The recent focus on the unchecked corruption in the Sochi Olympics made me reflect on what Russia can teach us about the costs and benefits of politically-motivated corruption prosecution, discussed in Matthew’s February 18 post. Businesspeople with close ties to Putin won and abused lucrative Olympic contracts with no repercussions from the state. Ironically, opposition blogger Alexei Navalny, who publicly exposed the rampant corruption in Olympic construction projects, was the target of a fabricated corruption prosecution in July of last year, and placed under house arrest (allegedly for violating the terms of his earlier suspended sentence) just last week–perhaps not coincidentally, right after the conclusion of the Sochi Olympics.
Navalny’s prosecution is just one example of the fraught landscape of corruption prosecution in Russia. In a 2008 paper entitled “Law as Politics: The Russian Procuracy and its Investigative Committee,” Ethan Burger and Mary Holland provide excellent background on the politicization of the Russian Procuracy, as well as the vivid examples of the Procuracy’s politically motivated activities described in this post. The Russian experience demonstrates that the costs of targeted corruption prosecutions may be higher and the benefits much more elusive than Matthew suggests.
Matthew identifies deterrence as a potential benefit of politically motivated corruption prosecutions: “politicians may be deterred from engaging in corrupt activities if they fear exposure by a political rival.” However, such exposure may not deter corruption among Russian politicians for two reasons.
First, when politicians must engage in corruption in order to participate in the political system at all, targeted corruption prosecutions will deter dissent from the ruling regime, not corrupt practices. The Procuracy’s selective prosecution of regional and local officials illustrates this point. Corruption is a prerequisite to regional officeholding. In wealthy regions, prospective governors must make illicit payments to the national government in order to secure a presidential appointment to the governorship. Many candidates solicit funds from corporate “sponsors” for this purpose. In the late 2000s, the Procuracy prosecuted several uncooperative regional governors on corruption charges. Similar prosecutions occurred at the local level. The mayors of Vladivostok and Volgograd were targeted for prosecution, while Moscow Mayor Yuri Luzhkov was left untouched (until his dismissal by Medvedev in 2010). What sort of incentives did this targeted prosecution campaign create? Will prospective politicians choose to opt out of the political system altogether by abstaining from corrupt practices, or, as is more likely the case, will they abstain from disobeying the center once in power?
Second, the Procuracy often prosecutes politicians and businesspeople on vague, corruption-like charges by reclassifying previously sanctioned activity as illegal. Burger and Holland describe the “arbitrary criminaliz[ation]” of conventional interactions between businesses and the government. For example, the Procuracy rebranded a sanctioned private-public deal as a “criminal scheme to defraud the state of due money.” This sort of ex post criminalization is likely made possible by the shockingly vague anticorruption federal statutes, which give wide latitude to prosecutors. When the parameters of criminal activity are fluid, two problems arise. First, the distinction set up by Matthew between convictions of innocent parties and convictions of truly guilty defendants breaks down somewhat. Second, individuals cannot know ex ante what behavior will be classified as corruption and what behavior will not. Unclear expectations about punishment weaken deterrence in any context.
What about the costs of targeted corruption prosecution? I think the most important lesson to draw from the Olympics and the atmosphere of impunity among the Russian elite generally is that the costs of selective prosecution cannot be considered in isolation from the costs of its corollary: the selective failure to prosecute. For every corruption witch-hunt, there may be egregious and crippling corrupt acts that go unprosecuted. Burger and Holland detail stunningly involved efforts of the Procuracy to avoid the investigation and prosecution of those with close connections to the regime. The devastating consequences of state-sanctioned corruption cannot be ignored when engaging in a cost-benefit analysis of politically-motivated corruption prosecutions.
GAB | The Global Anticorruption Blog 
Greetings:
An often overlooked aspect of mega-corruption is that many foreign governments/states, individuals (accountants, bankers, lawyers, money managers, former officials/politicians, real estate agents, etc.), and organizations also benefit.
Unfortunately, in many instances, kleptocracies are regarded as too big to fail (e.g. Russia and China) by foreign leaders, and most judicial systems are reluctant to exercise jurisdiction over matters where the original wrongful act doing occurred abroad.
Of course, there are exceptions — for example, when there is a change in government at the top, but such instances are rare.
Regards,
Ethan S. Burger.
And what could a country even do to combat this practice? Maybe appoint an independent “corruption prosecutor,” with life tenure to ensure political insulation? But then there’s the problem of appointing cronies, although maybe with life tenure cronies could evolve into independent decision-makers.
Even if it’s not a crony, what happens when the independent prosecutor (in good faith or otherwise) acts in ways that are biased, overzealous, or simply unwise? Think about the checkered history of the independent counsel provisions of the Ethics in Government Act in the U.S. — from Justice Scalia’s blistering (and prescient) dissent in Morrison v. Olson up through the Ken Starr investigation of President Clinton. It’s hard to escape the trade-off between independence and accountability.
I believe that there’s no way to completely avoid the possibility of a bad political connection between a prosecutor of a corruption probe and a party or faction. That’s why I also believe that a targeted prosecution (“witch-hunt”) violates the integrity of a corruption probe (lack of due process), even if “the witches are real”.
Michael Pierce’s comment seems spectacular to me, although I might add this tiny contribution:
One autonomous agency in charge of criminal prosecution, even if supposedly headed by a crony, but composed by independent prosecutors, would (as always) suffer the turmoils or pressures caused by the infinite political dispute between parties or factions. Nonetheless, a life tenure guarantee gives to (and also demands from) the prosecutor the “alternative” of not acting in a bad political way.
Anna, thanks for this fascinating blog post. It hadn’t occurred to me until you pointed it out how double-edged the rhetoric of corruption can be — how fighting corruption can be a smokescreen for some of the most harmful corruption of all.
I think Michael P.’s point about avenues to combat these problems is a fair one. There might be a risk of assuming that putting the right “structures” in place would help solve the problem, and it probably would be balance-positive. But if corruption is partly a culture (that has been seen to pervade even the judiciary in many countries), then structures such as life tenure could serve only to legitimate a corrupt system rather than cure it.
Thanks for a thoughtful and thought-provoking reflection, Anna. What you’ve written, when combined with Ethan and Michael’s responses, draws out a difficult problem. Regimes in power may selectively prosecute corruption to entrench their own power and disenfranchise political opponents; there is little incentive for a regime in power to appoint an “independent” prosecutor and, no matter the title, true independence isn’t likely; and, as Ethan observed, foreign leaders are unlikely to exercise jurisdiction over conduct that occurs in another state, especially when that conduct is sanctioned by a regime in power.
It seems all of these weigh into the “costs” of politically-motivated corruption prosecutions. They seem, also, to be unique to politically-motivated corruption prosecutions by regimes in power (those regimes that exercise the discretion both to prosecute and not to prosecute). I’m not ready to give up on checking these abuses, but I’m still a long ways from figuring out how to check the costs of this form of politically-motivated corruption prosecution.
The commentators are echoing a point that informs the work of Romanian scholar Alina Mungiu-Pippidi. In some societies corruption (at least as Western liberals define it) is not a deviation from the norm. It is the norm. The distinction is critical for policy reformers and advisers. What may work in a society where corruption is a deviation from the norm — better enforcement etc. — will not where corruption is the norm. She first advanced the thesis in “Corruption: Diagnosis and Treatment’, in the Journal of Democracy, Vol. 17, Issue 3, July 2006, pp. 86-99. A more recent, online publication explicating her views is the assessment of Norwegian anticorruption aid policies she and colleagues conducted for Norad: Contextual Choices in Fighting Corruption: Lessons Learned.
These are really interesting responses. I agree with Eden that a regime’s “solutions” to pervasive corruption could perversely do nothing more than legitimate a corrupt system. The risk of this is probably particularly high in Russia in particular, in light of Ethan’s observation. We see both the international community and the Russian leadership giving lip service to the anticorruption cause but actually doing nothing meaningful to stop corruption at the highest levels. For example, Medvedev signed into law vague anticorruption initiatives that call for freedom of the media and similarly nebulous, unattainable goals. In a way, these solutions allow the Russian leadership to save face by giving some attention to corruption (even if it’s in bad faith), while allowing corruption among the elite to continue.
After reading Ethan and Mary Holland’s paper, I would be interested to know how the creation of the Investigative Committee has played out over recent years. Is the Investigative Committee an example of a promising institutional change, or does it again demonstrate that institutional solutions are doomed in a “too big to fail” corrupt regime such as Russia? Judging from the Investigative Committee’s early years, it seemed to me to be the latter.
Unfortunately, in many respects, for the U.S. and the E.U., Russia indeed is too big to fail due to energy dependence and Russian ownership of real estate and other assets abroad — I doubt there would be support to freeze such assets..
While strong economic sanctions may be counterproductive and military action out of the question, symbolic gestures should not be underestimated. They would send a message to Mr. Putin and members of the Russian government.
As a preliminary note, I still think it is premature to judge Russia’s actions. There is indeed a divergence between the concept of the right of self-determination and the right of a state to territorial integrity, Borders are products of history.
While there are limits to the degree a country can interfere in the affairs of a sovereign state, it is unavoidable in today’s world where the promotion of human rights necessitates interference. Of course, states are obliged to honor their international obligations and the U.N. Charter represents the highest authority of international law and under the Russian law is superior to domestic law.
That being said, the U.S. and like thinking countries should announce:
1) that it will not participate in the World Cup Games scheduled to be held in 2018 (there have been suggestions to kick Russia out of the games this year);
2) Russia’s participation in international gatherings such as the G-8 and G-20 should be suspended;
3) Western countries should strengthen the enforcement of its anti-money laundering laws where the real party in interest is believed to be a Russian official.
4) There should be enhanced visa restrictions placed on Russian officials and perhaps restrictions on their ability to operate bank accounts abroad (such as the amount needed to feed themselves and their families).
5) Cultural exchanges enjoying Russian governmental backing should be cancelled.
6) The level of Russian language broadcasting into Russia from the West should be increased and steps to prevent information emanating from Western blogs/websites from being hacked increased.
I believe at this stage these represent realistic steps that are feasible. I would welcome other suggestions.
Cheers.