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Organized Crime and Corruption In Russia: Implications For The United States And International Law

Published online by Cambridge University Press:  17 February 2017

Scott P. Boylan
Scott P. Boylan*
Affiliation:
American Bar Association-CEELI
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Abstract

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Type
Kleptocracy and Democracy
Information
Proceedings of the ASIL Annual Meeting , Volume 90 , 1996 , pp. 90 - 95
Copyright
Copyright © American Society of International Law 2015

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References

* This is an extract from a longer article.

1 See Somebody Put A Dollar Bill In His Hand, Komsomolskaya Pravda, Dec. 23, 1994, at 2.

2 See Nothing for Nothing, Rossiskaya Gazeta, Jan. 6,1993, at 2. The author often heard that when American businesses negotiate commercial contracts, they are often, indeed always, requested to pay government officials for their acquiescence to the deal. These officials run from the low-level bureaucrat to the highest levels of the Russian government.

3 See Von Der Heydt, Russia's Spiritual Wilderness, Policy Rev., Fall 1994, at 12.

4 To Whom Belongs Power in Russia? Ministry of Thieves-in-Law: An Attempt at Breaking into Politics, Izvestia, Jul. 20, 1994 (final edition), at 1 & 5.

5 Since virtually all activities were controlled by the government in the former Soviet Union, there are now a large number of government officials in what would in the United States be private activity. See Journalists Hit TV “Mafiya,“ Moscow Times, Oct. 5, 1994, at 10.

6 See Zhukhevitsky, Crash Course for International Businessmen, Part II, The Russian, June 1995.

7 According to Russian police sources, there has been a gradual alliance formed between mafiya organizations, Russian government bureaucrats, and legitimate and illegitimate businessmen. As a result of this alliance, 70 percent of the privatization auctions where shams were the buyer was selected well in advance. Izvestia, Jul. 20, 1994 (final edition), at 1 & 5. Corruption “risks causing political unrest or—no better—a backlash against free-market reform.“ Money Talks, Newsweek, Nov. 14, 1994, at 10.

8 Id. See Stephen Handleman, Comrade Criminal 55–56 (1995).

9 “Just a few years ago, the FBI denied there even was a Russian mob.“ Friedman, The Organizatsiya: Brooklyn's Booming Russian Mob is Slicker, Smarter, and Much Meaner than La Cosa Nostra, N.Y. Magazine, Nov. 7, 1994, at 50.

10 How To Police an Ex-Police State, The Legal Times, July 11, 1994, at 12.

11 See Stephen Handleman, Comrade Criminal 131–143 (1995).

12 Russian Businessman Accused of Extortion, Moscow Tribune, May 18, 1992, at 3.

13 The Director of the FBI's visit to the former Soviet Union and Eastern Bloc emerging democracies is butone example. How To Police an Ex-Police State, The Legal Times, July 11, 1994, at 12.

14 Ulrich, Schmid The Russian Mafia and the Rule of Law, Swiss Rev. of World Aff., Oct. 3, 1994 Google Scholar.

15 Louis, J. Freeh Director of the FBI, visited Russia’ ‘to focus attention on increased threats from international crime groups, terrorism and drug trafficking.“ Int'l Herald Trib., July 9, 1994, at 2Google Scholar.

16 How To Police an Ex-Police State, The Legal Times, July 11, 1994, at 12.

17 Izvestia, Jul. 20, 1994 (final edition), at 1 & 5.

18 The United States is not alone in the effort to thwart organized crime on an international level. The United Nations is beginning to focus on organized crime that has become increasingly international in scope. See UN Gears Up for Landmark Conference on Organized Crime, Moscow Tribune, November 11, 1994, at 4.

19 S. Rep. No. 114, 95th Cong., 1st Sess. 3–4 (1977), reprinted in 1977 USCCAN 4098, 4101.

20 The 1988 amendments to the FCPA required that the Executive seek to create an FCPA-type agreement with the members of the OECD. 15 USC 78dd-l note.

21 An OECD committee approved a policy aimed at stamping out corruption and bribery of government officials in international commercial transactions. See Code on Corruption Advanced, Wall St. J., May 2,1994 at All. The new code “represents a ‘commitment to effective measures based upon agreement that corruption is both harmful to fair competition and to the political process.'“

22 OECD Press Release SG/Press (94)(36). Attachment dated May 27, 1994 (Paris).

23 Lockheed Corporation agreed recently to pay a $24.8 million fine after pleading guilty to conspiring to bribe an Egyptian politician and to falsify its financial records. “Federal prosecutors said that if the criminal case had gone to trial, they would have shown that Lockheed conspired to violate the Foreign Corrupt Practices Act by paying an Egyptian legislator $1 million for her help in securing an Egyptian government contract for three C-130H cargo jets worth $79 million.“ Lockheed Pleads Guilty to Bribery Conspiracy, Wash. Post, June 28, 1995, at Cl.

24 See Ministry, FBI Sign Deal on Cooperation, Moscow Times, Jul. 6, 1994, at 3.

25 James B. Stewart, The Prosecutors 27 (1987).

26 Russian Senator Yuri Boldyrev of Saint Petersburg is a co-founder of the Yabloko faction in the Russian parliament. ‘Two years ago, he headed the control department of the Kremlin when his anti-corruption investigations got too close for comfort to high-ranking officials. President Yeltsin, Boldyrev says, asked him orally to halt an investigation of Moscow. When he refused, Yeltsin dismissed him.“ Senators Take Alternative Path to Opposition, Moscow Tribune, Oct. 29, 1994, at 2.

27 See Reformers Face Crisis In 1995, Moscow Times, Dec. 31, 1994 at 1. Recent events in Korea in which the former President has been jailed for taking bribes is an example of political opponents punishing their former rivals for corruption. See Indictments of Ex-President, Business Chiefs Rock S. Korea, Wash. Post, Dec. 6, 1995, at Al.

28 The United States and Russia have already agreed to provide information to each other in their mutualfight against organized crime and corruption.'’ Russian Interior Minister Viktor Yerin said at the signing ceremonythe exchange of information would be ‘very wide.'“ See Ministry, FBI Sign Deal on Cooperation, Moscow Times, Jul. 6, 1994, at 3.

29 See Pines, Amending the Foreign Corrupt Practices Act to Include a Private Right of Action, 82 Calif. L. Rev. 185 (1994). The author argues that the FCPA should be amended to allow a private right of action among competing U.S. businesses. It is argued here that the Act should apply to all competing businesses, both U.S. and foreign, over which the court may have jurisdiction. The courts have been willing to apply the terms of the FCPA to foreigners and to apply the act extra-territorially. See Dooley v. United Technologies Corp., 803 F.Supp. 428 (D.D.C. 1992).

30 Although, at least among OECD member nations, there is definitely a realization that the combatting of bribery of foreign government officials should be given emphasis in the domestic laws of each member nation. Supra notes 22 and 23. Such action by the United States may be the catalyst needed to induce other nations to prohibit the bribery of foreign government officials by their nationals and prohibit favorable tax treatment for bribes under their domestic laws.