CORRUPTION Syndromes of Corruption

Oligarchs and Clans 129
all. In 2002 the Prosecutor General’s Office reported that ‘‘problematic
bankers’’ evaded a total of 36 billion Rubles (nearly $1.2 billion) in taxes;
evasions in Kalmykia, an emerging internal tax haven, totaled 17.8 billion
Rubles. Listed in the same report of lost revenues are a range of privatizers,
military officers, and the former Deputy Chairman of the State
Fishing Committee, who cost the state 42 million Rubles by issuing
fishing quotas illegally (Shelinov, 2003). Perhaps the most serious official
credibility problems, however, are with the courts and law enforcement
agencies. Oligarchs such as Oleg Deripaska use legal proceedings to
justify the seizure of productive assets, as noted above. Similarly, news
media frequently report raids by police (called ‘‘werewolves in uniform’’
by some Russian citizens) on the headquarters of some business, ostensibly
investigating business misconduct or enforcing the law but in
fact helping a powerful rival execute a legally camouflaged takeover
(Tavernise, 2002a, 2002b; Agence France Presse, 2003; Filipov, 2004).
Organized crime: muscle for hire
Organized crime’s power is both a consequence and a sustaining factor of
the Oligarchs and Clans syndrome, reflecting the same opportunities,
ineffective institutions, and climate of insecurity that shape corruption.
Mafiyas are often allied with business and state participants in corrupt
deals; oligarchs frequently rely on illegal ‘‘muscle’’ to get things done, and
organized crime figures are key members of several clans. Imagery borrowed
from the Sicilian case abounds in discussions of Russian organized
crime, and indeed the imported word mafiya makes useful shorthand. But
Russian organized crime is decentralized and non-hierarchical: instead of a
unified national network thousands of small gangs operate with little or no
coordination (Leitzel, 2002: 37). They may cooperate for a time on larger
projects, but overall organized crime is a universe of small, shifting groups
exploiting whatever illicit opportunities are at hand (Shelley, 2001: 248;
Volkov, 2002: 64). Estimates in 1995 had it that 30,000 individuals were
involved, 3,000 of them as leaders of their own gangs. Over 1,000 of these
groups were thought to link various regions within Russia, and 300 of them
to engage in international dealings (Frisby, 1998: 32).
By the mid-1990s, organized crime held substantial influence over half
of the Russian economy, and in 1994 paid an estimated 22 billion Rubles in
bribes (Frisby, 1998: 34, 37). Mafiya figures and oligarchs such as
Vladimir Gusinsky were behind some of the worst of the pyramid schemes
of the mid-1990s, luring citizens with extravagant promises of returns on
their money that, of course, they would never see. The same risks and
uncertainties from which the mafiyas profit mean that little of their money