Support independent journalism in Central & Eastern Europe.
Donate to TOL!
A move supposedly to make Russia safe for entrepreneurs probably won’t help those who need it most.by Galina Stolyarova 25 July 2013
On 2 July, Russian lawmakers voted overwhelmingly to declare an economic amnesty meant to show mercy to thousands of entrepreneurs convicted of or under investigation for minor economic crimes.
The amnesty, however, is likely to be a hollow gesture for those who most deserve it.
The more radical wings of the political opposition, including The Other Russia movement, have reacted bitterly, saying it creates “a caste system.”
“Some businessmen are now more equal than others,” reads an open letter signed by more than a dozen political prisoners, including two activists from The Other Russia, Ruslan Khubayev and Igor Berezyuk, who were sentenced for taking part in riots on Manezh Square in Moscow in December 2010.
“Russia does need an amnesty but of a different kind,” the letter continues. “Those who benefit from it should not be those serving time for swindling but young mothers or juveniles who desperately need the chance to make a fresh start.”
Russia’s business ombudsman, Boris Titov, had at one stage suggested including offenses under Article 160 of the criminal code – covering appropriation of another’s property – in the law. But he was forced to remove that from the final draft, as it would have meant releasing Mikhail Khodorkovsky, the former oligarch and Amnesty International prisoner of conscience, and Khodorkovsky’s former business partner, Platon Lebedev.
Titov presented the first draft to President Vladimir Putin in May, suggesting it would benefit businessmen sentenced under as many as 50 articles of the criminal code. Putin gave his general support to the draft but called it raw and inconsistent. The final version, which the Duma overwhelmingly backed, covered 27 articles. It may affect up to 10,000 people.
Speaking at the St. Petersburg Economic Forum in June, Putin urged parliamentarians to pass the bill before the start of their summer holidays, and they duly complied.
While the amnesty is encountering strong criticism from the human rights lobby, Titov praised Putin for his “courageous move,” acknowledging that it is also likely to be seen as unjust by most Russians.
Leaving Titov’s enthusiastic praise for his boss to one side, a very important question is raised by the Khubayev and Berezyuk letter. Who is really going to benefit from this amnesty?
The clue is in the slogan that was repeated at the forum by Putin and Titov, as if the two had agreed it in advance. “Business has to be profitable,” they chorused.
Apparently, Putin feels the need to lower the temperature in the confrontation between the business community and law enforcement. The president wants to encourage Russians to go into business. And the amnesty is meant to show that entrepreneurship is a safe field – as long as you don’t get mixed up with the political opposition. The message is that exactly how you made your profits, by fair means or not, will not be watched as closely as before.
Will the amnesty make Russian business more honest or transparent? Hardly. It is an open secret that in Russia, which many call “one big pay-as-you-go deal,” serious swindlers often avoid punishment, the only variable being the size of the bribes they shell out to survive.
Is the amnesty likely to encourage much new entrepreneurial initiative? Unlikely. The legislation governing the process of starting a company and running a business is notorious for creating myriad opportunities for officials to extort bribes.
The measure likely won’t even help those who most deserve it. One of its lesser-known conditions is that it will apply only to those who have paid all their fines to the state. Many critics in financial circles agree that this condition is nearly impossible to fulfill for honest business people who have ended up in jail because they were deliberately set up as fall guys by their smarter rivals.
“We all know that a big proportion of those who were sentenced for economic crimes were in fact innocent people, whose businesses were seized by competitors successfully using prosecutors to put their rivals behind bars,” said tycoon Mikhail Prokhorov, the leader of the right-wing Civic Platform movement. He proposed that the amnesty include provisions to make such people whole.
However, some believe that the law enforcement agencies are ready to mount a rearguard action against the amnesty. Titov predicted that a get-out-of-jail-free card for so many would meet serious resistance from prosecutors and investigators.
“What many businessmen see as fair profit-making prosecutors often regard as a swindle or a con,” Titov said. “What’s been happening across Russia is that the incidence of alleged swindling is growing rapidly, with no victims or complainants, but based solely on the opinions of a local prosecutor.
“In such a climate of mistrust, suspicion, and fear, the amnesty will surely meet a lot of resistance.”
As if to confirm Titov’s fears, Deputy Interior Minister Igor Zubov told a forum audience that many business people in Russia virtually force officials into accepting bribes.
“I cannot agree with the complaints about the state’s alleged pressure on business. What happens is quite the opposite. The government is going to great lengths to try and create a favorable climate,” Zubov said. “In most cases, businessmen themselves are offering bribes. They want to avoid the hassle and get things done quickly, and to get rid of competitors. And then they accuse the officials of corruption and playing dirty, when they themselves tease and provoke government officials.”
The more you think about this amnesty, the more pointless it seems. Its advocates concede that in many cases the criminal law was used as a blunt instrument to persecute innocent entrepreneurs. On the other hand, this misuse of the law was dressed up as an anti-corruption campaign. And nothing at all has been done to expose and punish those law enforcement officers who perverted the justice system to launch vendettas against innocent people.
The goal of any amnesty should be the restoration of justice. A key facet of this must be equality before the law, and this is exactly what is lacking in the Kremlin’s efforts. The guiding principle for the Kremlin – whether in the anti-corruption campaign, or the amnesty moves, is selectivity. And that effectively undermines any reform, even one devised with noble intentions.