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Worldcrunch

Why Is Vladimir Putin Auditing Every Single Government Employee?

Article illustrative image Partner logo Government employees, Putin is watching you.

MOSCOW - Last week President Vladimir Putin put into place the mechanisms to audit all of Russia’s government employees, who have until July 1 to rid themselves of any overseas property, stocks or bank accounts.

Based on an Executive Order he signed last week, Putin’s administration – not an independent auditor or other part of the government – will take care of verifying all of the income sources and all of the expenditures of government employees.

According to the new procedures, government employees will have to submit declarations of their income and expenses, starting from 2009. The head of the president’s administration, Sergei Ivanov, will be in charge of establishing that no government employee has overseas property. 

This new rule is the first inkling of how the 2012 law meant to "nationalize" the Russian elite and combat corruption will actually be enforced. “If a person has an overseas account, we will give him or her three months to get rid of that account, but everyone should be done by July 1 and it should all be proven in the declarations,” Ivanov explained. He said that the three months would be a transitional period, adding that he didn’t want to be accused of dragging his feet. 

The transitional period, Ivanov stressed, was not only for government workers, but also for employees of state-owned corporations, including the heads of state-owned corporations like Gasprom and Rosneft. The heads of both of those companies have announced through their respective press secretaries that they did not need a transitional period – that all of their money was in Russia. Of course, it recently came out that another head of a major state-owned corporation, Gasprombank, had two million euros in Cyprus that he withdrew just weeks before the banking crisis and subsequent haircut on big deposits in the island. 

Who audits the auditors?

Ivanov admitted that these new measures might mean that people would leave government service. “The rules of the game have changed, and government officials have to adopt them whether or not they like the new rules,” said a source in the president’s administration. “People have to figure out their priorities themselves, and decide what is more important – government service or everything else. Some people will decide to get rid of their property, but it's already clear that there are some government officials who are not going to wait for Ivanov to put their file on Putin’s desk, and they are going to quit government work first.” 

The new rules will apply to more than a million people, and Ivanov has said that any of those people could have their declaration audited. This is not in fact a totally new system – in 2012, 1.3 million government workers had to turn in income and property declarations as part of the government’s fight against corruption. Of those 1.3 million, 211,000 government employees were audited, and 322 people were fired. 

Experts reacted guardedly to the new rules and Putin’s plan on how to enforce the limits on overseas property. On the one hand, some said that this new plan, which is meant as a way to battle corruption, is better than nothing. On the other hand, many experts take issue with the fact that enforcement will be handled inside the president’s administration. According to Elena Panfilova, director of Transparency International in Russia, an enforcement institution “must be independent from all of the branches of the government and should work year-round, not only at the time that people have to submit declarations.”

Panfilova noted that while the new law promises to protect government workers who blow the whistle about corruption, it has no protection for ordinary citizens who bring corruption complaints against the government.

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