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### Viewing cable 09MOSCOW2823, EXPERTS REMAIN SKEPTICAL OF GOR'S ABILITY TO

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09MOSCOW2823 | 2009-11-19 15:03 | 2010-12-01 21:09 | CONFIDENTIAL | Embassy Moscow

`

    VZCZCXRO2819
    OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
    DE RUEHMO #2823/01 3231507
    ZNY CCCCC ZZH
    O 191507Z NOV 09
    FM AMEMBASSY MOSCOW
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 5426
    INFO RUCNCIS/CIS COLLECTIVE
    RUEHZL/EUROPEAN POLITICAL COLLECTIVE
    RHEHNSC/NSC WASHDC

` `

    C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 002823

    SIPDIS

    STATE FOR EUR/RUS, EEB
    NSC FOR MCFAUL

    E.O. 12958: DECL: 11/18/2019
    TAGS: ECON PGOV PINR RS
    SUBJECT: EXPERTS REMAIN SKEPTICAL OF GOR'S ABILITY TO
    REDUCE CORRUPTION

    REF: A. 08 MOSCOW 3775
    ¶B. 08 MOSCOW 3363
    ¶C. MOSCOW 1450

    Classified By: Econ MC Matthias Mitman for reasons 1.4 (b. and d.)

    -------
    Summary
    -------

    ¶1. (C) In a nod to President Medvedev's 2008 anti-corruption
    legislation, Transparency International's Corruption
    Perceptions Index ranked Russia at 146, up one spot from its
    2008 147th ranking.  This general lack of progress confirms
    what analysts have told us.  Corruption in Russia remains a
    serious problem, despite Medvedev's public denouncements and
    efforts to reduce it.  This presents a quandary for the GOR
    as it decides how to proceed.  Dramatic steps might threaten
    the status quo, yet gradual steps so far have been
    ineffective.  End Summary.

    -------------------------------------
    Russia's Corruption Rankings Stagnate
    -------------------------------------

    ¶2. (SBU) Transparency International released its 2009
    Corruption Perceptions Index on 17 November.  Russia was
    ranked at 146 (it was ranked at 147 in 2008), which
    Transparency International said reflected a "mildly positive"
    response to Medvedev's 2008 anti-corruption legislation.
    Russia's 2009 rank, however, is still below its 2007 rank
    (143) and far below its 2006 rank (121).  These results echo
    the World Bank's Worldwide Governance Indicators, with
    Russia's rankings on "control of corruption" showing a steady
    annual decline since 2005.

    ¶3. (SBU) President Medvedev has repeatedly stated that
    corruption is endemic to Russia and has made fighting it a
    signature issue for his presidency.  He has highlighted
    consistently the damage corruption has done to Russia, most
    recently in both his high-profile "Forward Russia" article in
    September and his 12 November address to the Federal
    Assembly.  Beyond the anti-corruption legislation promulgated
    last year, however, few practical steps have been implemented.

    --------------------
    Elite Losing Control
    --------------------

    ¶4. (C)  Furthermore, there is growing consensus among
    analysts that even if the power elite wants to tackle
    corruption, the economic crisis has exacerbated tendencies
    towards unmanageability of corruption within the power
    vertical.  XXXXXXXXXXXX
    XXXXXXXXXXXX, told us that the GOR may have waited
    too long.  XXXXXXXXXXXX said that a few years ago, when only
    millions had been "stolen" from the Russian people (as
    opposed to today's billions), the GOR could have acted and
    not sparked public outrage.  XXXXXXXXXXXX said that the crisis had
    made the GOR's task more difficult and the scope of
    corruption has become unmanageable.  As the crisis reduced
    the size of the pot and the anti-corruption rhetoric
    increased, some Russians felt that they had best grab as much
    as they could while the going was good.  XXXXXXXXXXXX
    XXXXXXXXXXXX, noted that the tendency of
    corruption to evade control by the GOR was not new.  In 2006
    -- at the height of Putin's control in a booming economy --
    it was rumored within the Presidential Administration that as
    many as 60 percent of his orders were not being followed.

    --------------------------------------------- ---
    Do Changes At Interior Ministry Signal Progress?
    --------------------------------------------- ---

    ¶5. (C)  XXXXXXXXXXXX noted that Minister of Interior Rashid
    Nurgaliev had recently fired or brought charges against a
    number of relatively low-ranking law enforcement officials
    for corruption.  XXXXXXXXXXXX stated though, that it was too soon to
    judge whether this activity reflected real change.  XXXXXXXXXXXX
    XXXXXXXXXXXX, argued that Nurgaliev's actions were not
    meaningful.  He stated that action was required from higher
    up the power vertical and needed to affect the strata that
    average Russians would consider "untouchable".

    -----------------------------------

    MOSCOW 00002823  002 OF 002

    Can Russia's Trajectory Be Changed?
    -----------------------------------

    ¶6. (C) XXXXXXXXXXXX
    XXXXXXXXXXXX, said that only a "revolution" could change Russia's
    current trajectory.  He argued that the system had become too
    sclerotic and too beneficial for too many to allow for
    change. XXXXXXXXXXXX noted that corruption had even become a
    positive factor for a substantial portion of society.  By
    taking merit out of the equation for success, it was simply
    easier to pay for entrance to a university, for a contract,
    etc.  XXXXXXXXXXXX, who has made a fortune in Russia's
    casino business, told us forthrightly that the "levels of
    corruption in business were worse than we could imagine" and
    that, after working here for over 15 years and witnessing
    first-hand the behavior of GOR officials at all levels, he
    could not imagine the system changing.

    -------
    Comment
    -------

    ¶7. (C) Corruption in Russia remains pervasive and
    deep-rooted.  While Medvedev's anti-corruption rhetoric is a
    step in the right direction, we have yet to see significant
    implementation of new measures.  Russians appear to accept
    current levels of corruption and seem inclined to pay up or
    emigrate, rather than protest.  Neither have Russians reacted
    to the sight of the connected few continuing to indulge in
    luxurious lifestyles as the economic recession continues to
    leave most Russians worse off than they were two to three
    years ago.  Nonetheless, the commentary on the GOR's
    increasing inability to manage the scope of corruption bodes
    ill for its stated effort to enhance corporate governance and
    investor confidence.
    Beyrle

`