the political loyalty of the ‘figure.'”

Bastrykin notwithstanding, the siloviki think they long since had enough evidence for Serdyukov’s prosecution. 

Stanovaya cites Kommersant’s report that the former minister decided to cooperate, to talk, because investigators recently conducted searches and seized documents on the case from his relatives.  The commentator believes his more constructive position improves his chances of escaping the affair without criminal charges.

If the existing affair of the three dachas weren’t enough, Nezavisimaya gazeta unearthed another issue last week.

In the deal to import light armored vehicles from the Italian firm IVECO, Serdyukov’s Defense Ministry allegedly conspired to avoid paying customs duties amounting to $10 million.  All for vehicles of questionable suitability for Russian conditions.  NG concludes charges will be brought against the Oboronservis officials involved in the purchase.   

The paper wonders out loud if Serdyukov will play a part in the regime’s anti-corruption campaign (such as it is): 

“A critical mass of dissatisfaction is accumulating.  The country’s leadership is turning into a hostage of its own effort to reprove part of the confused elite in this way.  Citizens have learned too much about the life of high officialdom so it’s possible the ‘valve could turn’ at any moment.  It’s possible for this besides the usual cosmetic means of a party-political character a serious sacrificial victim is required — if the process of disclosures goes far enough.  It’s possible that now some backstage casting for the role of such a victim is going on.”

Izvestiya provided details on Serdyukov’s personal involvement in building Puzikov’s resort on Zhitnoye, where he claimed officers could stay (but not for free) after air defense exercises at Ashuluk.  The former Defense Minister traveled to the site 17 times between 2010 and 2012, while the road construction and landscaping was in progress, on Air Forces helicopters leased to Chkalov Avia.  That company’s majority owner is Anna Tretyakova, and her mother Yelena is general director of Zhitnoye.

Former General Staff Chief Makarov reportedly told investigators he ordered railroad troops (v/ch 42677) to build the 6.7-kilometer road and three bridges on Serdyukov’s personal order.  The construction materials came from that unit. 
 
A law enforcement source told the paper Puzikov and Serdyukov didn’t miss a trick: 
 
“First they built themselves a dacha at government expense, and then they wanted to rent out the very same — also at government expense.”

Moskovskiy komsomolets concludes Serdyukov’s assertion that Zhitnoye would serve the needs of servicemen would be funny if it weren’t so sad.  Then:

“So, as ‘MK’ has already written, Serdyukov must sit.  Otherwise Vladimir Putin can’t prove to 140 million Russian citizens that he is as before master of the situation.”

On balance, it seems prosecutors are closing on Serdyukov.  As written here in November, there’s too much blood in the water.  Putin will sacrifice him.  His effort to rebalance the political system he created depends on more than not letting the siloviki have Serdyukov.

And what of Serdyukov-instituted reforms which promised to change still largely Soviet Armed Forces into a more modern military?  The pain of reforms joined with the taint of high-level corruption to undermine them.  Their opponents could not possibly devise a more ingenious strategy to discredit them.  That too would be funny if it weren’t so sad.

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If That Was Cosmic . . .

If 2011’s corruption figures for the armed forces were cosmic, what are 2012’s?

We usually get various prosecutors’ reports about this time.  This year’s no different.

Newsru.com picked up some of Main Military Prosecutor Sergey Fridinskiy’s comments on military corruption from the GVP’s web site.

The biggest issue, of course, is Oboronservis, 25 related criminal cases, and more than five billion rubles in damages to the state.  But those future facts and figures don’t play into Fridinskiy’s 2012 report.

In 2012, Fridinskiy said crimes by officers, as a share of the armed forces total, reached their highest level in 10 years — 30 percent.  The share of crimes by contract servicemen increased by 14 percent.

The overwhelming motive, said Fridinskiy, was greed, and losses to the state tripled to 11 billion rubles.

According to GVP data, every fifth crime involved corruption.  Losses from corruption exceeded seven billion rubles.  Bribery cases rose by a third.  Embezzlement and misappropriation by two times.  And fraud by almost 20 percent.

Three higher [general] officers and 210 senior officers, including 64 military unit commanders and chiefs of various facilities, were convicted of corruption-related offenses.

Promotion List

On February 20, President Putin, as is customary, issued a pre-Defender’s Day promotion list.  The link takes you to a page with an Excel file.  Click on the icon for “View full-size workbook” and you’ll access the entire spreadsheet on the Microsoft Skydrive site.

Putin promoted forty officers.  Most of their duty posts are identified on the spreadsheet.

You can see the original promotion list at Pravo.gov.ru or Krasnaya zvezda.

 

It’s All Relative (Part II)

Regret the delay in returning to the rest of this summary of the Oboronservis scandal from Newsru.com.

“The ‘Oboronservis’ Affair:  Figures and Episodes”

“Despite, more precisely, thanks to his unconstructive, in the SKR’s opinion, silence, Serdyukov continues to keep his witness status in the ‘Oboronservis’ affair.  At present the number of accused has reached eight.  And the charge of particularly large-scale fraud has been leveled at the former head of OAO ‘Oboronservis’ Vasilyeva (the restraint measure is house arrest), Smetanova (personal recognizance) and Zakutaylo (arrest).  Smetanova is also implicated in commercial bribery as a result of investigation of activity which the ‘Oboronservis’ affair initiated.”

“Another branch of the anticorruption investigation concerns OAO ‘Slavyanka’ and ZAO ‘Security and Communications.’  The three affairs, united into one case, arose over falsely signed statements of completed construction and cleaning work on Kolymazhnyy Lane, the Military Academy of the General Staff and a number of other facilities.  As of today in this affair the charge of particularly large-scale fraud has been leveled at five:  former general director of ‘Slavyanka’ and ‘Security’ founder Aleksandr Yelkin; Andrey Luganskiy, who has been general director of ‘Security’ since April 2011; ‘Security’ head bookkeeper Yuliya Rotanova.  And also Nikolay Ryabykh and Konstantin Lapshin — former acting chief of the Defense Ministry’s administrative directorate and chief of ‘Slavyanka’s’ repair department.  All of them are under arrest.”

“The largest part of criminal cases in ‘Oboronservis’ concerns the disposition of several pieces of property.  They are the complex of buildings ‘31st State Planning Institute of Special Construction’ and the ‘Main Directorate of Troop Installations,’ the hotel ‘Soyuz’ and the premises of OAO ‘Mosvoyentorg’ on the Arbat, buildings in the working-class village Bolshiye Vyazemy in Moscow Oblast, land plots in St. Petersburg.  Part of the matters arose over the facts of theft of money upon the conclusion of contracts with ‘Expert’ Smetanova, for example, in the sale of shares in Moscow-based ‘Central Experimental Production Combine’ and stakes in ООО ‘436th Non-Metallic Minerals Combine’ in Leningrad Oblast.”

“‘Thanks to timely intervention we succeeded in preventing the illegal, in our view, disposition of the building of the directorate of trade of the Moscow Military District on Bolshaya Serpukhovskaya Street in Moscow, and also the oil transshipping complex in the village of Roslyakovo-1 in Murmansk Oblast,’ – GVSU Chief Sorochkin boasted to ‘Rossiyskaya gazeta.’  He also recalled that today the general amount of losses, suffered by the state in the ‘Oboronservis’ affair, exceeded four billion rubles.”

“Serdyukov’s Brother-in-Law Could be Called for Questioning”

“So, investigators tactfully sidestep the question of whether the appearance of new figures and still more accused in the ‘Oboronservis’ affair is expected.  There are already a number of candidates to populate the list.  For example, there’s Marina Lopatina, ex-chief of OAO ‘Voyentorg’ and the ‘Red Star’ subholding.  But also head of ‘Oboronstroy’ Larisa Yegorina.  Both ladies are thought to be former classmates of Vasilyeva and at present are alleged to be on the run.”

“There are suspicions that Serdyukov’s brother-in-law is also on the run, still, it’s true, investigators are not confirming this information.  ‘I don’t have unambiguous information about this.  I confirm that we have questions for him, therefore he could be interrogated,’ – Sorochkin said.”

“Petersburg’s ‘Fontanka’ relays interesting facts from Puzikov’s life.  ‘No stranger to the family furniture business, Puzikov managed to achieve notable commercial successes also in the automobile business and in construction, and the amount of property he’s acquired is striking,’ – the article’s author notes.”

“According to the publication’s information, the Kuban native Puzikov built an expensive development where his neighbor found a space for Serdyukov’s OAO ‘Furniture-Market’ (the former ‘Lenmebeltorg’).  At the same address nine companies, fully or partly controlled by Puzikov, appeared, for example, OOO ‘Avtotsentr Soyuz 021.’  The auto business generally attracted Puzikov’s attention, ‘Fontanka’ notes.  So, he owns 15% of OOO ‘Aksel Group’ – a large dealer of BMW, Volkswagen and Toyota automobiles, one of the showrooms of which is located in the very same expensive development.  Incidentally, also located there is OOO ‘Avtoservis-MM,’ where Viktor Zubkov, father of Serdyukov’s wife Yuliya Zubkova bought a Toyota Land Cruiser, ‘Fontanka’ writes.”

“The publication also reports that Puzikov together with Aleksandr and Petr Usov and Artur Pozov was involved in construction, and also bought up property in Leningrad Oblast.  According to YEGRYUL [Unified State Register of Juridical Persons] data, today limited liability companies ‘Alyans’ (until 2012 – ‘Furniture-Market’), ‘Petersburg Agricultural Corporation,’ ‘Contemporary Food Technologies,’ ‘Investproyekt,’ ‘KRIOS’ fully belong to Puzikov, he has shares in OOO ‘Novyy Megapolis,’ ‘TrestStroyKomplekt’ and ‘InterVal.’  An OOO with the classic name ‘Vektor-SPb,’ in which Puzikov was the only participant, no longer belongs to him, but the firm remained in the larger family [?!] of the ex-defense minister — now its owner is Yevgeniya Vasilyeva, ‘Fontanka’ concludes.”