Oligarchs – Corruption in Russia

Oligarchs - Corruption in Russia

Oligarchs - Corruption in Russia

An oligarch is a corrupt person who having been
friends with people in power has taken over some of the government business in a
dishonest manner.

Some years ago a friend of mine visited the country of Russia
and tried to exchange some money at the bank. The teller looked nervously at him
and pointed to a rugged looking man sitting behind a desk on the far side of the
foyer. When my friend went to exchange his money he discovered that the man
behind the desk was not a bank employee but a member of the Russian Mafia who's
group had in the main taken over the financial running of that country.

As a result when Yeltzin lost his job the new prime minister
has done his best to try and correct the imbalance.

We quote from the New Zealand Business Herald, 24 November
2000. Shady tycoons keep Russia's companies humming.

"Since succeeding Boris Yeltzin on December 31 1999, Mr
Putin has tried to rein in the dozen or so rich businessmen who -– mainly
through a series of tainted sales by the Government in the 1990s -– took
control of the industries that power the Russian economy and began running them
as personal fiefdoms...

Mr Putin's investigations might make Mr Potanin and the
others squirm, but the oligarchs have shown a talent for running the companies
they connived to acquire....

To keep his economy expanding, Mr Putin may have no choice
but to leave these men in charge.

"Putin needs these people," says Martin Diggle, a
director of Brunswick UBS Warburg brokerage in Moscow.

"The message seems to be now understood that if you are an
oligarch, if you stay out of politics, pay your taxes, don't openly violate
shareholder rights, then you'll probably be left alone."

Mr Putin, a former KGB spy elected president in March, came
to power with more support in the Duma than Boris Yeltsin ever had....

His first shot at the oligarchs came in June with the arrest
of Vladimir Gusinsky, chairman of Media Most -– which controls Russia's
biggest independent TV station -– who criticised Russia's war in Chechnya.

Mr Gusinsky was released after three nights in prison, and
embezzlement charges against him were dropped. He left Russia and says he won't

Later Boris Berezovsky, owner of the daily newspaper Kommersant...
says Mr Putin won't tolerate a free press.

But despite Mr Putin's attempts to make the oligarchs toe
the line, analysts believe that as long as they are making their once-decrepit
companies hum, foreign investors should expect them to hold the reins of power
in Russia's economy." End Quote.