Duma Passes Legislation To Curb Expenses Fraud

By Alexander Bratersky

The St. Petersburg Times

Published: November 28, 2012 (Issue # 1737)

MOSCOW — The State Duma on Friday passed anti-corruption legislation requiring government officials to prove the legality of their spending and the spending of their spouses and underage children if it exceeds the family’s declared income.

All 449 deputies voted in favor of the bill pushed by President Vladimir Putin, which would apply to officials including Duma deputies, Federation Council senators, Cabinet ministers, the prime minister and the president.

The bill complements legislation already on the books requiring officials to declare their incomes, a measure that critics have said is ineffectual without a requirement to also declare expenses.

The legislation comes amid a wave of corruption scandals in various government bodies, including the alleged embezzlement of almost $100 million from Defense Ministry-controlled agencies. Earlier this month, Putin cited that investigation when dismissing Anatoly Serdyukov as defense minister.

According to the bill, if the amount of money spent or goods purchased by an official or his spouse over a three-year period exceeds their earnings, the official can be relieved of his post and his property confiscated.

If the bill is passed by the Federation Council and signed into law by Putin as expected, it will come into effect in January but will cover cases beginning in 2012, according to state newspaper Rossiiskaya Gazeta.

“It’s true that this is a ‘presumption of guilt,’ but this is in line with the anti-corruption convention that we implement in whole sets of laws,” said Vladimir Vasilyev, head of the United Russia faction in the Duma, before the vote Friday, the newspaper reported.

Vasilyev was referring to Chapter 20 of the UN Convention Against Corruption, which advises that countries criminalize the illicit enrichment of government officials, a measure that many view as a powerful tool in fighting corruption.

Russia has not ratified the chapter, but the new legislation follows the spirit of its recommendation.

The bill says that upon the emergence of information from banks, the media, political parties or the public, a special commission could be appointed to oversee a possible case of illegal financial gain. Information from anonymous sources will not be considered.

If a person under review cannot prove his innocence, his case will be referred to the Prosecutor General’s Office.

The bill would also allow prosecutors to confiscate unlawfully obtained property, placing it into government custody.

Kirill Kabanov, head of the National Anti-Corruption Committee think tank, said he welcomed the law but believed that it would be applied “selectively” to government officials.

He also noted that the law is limited to close relatives, giving officials the chance to find loopholes. “This law should have covered other relatives, too,” Kabanov said Friday.

Kabanov’s concerns were echoed by a federal official who said that some “crooked” officials would register property to associates outside their families.

But he said the law is still a step forward. “Before, you could have declared, say, 50 Maybach cars and nobody could legally ask you where they came from,” said the official, who spoke on condition of anonymity because he was not authorized to speak to the press.

Kabanov also said the law doesn’t provide a clear definition of how the check of the suspected government employees will be carried out.

The legislation only says that the probe will be carried out by an anti-corruption body or by law enforcement officials according to a procedure defined by the president.

Putin, to whom the new legislation would also apply, has been accused by opposition leader Boris Nemtsov of having a watch collection valued at around 22 million rubles ($700,000), which amounts to Putin’s annual salary over a six-year period. The information was published in a report co-authored by Nemtsov in June.

According to Transparency International’s 2011 Corruption Perception Index, Russia is ranked 143 out of 182 countries surveyed.