The meeting took place on the eve of the Council for Countering Corruption meeting.
* * *
President of Russia Dmitry Medvedev: Mr Stepashin, on Thursday, I will hold a meeting of the Anti-Corruption Council, of which you are also a member.
What positive steps has the Accounts Chamber taken in this regard during the last year?
Chairman of The Accounts Chamber Sergei Stepashin: Perhaps I can begin with some figures?
Dmitry Medvedev: Very well.
Sergei Stepashin: First of all, the financial violations we have discovered stand at 580 billion rubles [about $19 billion] (generally these are corruption risks), twice the last year’s amount. This has to do with the crisis and major injection of funds that occurred, including into private companies.
Two billion of that money represents unlawful diversion of budgetary funds (direct criminal action, according to the law). We have sent 464 inquiries to the Prosecutor General’s Office, with criminal cases opened for 81 of them. So far, none of those funds have been returned.
I reported to you earlier that we have changed our tactics because we are not a law-enforcement agency, and our main goal is to prevent and detect corruption risks. We are the Accounts Chamber, but we are working with corruption risks. We have signed agreements with all law-enforcement agencies.
Last year, we took 65 actions together with the Ministry of the Interior, the FSB, and the Investigative Committee. I’m talking about actions when representatives of these agencies are directly involved in a working group, and that gives us completely new opportunities. We have the knowledge, and they can provide better operational support, so the final result is very good. High-profile cases, as you know, include the notorious Vancouver case, with a criminal probe launched into alleged misspending of 200 million rubles of state funds.
We audited the Russian Agricultural Bank (Rosselkhozbank) as per the request from its new CEO. Two branch managers have been fired and are now facing criminal charges, in Kaliningrad and Krasnodar. Moreover, the losses at the Kaliningrad office amount to almost 100 million, with loans extended for unclear purposes.
Following your instructions, serious audits have been carried out in all the republics of the North Caucasus. This included Ingushetia, where we opened ten criminal cases, — and here I must thank [Head of the Republic of Ingushetia] Yunus-Bek Yevkurov, who works openly. Audits were also carried out in Karachayevo-Circassia.
This year, we decided to audit everything being done in Kabardino-Balkaria, especially with regard to alcohol since this item accounts for 1.5 per cent of the republic’s budget, and in our nation, that’s unacceptable. According to our joint data with the Federal Tax Service, 33 per cent of that comes from illegal vodka production. In essence, this means corruption, so we will now be engaging in this serious work as well.
And the last thing I would like to mention – not something that has been done, but something I would like to say – also has to do with your instructions outlined in your Address to the Federal Assembly. It concerns the situation with public procurements and contracts. We are currently drafting proposals (I have put them in writing for you) on switching over to a contract system, and we are creating a joint working group; the Economic Development Ministry and the Anti-Monopoly Committee agree with this. We lose nearly one trillion rubles every year. In the Kirov Region alone, we discovered purchase overpricing worth 100 million rubles, and that’s for just one specific hospital – a perinatal centre.
I feel that pharmaceuticals are also among the most corrupt areas. And the last are corporate raids.
Together with the FSB, we have specifically created a joint inspection. I am not afraid to say ‘with the FSB,’ there is nothing shameful about it.
Dmitry Medvedev: Yes, don’t be shy; it’s nothing to worry about.
Sergei Stepashin: It’s just that all European nations work differently; they are surprised that we work together with the special services. But I feel that this is entirely normal; we are resolving the same problem.
Dmitry Medvedev: Of course.
Sergei Stepashin: We also inspected a number of larger facilities, such as Iskitimcement, the Machine-Building Plant named after Dzerzhinsky (in Perm), and many others, where deliberate bankruptcy was undertaken, and we were able to prevent that. So we are doing this work.
We also carried out your direct instructions: together with the Prosecutor General’s Office and the Ministry of the Interior, we developed a special programme (which we started implementing this January) to educate the public on matters pertaining to fighting and countering corruption. The programme is interesting. It will involve the Russian Academy of Public Administration, the Institute of the Prosecutor General’s Office [of the Moscow State Law Academy], the Interior Ministry’s Institute of Economic Security, and the System Analysis Institute of the Accounts Chamber. We need to teach people. I think that we will look into this topic together on January 13. That’s all, in brief.
Dmitry Medvedev: Very well.
All of the things you have spoken about are indeed important areas of work. This year, I would like for you to focus your attention specifically on these kinds of crimes. It is true that the Accounts Chamber is not a part of the law-enforcement system and is not an investigative agency, but nevertheless, you have highly skilled specialists and you have been instructed to monitor the spending of budgetary funds and oversee the state of affairs with regard to public property. Corruption-related crimes are constantly being committed around these areas. So please continue this work together with other agencies and ministries. I think that that these efforts will be fruitful.
<…>