Wednesday, September 23, 2009

"a vacuum wrapped in a nullity inside an abyss"

I've tended to think of Putin's Russia as a gangster state, but one where the gangsters know where to draw the line - that line being Russian national interest - or at least said interest as perceived by Vladimir Putin. Others, like Mark Steyn, consider the place to be the basket case of basket-cases - "Russia is the sick man of Europe, and would still look pretty sick if you moved him to Africa.".

This (via the excellent FT Alphaville blog) certainly seems to lend weight to the Steyn view ("Russia is facing simultaneously a massive ongoing drain of wealth out of the system") - the travails of one William Browder, a few years ago the largest single foreign investor in Russia via his still-extant (but now London-based) Hermitage Fund.

“Certain Russian officials and private citizens entered into a conspiracy to reregister to themselves three investment companies owned by the Hermitage Fund,” the filing says, with the goal to “apply for and receive fraudulent tax refunds of over $230 million from the Russian Treasury, and finally, to funnel these proceeds through bank accounts in Russia and the United States.”

The filing outlines a familiar story of brazen corruption in Russia. Even Russia’s president speaks often on the topic. Last Sunday, for instance, Mr. Medvedev told a television interviewer that foreigners perceive corruption in Russia to be “without limits.”
What's impressive is that the crooks didn't rob Hermitage (although they were driven out of Russia), but stole tax that Hermitage had already paid to the Russian Treasury. Ripping off unwary foreign investors is a tradition in many countries (I used to bank with the biggest bank in the world - then it bought an aptly named American bank called Crocker) - but in Russia, state functionaries and private capitalists combine to rip off the state. Here's Crowder's open letter :

Simply put, Russia is not a “state” as we understand it. Government institutions have been taken over as conduits for private interests, some of them criminal. Property rights no longer exist, people who are supposed to enforce the law are breaking it, innocent people are victimised and courts have turned into political tools.

Rather than a normally functioning bureaucracy, Russia’s clans fight over control of government positions and the power to use state resources to expropriate assets...

First, the Russian police raided our offices and took all our corporate documents. These were used fraudulently to re-register our investment holding companies into the names of convicted felons. The same documents were used to fabricate backdated contracts the criminals then “enforced” in Russian courts, which obligingly awarded them $974m in fake damages – helped by a guilty plea from lawyers falsely claiming to represent us. The criminals used these fake losses to claim a fraudulent refund of $230m of taxes we had paid in 2006, which was paid out to them in just two days. This despite us reporting the unfolding fraud to Russia’s top law enforcement officials 21 days before the tax money was stolen.

Foreign investors get ripped off all the time in many countries. What makes this story unique is the state officials working together to steal $230m from the Russian state itself. The sharks have started to feed on their own blood.

What makes it even more worrying is that the Russian government took no action to recover the money when we reported the crime. Rather than going after the rogue officials and criminals, the government turned the full weight of the law enforcement apparatus against us for reporting it. They arrested our lawyer, Sergey Magnitsky, who uncovered the tax rebate fraud. He has since been kept in pre-trial detention on cases I believe were fabricated. Six other lawyers who filed criminal complaints or helped discover the fraud were harassed and fled Russia for safety.

Steyn :

What would you do if you were Putin? What have you got to keep your rotting corpse of a country as some kind of player? You’ve got nuclear know-how — which a lot of ayatollahs and dictators are interested in ... That’s the danger for America — that most of what Russia has to trade is likely to be damaging to US interests.

Crowder :

Some may argue the rule of law in Russia should not concern outsiders, but if corrupt officials can steal such a large amount of money from the state with no questions asked, it is not a very big leap for a similar group of corrupt officials to sell some loose Russian military hardware to terrorists, or even help rogue states to acquire nuclear technology. Moreover, when government officials act not in the interest of the state but for themselves, the normal tools of diplomacy simply do not work. It becomes impossible to trust international commitments, be it in the area of arms control or nuclear security. Perhaps there was a line in the past that Russians would not cross, but with the spectacular recent decline in the rule of law, anything is possible in Russia now.
It all makes the mysterious "hijacked" Russian timber ship episode look even more sinister. Is Russia, in Steyn's words, "a vacuum wrapped in a nullity inside an abyss" ?

UPDATE - not that state functionaries colluding to rob the State is exclusive to Russia :

Two tax office workers invented more than 1,400 fictitious children and hijacked hundreds of identities in a £1.2m payments scam, it has emerged. Civil servant John Brian Agdomar and an accomplice, Olanekan Omatayo Ogunmekan, were jailed after being caught using information in the national tax credit computer system to arrange extra payments diverted to a complex network of bank accounts. Agdomar used his job at the Department for Work and Pensions as a cover to access genuine customer records to obtain personal information, allowing the pair to arrange for genuine claims for tax credits to be increased by way of a bogus 'change in personal circumstances'. Records were amended with additional fake children in order to increase the payments but the extra money was siphoned off. In some cases personal records were amended with fictitious disabled twins or triplets to inflate the tax credits as much as possible.

Agdomar is thought to have illegally accessed more than 2,500 customer accounts. Between them the pair fabricated more than 1,400 fictitious children, hijacked hundreds of identities and illegally claimed more than £1.2m in tax credits until they were caught by HM Revenue & Customs (HMRC) investigators. Agdomar, 42, from Hackney, east London and Ogunmekan, 35, from Bethnal Green, London, were arrested by HMRC in 2008.
The UK is importing millions of people from countries with high levels of corruption. No attempt at integration with the host culture is required (and it would now be difficult in a place like Bethnal Green, where there aren't any hosts left to integrate with) . All things being equal, it would be surprising if levels of corruption in the UK did not rise. It's a subject I've touched on before and doubtless will again. But we've a way to go before we manage Russian-style sleaze. Give us time.


Borealis said...

Government institutions have been taken over as conduits for private interests...

But we already knew that...oh wait, you're talking about Russia, not the U.S. My mistake.

I don't know why people get all fretful about the Russians doing deals with our enemies that are not in our long term interest. Our own great and good are already doing a bang-up job of transferring the nation's wealth and tech base, and hence defensive capability, to points East for fun and profit. I'm not losing any sleep over Russian gangsters when there are already enough Ivy League mafiosi to scare the bejeezus out of me, right here at home.

Homophobic Horse said...

My word verification was "cunt".


And yeah, some Блядь Western journalist slating Russia is the pot calling the kettle black

Martin said...


Having no idea as to what sort of 'investments' Browder, an American born naturalised Briton, specialised, one must give him the benefit of the doubt and assume that his beef is not based on the Russians pillaging their own country as opposed to him being permitted to pillage it.

I have no sympathy for him or people like him. What did he expect in a country whose history passed from autocracy passed to totalitarianism without passing go, and whose people were left to suffer the fanaticism of Western economists when it all came crashing down? There would be no Putin now if we had not abandoned the Russians 20 years ago. The Bill Browders of this world might seem to like to think of themselves as 21st Century Don Pacificos, but this delusion should be discouraged at every turn.

Anonymous said...

Civil servant John Brian Agdomar and an accomplice, Olanekan Omatayo Ogunmekan.

Stout British names all.

Some of the indisputable benefits of immigration Yasmin? Yasmin...hello? Hello, anybody there?

Anonymous said...

Most of the biggest looters of Russia post-USSR just happen to have something in common with each other.

They also just happen to have something in common with Larry Summers who organised the Harvard economists who went to Russia to 'advise' on privatisation back in the '90s. And those economists just happen to have something in common with Larry.

Oh and Marc Steyn just happens to have something in common with them too.

But not to worry, its all a coincidence and anyone who thinks along those lines is a deranged comspiracy theorist.

Waits for comment to be deleted... ;-)

Recusant said...

Oh really 'Anonymous'. Do you find the hand of 'rootless cosmopolitans' everywhere?

Mark Steyn is of Catholic stock, but not practicing. In Scotland alone I can show you countless other Catholic Steyns and Steins: ever heard of Jock Stein, manager of Celtic and Scotland?. Just because it looks Jewish, doesn't mean it is.

Now scurry back down into your dark little hole and continue to allow your festering thoughts to make you look an unpleasant fool.

Anonymous said...

I was one of the people these Nigerians tried to rip off. I got a visit from Customs and Revenue who told me that an address in South London - Forest Hill - had been used.
I do not have children, and me the youngest of a Scot's Catholic tribe, but these chaps invented two and then tried to claim tax allowances and have the payments sent directly to another bank account.

I will be following the trial with interest, Hell, I might even see if I can get to the court and have a butchers at these scumbags.


Anonymous said...

Recusant - All true about the Steyn's of Scotland I'm sure, but the fact remains Steyn's ancestors are not all Caledonian. And Steyn's ethnic origins have nothing to do with his attitude to certain issues. Its only religion that counts, so on matters pertaining to Israel, Steyn's attitude would be no more partisan than a Catholic priest in Chile or a Bhuddist monk in Thailand. Of course.

You are making a play for identity and common interest being based purely on religion rather than ethnicity. You know what? I bet most of the people I alluded to are not particularly religious either, doesnt alter anything.

Care to trawl the internet for Jewish voices complaining about the behaviour of the wont find much I'm afraid. Yet if religion/ethnicity is as irrelevant as you say, you should find plenty. Yet they just happen to line up against Russia/Putin and dont have a whole lot to say about the oligarchs at all. Just another conincidence, yes?

Now scurry back down into your dark little hole and continue to allow your festering thoughts to make you look an unpleasant fool.

Blatent emotional argument.

Think about it, your position can only be defended by dissembling on the question of ethnicity/religion and by crass emotional outbursts. Not a strong position when you think about it pal.

Anyhow I'm clearly crossing what someone called Laban's redline, so I dont know how long these comments will survive!

Anonymous said...

Story development

Anonymous said...

Mark Steyn, like all good neocons, seems to take particular pleasure in bashing Russia. Mark Steyn also likes writing long, smug articles smirking about the demographic catastrophe facing Europe without even mentioning mass immigration, let alone the fact that mass immigration could be stopped (and reversed) if the political will were there. Mark Steyn supports our wars in Iraq and Afghanistan, saying we need to "fight them (i.e., Muslims) over there so we don't have to fight them over here"; it apparently doesn't occur to him that the least we in the West could do is protect our borders. Mark Steyn will drone on about Muslims and say almost nothing about America's 12 million illegal immigrants from Mexico. Mark Steyn is a fraud, appealing to people who want to laugh at "liberals" but don't want to think about anything else too deeply. What is his motivation?

Well, I think Anon@8.27&11.26 gets it.

JuliaM said...

Errr, Mark Steyn is married with three children. I'm not entirely sure who HH is talking about. Andrew Sullivan, perhaps?

Anonymous said...
This comment has been removed by a blog administrator.
The Kusabi said...

Oh dear, we're going to see comments being closed again, aren't we?

Anonymous & HH - STFU, GTFO.

asdf said...

If Steyn has children, then he is a breeder too. Now, follow me on this. Steyn is a Jewish Catholic breeder, and Sullivan is an Irish Catholic breeder, so if the two got together they could breed Jewish Irish Catholic children who go to Harvard and become economists. See?

Anonymous said...

If Wikipedia is to be believed:

Steyn was born in Toronto to a family of Jewish descent, however he was baptized a Catholic and later confirmed in the Anglican Church; he was educated at the King Edward's School, Birmingham, in the United Kingdom. He has stated "the last Jewish female in my line was one of my paternal great-grandmothers and that both my grandmothers were Catholic"

So Scottish or not there is Jewish ancestry. Furthermore:

Stella Steyn (1907–1987) was a Dublin-born artist of Russian and German heritage. She was born in 1907 to dentist William Steyn and Bertha Jaffe, who had moved to Ireland from Eastern Europe, initially settling in Limerick...

...Stella Steyn is the great-aunt of columnist Mark Steyn

So Recusant is asking us to believe that Mark Steyn is both a Steyn of Scottish descent and a Steyn of Jewish. OK, not impossible.

Note Wikipedia does not describe Stella as Jewish but of "Russian-German heritage" thus opening the way for further dissembling.

Anonymous said...

Laban deletes comment because he can't win.

dearieme said...

"In Scotland alone I can show you countless other Catholic Steyns and Steins: ever heard of Jock Stein, manager of Celtic and Scotland?" Jock Stein was a protestant.

Anonymous said...

Let's not forget Frank N. Stein, famous German-Jewish monster begetter. Nor well-known Jewish art critic Phyllis Stein. Nor Liechten Stein, tiny land of Jewish tax exiles.

Anonymous, you retard, you give a bad name to anonymouses everywhere.

Media Study 101 said...

Anon @ 10:23 PM

Actually I think you meant Recusant is a retad.

It was he who wandered off into a blind alley about the origins the name Steyn. Later it was shown that he was incorrect in his assertions.

Your puerile Stein comment in turn, like Recusants above is an emotionally loaded appeal devoid of any other content. Lets all have a laugh, and not address the debate.

Media Study 101 said...

OK, retad was retard - obviously.

Laban said...


Anonymous said...

Anonymous said...10:23 PM

Let's not forget Frank N. Stein...

That's Frank N. SHTEEN!!!!!!!!!!!!

Anonymous said...

Well I've been visiting Russia for years and it has got significantly better over the years since Communism ended. The conclusion I must draw is that the state is functioning.

However, I notice that most of the fraud mentioned is about ripping off Americans. Probably true. The Russians hate Americans through and through. They probably consider ripping them off a good game, and no doubt Putin encourages it.