US STATE department cables released by WikiLeaks on Wednesday night describe a deeply corrupt Russia, where state security agencies engage in racketeering and political patronage provides the only means for businessmen to circumvent crippling bureaucracy.
Witnesses told the US embassy in Moscow they had seen suitcases, believed to contain cash, carried into the Kremlin under guard.
The cables also describe how the mistrust which lingers after the cold war hampers US attempts to co-operate militarily with Russia. They also detail the fear of the former Soviet Union among its east European neighbours.
Prime minister Vladimir Putin is the central character in this unflattering portrait of Russia. Although he is the country’s undisputed strongman, a cable drafted in November 2009 notes that even at the height of his power in his previous job as president, “it was rumoured . . . that as many as 60 per cent of his orders were not being followed”.
The embassy in Moscow earlier this year sent a cable entitled “Questioning Putin’s Work Ethic”, about rumours that Mr Putin had little interest in the minutiae of the prime minister’s office and often worked from home.
Other cables suggested that despite his denials, he had amassed a fortune – probably through ties to the Swiss petroleum-trading company Gunvor, which is allegedly owned by a former crony in the KGB.
The successor to the KGB, the FSB (Federal Security Service), is one of several branches of Russian government which US diplomats described as mired in corruption and virtually indistinguishable from the mafia.
“Analysts identify a three-tiered structure in Moscow’s criminal world,” says one cable. Yuri Luzhkov, a former mayor of Moscow who was fired by President Dmitri Medvedev at the end of September, was at the top of this structure. “The Moscow city government’s direct links to criminality have led some to call it ‘dysfunctional’ and to assert that the government operates more as a kleptocracy than a government,” a diplomat wrote.
In the middle of this structure of corruption were the FSB and the ministry of internal affairs (MVD). The government agencies racketeered big businesses, leaving small fry to the police. “Moscow business-owners understand that it is best to get protection from the MVD and FSB (rather than organised crime groups) since they not only have more guns, resources and power than criminal groups, but they are also protected by law,” the embassy reported.
At the bottom of the structure were criminal groups who worked under the “roof” or protection of the security agencies, prosecutor’s office and city government.
Corruption costs Russia more than $300 billion (€230 billion) annually, according to Indem, a Moscow think tank quoted by the Washington Post. The anti-corruption group Transparency International ranks Russia 154th on a list where numbers rise in proportion to the level of corruption.
Graft is so prevalent, the owner of a casino in Moscow told a US diplomat, that “only a ‘revolution’ could change Russia’s current trajectory”. The source said too many people benefited from the system for it to change. “Levels of corruption in business were worse than we could imagine” and he “could not imagine the system changing”.
US diplomats said the Russian energy sector, the mainstay of the country’s economy, was so inefficient it took twice as long to drill an oil well in Russia as in the west. Decisions at the state-owned company Gazprom were made “in the interests of its political masters, even at the expense of sound economic decision-making”.
Since last year, the Obama administration has attempted to “reset” its relations with Moscow. Yet a military working group found it impossible to establish genuine dialogue. Russian participants were “closely monitored by their military intelligence handlers” and simply recited “tightly controlled statements . . . from prepared texts”. The US appealed to Moscow to restrict sales of anti-tank missiles and in particular shoulder-launched anti-aircraft missiles which they feared extremists might use against civilian airliners.
Their Russian interlocutor argued that “if Russia did not provide these weapons to certain countries, ‘someone else’ would”. In another echo of the cold war, a Polish diplomat in Moscow was rebuked by the Russian foreign ministry for jokingly calling Poland’s bureau of eastern security the “Office of Threats from the East” in a telephone conversation with Warsaw – evidence that his telephone was tapped.
In cables sent from the US embassy in Tbilisi during the Russia-Georgia war in August 2008, diplomats accepted without question the false version of events recounted by the pro-American President Mikheil Saakashvili.
It remains to be seen whether the description of Russia in the WikiLeaks cables will harm the Obama administration’s efforts to obtain Senate ratification of the new arms control treaty with Moscow before the year-end. In a meeting with congressional leaders earlier this week, Mr Obama said a vote was “absolutely essential to our national security”.