Positions for sale: How much to become a governmental official?
There is a special category of corruption crimes that almost always remain unpunished. They are committed by so-called ‘kingmakers’ or ‘fixers’ selling positions in governmental institutions, enforcement structures, and large companies. Bitter struggle is raging in quiet ministerial and departmental offices for sinecures and ‘gravy trains’ allowing to receive good bribes. Upon purchasing the desired position, the civil servant starts using various corruption schemes to compensate the incurred costs. Obviously, the public and state interests are the last thing he is concerned about.
Everything is bought and sold
Such machinations are rarely detected by law enforcement authorities because all parties to the deal are happy: the seller gets good money, while the buyer – powers that can be used at his own discretion. No one is willing to show off such a deal.
In the recent years, brokage became a common practice in many governmental structures. Wherever duties of officials can generate illegal profits, fat jobs are sold out like hot cakes – be it a chair in a district administration or a high post in a federal ministry. Demand always creates supply.
There are plenty of semi-criminal businessmen in Russia willing to invest considerable money into a chair in a governmental structure – that not only allows to make illegal profits, but also brings numerous privileges available only to officials. Very often an oligarch – the main beneficiary – remains in the shadow, while the important chair is occupied by his henchman – a trusted aide who does not make any decisions and only creates an illusion of work. Of course, all the financial flows stay under control of the real master.
Media normally learn about such type of swindling when positions are sold by adventurous persons who, in fact, have no relation to staff appointment mechanisms in governmental structures. The defrauded purchasers address law enforcement authorities in a hope to return millions of rubles paid to the scammers. The number of such machinations grows every year because people are willing to pay really big money for prestigious positions.
The fake fixers exploit the firm belief of businessmen that money can resolve any issue with state bureaucrats. The unscrupulous scammers take advantage of the secrecy surrounding administrative structures and inability of perspective buyers to verify whether the promised appointment is real or not. The fraudsters meet with their victims in expensive restaurants, show fake service ID’s and other attributes of power. They arrive on luxury cars with governmental license plates, pretend to take phone calls from influential officials, complain on work load…
Businessmen, who understand very well that staffing issues in many governmental agencies are resolved by money, lose their cautiousness and take the bait.
Post in district administration for mullion rubles
The real kingmakers rarely attract attention of law enforcement authorities. Normally, police and special services catch not true fixers, but fraudsters pretending to be them. Files of arrested law enforcement officers often have a note: “Had no real possibility to affect the matter”.
For example, recently a 40-year-old man tried to sell a cushy job in the Administration of the Moscow District of St. Petersburg for 1 million rubles.
According to the St. Petersburg police press service, the investigation of this criminal case is completed, and the materials have been submitted to court for examination of the merits of the case. Investigators of the Administration for the Central District of the General Administration for St. Petersburg and the Leningrad Region of the Ministry of Internal Affairs (MIA) of the Russian Federation have charged the detained suspect under part 3 of Article 30 and part 3 of Article 159 of the Criminal Code of the Russian Federation (Attempted Swindling on a large scale).
According to the law enforcement authorities, a person have addressed police because he suspected that a 40-year-old St. Petersburg resident, who had offered him to buy a prestigious position in the district administration, had no relation to the human resources management in this municipal authority. The suspect was arrested on April 27, 2016 in a restaurant located on Ligovsky avenue in St. Petersburg during a meeting with the potential buyer. Currently the fraudster is waiting for the trial.
A sentence has been already announced in another high-profile brokage case. The Tverskoy District Court of Moscow has found that Gennady Astsaturov, 69 years old, and Mikhail Kharsiev, 23 years old, were selling the post of an Aide to the Deputy of the State Duma of the Russian Federation for $155 thousand.
According to the official statement of the Prosecutor General’s Office of the Russian Federation, the convicted criminals have defrauded a person familiar to them claiming that they can assist with this appointment. If fact, they never intended to keep that promise. Interestingly, Astsaturov and Kharsiev themselves were Aides to a Deputy of the State Duma – they used this fact to make their scam more convincing.
The fraudsters were arrested by the Federal Security Service of the Russian Federation (FSB) in a Moscow café immediately after receiving a partial payment from the victim. The Tverskoy District Court of Moscow has found them guilty under part 3 of Article 30 and part 4 of Article 159 of the Criminal Code of the Russian Federation (Attempted Swindling committed by an organized group on an especially large scale). Mikhail Kharsiev was sentenced to 3 years in a general regime penal colony; Gennady Astsaturov was sentenced to the same term conditionally – the court has taken into consideration his senior age.
US citizen selling position in Russian Federal Fishing Agency
However, not all sellers of posts are fraudsters – even if they are accused of fraud. Top-level officials often deny any connections with the intermediaries in such deals. Law enforcement authorities, being unable to prove the fact of brokage, have to charge the intermediaries under Article 159 of the Criminal Code of the Russian Federation – while the high-ranked masterminds escape the liability.
For example, members of an organized crime group involving George Hager, an American citizen, told the FSB the name of an influential official in the Federal Fishing Agency of the Russian Federation who had promised to assist in appointing a certain person to a senior position in this agency for a fee of $7 million payable to the intermediaries. It was Yuri Khokhlov, the Counselor of the Head of the Federal Fishing Agency, who has immediately denied all corruption accusation and soon retired from his post. Despite the public uproar, he was never prosecuted in the framework of this case.
The criminal group involved George Hager, an American with Belorussian roots, Fanil Sabirianov, ex-official from the Republic of Bashkortostan, and Minkail Umaev, a businessman operating in Ingushetia and Chechnya.
According to the investigation, these three people told the potential purchaser that they have good connections in the Administration of the President of the Russian Federation and in the Russian Government. The suspects offered the buyer, whose name was not disclosed, a senior position in the Federal Fishing Agency. Hager, Umaev, and Sabirianov explained that most of the requested $7 million fee will be spent on bribing high-ranked officials in the federal agency responsible for management and protection of the national fish resources.
The potential buyer of this cushy job did not believe the intermediaries and addressed the FSB – so all further negotiations were conducted under surveillance of the operatives. In the end of May 2016 George Hager was arrested in Roberto restaurant on Rozhdestvensky boulevard in Moscow immediately after receiving $300 thousand as the first installment. The American quickly agreed to collaborate with the investigation and brought the money to his accomplices on Nikitsky boulevard – where FSB officers have arrested Fanil Sabirianov and Minkail Umaev.
Yuri Khokhlov, former Counselor of the Head of the Federal Fishing Agency
Questionings started. The members of the criminal group told the operatives that their intention was to arrange the appointment of the client to the superior position through Yuri Khokhlov, the Counselor of the Head of the Federal Fishing Agency. During the special operation, Hager, Umaev, and Sabirianov attempted to give a paper replica of $3 million to the federal official – but Khokhlov refused to take the money. He said that this is a provocation. Therefore, his involvement into the corruption scheme could not be proven. Still, the scandal has resulted in his resignation from the Federal Fishing Agency of the Russian Federation.
George Hager, Minkail Umaev, and Fanil Sabirianov are currently waiting for the trial. All of them have been charged under part 4 of Article 159 of the Criminal Code of the Russian Federation (Swindling on an especially large scale committed by an organized group by previous concert).
“You must know whom to pay and how much”
A Human Resources Department officer in a federal agency agreed to talk with the CrimeRussia journalist on condition of anonymity.
“If I tell you how appointments are being made in our organization, I will be held liable. They will set the dogs on me,” – Mikhail Alekseev (fictious name) expressed his concerns.
An experienced human resources specialist, he found his first job through good connections back in the 1980s. Upon graduation, he did not want to go through the job placement system – which could send him to a distant Rassvet (Sunrise) village as a teacher of history. His aunt was familiar with an influential female official who helped the young graduate. Monetary bribes were not paid for employment assistance at that time, but his family had to be friends with the patroness: give her expensive presents on holidays, invite to family events, run small errands, etc.
“My father had to drive that lady to her cottage on week-ends, help her with renovations, move furniture. My mother helped her in the kitchen when the patroness was making banquettes for important people. My parents considered this a normal situation because the management was favorable to their son,” – Mikhail Alekseev told.
But now a position in the institution where he works costs much more than simple presents and favors. Everything has its price. For instance, the current Head of this organization has paid 25 million rubles to his Moscow patrons for the chair. His Deputy’s chair costs some 15 million rubles. To become an entry-level employee, one has to pay only 100 thousand rubles – but right connections are still required. You must know whom to pay and how much – otherwise you might be defrauded by a scammer.
Similar staffing policies are used in other governmental institutions as well. Of course, each organization has its own specific nuances. The more profitable – from the bribe-taking point of view – is a position, the more you have to pay for it. The most expensive are positions in control and watchdog authorities – where you can first put pressure on somebody and then offer him a solution for a good reward.
“Officials make good money on oil and gas companies, construction businesses, industrial enterprises, and trade and service companies. Therefore, governmental positions overseeing these sectors of economy are worth millions of rubles at the regional level and millions of dollars – at the federal level. And each oligarch wants to seat his own henchman in such a chair,” – the human resources specialist said.
“Official is not a surgeon: he won’t cut away from you too much”
According to Mikhail Alekseev, not only monies are required to be appointed to a good position, but right connections as well. You can’t just bring a case of cash and become an official – you must demonstrate that you belong to that circle. The only way to gain trust of corrupt civil servants is to find a guarantor well-known for his loyalty to the superiors.
According to the human resources specialist, law enforcement authorities never express interest towards governmental appointments and don’t ask whether it was for a bribe or not. Of course, the colleagues know this precisely, but keep silence. No one needs issues and reputation of a truth-seeker that can destroy an official’s career.
“I had never taken bribes for referring somebody to my boss. The money flow directly to the pockets of the management, I get nothing. But I can tell about available vacancies or provide intermediary contact information to an interested person. I can also help to revise the resume. Sometimes I participate in negotiations – but only in relation to entry-level staff. Everything else is above my level,” – Mikhail admitted.
He believes that there is nothing wrong with helping people to find a job. After all, an official is not a surgeon: he won’t cut away from you too much.
The retired security official and two of his subordinates are suspected of an attempt to receive 31.5 million rubles ($470,610) from a construction company for its participation in the corporation’s tender.
Early in August, criminal ‘authority’ Yuri Esin a.k.a. Samosval (Dump Truck) has been detained in Moscow. In the 1990s he had a reputation of the ‘godfather’ of ‘Russian mafia’ in Italy and faced 75 years behind bars. The CrimeRussia was figuring out how could the 67-year-old criminal ‘authority’ having close ties with many thieves-in-law escape the Italian justice 20 years ago and avoid any issues with the Russian law enforcement authorities up until his recent arrest.