Russian chief auditor: 30bn dollars a year embezzled from state procurement

File Photo of Man Placing Stack of Large Bills into Inside Pocket of Suitcoat

(Interfax – November 14, 2012) Russia’s chief auditor has described as “critical” the scale of embezzlement of fund allocated for state procurement, privately-owned Russian news agency Interfax reported on 14 November.

“Every year, R1,000bn is embezzled from the funds allocated for state procurement,” Chairman of the Russian Audit Chamber Sergey Stepashin was quoted as saying. The sum is equal to 31.5bn dollars at the current rate of exchange. Stepashin added that “one-fourteenths of the consolidated state budget is embezzled”.

“This is why a bill to move to a federal contract system of procurement is now being examined by the State Duma. It should lead to transparency and prevent major embezzlement,” Interfax quoted him saying.

Speaking on Gazprom-owned, editorially independent Ekho Moskvy radio, Kirill Kabanov, head of the Russian NGO called the National Anticorruption Committee, said that the scale of embezzlement in state procurement had been known for some time. He said a report which quoted the figure of R1,000bn had been submitted to the then President Dmitriy Medvedev three years ago, and the decision had then been taken to draft a new law on state procurement within three months. “The law has not been drafted yet, three years on. The existing lobbies, the kleptocracy, they do not want to give up this market because it is one of the main sectors of the corruption market in terms of size. The whole system is based on cronies, on families,” Kabanov said.

Meanwhile Stepashin was quoted in an earlier Interfax report as saying that the audits carried out by the Audit Chamber in the last few years revealed that “billions” had been embezzled from the funds allocated for the procurement of arms, the so-called state defence order. He said the findings had been passed to the military prosecutor’s office, and predicted that more criminal proceedings would follow.

A later Interfax report quoted Stepashin saying that the Audit Chamber had questions not only to the Defence Ministry but to other ministries as well, including the Health Ministry.