14 August, 2013 15:01 ▪
The New York Times: a business owner in Russia has a better chance of ending up in the penal colony system once known as the GULAG than a common burglar does
More than 110,000 people are serving time for what Russia calls “economic crimes,” out of a population of about three million self-employed people and owners of small and medium-size businesses. An additional 2,500 are in jails awaiting trial for this class of crimes that includes fraud, but can also include embezzlement, counterfeiting and tax evasion.
In 2010, the police investigated a total of 276,435 “economic crimes,” according to the Russian prosecutor general’s office, whose statistics show burglary and robbery are prosecuted less than economic crimes.
Many Russian business owners are doing time that support groups have sprung up in Moscow for their families known as “The 159 Society.” It takes its name from the article on fraud in the criminal code. In the “zone,” as the prison camps are known in colloquial Russian, the business owners live, as nearly all Russian prisoners do, in squat wood or brick barracks. It is a grim, violent and disease-ridden world, they say.
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Most of the imprisoned are not there for any political reason. Their incarceration has to do with the nature of Russian corruption, said Elena Panfilova, the director of the Russian branch of Transparency International, a nonprofit group that studies corruption around the globe. Run-of-the-mill bribery schemes, practiced from China to Mexico, usually involve the police, fire inspectors or other regulators asking for payments on the side to allow a business to operate. In these instances, the interests of the business owners and corrupt officials are aligned — both ultimately want the enterprise to succeed.
But in Russia, the police benefit from arrests. They profit by soliciting a bribe from a rival to remove competition, by taking money from the family for release, or by selling seized goods. Promotion depends on an informal quota of arrests. Police officers who seize businesses became common enough to have earned the nickname “werewolves in epaulets.”
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