Off with Their Heads

Has Vladimir Putin lost control of his “corruption crackdown”?

BY SIMON SHUSTER

Over the past month, a surreal new element has come to dominate Russia's nightly news. At times it feels like some sort of hybrid reality show, as if the Kremlin's propaganda men have started splicing episodes of MTV Cribs with episodes of COPS. The entrancing new genre was born from the purge that President Vladimir Putin launched in October -- the first anti-corruption campaign he has ever attempted -- and it has made for excellent television.

Viewers have been treated to commando raids on posh apartments, seized boxes of diamonds and gold, stacks of bribe money being fed by police into counting machines that look about ready to burst. Perhaps most satisfying of all, for the millions of workaday Russians watching at home, has been the sight of once-mighty bureaucrats groveling for sympathy, clemency, or bail. That schadenfreude is part of the point. Purges are meant to be popular.

But six weeks into this one, its initiator has found himself in the bind of his career. By allowing state TV to cover all the gory details of the bureaucratic bloodletting, Putin's government seems to have only reminded Russians just how shameless and pervasive corruption has become. In one case, police claim to have found an obscure military bureaucrat, Alexander Yelkin, in possession of around $9 million in cash and four Breguet watches. Had he not been arrested on Nov. 16, he was reportedlyplanning tocelebrate his birthday the following night with a private concert by Jennifer Lopez. Judging by the latest polls, such tales of profligacy have begun to reflect badly on the entire government -- Putin included. But satisfying the public's piqued desire for justice is hardly an option at this point. Bureaucrats at every level are already spooked by the spate of arrests, and if the lifestyle to which they have become accustomed becomes threatened, they could start to turn on Putin. And that raises the risk of a palace coup.

"He has to strike a very delicate balance," says Alexander Rahr, a member of the Valdai Club, a forum of Russia experts that meets with Putin once a year. "He is too dependent on the boyars [feudal lords] to go chopping off their heads, but that is what the people are now demanding."

Putin announced the new anti-corruption campaign at the most recent Valdai Club meeting on Oct. 25. At the time, no one took it very seriously. Over the past decade, corruption in Russia has grown to the levels of a third-world kleptocracy , and hardly a month goes by without some senior official promising a crackdown. But this time it seems Putin was serious, or at least more serious than usual.

The day of the Valdai Club meeting, police had raided a handful of homes and offices linked to Defense Ministry officials accused of stealing about $100 million in state assets. When the cops arrived at the apartment of Evgenia Vasilieva, the comely young director of the ministry's property department, they were surprised to findDefense Minister Anatoly Serdyukov there. (One of the more entertaining sidebars of the scandal has involved the harem of beautiful women Serdyukov had placed in positions of extraordinary power. The Russian press has dubbed them "the Amazons," and before resigning last month, one of them, a 31-year-old aspiring poet namedMarina Chubkina was in charge of maintaining some of Russia's chemical and nuclear weapons facilities.) During the raid on Vasilieva's apartment, police found several valuable paintings by the 19th-century masters Ilya Repin and Ivan Shishkin that belonged to the ministry's museum. Now under house arrest pending investigation for large-scale fraud, Vasilieva, 31, denies any wrongdoing. The museum has gotten its paintings back.

But that series of raids was just the opening act. On Nov. 6, Putin shocked the nation by firing Serdyukov "in order to allow for an objective investigation into all matters." Never before had one of the supposed untouchables from Putin's inner circle been so publicly humiliated. It suddenly dawned on Russian officialdom that this was more than just a cosmetic shake-up. High-profile cases followed: officials from the Ministry of Regional Development now stand accused of looting millions of dollars from the coffers of this year's APEC summit in Vladivostok. In another, officials in the space industry allegedly stole more than $200 million from the state fund to build Russia's satellite navigation system, which has recently experienced several technological disasters.

In the past month, dozens of searches have been carried out; several officials are already in jail, including a deputy minister. Officials at every level are starting to get panicky, says Olga Kryshtanovskaya, a former lawmaker who studies the country's elites at the Russian Academy of Sciences. "This is a rupture in their agreement with the leader of the country," says Kryshtanovskaya. "Among Russian officials, there is a tacit contract of loyalty in exchange for guarantees of protection."

This silent arrangement was not invented under Putin, she adds, but is a hallmark of Russian statehood going back to the tsars. At the end of the 19th century, the Russian historian Nikolai Karamzin was famously asked to describe, in just a couple words, what is going on in the Motherland. One word was all he needed: voruyut, which means "thieving."At the time, many bureaucrats were only paid a nominal salary; it was assumed they would earn the rest in bribes. The tsar looked the other way.

For the most part, this system held under the Soviet Union, and the only major effort to dislodge it helped precipitate the empire's collapse. In the late 1980s, Soviet President Mikhail Gorbachev oversaw the so-called Cotton Case, which exposed a syndicate of senior Communist Party officials who had pilfered millions of dollars from the state. Two of them were executed and dozens jailed; but rather than restore faith in the Soviet system, the scandal helped expose to the public just how rotten it truly was.

The raids now filling the nightly news look a lot like the now-grainy images from the Cotton Case. Stacks of confiscated cash, gold, and jewelry were first shown to the Soviet media during a news conference in Moscow in April 1988. Millions of Soviets watched from their communal apartments, having stood in line all day at empty grocery stores, and the shock did irreparable damage to public confidence.

"What's going on now has brought back a lot of memories [of the cotton scandal], and they are now very afraid of repeating that story," says Nikolai Zlobin, another member of the Valdai Club and director of Russian and Asian programs at the World Security Institute in Washington. "More and more often I'm hearing from the top that we can't allow this kind of mistake, where one investigation leads to a systematic collapse of the country."

But considering the scale of the corruption in Russia, Putin also can't afford to let it fester anymore. It has become a major liability. In the latest Corruption Perceptions Index, which Transparency International released on Dec. 5, Russia improved slightly from last year, but still ranks near the bottom of the list, on a par with Guyana and Honduras, and well below Sierra Leone and Niger. According to data from the Levada Center, an independent pollster, corruption is now third in the ranking of public concerns, up from tenth in 2005. Only poverty and inflation worry Russians more. "At this point corruption is dangerous not just because [officials] steal, but because all they do is steal," says Zlobin.

"They have stopped carrying out their basic responsibilities. They don't listen to anyone, not even Putin. This compromises the stability of the state."

The best way for Putin to bring them into line, Zlobin suggests, is by making an example of someone at the very top, much like he did in confronting the country's oligarchs during his first presidency. In 2004, the richest and most powerful among them, Mikhail Khodorkovsky, was put in prison, where he remains. Soon after his conviction on fraud and embezzlement charges, Russia's other oligarchs either emigrated or pledged allegiance to Putin. But this time, the president seems reluctant to choose a sacrificial lamb. Serdyukov, the sacked defense minister in the middle of the scandal, has not even been interrogated, let alone charged, even though several of his direct subordinates are already in jail. On Nov. 16, Putin even shielded him from criticism. "No investigators and no courts have made any claims against Serdyukov personally," Putin said in response to rumors that the fallen minister had been appointed to another post. "If he wants to find work and someone takes him in, I don't think we should prevent that."

Evgeny Minchenko, a Kremlin-connected spin doctor, says that is when Putin's war against corruption "ceased to be very convincing" for the people watching at home. Serdyukov was the only man from Putin's inner circle who was in the line of fire, and with investigators recently saying that they are not even interested in questioning him, the purge suddenly seems to be running out of steam. "People have begun to question how serious this is," Minchenko says. "So far only the lackeys seem to be taking the heat."

And this seemed to make the public restless. In a nationwide survey released on Dec. 3, the Levada Center found that 80 percent of respondents consider the Defense Ministry probe a sign of "all-encompassing degradation and corruption of power." Only 12 percent said the graft at the ministry was "atypical." Meanwhile, Putin's ratings have also begun to suffer, falling last week to their lowest level since last December, when massive street protests erupted against him.

"The people demand blood. And if they allow this bloodletting, that demand will only grow," says Zlobin. "Once you devour one very senior person, the question immediately arises, why is he the only one?"