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Corruption

Russian minister's arrest - a fight against corruption or liberalism?

The surprising corruption allegations leveled against Economic Development Minister Alexei Ulyukayev have made waves in Russia. As one of Moscow's few pro-Western liberals, he was recently facing government pressure.

The word of the day in Russia is "strange." One hears it often as journalists, politicians and experts discuss recent events surrounding Minister of Economic Development Alexey Ulyukaev. Russian investigators announced his surprising arrest in the middle of the night. Ulyukaev is said to have received $2 million (1.9 million euros) in bribes for the sale of the Russian state-controlled oil company Bashneft to the likewise state-controlled oil company Rosneft. According to media reports, Ulyukaev has been under surveillance for the last several months. The minister himself denies the accusations. His lawyer stated that the charges were simply a provocation. Reactions to his arrest ranged from astonishment among colleagues and experts to joy among radical nationalists.

"I could barely believe that such a high-level minister could face such accusations and be arrested," said Alexander Rahr, project coordinator of the German-Russian Forum and an adviser to the Russian company Gazprom, when speaking with DW. "It was even more surprising that Ulyukaev was allowed to remain at his post during the time that he was being surveilled." One can only speculate as to the background of the story. It could be an attempt to "undercut someone that is even higher up" than Ulyukaev. Others suspect a power struggle between various security agencies or an attempt to shift economic policy, according to Rahr.

Alexander Rahr, Deutsch-Russisches Forum, Forschungsdirektor (DW)

Alexander Rahr from the German-Russian Forum

Bribes from Putin confidants?

The 60-year-old Ulyukaev is one of the most experienced ministers in Prime Minister Dmitry Medvedev's government. In the early 1990s, he was a close associate of liberal economist Yegor Gaidar, who orchestrated the transition from a planned to a market economy. During the 16 years of Vladimir Putin's reign, Ulyukaev has been deputy finance minister, deputy director of Russia's Central Bank and since June 2013, minister for economic development.

It is hard to say whether the accusations are true. The sale of Bashneft in early October was one of the biggest deals in the Russian energy sector this year. Initially, Ulyukaev came out against the sale to Rosneft, only to later vote for it. Rosneft is headed by Igor Sechin, a close confidante of Vladimir Putin.

Russian state television ran the headline "Fight Against Corruption" when reporting on Ulyukaev's arrest, calling to mind other controversial cases. When Vladimir Putin was elected president for the third time in 2012, he declared that he would lead the fight against rampant corruption himself. Since then, there have been a number of spectacular resignations and arrests. The case of Nikita Belykh, governor of Kirov, is especially reminiscent of the events now swirling around Ulyukaev. Belykh, a liberal politician, was arrested this summer, accused of having received 400,000 euros in bribes. He, too, denies the accusations.

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Name in the Panama Papers

Until now, Ulyukaev had a clean reputation, with one notable exception. His name made headlines this spring in connection with the so-called Panama Papers. Investigative journalists found that an offshore company registered in the British Virgin Islands was initially headed by Ulyukaev's son and then perhaps later by his second wife. At the time, the minister claimed that he had done nothing wrong.

The Economics Ministry has played a key role in combatting Russia's economic crisis. The downturn began before Russia's annexation of Crimea in 2014 and has been worsened by Western sanctions and falling oil prices. Ulyukaev, who is fluent in English and French, has recently traveled the globe to drum up investment. Just days ago he was in Italy and Austria calling for an end to EU economic sanctions.

Criticism from national conservatives

Ulyukaev has repeatedly emphasized that the worst of the crisis is over. Critics ridiculed his statement that, "the bottom has been reached." Longterm projections from his ministry, however, have been less than optimistic and point to a stagnating Russian economy.

Moreover, Ulyukaev, along with Finance Minister Anton Siluanov and Central Bank Governor Elvira Nabiullina, is seen as a representative of the economically liberal wing of a Russia increasingly under the influence of conservatives. There have been calls from ultra-nationalists to throw liberals out of the government. Liberals are regularly derided as "the fifth column of the West" and blamed for Russia's economic woes.

Julius von Freytag-Loringhoven (privat)

Von Freytag-Loringhoven leads the Moscow bureau of the Friedrich Naumann Foundation

"I think it is more likely a personal conflict of loyalty," said Julius von Freytag-Loringhoven, director of the Moscow offices of the Friedrich Naumann Foundation, which is affiliated with Germany's Free Democratic Party (FDP), when speaking of the Ulyukaev case. The political scientist says that the case will only benefit those "who do not believe in systematic regulations, liberalism and reforms." Ulyukaev, he says, was a partner who spoke "the language of the West."

Russian nationalists are joyous over Ulyukaev's arrest. Some are even calling for the resignation of the entire government. During pro-Kremlin demonstrations in Moscow in early November, many observers noticed a poster calling for Putin to "remove traitors from power." After Ulyukaev's arrest, some critics see themselves vindicated.

 

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