HOW CORRUPT IS RUSSIA’S MILITARY LEADERSHIP?

How corrupt is Russia’s military leadership?

by Aleksandr Zhilin

Stories about corruption in the army regularly appear in the Russianmass media. But these stories, to this point, have given onlya fragmentary conception of the extent of the corruption amongthe Defense Ministry’s highest officials. A document has comeinto my hands from the General Staff, in which the main factsof the abuse of official position by various officials of theRussian defense ministry have been collected.

This is a list of officials of the Ministry of Defense and theGeneral Staff of the Armed Forces of the Russian Federation which,from 1992-1995 were suspected or charged by competent law-enforcementorgans and the mass media of illegal activities.

1. Minister of Defense of the Russian Federation, Generalof the Army, P. Grachev

Alleged Illegal Activity:

a) Illegal acquisition of a Mercedes staff car with funds intendedfor housing construction for servicemen of the Western Group offorces, in violation of a presidential decree.

The criminal case was "frozen" by the ProsecutorGeneral’s office.

b) Illegal privatization of a military dacha at a much-reducedprice.

He made a "conditional" repayment at 1992 prices.

c) Involvement in a dubious transaction between the StateProperty Commission and the Japanese "Tozi Sioji" companyon the sale of 12 obsolete Pacific Fleet submarines–testimonyof former Pacific Fleet commander Admiral G. Gurinov, ]

No action was taken.

d) Involvement in a dubious transaction between the Defenseministry and the Lithuanian firm "Selma" to build housesin exchange for arms and military equipment, at an artificiallylow price.

No action was taken.

e) Illegal transfer of rifles to a group of generals’orderlies in the Northern Caucasus Military District,

No action was taken.

f) Issuance of an illegal order giving V. Shumeiko’s former adviser,reserve senior lieutenant D. Yakubovsky–who was under suspicionin a criminal case–the rank of general.

The order was repealed.

g) Illegal transfer of arms to Georgian and Chechen armed formationsin 1992; failure to take necessary measures to prevent the theftof military equipment.

No action was taken.

2. Deputy Defense Minister of the Russian Federation, Col.Gen. K. Kobets

Alleged Illegal Activity:

a) Participation in the work of a commercial firm involved indubious transactions, including arms sales. Close collaborationwith D. Yakubovsky–according to his statements in the press–duringthe period of the firm’s activity, 1991-1993.

Law enforcement did not investigate press reports.

b) Involvement in the shady "arms for housing" dealbetween the Defense Ministry and the Lithuanian firm "Selma."

Law enforcement did not investigate press reports.

c) Receipt of large credits from the Military Insurance Companyfor commercial purposes.

Law enforcement did not investigate press reports.

3. Deputy Minister of Defense of the Russian Federation,Col. Gen. M. Burlakov

Alleged Illegal Activity:

a) Involvement with foreign criminal-commercial firms, knowinglytaking unprofitable contracts from them, deliberate refusal totake measures to save government financial and material resources.

b) Illegal removal of antiquities from Germany.

c) Dubious acquisition of an apartment on Kotelnicheskaya Naberezhnayaand a dacha in Arkhangelsk, with a plot of land far exceedingpermissible norms.

d) Involvement in the squandering of public money intended forservicemen’s social needs– the illegal purchase of a Mercedesfor the Defense Minister.

Presidential organs conducted an objective investigation, whichled to the dishonorable discharge of several participants. Theinvestigation of corruption in the Western Group of Forces wasbroken up in the State Prosecutor’s Office into several individualcases. The individual investigators were dismissed. Burlakov continuesto serve.

4. Deputy Minister of Defense of the Russian Federation,Armed Forces Chief of Logistics, Col. Gen. V. Churanov

Alleged Illegal Activity:

Involvement in the illegal manipulation of public funds, locatedin foreign and domestic bank accounts–in particular, his decisionto put 30 million DM in "Most-Bank."

No action was taken.

5. Chief of the Main Administration of International MilitaryCooperation, Deputy Chairman of the General Staff of the ArmedForces of the Russian Federation, Col. Gen. D. Kharchenko

Alleged Illegal Activity:

Building a country villa costing over $800,000 on the basis ofdubious income and materials–on a monthly salary of $275-280.

Press signals were not investigated.

6. Chief of the Main Military Budget and Financing of theMinistry of Defense of the Russian Federation, Col. Gen. V. Vorobiev

Alleged Illegal Activity:

Involvement in illegal activities linked with the diversion ofgovernment funds to foreign and domestic commercial banks in violationof decrees and orders of the President of the Russian Federation.

No action was taken.

7. Chief of the Main Administration of Trade of the Ministryof Defense of the Russian Federation, Maj. Gen. V. Tsarkov

Alleged Illegal Activity:

Involvement in illegal activities linked with the deposit of governmentfunds in commercial banks in the Russian Federation, at a lossto the Ministry of Defense.

No action was taken.

8. Former Chief of the Main Administration of Trade ofthe Ministry of Defense of the Russian Federation, Gen. V. Sadovnikov

Alleged Illegal Activity:

Involvement in illegal activities linked to the exploitation ofhis official position for his own personal gain; misappropriationof government funds and materials.

Convicted.

9. Former Chief of the Main Administration of Tradeof the Ministry of Defense of the Russian Federation, Maj. Gen.G. Karakozov

Alleged Illegal Activity:

Involvement in criminal activities, linked with the misappropriationof material property of the Ministry of Defense on an especiallylarge scale; abuse of official position for personal gain.

Sentenced to a prison term.

10. Former Chief of the Main Administration of InternationalMilitary Cooperation, Deputy Chairman of the General Staff ofthe Armed Forces of the Russian Federation, Col. Gen. F. Markovsky.

Alleged Illegal Activity:

Participation in criminal activities linked with the diversionof Defense Ministry hard currency funds to the account of thecommercial firm "Nadezhda,"; illegal purchase of apartments,causing serious economic damage to the Ministry of Defense.

Dishonorably discharged from the army. A criminal case, onthe decision of the Minister of Defense, was not brought. Finedthe amount of one paycheck.

11. Former Commandant of the Guard of the Ministry of Defenseof the Russian Federation, Maj. Gen. V. Ovsyannikov

Alleged Illegal Activity:

Abuse of official position; fraud

Dishonorably discharged from the army. Received a suspendedsentence.

12. Former Section Chief of the Main Administration ofInternational Military Cooperation, Maj. Gen. V. Ulyanov

Alleged Illegal Activity:

Participation in criminal activities linked with the diversionof Defense Ministry hard currency funds to the bank accounts ofcommercial firms, causing severe economic damage to the Ministryof Defense; complicity in the illegal purchase of apartments for12 Ministry of Defense officials.

Dishonorably discharged from the army. No criminal case wasbrought, by decision of the Minister of Defense.

13. Deputy Chief of the Main Operations Administrationof the General Staff, Lt. Gen. L. Shevtsov

Alleged Illegal Activity:

Participation in the work of the commercial firm "TIRR,"which broke off construction of housing for servicemen in theWestern Group of Forces–after signing a contract and receivingmoney, the leadership of "TIRR" used the funds for otherpurposes.

Press signals were not investigated.

1. Press and Public Relations Assistant to the Minsterof Defense, E. Agapova.

Alleged Illegal Activity:

Construction of a country villa on dubious financial and materialmeans–the cost of the structure was estimated at approximately$600-650,000, while Agapova’s monthly family income is approximately$350.

Press signals were not investigated.

15. Chief of the Military Policy Administration, Assistantto the Minister of Defense of the Russian Federation, Lt. Gen.G. Ivanov

Alleged illegal activity:

Received a plot of land, without going through the proper DefenseMinistry channels, and in dimensions far exceeding the permissiblenorms of the Podolsky region of the Moscow oblast.

The attempt of the investigative organs to conduct an investigationwas stopped.

16. Chief of the Main Administration of Educational Workof the Ministry of Defense of the Russian Federation, Lt. Gen.S. Zdorikov

Alleged illegal activity:

Construction of a country villa using financial and material resourcesof suspicious origin–Barvikha– illegal use of government technologyand people for this construction work.

Press signals were not investigated.

17. Commander in Chief of the Air Force of the RussianFederation, Col. Gen. of Aviation P. Deinekin.

Alleged illegal activity:

Involvement in the illegal sale of aviation engines and diversionof money entrusted to him to accounts in foreign commercial banks.

No action was taken.

18. Commander of the Space Forces of the Russian Federation,Col. Gen. V. Ivanov

Alleged illegal activity:

Involvement in dubious transactions connected with the rentingof several systems to commercial firms in 1992-1993.

No action was taken.

19. Commander of the Russian Group of Forces in the Caucasus,Col. Gen. F. Reut

Alleged illegal activity:

Involvement in the illegal sale of arms, military equipment, andammunition to armed formations in Armenia, Azerbaijan, and Georgiain 1992-1994.

No action was taken.

20. Former Commander of the Forces in the North CaucasusMilitary District, Col. Gen. A. Mitiukhin.

Alleged illegal activity:

a) Illegal attempt to smuggle unique rarities–sculptures of bronzedeer–out of Germany, with the assistance of the Commander inChief of the Western Group of Forces.

The deer were returned to Germany.

b) Construction of a country villa near Moscow with financialand material means of doubtful origin,

Press reports were not investigated.

21. Commander of the Forces in the Far East Military District,Col. Gen. V. Chechevatov

Alleged illegal activity:

a) Illegal smuggling of a unique rarity–a clock, all of whoseparts were made of porcelain.

Returned to Germany on the demand of the German government.

b) Participation in illegal operations, linked with the sale ofimported automobile technology.

No action was taken.

c) Involvement in the illegal sale of technology and militaryproperty through the commercial firm "Bizon."

No action was taken.

d) Shielding his son–an officer who had committed a crime whilearmed–from criminal responsibility.

No action was taken–his son continues to study at the militaryacademy.

22. Representative of the President of the Russian Federationat the state-owned company "Rosvooruzhenie,"Marshal of Aviation E. Shaposhnikov

Alleged illegal activity:

Privatization of a military dacha at a price many times lowerthan its real cost and without taking account of inflation.

He agreed to make a repayment at a level which did not correspondwith the rate of inflation.

23. Former Chief of the Financial Service of the StrategicMissile Forces, Maj. Gen. Iu. Karev

Alleged illegal activity:

Illegal diversion of funds on an especially large scale to theaccount of a commercial firm.

Removed from his position.

25. Former Chief of the Main Administration of Personnelof the Ministry of Defense of the Russian Federation, Col. Gen.Iu. Rodionov

Alleged illegal activity:

Exploiting his position to solve personal careerist goals–intwo months without any visible service to the Fatherland, he roseto the rank of Colonel General.

No action was taken.

25. Former General Director of the state-owned company"Rosvooruzhenie," Lt. Gen. V. Samoilov

Alleged illegal activity:

a) Concealing the company’s income–on an especially large scale–fromtaxation.

Rosvooruzhenie was audited in 1994, and Samoilov was removedfrom his position.

b) Systematically and illegally awarding bonuses to company employeesfrom funds concealed from the company’s hard currency income.

The bonuses were paid back in hard currency.

26. Commander of the Pacific Fleet, Admiral V. Khvatov

Alleged illegal activity:

Involvement in an illegal deal linked with the renting of twoPacific Fleet tugboats to a Greek commercial firm.

No action was taken.

27. Former Chief Long-Range Aviation Logistics Officerof the Armed Forces of the Russian Federation, Maj. Gen. V. Iudin

Alleged illegal activity:

Involvement in a criminal group which stole Defense Ministry propertyon an especially large scale.

The criminal case is still open.

28. Former Chief of the Main Communications-OperationsAdministration of the Ministry of Defense of the Russian Federation,Lt. Gen. V. Korotkov

Alleged illegal activity:

Involvement in the activities of the commercial fund "TIRR,"which broke a contract for construction of housing for servicemenin Smolensk and used the money for other purposes.

No action was taken.

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In this document, facts are set out which were obtained by investigatorsof the security services, the Prosecutor General’s and Main MilitaryProsecutor’s Offices, and also, in part, information publishedin the press after leaks from these same investigators, who hadlost faith that any criminal cases against the highest generalswould ever be concluded, or in some cases, even opened. Sourcesin the Federal Security Service, the Presidential Security Serviceand the president’s administration testify that all of this informationis well known to Boris Yeltsin. Nevertheless, he reacts calmlyto reports on the facts of corruption in the army. Investigations,if they were held, could possibly clear some military leadersfrom unfounded accusations, and holding other corrupt militaryofficials responsible before the law would, undoubtedly tightenup order in the army.

People close to the president give two versions of his benevolentattitude towards generals suspected of corrupt practices. Thefirst is that Boris Yeltsin, in his mentality, remains a communist-styleleader, to whom the principles of personnel policy and managementof courtiers characteristic of the communist regime remain closeto heart. Just as his predecessors, the general secretaries ofthe CPSU, Yeltsin proceeds on the "divide and conquer"principle. This principle does not presuppose elevated moral,ethical or other criteria of personal propriety for high-levelgovernment officials. On the contrary, it is thought that if officialsare discovered in improper activities and fall on the hook ofthe security services, they are more easily manageable and areforced to be more devoted to the master of the Kremlin. Therefore,there is no hue and cry in Russia against those leaders who, abusingtheir official position, make millions of dollars in suspiciousbusiness transactions. Generals are no exception.

In connection with this, I was told a remarkable story in thepresident’s administration. At the time when, on Boris Yeltsin’sinstruction, law enforcement agencies were urgently looking forcompromising materials on Vice-President Aleksandr Rutskoi, Yeltsinwas presented with a report on the facts of corruption in thehighest echelons of government, in which Rutskoi did not figureas prominently as other highly-placed officials. After readingthe report, the president irritatedly said "you’re catchingthe wrong people in your net."

A senior investigator, who works on the Prosecutor General’s Office’smost important cases, Colonel of Justice Boris Uvarov, told methat recently a rule was introduced in the Prosecutor’s Officethat when a big criminal case is brought against high-rankinggenerals or state officials, the investigations will be carriedout by several groups who have no knowledge of each other’s activity.The factual material collected from these groups is not concentratedor analyzed. In Uvarov’s words, this is done on purpose, so thatit will be easier to dismiss the case on command from above. Accordingto Uvarov, many examples can be given, when cases, such as theone on the illegal acquisition of expensive Mercedes automobilesby Minister of Defense Pavel Grachev, or on the acceptance ofbribes by Minister of Finance Panskov, have been dropped in thisway.

The second version of Yeltsin’s "patience" with thievinggenerals, according to information from his closest associates,is the following. Rather competent and informed officials in thepresident’s administration, in conversation with me, do not concealtheir fears that the level of corruption at the highest levelin the military is so high that even the president is no longerable to cope with this evil. According to this version, Yeltsinis a hostage of the highest generals, who manipulate his opinion,and use him to cover up their improper activities. In this respect,it is instructive that even someone as close to the presidentas General Korzhakov does not permit himself such flippant behaviortowards Yeltsin as Minister of Defense Grachev demonstrates, whosephrase "The President will do what I say" resounds inthe military department ever more frequently and peremptorily.

Aleksandr Zhilin is the Editor of the Department of SecurityProblems for the Weekly "Moskovskie novosti."