BY IRON AND BRIBE

Corporate, Property & Land Raiding Russian Style

Ararat L. Osipian

BY IRON AND BRIBE

Corporate, Property & Land Raiding Russian Style

Ararat L. Osipian

Osipian, Ararat L. By Iron and Bribe: Corporate, Property & Land Raiding Russian Style. : Press, 2012. This book presents theoretical and empirical investigation of the politico-economic nature of corporate, property and land raiding and its impact on the process of creation of new economic structures in Russia. This research defines raiding as well as its place and role in the process of transition from plan-directive to market economy. It also addresses major foundations and main forms of raiding. A substantial part of the book is devoted to theoretical aspects of raiding. Key words: corruption, economic transition, hostile takeover, corporate raiding, Russia JEL codes: I22, K42, P26, P31, P37 The book is intended for professors, scholars, graduate students, students, public officials, leaders of NGOs and businesses, all who are interested in issues of raiding, corruption, and privatization. Osipian, A.L., 2012

Exit data: Manuscript is completed, 92,000 words, 2 tables, 1 figure. Status: Under review.

PREFACE Big Bang or the Free Fall Theory Our government declared that it is conducting some kind of great reforms. In reality, no real reforms were begun and no one at any point has declared a coherent programme. Aleksandr Isayevich Solzhenitsyn The Big Bang School formulated the task of overcoming the gap that divides the slowdown of socialism and the progressive market economy. The term transformation came sometime later. The theories of the convergence of the two systems and smooth transition from one condition to another were no longer satisfying. The suggested gradualist transition did not fit the agenda of new reformers. Shatalins 500 days, also known as the Five-Hundred-Day-Plan, and Polish shock therapy did not look good either. Thus, there were two necessary ideas set in mind: that there is a need to overcome the gap and that it should be done slowly, based on science. In fact, the idea to get across the gap in one jump did not appear to be appealing. But is it possible to get across the gap in two jumps? While Egor Timurovich Gaidar was pushing the Jinn, i.e. the spirit of entrepreneurialism, out of the bottle, Anatoly Borisovich Chubais and his best friend Alfred Reingoldovich Kokh were trying to pull the biblical camel, apparently with the humps privatization and restructuring, through the eye of a needle. The idea that the economic reform is slow due to the lack of entrepreneurial spirit among the Soviet people was expressed by one of the deputies of The Supreme Council of the USSR in the period when Mikhail Gorbachev was still present. There was a saying that it is necessary to literally push the Jinn out of the bottle, not just release him. Maxim Boyko authored a chapter entitled How to pull the camel through the eye of a needle, a chapter in the book Privatization Russian style, edited by Anatoly Chubais. Chubais was accused by the press, and not only by the press, of receiving a suspiciously high honorarium for this book, around $100,000. There were also suggestions aired that there was no book, but the honoraria played the role of a hidden bribe. Finally, when the scandal got out of control, the manuscript was written with rocket speed, almost in one night. The sum was very insignificant for Chubais, but sounded astronomical for regular folk. Apparently, his enemies were looking for ways to irritate Chubais and did not find anything better than to voice concerns about his high honorarium for a non-existing book. Anatoly Borisivich offered the following comment about this incident: Is the honorarium too high? Well, this comment is fair Alfred Kokh authored two chapters in this book: How it was done in Petersburg, and State as the seller. It became obvious that we decided not to jump over the gap in just one hop. Maybe Gaidar got a stubborn Jinn or an empty bottle with no Jinn in it at all. Maybe the biblical camel of Chubais, burdened with the riches of the natural monopolies, did not manage to get through the needle eye of rapidly changing legislation or simply got stuck in there shamelessly. The fact is that the attempt to cross the gap in more than one jump led to the condition of free fall. The free fall condition does not really feel that bad, except, perhaps, for the fall of the national currency against the international dollar, but at the same time approaching the bottom is somewhat disturbing. The IMF and World Bank credits and other miracles of financial manipulations come to mind as possible parachutes: everything to mitigate the shock of the landing. Either the parachute did not open, i.e. credits were wasted, or the size was wrong, i.e.

credits were not large enough to save the economy, but the free fall continued, except for top managers who managed to supply themselves with golden parachutes. The continuing fall, i.e. transformation, becomes boring. One wants something new, but there is little new in the preservation of economic transition. It was decided to announce victoriously that we have already reached the bottom, or simply put, landed. Taking into consideration the fact that we were falling down for almost a decade we should have crushed. Explanations a la we landed successfully on the stagnant industry and agriculture were unconvincing. Here came the idea that we did not jump over the gap, and hence did not fall in it. Instead, we were jumping over the river and reached the bottom due to sluggishness. Now is the right time to push off the bottom and swim up to the surface. We are good divers, and in such a context even the term bottom sounds positive. But what were the foreign credits, if not parachutes? Were they stones on the neck? Of course, not. These were our oxygen balloons, necessary for deep water diving. The comments that the river of transformation is nothing but a swamp are not accepted. Moreover, we are certain that the springs of tax reforms will catapult us up to the surface of no longer mythical socialist welfare, but real capitalist wellbeing. It cannot be different. According to Plato, it is impossible to enter the same river twice. The reformers have to keep in mind that the swift underwater rise to the surface can cause decompression. Otherwise they will have to compose a new Stalin type communiqu Dizziness caused by success, in addition to the restoration of the Soviet anthem. Suddenly something unexpected happened, economic growth has begun. Not a fake economic growth that exists on paper in statistical reports with the rates within statistical error, but real growth. This growth was in part thanks to skyrocketing oil prices, but growth had started even before the oil prices went up. Growth came so unexpectedly that the observers simply got lost. Most amazed with growth were those who continuously tried to convince others that economic growth during the transition to market economy would be unavoidable. Economic growth in this sense was perhaps as unavoidable as Communism in the earlier days. Moreover, the unavoidability of the former and the latter in different eras was proclaimed by all the same people. One should pay little attention to all the modern theories of big bang, free falls, diving and surfacing, as well as pushing, pulling and getting through. Instead, let us consider the origins of raiding and its role in the contemporary national economic history. Since the attention of now post-Soviet people, along with the rest of progressive humankind, was focused on the process of changes, the issue of what belongs to who was not in focus. The attention to transformation was shared along with discussions of soap operas, run as new to the Soviet people on TV. The Soviet people, now transformed into a mere population, continues to believe that the factories still belong to workers, land belongs to peasants, and peace belongs to peoples, as it should. And who would care much about property rights on the means of production, when these means do not really produce much anymore and the industry is in recession. People were busy studying such new capitalist terms as inflation and unemployment. As one little boy said to his sister, How can you watch the next part of this soap opera, if you do not even know what inflation is? Indeed, what kind of unemployment one can possibly speak about in the country where people run from the bus stop to their plant, afraid to be ten minutes later to work where the wage arrears exceed ten months? Vouchers, distributed among the Russian population, for privatization acted as irritants. People had to think where these vouchers should be deposited or invested. In addition, they had

to resist the offers of making your voucher gold. People had to learn how not to miss the chance and to resist the temptation of convincing advertisements. The information that absolutely all the oil of Western Siberia is represented in the shares of the Hermes Company, and that Moscow real estate is always highly priced led to hot debates and disputations in the families regarding the right choice among plentiful options. Now this kind of family situation would be identified as the process of making rational decisions by households and optimization of investment portfolio under the conditions of asymmetric information, but at that time it was called simply privatization. And the Soviet people, by that time already converted into population, had yet to move to the category of households as rationally acting economic agents. Imagine an irrational economic agent, who exchanged his voucher for vodka. He was looked at as the enemy of the people, depriving his family of its part of national wealth given them by the state that was supposed to be exchanged for this voucher, deprived his children of a future. Indeed each voucher-holder was promised the value of a Volga luxury car, but the real value was equal to a bottle of Russian vodka. But there was hope. Everyone believed that the state would not deceive; it would take care of the people. And why would one need that small tangible, but unknown and nameless part of a large enterprise, or even a whole national economy, supposedly distributed in exchange for pieces of paper called privatization vouchers? If necessary, everyone could take a piece of his or her enterprise or its production and carry it out through the gate. This phenomenon was known as nesuny. Nesuny, stubborn as iron nails, were a disease of the Soviet industry. They de facto shared the Soviet socialist property without any privatization vouchers, certificates and other useless papers and permissions. They carried this property away from plants, factories, shops, and organizations. Everything from metal parts of locomotives and sledge hummers to sausage and macaroni was carried through check points, thrown over fences, or pushed through the breaches in these fences, made by nesuny specifically for this purpose. By the way, nesuny were much more successful in pushing the produce through the breaches than was Anatoly Borisovich Chubais in pulling his biblical camel through the eye of a needle. This was the real and continuous peoples privatization that lasted for decades. People took a little bit from the enterprises and organizations where they worked over many years. However, to the surprise of many, obstacles appeared. Some strange people at the check point, dressed in camouflage. Camouflage was initially designed for paratroopers in order to make them invisible and indistinctive from the surroundings. But now this camouflage was used on the check points, laid with blue and white ceramic plates. It allowed the controllers to associate themselves with paratroopers rather than with the surrounding environment. People learned a new word, adopted from English: security. Besides, the right to steal was now monopolized by the director. He monopolized the right and authority of nesuny; he became the exclusive and only nesun at his particular factory. All the other employees simply lost their unofficial right on the part of the enterprises property overnight. Workers were not always willing to accept such new order of things. Those who could not get through the newly erected fences and control lines were engaging in close combat with the security. Workers after the shift were going to the fields of collective farms to rest and eat strawberries as they use to do for decades, but there were obstacles, gatekeepers, security. There was a case when workers of a metallurgy plant in Donbass were fighting for their rights on a strawberry field with iron spears. They rushed in a bayonet offensive and charged the security and police on duty. The security and police did not enter the fight and cowardly ran away to call for back up. The eternal class conflict

between the owner and the workers, hidden during the Soviet period with such a great mastery, now became bold and naked. The workers were certain that their status of proletariat was left in the smog of the Great October Socialist Revolution and would never come back. And they were deeply mistaken, because behind all the promises of market prosperity, effectiveness, consumer goods, democracy and struggle against bureaucracy, along with financial pyramids and long-lasted images of Lenia Golubkov and his brother Ivan, either slacker or partner, was one major goal, to turn workers back into proletarians. Simply push workers back into the black body. Proletarians are by definition people who do not have anything but their hands. Thus, the process of democratization, i.e. political and spiritual liberation, was accompanied by a much less visible and much more significant process of liberation of workers from the means of production. This liberation was forceful, not voluntary. The population did not think much about this, since it was ready to give up not only its right to own the means of production, but even to work for nothing, for free, and without a fight. Descendants of Revolutionary sailors and workers turned out to be defenseless. Just recently workers openly expressed their dissatisfaction over the fact that two vacations to then socialist Yugoslavia at discounted prices were given to the directors wife and daughter, and then accepted calmly the fact that this same director built himself a three-story house, made of the construction material taken from the plant, and travels around the world at the expense of the enterprise. The state deceived people; it did not take care of them. Similar to becoming the first counterfeiter and false-coiner in history, the state became the first raider. The transfer of the allpeople property to the private hands occurred at the initiative of the state with the use of state power and state mechanisms of authority. Contrary to the commonly shared belief, we think that the voucher or certificate-based privatization was a success: property was obtained precisely by those who initiated and organized privatization. Everyone else was left with nothing. As it happens in any good old Russian fairy tale, all the stuff during the split of the inherited wealth went to two older brothers, i.e. those who at the time of privatization was of the right age, the age of later-Komsomol leaders. Komsomol stands for the Young Communists League Kommunisticheskij soyuz molodezhi [Kommunisticheskij soyuz molodezhi], and many of the newly emerged entrepreneurs were Komsomol leaders. The youngest brother received nothing, either due to his young age or simply because he was not in business yet. But Ivan was a good fellow and understood that he still has a chance. It is very characteristic of Russian fairy tales that the hero necessarily communicates with the state authorities, with the Tsar, promises him faithful service in exchange for something else. Similarly, modern raiders, who were late to the initial split of the pie, and dissatisfied with the results of privatization, deal with the state, with authorities, offering gratuities and grabbing property and oftentimes power itself. Bailiffs, sheriff deputies, judges, police and other servicemen in black masks and bodies of ancient heroes act under the general title of force ministries, also known as Siloviki or Silovye vedmostva. They are always part of the news about corporate raiding. Although in most of the cases it is not clear, who is raider and who is lawful owner, since each side of the economic dispute waves court orders with big seals. They wave just for a warm up, before proceeding to the arguments a la you fool and fist fight for their property. Surprisingly this authentic strive to manage does not lead to any increase in effectiveness and efficiency.

The belief in the honesty and diligence of the state held among the regular Soviet people was really immortal, extending to an unwillingness to accept the powerless position and resist the robbery in the light of day. Even twenty years after the robbery of the entire population of the USSR, three hundred million people, by way of inflation that affected peoples savings in the State Savings Bank Sberbank, the population hopes to receive compensation. It is the same as if red cats, often called Chubais for a well-known reason, and for equally well-known reasons disliked among the population, would expect compensation for their rights violations and moral damages not from someone else, but from Anatoly Borisovich himself. One thing was obvious: the state robbed its people not to compensate them two decades later. And who would take on calculating the interest? To sum up, there is almost no one left to work, create, develop, and get the job done. All the healthy and active population is involved in redistribution of already created wealth, property, rights, and revenues. One group defends and protects, another group takes away, and all of the participants frequently change roles. Even academician Sergei Kapitsa pointed out that Today almost half of all the economically active youth works in security firms! So, it turns out that all of these young people are stupid men with limited views (Sergei Kapitsa. Argumenty i fakty, May 28, 2010) 1 The profession of private security guard is perhaps the most popular and widespread profession, while the image of a raider entered the annals of the national folklore. This book has the goal of showing the heterogeneity of the raiding phenomenon in Russia. We recommend this book to all those who own property or pretend on someone elses property, including professors, students, businessmen, bureaucrats, civil servants and other rational economic agents, those who share and those who oppose the ideas of privatization. This book is not intended to scare foreign investors away from Russia. To the contrary, Soross losses in Svyaz-Invest should not be the reason for holding investments from Russia in fear of corporate raiders.

Sergei Kapitsa: Rossiyu prevrashchayut v stranu durakov [Sergei Kapitsa: Russia is turned into a country of idiots]. Argumenty i fakty, May 28, 2010. Retrieved May 28, 2010, from http://www.aif.ru/society/article/29249

TABLE OF CONTENTS

INTRODUCTION I. DIVIDE AND CONQUER: A THEORY OF PREDATORY RAIDING II. KREMLIN, INC.: STATE AND RAIDER AND STATE-RAIDER III. BY SWORD AND BY FRAUD: RAIDING IN POSTSOVIET RUSSIA IV. BRIBE SET BY LAW: CORRUPTION AND RAIDING V. THIS LAND IS MY LAND: PERSPECTIVES OF RAIDING CONCLUSION BIBLIOGRAPHY APPENDICES

TABLE OF CONTENTS

Preface LIST OF TABLES LIST OF FIGURES INTRODUCTION I. DIVIDE AND CONQUER: A THEORY OF PREDATORY RAIDING 1.1. Theoretical explanation of raiding in a transition economy Am I a trembling creature or do I have the right? Defining raiding Alienation-appropriation: the inverted character of raiding Nature, causes and basis of raiding 1.2. Takeovers without mergers: a culture of raiding Takeovers without mergers Anti-raiding culture: if you cant pay with money, pay with respect 1.3. Concluding remarks II. KREMLIN, INC.: STATE AND RAIDER AND STATE-RAIDER 2.1. State and raider Optimization of the state Economically active bureaucracy State against raiding 2.2. State-raider Amorphous state: who owes whom A pair of each animal: The Noahs Ark of court bailiffs Non-economic factors of influence 2.3. Concluding remarks III. BY SWORD AND BY FRAUD: RAIDING IN POSTSOVIET RUSSIA 3.1. Problem of raiding in the transition economy Ways of hostile takeovers: reforging robber wooden clubs into baseball bats Objects of raiding: risks and victims Scale of raiding 3.2. Spheres of raiding Unusual spheres of raiding Workforce reserves of the raiders movement Discussion and condemnation of raiding 3.3. Concluding remarks IV. BRIBE SET BY LAW: CORRUPTION AND RAIDING 4.1. Links between corruption and raiding: not a thief if not caught The fact that you dont have a criminal record is not your merit but our mishap Ties between corruption and raiding

3 11 12 13 16 16 16 22 26 32 32 40 45 48 48 48 52 55 59 59 67 74 83 87 87 87 94 96 100 100 104 108 110 113 113 113 122

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Crime in the Soviet era as a basis for modern raiding 4.2. Bureaucracy, corruption, raiding and struggle against it Russian bureaucracy and corruption Offered a bribe to the state official equal in value to the bribe established by the law 4.3. Concluding remarks V. THIS LAND IS MY LAND: PERSPECTIVES OF RAIDING 5.1. Prospects of raiding evolution: from merchant ship to court takeovers Perspectives of raiding movement: prognosis is optimistic From Lenin to Sonin: a revolutionary theory of permanent lawlessness 5.2. Land of opportunity: changing value, changing owners Battle for land: take no prisoners Land brings raiders in 5.3. Concluding remarks CONCLUSION REFERENCES AUTHOR INDEX SUBJECT INDEX About the author

125 127 127 137 141 144 144 144 147 151 151 154 159 161 165 171 173 184

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LIST OF TABLES

TABLE PART II 2.1. State budget revenues from the oil and gas industry in Russia, 2000-2006 PART IV 4.1. Number of employees in the state and municipal government in Russia, 1995-2007, thousand

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51

127

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LIST OF FIGURES

FIGURE PART I 2.1. Relation of raiding to other similar themes

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21

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INTRODUCTION The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood. Otto Won Bismarck

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PAGES 14-164 ARE NOT PART OF THIS PREVIEW

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Vaksberg, Arkady. (1991). The Soviet Mafia. New York: St. Martins Press. Varnalij, Zakharij, & Mazur, Irina. (2007). Reiderstvo v Ukraini: peredumovy ta shlyahi podolannya. Strategichni Pryoritety, 2(3), pp. 129-136. Retrieved April 2, 2009, from http://www.niss.gov.ua/book/StrPryor/3/17.pdf Varnalij, Zakharij. (2006). Tinova ekonomika: sutnist, osoblyvosti ta shlyahi legalizatsii. Kiev: NIDS. Volkov, V., Dmitrieva, A., Paneyakh, E, & Pozdnyakov, M. (2011). Aktivnost pravookhranitelnykh organov RF po vyyavleniyu prestuplenij v sfere ekonomicheskoj deyatelnosti, 2000-2011 gg. [Productivity of law enforcement agencies in investigating economic crimes, 2000-2011]. The Institute for the Rule of Law. Retrieved January 10, 2012, from http://www.enforce.spb.ru/images/analit_zapiski/pm_econ_crime_1111.pdf Volkov, Vadim. (2002). Silovoe predprinimatelstvo: ekonomiko-sotsiologicheski analiz [Violent entrepreneurship: economic and sociological analysis]. Ekonomicheskaya sotsiologiya, 3(1-5). Volkov, Vadim. (2003). Silovoe predprinimatelstvo: ekonomiko-sotsiologicheski analiz [Violent entrepreneurship: economic and sociological analysis]. Ekonomicheskaya sotsiologiya, 4(1-3). Volkov, Vadim. (2004). The Selective Use of State Capacity in Russias Economy: Property Disputes and Enterprise Takeovers, 1998-2002. In Janos Kornai, Bo Rothstein, and Susan Rose-Ackerman (eds.). Creating Social Trust in Post-Socialist Transition (pp. 126-147). New York: Palgrave Macmillan. Volkov, Vadim. (2005a). Silovoe predprinimatelstvo ekonomiko-sotsiologicheski analiz [Violent entrepreneurship: economic and sociological analysis]. Moscow: Izdatelski dom GU VSHE. Volkov, Vadim. (2005a). Transformation of Russian State after 2000. Public lecture, April 2, 2009. Retrieved June 10, 2009, from http://www.polit.ru/lectures/2009/04/02/estado.html Volkov, Vadim. (2005b). Po tu storonu sudebnoj sistemy, ili Pochemu zakony rabotayut ne tak, kak dolzhny [On the other side of the justice system or Why dont laws work as they should]. Neprikosnovennyj zapas, 4(42). Retrieved from http://magazines.russ.ru/nz/2005/42/vv6.html Voslensky, Michael. (1984). Nomenklatura: The Soviet Ruling Class. Garden City, NY: Doubleday. Waite, Duncan, & Allen, David. (2003). Corruption and Abuse of Power in Educational Administration. The Urban Review, 35(4), pp. 281-296. Weber, Max. (1990). Selected Works. Translated from German. Moscow: Progress. Whitefield, Stephen. (1993). Industrial Power and the Soviet State. Oxford: Clarendon Press. Woodruff, David. (1999). Money Unmade: Barter and the Fate of Russian Capitalism. Ithaca, NY: Cornell University Press. Woodruff, David. (2004). Property Rights in Context: Privatizations Legacy for Corporate Legality in Poland and Russia. Studies in Comparative International Development, 38(4), pp. 82-108. Retrieved from: http://personal.lse.ac.uk/woodruff/_private/materials/property_rights_in_context_scid.pdf Woodruff, David. (2005). Nestabilnost chastnoi sobstvennosti v Rossii: ekonomicheskie i politicheskie prichiny [The Instability of Private Property in Russia: Economic and Political Causes]. Russkie Chteniia. Vypusk 1. Moskva: Gruppa Ekspert, 2005, pp.

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206-219. Retrieved from: http://personal.lse.ac.uk/woodruff/_private/materials/kogdanelzia.pdf Work of the Commercial Arbitration Courts of the RF, 1992-2001. Retrieved from http://www.arbitr.ru/press-centr/news/totals/10anniversary/index.htm; http://www.arbitr.ru/press-centr/news/totals/10anniversary/details.htm Work of the Commercial Arbitration Courts of the RF, 2002-2006. Retrieved from http://www.arbitr.ru/_upimg/57605A349468E3993D142B3AD5AB4ABB_2006_vass_3.pdf Work of the Commercial Arbitration Courts of the RF, 2005-2009. Retrieved from http://www.arbitr.ru/_upimg/52DBED34AEEDC6F7479ADFDF2E0DE557_13.pdf Zadorozhny, G.V. (1996). Sobstvennost i ekonomicheskaja vlast [Property and economic power]. Kharkiv: Osnova. Zhdanov, I. (2002). Corruption in Ukraine: Essence, Scale, and Influence. Connections, 1(2). Retrieved 20 May 2004, from http://www.ciaonet.org/olj/co/co_apr02d.pdf Zimmer, Kerstin. (2007). Not So Different After All? Centre-Region Relations: a Ukrainian Comparison. In Graeme Gill (Ed.). Politics in the Russian Regions (pp. 108-137). New York: Palgrave Macmillan. Zon, Hans van. (2008). Russias Development Problem: The Cult of Power. New York: Palgrave Macmillan.

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AUTHOR INDEX

Allen, David, Almond, George, Andreski, Stanislav, Anechiarico, Frank, Aslund, Anders, Astakhov, Pavel, Banfield, Edward, Barnes, Andrew, Black, Bernard, Blasi, Joseph, Borisov, Yuri, Buzgalin, A. Chapaev, Roman, Chubais, Anatoly, Coleman, James, Cooke T. E., Darden, Keith, Demekhin, Aleksey, Dmitrieva, E., Dolgova, A., Dostoyevsky, Fyodor, Dugin, Aleksandr, Egorova, Olga, Firestone, Thomas, Frye, Timothy, Glazev, Sergei, Gritsenko, A. Harabet, K., Ilf, Ilia, Ivanova, K., Jacobs, James, Karatnicky, A.,

Karatuev, Aleksandr Grigorievich, Kireev, Aleksei, Kolganov, A. Kotin, V., Ledeneva, Alena, Lowenstein, Louis, Mazur, Irina, Medvedev, Roj, Montesquieu, Charles-Louis de Secondat, Neutze, J., Osipian, Ararat, Payne, Robert, Petrov, Evgeny, Pistor, Katharina, Pivovarsky, Alexander, Proudhon, Pierre-Joseph, Pushkin, Alexander, Rose-Ackerman, Susan, Sachs, Jeffrey Shlapentokh, Vladimir, Shlyapnikova, O., Simis, Konstantin, Skidanova, Lilia, Sonin, Konstantin, Starovsky, V.N., Sychev, Pavel, Tarkhanova, Zarina, Thyrt, Isolde, Tkachenko, N.I., Vaksberg, Arkady, Varnalij, Zakharij, Volkov, Vadim, Voslensky, Michael,

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Waite, Duncan, Weber, Max, Whitefield, Stephen, Woodruff, David, Xu, Chenggang,

Zadorozhny, G., Zhdanov, I., Zimmer, Kerstin, Zon, Hans van,

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SUBJECT INDEX

abuse of authority abuse of public office abuse of the office abuse of trust Academy of the National Economy accountability administrative pressure administrative resource Ageev, Alexander Agroprom Akademiya narodnogo hozyajstva alienation Altay region amendment ANH Anti-abuse anti-corruption Antiproizvol anti-raiding Anti-Raiding 2008 anti-raiding campaign anti-raiding culture anti-raiding legislation anti-raiding measures Antiterrorist Unit appeals appraisers appropriation Arbat Arbat Prestige Arms Chamber Ascanio assets Astrakhan Attorney General Auditing Chamber authoritative bureaucratic hierarchy autonomy average bribes AvtoVAZ bailiffs

ban Bank of Moscow bankruptcy bankruptcy cases bankruptcy claims bankruptcy costs bankruptcy law of 1998 barter Bashkiria Bastille Batista Baturina, Elena Belgorodskaya oblast Berezovsky, Boris biblical camel black market Black Sea blackmail Bogatikov, Alexander Boyarskaya Duma Boyko, Maxim Bratanov, Viktor Brezhnev, Leonid bribe-givers bribery bribes bribe-takers Britain British Parliament Buddhist Bukato, Victor bullying Bulava bureaucracy bureaucrat bureaucratization burial services business ethics Bykov, Anatoly California capital flight

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causing nightmares for business Central Asia Central Election Committee centralization of production certificate-based privatization Chajka, Yuri Chamber of Tax Consultants Chamber of Trade & Commerce Chavez, Hugo Chechnya check privatization Chicago Chief of the Investigations Committee child support China Christian Chubais, Anatoly Borisovich Church Church of Christ the Savior Churov, Vladimir city cemeteries civil complaints civil servants clan codes of conduct Colbert, Jean-Baptiste collective farms collectors business Colton, Timothy commercial arbitration court commercial dispute commodity commodity exchange commodity raiding competition complaints complexity confidential information confiscation of property conflict of interest conflict regulation consolidation conspiracy Constitution construction companies

consumer credit contract killings Convention Against Corruption cooperator corporate control corporate law corporate lawyers corporate raiders corporate raiding corruptibility of courts corruption corruption in courts Council of Nobles Council of the Federation court bailiffs court decisions court system court-ordered restriction cover creditors crime Crimea criminal activities Criminal Code criminal investigations criminal justice criminalization Cuban revolution DEstourville dacha damage of raiding debt repayment debtors decentralization default defendants delays democratization Denisenko, Filaret Department of Land Resources Department for Organized Crime Prevention Department of Economic Security of the Chamber of Trade & Commerce of the Russian Federation

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Department of Economic Security of the Moscow city government Deputy Head of the Prosecutor General Deputy inquiry derivative desyatina detective detectives developers Diocletian Director of the Chamber of Tax Consultants directors of Soviet enterprises disclosure discretion disintegration distribution dividends document fraud dolshchiki Dubrovsky Duma Eastern Europe EBITDA economic crime economic crimes in the military economic development economic disputes economic growth Edinaya Rossiya effective owners effectiveness efficiency election commissions electricity embezzlement embezzling funds England enterprise entrepreneurial talent entrepreneurship ethics Ethics Committee of the State Duma European Court of Human Rights Evroset

expropriation extortion fair market price fairness falsifications family relations Far East Federal Migration Services Federal Security Services Federal Services of Court Bailiffs Federal Services on Financial Markets Federal Tax Services Federalnaya nalogovaya sluzhba Federalnaya sluzhba bezopasnosti Federalnaya sluzhba po finansovym rynkam Federalnaya sluzhba sudebnyh pristavov Federalnoe gosudarstvennoe unitarnoe predpriyatie Federation Council Feniks feudalism fiduciary responsibility FIG Fili Filimonov, Alexander financial crisis financial documents financial inspectors financial pyramids financial-industrial group Finansgrup fine First Vice Mayor of Moscow First Deputy Prime Minister Five-Hundred-Day-Plan FNS forced labor Foreign Intelligence Services foreign investments foreign investors France fraud free market

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FSB FSFR FSSP Gaidar, Egor Timurovich gambling businesses gangster operations Gazprom GDP GDR Georgia Georgian thief-in-law Germany gift Golden Calf golden parachutes Golubkov, Lenia good governance Gorbachev, Mikhail Gosduma Great October Socialist Revolution greenmail Gref, German gross waste guarantees Gusinsky, Vladimir Head of the Ministry of Economic Development healthcare hierarchy higher education higher education institution hostile takeovers hotbed of corruption Hotel de Nesle housing hyperinflation IA Advisers Icahn, Carl Illarionov, Andrei illegal access illegal act illegality

IMF immunity imprisonment individual entrepreneurship inflation informal norms information Information analytical agency Advisers Information Center of the President insider information insiders institutionalization institutions intentional bankruptcy International Foreign Trade Agency internationalization Investigations Committee investments Ioann the IV, Grozny Italian creditors Italy Ioann Grozny Ivan the Terrible Ivankina, Elena Ivanov, Sergei Ivanov, Vyacheslav Japan joint stock companies judges judicial system jurisdiction Just Russia Kabanov, Kirill Kadyrov, Ramzan Kapitsa, Sergei Kapliev, Andrei KGB Khatsernov, Sergei Khodorkovsky, Mikhail kickbacks Kiselev, Evgeny Kokh, Alfred Reingoldovich Koltsovo airport

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kolhozy Kommunisticheskij soyuz molodezhi Komsomol KrAZ Kremlin Kubarev, Valery Kuzbass land Land Committee Land Laws of the Russian Federation landlords law enforcement lawful owner laws lawsuits lawyers LDPR Lebedev, Vyatcheslav legal dimension legal disputes legal gaps legal loopholes legal nihilism legality legislative process legitimacy Lenin, Vladimir Leningradskaya oblast Liberal Democratic Party of Russia Liberalno-demokraticheskaya partiya Rossii Lieutenant-General Viktor Vasilev liquidation liquidity Literary Fund local authorities localization lockouts Logunov, Oleg Lower Chamber of the Russian Parliament Luzhkov, Yuri M&A mafia

malfeasance Malyuta Skuratov management Manahov, Sergei manipulations market cleaners market economy market reforms market value Marx, Karl Maski-Show Masks-Show mass privatization MChS means of production Media-Most Medvedev, Dmitry meetings of creditors meetings of shareholders Member of Parliament Mergers and acquisitions Merriam-Webster Dictionary metallurgy methodology Middle Ages Mikhalchuk, Ilya military military bases military commissariats military trophies Ministerstvo chrezvychajnyh situatsij Ministerstvo kultury Ministerstvo vnutrennih del Ministry of Agriculture and Agricultural Industry Ministry of Culture Ministry of Defense Ministry of Emergency Situations Ministry of Healthcare Ministry of the Interior minority holders Mironov, Sergei Mitrofanov, Georgy mixed market type economy

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Model Law on International Commercial Arbitration Moldova monopolization monopoly Moon moonshine moratorium mortgages mosaic Moscow Moscow City Council Moscow government Moscow Mayor Moscow oblast Moscow oblast Council Moscow region Mosrybokombinat MP municipality MVD NAK Naryshkin, Sergei National Anti-Corruption Committee National Bolshevik Party National Bolsheviks nationalization Natsionalny antikorruptsionny komitet Natsional-bolshevistskaya partiya natural exchange natural monopoly Nazran NBP negligence Nekrasov, Vladimir Nemtsov, Boris nepravitelstvennye organizatsii Nerpa nesuny NGOs Nizhegorodskaya oblast Noah Ark Nobel laureates nomenklatura

non-economic enforcement non-economic mechanisms non-economic methods non-economic spheres non-governmental organizations Norilsk nickel Nornikel Novgorodchina OBEP office malfeasance Ogonek oil and gas industry oil pipeline oil refinery plant oligarch OMON On actions with agricultural land On anti-corruption expertise of normative legal acts and projects of normative legal acts, Federal law On appraisals code in the RF On autonomous legal entities On combating corruption On investigation and search operations On joint-stock companies On leaving the Russian Federation and entering the Russian Federation On monetization of subsidies On police On state civil service in the RF On the amendments to Federal Law on supply of products for federal needs open access opportunistic behavior Oprichniki Oprichniks Oprichnina Order On the measures against corruption Order of the Government of the RF 864 Order of the Government of the Russian Federation 354, April 15, 1993 Order of the President of the Russian Federation 1403, November 17, 1992

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Orenburgskaya oblast organized criminal groups Oruzhejnaya palata Ostap Bender Otdel po borbe s ekonomicheskimi prestupleniyami Otryad militsii osobogo naznacheniya outsiders oversight ownership Padva, Genrikh Pakistan Panfilova, lena paratroopers Paris Parkin, Ruslan Pastukhov, Vladimir payments pension funds Peoples Deputy Peredelkino Perestroika personal connections Petrozavodsk phenomenon of raiding Pinkov, Aleksandr piracy plaintiff planned economy Podmoskove poison pill police Polish shock therapy political clan political raiding populism portfolio investments post-Soviet space potential for corruption Povolzhe Pozgalev, Vyacheslav predatory incursion Prefect Presidential Anti-Corruption Council

prevention primary capital accumulation private security firm private security guard private workshops privatization privatization vouchers procedural violations professional conduct professional ethics profit sharing profiteering Prohibition era proletarians property relations property rights Prosecutors General Office protection provisions provocation by bribe Provost public recognition public sector public services Putin, Vladimir racketeer racketeering racketeers RAGS raider Raider, novel raiding raiding attacks raiding movement Rajkov, Gennady Railways Military Forces Rajonnoe upravlenie po borbe s organizovannoj prestupnostyu RAN RAO EES rate of return real estate real estate market redistribution

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refinery regulations reiderstvo Renaissance re-nationalization Renova Company replacement of management re-sale Research Institute responsibility restructuring retail trade Return of the Prodigal Son RF Roman Emperor Rosatom Rosbilding Rosbuilding Investment Company Roslyak, Yuri Rosoboronexport Rosselkhozbank Rossijskaya akademiya gosudarstvennoj sluzhby Rossijskaya akademiya nauk (RAN) Rossijskaya Federatsiya Rossijskoe aktsionernoe obshchestvo Edinye energeticheskie sistemy Rostovskaya oblast Rovenska oblast Rovno RPC Rublevskoe Highway RUBOP rules Russian Academy of the National Economy and the State Services under the President of the Russian Federation Russian Academy of Sciences (RAN) Russian Academy of State Services Russian Army Russian Black Sea Fleet Russian fairy tale Russian Federation Russian Joint-Stock Company Unified Energy Systems

Russian Ministry of Statistics Russian National Anti-corruption Committee Russian Oprichniks Russian Orthodox Church Russkaya pravoslavnaya tserkov sanctions savings Sberbank scale of raiding Schetnaya palata searches seizure of property self-financing shadow economy Shalakov, Yuri Shatalin Shatalins 500 days Sheremetevo International Airport sheriff deputies Shuvalov, Igor Shvartsman, Oleg Siloviki Silovye vedmostva SK slave labor Sledstvennyj komitet Sluzhba vneshnej razvedki small entrepreneurship Smith, Adam smuggling Sobyanin, Sergey social obligations socialism Socialist Bloc socialist property socialist Yugoslavia soldiers as a workforce Soros, George Sothebys soul raiding sovhozy Soviet people Soviet socialist property

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Soviet Union Soyuz sotsialnoj spravedlivosti Rossii special police forces speculations Spravedlivaya Rossiya St. Petersburg staged bankruptcies Stalin, Joseph starting price state cannibalism state contracts State Duma state evaluators State Registration Chamber State savings bank stock holders stock market stock value storm troopers stormings Strasburg court structure of property relations Styrova, Tatiana sub-contracting submitted claims subsidiary subsidized regions Sukhorukova, Svetlana Supreme Council of the USSR Supreme Court surprise attack Sverdlovskaya oblast Sviato-Nikolaevski monastery SVR Svyato-Voskresenski temple Svyaz-Invest target targeted company targeted firm Tax Administration tax collectors tax debts tax evasion taxation

theft theft of socialist property Torgovo-promyshlennaya palata Rossijskoj Federatsii TPP trade union raiders traffic police transaction costs transactions transfer of property transition economy transparency Transparency International, Russian Office of travel abroad trophies Trotsky, Lev trust Tsar Ioann the IV tsekhoviki tserkovnaya desyatina UFMS Uganda UK Ukraine Ulyanovskaya oblast undercover police detective unemployment Union of the Social Justice of Russia Union of the Soviet Socialist Republics United Kingdom United Nations Convention against Corruption United Russia United States unlawful actions Upravlenie federalnoj migratsionnoj sluzhby US USPP USSR velvet re-privatization Venezuela

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violations violence violent deaths violent entrepreneurship violent storming and assaults virtual reality Vladivostok Vneshekonombank Vneshtorgbank Volga Volgograd Vologodskaya oblast voucher auctions voucher privatization vouchers wage arrears western investors Western Siberia workers collective World Bank World War I World War II would-be bribe wrongdoing WWII Yekaterinburg Yeltsin era Yeltsin, Boris Young Communists League Yugoslavia YUKOS Zamoshkin, Sergei Zemelny Kodeks Rossijskoj Federatsii zero tolerance policies Zhirinovsky, Vladimir

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ACRONIMS and ABBREVIATIONS ANH, Akademiya narodnogo hozyajstva [Academy of the National Economy] Duma, Lower Chamber of the Russian Parliament FIG, financial-industrial group FNS, Federalnaya nalogovaya sluzhba [Federal Tax Services] FSB, Federalnaya sluzhba bezopasnosti [Federal Security Services], former KGB FSFR, Federalnaya sluzhba po finansovym rynkam [Federal Services on Financial Markets] FSSP, Federalnaya sluzhba sudebnyh pristavov [Federal Services of Court Bailiffs] Gosduma, State Duma, Lower Chamber of the Russian Parliament IMF, International Monetary Fund Komsomol, Kommunisticheskij soyuz molodezhi [Young Communists League] LDPR, Liberalno-demokraticheskaya partiya Rossii [Liberal Democratic Party of Russia] M&A, Mergers and acquisitions MP, Member of Parliament MVD, Ministerstvo vnutrennih del [Ministry of the Interior] NBP, Natsional-bolshevistskaya partiya [National Bolshevik Party] NAK, Natsionalny antikorruptsionny komitet [National Anti-Corruption Committee] OBEP, Otdel po borbe s ekonomicheskimi prestupleniyami [Department for Economic Crime Prevention] OMON, Otryad militsii osobogo naznacheniya [special police forces] RAGS, Rossijskaya akademiya gosudarstvennoj sluzhby [Russian Academy of State Services] RAO EES, Rossijskoe aktsionernoe obshchestvo Edinye energeticheskie sistemy [Russian Joint-Stock Company Unified Energy Systems] RF, Rossijskaya Federatsiya [Russian Federation] RPC, Russkaya pravoslavnaya tserkov [Russian Orthodox Church] RUBOP, Rajonnoe upravlenie po borbe s organizovannoj prestupnostyu [Department for Organized Crime Prevention] Sberbank, State savings bank SK, Sledstvennyj komitet [Investigations Committee] SVR, Sluzhba vneshnej razvedki [Foreign Intelligence Services] TPP, Torgovo-promyshlennaya palata Rossijskoj Federatsii [Chamber of Trade & Commerce] UFMS, Upravlenie federalnoj migratsionnoj sluzhby [Federal Migration Services] USSR, Union of the Soviet Socialist Republics YUKOS, YUganskneftegaz and KuibyshevOrgSintez

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About the author Ararat L. Osipian is a PhD candidate in the Department of Leadership, Policy, and Organizations at Peabody College of Education at Vanderbilt. He holds a PhD in Political Economy from Kharkov National University (Ukraine) and an MA in Economics from Vanderbilt University, where he came as a fellow of The US Department of State. Dr. Osipian served as an Assistant Professor of Economics at Kharkov University of Construction and Architecture before he came to the US. His publications include four books, Raiderstvo: Corrupt Raiding and Hostile Takeovers (Ukraine, 2011), The Impact of Human Capital on Economic Growth: A Case Study in Post-Soviet Ukraine, 1989-2009 (New York: Palgrave Macmillan, 2009), Economic Growth: Education as a Factor of Production (Ukraine, 2007), and Economy of the Welfare State: Foundations and Creation under the Conditions of Market Transformation (Ukraine, 2001). His articles appeared in Demokratizatsiya: The Journal of Post-Soviet Democratization, Research in Comparative and International Education, European Education: Issues and Studies, Canadian and International Education Journal, Economics of Education Review, Prospects: Quarterly Review of Comparative Education, International Journal of Educational Development, Transition Studies Review, Journal of Eurasian Studies, Journal of Economic Issues, International Journal of Sociology and Social Policy, Brigham Young University Education and Law Journal, East European Politics and Societies, Global Crime, Soviet and Post-Soviet Review, Laboratorium: Russian Review of Social Research, FedUni Journal of Higher Education, European Dialog, Business-Inform, and Region. He is also a winner of several awards, including grants from Soros Foundation, Open Society Institute, Edmund Muskie/FSA, Yale, Vanderbilt, and Central European University. His research interests include corruption in higher education and inequalities in access to higher education in international perspective, corporate, property and land raiding, nexus of education and economic growth, modern welfare states and political economy of transition.