Wednesday, 17 July 2013

Friendship in Putin's Russia

"Corruption has also reinforced Putin’s management principle number one: friends can have anything they want and the rest can go to hell. Obedience of the law and delivering any kind of justice do not form part of the deal for the civil servants of the Putin regime. The supreme principle is personal loyalty. The main guideline of the authorities today is: 'Stay loyal and you’re free to steal, let the side down and you go to jail'."

Putin. Corruption. An independent white paper

The Rotenberg brothers, Arkady and Boris, are typical examples of what it means to be friends with Vladimir Putin. They have been able to amass billions during the years their boyhood friend and judo partner from St. Petersburg has ruled Russia
Arkady Rotenberg, the boyhood friend and former judo partner of black-belt President Vladimir Putin, already is collecting his winnings from what promises to be the most expensive Winter Olympics ever next year.
Rotenberg’s companies have been awarded at least 227 billion rubles ($7.4 billion) of contracts for the 2014 Sochi Games, according to figures compiled from corporate and government filings. That’s more than the entire budget for the 2010 Vancouver Olympics, though it represents just 15 percent of Russia’s latest estimate for the Sochi event.
Those contracts, which number at least 21, include a share of an $8.3 billion transport link between Sochi and ski resorts in the neighboring Caucasus Mountains, a $2.1 billion highway along Sochi’s Black Sea coast, a $387 million media center, and a $133 million stretch of venue-linking tarmac that will double as Russia’s first Formula One track.
“This is a monumental waste of public money,” Stefan Szymanski, a sports economist at the University of Michigan who tracks Olympic spending, said by phone from Ann Arbor. “A small number of people at the top have control of resources and there is no accountability.”

Read the entire article here
The independent white paper on corruption in Putin's Russia, published in 2011, gives some useful background information about the Rotenberg brothers' - now worth $2.97 billion each:

Little-known entrepreneurs in the 1990s, the Rotenbergs are now dollar billionaires, the largest suppliers of pipes to Gazprom, and major pipeline construction contractors. Having bought up Gazprom’s construction assets at a rock-bottom price, the Rotenbergs set up a company called StroiGasMontazh. By 2008, this company was winning tender after tender for pipeline construction. [Source: Gazprom Looks After Its Own, Vedomosti, 10.09.2009]. StroiGasMontazh won the tender to build the North Stream pipeline, despite the cost being three times that of building similar pipelines in Europe! Despite the fact that our workers are paid far less than European ones.
Without even going through a tendering process, the Rotenbergs were given the contract to build the epoch-making Sakhalin-Khabarovsk-Vladivostok pipeline – at the astronomical price of 210 billion roubles.
The Rotenberg were also given the Dzhugba-Lazarevskoye-Sochi Olympic pipeline contract without having to go to tender.

Last Sunday the Finnish daily Helsingin Sanomat published an in-depth interview with Boris Rotenberg's 32 year old son Roman, who has both a Finnish and a Russian passport. Judging from his reply to a question about whether the Rotenbergs have been given contracts without proper tenders, the London educated young man - now also vice president of Gazprombank - appears to have a sense of humor:
"The policy of the government is that everything is put out to tender. If we have the best bid, the government approves it."

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