Tuesday, May 3, 2016

Russian Taxes and Foreign Firms Illegally Financing Some Russian Candidates, TI Finds

Paul Goble

            Staunton, May 3 – An investigation by Transparency International into electoral practices in Altay kray found that because of gaps in Russian electoral law, tax money and even funds from foreign firms are paying for the campaigns of some candidates even though both of those things are nominally illegal in the Russian Federation.

            The report is available online (transparency.org.ru/images/docs/research/2016-03_Altay_PR.pdf) and represents an extension of the report TI prepared a year ago for Russia as a whole (golosinfo.org/ru/articles/74151). One author of the new report, Stanislav Andreychuk, gave an interview to Radio Liberty (svoboda.org/content/article/27711734.html).

            Andreychuk describes the way TI documented the flow of tax money from government offices to various publications which then carried articles favorable to this or that candidate, usually but not always from the ruling United Russia Party. Often this illegal transfer of funds was covered by the use of intermediary firms, thus making it more difficult to trace.

            Another way government officials hide what they are doing, the TI investigator says, is to give firms contracts for completely unrelated projects and then require the recipients to transfer part of the money they have received to the campaign coffers of this or that preferred candidate. Such arrangements are hard to prove, but they exist, Andreychuk continues.

            In addition, money for Russian candidates is coming in from abroad, sometimes but not always from companies owned by Russians who want to avoid taxes or who don’t trust the Russian legal system and something that is completely illegal, as are arrangements to pass government money through one or another NGO for candidates’ election campaigns.

            What is particularly worrisome, Andreychuk suggests, is that sometimes firms are not simply supporting candidates they approve or but are investing in people the authorities are ordering them to back or doing it as a kind of “business exchange,” thus blurring the line between public and private still further.

            Over the last few years, he continues, there has been little or no improvement in Russian electoral law or practice; and consequently, he predicts that all of the faults TI has seen in the past will be repeated, especially given the weaknesses of the electoral commissions and the lack of connections between the Central Election Commission and the tax authorities.

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