Robert Amsterdam

Süddeutsche Zeitung
Business
Friday, December 14, 2007

“Wherever government bureaucrats are involved, there is corruption”

The political scientist Georgy Satarov on illegal business practices in Russia, the Siemens case, and the lack of control under President Putin Siemens has come under sharp criticism for its payment of large bribes. Many recipients come from Russia. Die Süddeutsche Zeitung spoke in Moscow with Georgy Satarov, from 1994 to 1997 an advisor to then President Boris Yeltsin, about the extent of corruption in the country. Satarov heads the Indem Foundation (Information Science for Democracy) and is one of the leading experts on corruption in Russia.

SZ: A Munich court has found Siemens guilty of keeping slush funds and ordered the company to pay a fine of € 210 million. It was determined that considerable bribes were paid in Russia. Does this surprise you?

Satarov: No, I’m not surprised at all. Our investigations have shown that the extent of bribe payments in Russia has increased at least tenfold since 2000.

SZ: That was the year Vladimir Putin was sworn in as president. A coincidence?

Satarov: No, what we are seeing here is an inherent pattern. There is a clear reason for the growth in corruption. There is simply no longer any external control of the bureaucracy. This control still existed under President Yeltsin. What I am referring to is the control exerted through competition at the political level – by opposition parties, the free press, and freely operating civil society organizations. State power was much more transparent than today. Putin has eliminated this external control. Now, only the bureaucracy enjoys freedom of action, and Putin stands as its head.

SZ: This poses a question for international companies like Siemens. Is it possible to do business in Russia without paying bribes?

Satarov: We don’t maintain any sociological data. However, I have never met any businessman who has said, “All of our business has gone smoothly, we have had no problems entering the market, we’ve completely adhered to the legal framework, and no one has attempted to extort us.” Although I don’t know of any such companies, it doesn’t necessarily mean that they don’t exist. Perhaps there is a large automobile company that can use its authority to exercise the necessary pressure. Yet, Siemens is not exactly a small company.

SZ: Leaving aside international companies for the moment, is it possible to escape corruption in Russia?

Satarov: I am not making the claim that corruption has complete reign over Russia. It is widespread – and greater than ever before. But there are exceptions. I know Russian businessmen who don’t pay any bribes, who are honest, and conduct their work transparently. Their lives are often made difficult, though. The bureaucracy viciously pounces on them and tries to force them to comply. These businessmen rarely end up leaving the courtroom.

SZ: Siemens paid bribes in order to receive contracts in the telecommunications sector. Is this a particularly corrupt area of business?

Satarov: The Russian telecommunications sector is developing rapidly. And it is tightly controlled by government bureaucrats. The state tends to get involved wherever there is fast and easy money to be made. This is true for the oil sector, but equally applicable for telecommunications. Wherever government bureaucrats are involved, there is also corruption.

SZ: One gets the impression that the Russian judicial apparatus is not particularly interested in the findings of the Munich court. What could be the reason for this?

Satarov: I am not familiar with the details of the scandal. It might be the case that high-ranking individuals are involved. Telecommunications Minister Leonid Reiman has had his sins forgiven by President Putin.

Interview: Daniel Brössler