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BY IRON AND BRIBE

Corporate, Property & Land RaidingRussian Style

Ararat L. Osipian

http://fotki.yandex.ru/users/gbobrysheva/view/201336/

http://fotki.yandex.ru/users/gbobrysheva/view/201336/



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BY IRON AND BRIBE

Corporate, Property & Land Raiding Russian Style

Ararat L. Osipian



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Osipian, Ararat L. By Iron and Bribe: Corporate, Property & Land Raiding RussianStyle. : Press, 2012.

This book presents theoretical and empirical investigation of the politico-economic natureof corporate, property and land raiding and its impact on the process of creation of neweconomic structures in Russia. This research defines raiding as well as its place and role in theprocess of transition from plan-directive to market economy. It also addresses major foundationsand main forms of raiding. A substantial part of the book is devoted to theoretical aspects of raiding.

Key words: corruption, economic transition, hostile takeover, corporate raiding, RussiaJEL codes: I22, K42, P26, P31, P37

The book is intended for professors, scholars, graduate students, students, public officials,leaders of NGOs and businesses, all who are interested in issues of raiding, corruption, and

privatization.

© Osipian, A.L., 2012

Exit data:Manuscript is completed, 92,000 words, 2 tables, 1 figure.Status:Under review.



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PREFACE

Big Bang or the Free Fall Theory

Our government declared that it is conducting some kind of great reforms. In reality, noreal reforms were begun and no one at any point has declared a coherent programme.Aleksandr Isayevich Solzhenitsyn

The Big Bang School formulated the task of overcoming the gap that divides theslowdown of socialism and the progressive market economy. The term transformation camesometime later. The theories of the convergence of the two systems and smooth transition fromone condition to another were no longer satisfying. The suggested gradualist transition did not fitthe agenda of new reformers. Shatalin’s “500 days”, also known as the Five-Hundred-Day-Plan,and Polish “shock therapy” did not look good either . Thus, there were two necessary ideas set inmind: that there is a need to overcome the gap and that it should be done slowly, based on

science. In fact, the idea to get across the gap in one jump did not appear to be appealing. But isit possible to get across the gap in two jumps?While Egor Timurovich Gaidar was pushing the Jinn, i.e. the spirit of entrepreneurialism,

out of the bottle, Anatoly Borisovich Chubais and his best friend Alfred Reingoldovich Kokhwere trying to pull the biblical camel, apparently with the humps “privatization” and

“restructuring,” through the eye of a needle. The idea that the economic reform is slow due to thelack of entrepreneurial spirit among the Soviet people was expressed by one of the deputies of The Supreme Council of the USSR in the period when Mikhail Gorbachev was still present.There was a saying that it is necessary to literally push the Jinn out of the bottle, not just releasehim. Maxim Boyko authored a chapter entitled “How to pull the camel through the eye of a

needle,” a chapter in the book “Privatization Russian style”, edited by Anatoly Chubais. Chubais

was accused by the press, and not only by the press, of receiving a suspiciously high honorariumfor this book, around $100,000. There were also suggestions aired that there was no book, but thehonoraria played the role of a hidden bribe. Finally, when the scandal got out of control, themanuscript was written with rocket speed, almost in one night. The sum was very insignificantfor Chubais, but sounded astronomical for regular folk. Apparently, his enemies were looking forways to irritate Chubais and did not find anything better than to voice concerns about his highhonorarium for a non-existing book. Anatoly Borisivich offered the following comment aboutthis incident: “Is the honorarium too high? Well, this comment is fair…” Alfred Kokh authoredtwo chapters in this book: “How it was done in Petersburg,” and “State as the seller.”

It became obvious that we decided not to jump over the gap in just one hop. MaybeGaidar got a stubborn Jinn or an empty bottle with no Jinn in it at all. Maybe the biblical camelof Chubais, burdened with the riches of the “natural” monopolies, did not manage to get throughthe needle eye of rapidly changing legislation or simply got stuck in there shamelessly. The factis that the attempt to cross the gap in more than one jump led to the condition of free fall.

The free fall condition does not really feel that bad, except, perhaps, for the fall of thenational currency against the international dollar, but at the same time approaching the bottom issomewhat disturbing. The IMF and World Bank credits and other miracles of financialmanipulations come to mind as possible parachutes: everything to mitigate the shock of thelanding. Either the parachute did not open, i.e. credits were wasted, or the size was wrong, i.e.



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credits were not large enough to save the economy, but the free fall continued, except for topmanagers who managed to supply themselves with golden parachutes.

The continuing fall, i.e. transformation, becomes boring. One wants something new, butthere is little new in the preservation of economic transition. It was decided to announce

victoriously that we have already reached the bottom, or simply put, landed. Taking intoconsideration the fact that we were falling down for almost a decade we should have crushed.Explanations a la “we landed successfully on the stagnant industry and agriculture” wereunconvincing. Here came the idea that we did not jump over the gap, and hence did not fall in it.Instead, we were jumping over the river and reached the bottom due to sluggishness. Now is theright time to push off the bottom and swim up to the surface. We are good divers, and in such acontext even the term “bottom” sounds positive. But what were the foreign credits, if notparachutes? Were they stones on the neck? Of course, not. These were our oxygen balloons,necessary for deep water diving.

The comments that the river of transformation is nothing but a swamp are not accepted.Moreover, we are certain that the springs of tax reforms will catapult us up to the surface of no

longer mythical socialist welfare, but real capitalist wellbeing. It cannot be different. Accordingto Plato, it is impossible to enter the same river twice. The reformers have to keep in mind thatthe swift underwater rise to the surface can cause decompression. Otherwise they will have tocompose a new Stalin type communiqué “Dizziness caused by success,” in addition to the

restoration of the Soviet anthem.Suddenly something unexpected happened, economic growth has begun. Not a fake

economic growth that exists on paper in statistical reports with the rates within statistical error,but real growth. This growth was in part thanks to skyrocketing oil prices, but growth had startedeven before the oil prices went up. Growth came so unexpectedly that the observers simply gotlost. Most amazed with growth were those who continuously tried to convince others thateconomic growth during the transition to market economy would be unavoidable. Economic

growth in this sense was perhaps as unavoidable as Communism in the earlier days. Moreover,the unavoidability of the former and the latter in different eras was proclaimed by all the samepeople. One should pay little attention to all the modern theories of big bang, free falls, divingand surfacing, as well as pushing, pulling and getting through. Instead, let us consider the originsof raiding and its role in the contemporary national economic history.

Since the attention of now post-Soviet people, along with the rest of progressivehumankind, was focused on the process of changes, the issue of what belongs to who was not infocus. The attention to transformation was shared along with discussions of soap operas, run asnew to the Soviet people on TV. The Soviet people, now transformed into a mere population,continues to believe that the factories still belong to workers, land belongs to peasants, and peacebelongs to peoples, as it should. And who would care much about property rights on the meansof production, when these means do not really produce much anymore and the industry is inrecession. People were busy studying such new capitalist terms as inflation and unemployment.As one little boy said to his sister, “How can you watch the next part of this soap opera, if you do

not even know what inflation is?” Indeed, what kind of unemployment one can possibly speak

about in the country where people run from the bus stop to their plant, afraid to be ten minuteslater to work where the wage arrears exceed ten months?

Vouchers, distributed among the Russian population, for privatization acted as irritants.People had to think where these vouchers should be deposited or invested. In addition, they had



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to resist the offers of “making your voucher gold.” People had to learn how not to miss thechance and to resist the temptation of convincing advertisements. The information thatabsolutely all the oil of Western Siberia is represented in the shares of the Hermes Company, andthat Moscow real estate is always highly priced led to hot debates and disputations in the families

regarding the right choice among plentiful options. Now this kind of family situation would beidentified as “the process of making rational decisions by households and optimization of investment portfolio under the conditions of asymmetric information,” but at that time it was

called simply “privatization.” And the Soviet people, by that time already converted into

population, had yet to move to the category of “households as rationally acting economicagents.” Imagine an “irrational economic agent,” who exchanged his voucher for vodka. He was

looked at as the enemy of the people, depriving his family of its part of national wealth giventhem by the state that was supposed to be exchanged for this voucher, deprived his children of afuture. Indeed each voucher-holder was promised the value of a “Volga” luxury car, but the realvalue was equal to a bottle of Russian vodka.

But there was hope. Everyone believed that the state would not deceive; it would take

care of the people. And why would one need that small tangible, but unknown and nameless partof a large enterprise, or even a whole national economy, supposedly distributed in exchange forpieces of paper called privatization vouchers? If necessary, everyone could take a piece of his orher enterprise or its production and carry it out through the gate. This phenomenon was known as“nesuny.” “Nesuny,” stubborn as iron nails, were a disease of the Soviet industry. They de facto

shared the Soviet socialist property without any privatization vouchers, certificates and otheruseless papers and permissions. They carried this property away from plants, factories, shops,and organizations. Everything from metal parts of locomotives and sledge hummers to sausageand macaroni was carried through check points, thrown over fences, or pushed through the breaches in these fences, made by “nesuny” specifically for this purpose. By the way, “nesuny”

were much more successful in pushing the produce through the breaches than was Anatoly

Borisovich Chubais in pulling his biblical camel through the eye of a needle. This was the realand continuous people’s privatization that lasted for decades. People took a little bit from the

enterprises and organizations where they worked over many years.However, to the surprise of many, obstacles appeared. Some strange people at the check

point, dressed in camouflage. Camouflage was initially designed for paratroopers in order tomake them invisible and indistinctive from the surroundings. But now this camouflage was usedon the check points, laid with blue and white ceramic plates. It allowed the controllers toassociate themselves with paratroopers rather than with the surrounding environment. Peoplelearned a new word, adopted from English: “security.” Besides, the right to steal was nowmonopolized by the director. He monopolized the right and authority of “nesuny;” he became theexclusive and only “nesun” at his particular factory. All the other employees simply lost theirunofficial right on the part of the enterprise’s property overnight. Workers were not always

willing to accept such new order of things. Those who could not get through the newly erectedfences and control lines were engaging in close combat with the security. Workers after the shiftwere going to the fields of collective farms to rest and eat strawberries as they use to do fordecades, but there were obstacles, gatekeepers, security. There was a case when workers of ametallurgy plant in Donbass were fighting for their rights on a strawberry field with iron spears.They rushed in a bayonet offensive and charged the security and police on duty. The security andpolice did not enter the fight and cowardly ran away to call for back up. The eternal class conflict



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between the owner and the workers, hidden during the Soviet period with such a great mastery,now became bold and naked.

The workers were certain that their status of proletariat was left in the smog of the GreatOctober Socialist Revolution and would never come back. And they were deeply mistaken,

because behind all the promises of market prosperity, effectiveness, consumer goods, democracyand struggle against bureaucracy, along with financial pyramids and long-lasted images of LeniaGolubkov and his brother Ivan, either slacker or partner, was one major goal, to turn workersback into proletarians. Simply push workers back into the “black body.” Proletarians are bydefinition people who do not have anything but their hands. Thus, the process of democratization,i.e. political and spiritual liberation, was accompanied by a much less visible and much moresignificant process of “liberation” of workers from the means of production. This “liberation”

was forceful, not voluntary.The population did not think much about this, since it was ready to give up not only its

right to own the means of production, but even to work for nothing, for free, and without a fight.Descendants of Revolutionary sailors and workers turned out to be defenseless. Just recently

workers openly expressed their dissatisfaction over the fact that two vacations to then socialistYugoslavia at discounted prices were given to the director’s wife and daughter, and then

accepted calmly the fact that this same director built himself a three-story house, made of theconstruction material taken from the plant, and travels around the world at the expense of theenterprise.

The state deceived people; it did not take care of them. Similar to becoming the firstcounterfeiter and false-coiner in history, the state became the first raider. The transfer of the all-people property to the private hands occurred at the initiative of the state with the use of statepower and state mechanisms of authority. Contrary to the commonly shared belief, we think thatthe voucher or certificate-based privatization was a success: property was obtained precisely bythose who initiated and organized privatization. Everyone else was left with nothing.

As it happens in any good old Russian fairy tale, all the stuff during the split of theinherited wealth went to two older brothers, i.e. those who at the time of privatization was of theright age, the age of later-Komsomol leaders. Komsomol stands for the Young CommunistsLeague Kommunisticheskij soyuz molodezhi [Kommunisticheskij soyuz molodezhi], and manyof the newly emerged entrepreneurs were Komsomol leaders. The youngest brother receivednothing, either due to his young age or simply because he was not in business yet. But Ivan was agood fellow and understood that he still has a chance. It is very characteristic of Russian fairytales that the hero necessarily communicates with the state authorities, with the Tsar, promiseshim faithful service in exchange for something else. Similarly, modern raiders, who were late tothe initial split of the “pie,” and dissatisfied with the results of privatization, deal with the state,with authorities, offering gratuities and grabbing property and oftentimes power itself.

Bailiffs, sheriff deputies, judges, police and other servicemen in black masks and bodiesof ancient heroes act under the general title of “force ministries,” also known as Siloviki orSilovye vedmostva. They are always part of the news about corporate raiding. Although in mostof the cases it is not clear, who is raider and who is lawful owner, since each side of theeconomic dispute waves court orders with big seals. They wave just for a warm up, before proceeding to the arguments a la “you fool” and fist fight for “their” property. Surprisingly thisauthentic strive to manage does not lead to any increase in effectiveness and efficiency.



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The belief in the honesty and diligence of the state held among the regular Soviet peoplewas really immortal, extending to an unwillingness to accept the powerless position and resistthe robbery in the light of day. Even twenty years after the robbery of the entire population of theUSSR, three hundred million people, by way of inflation that affected people’s savings in the

State Savings Bank “Sberbank”, the population hopes to receive compensation. It is the same asif red cats, often called “Chubais” for a well-known reason, and for equally well-known reasonsdisliked among the population, would expect compensation for their rights violations and moraldamages not from someone else, but from Anatoly Borisovich himself. One thing was obvious:the state robbed its people not to compensate them two decades later. And who would take oncalculating the interest?

To sum up, there is almost no one left to work, create, develop, and get the job done. Allthe healthy and active population is involved in redistribution of already created wealth, property,rights, and revenues. One group defends and protects, another group takes away, and all of theparticipants frequently change roles. Even academician Sergei Kapitsa pointed out that “Today

almost half of all the economically active youth works in security firms! So, it turns out that all

of these young people are stupid men with limited views…” (Sergei Kapitsa. Argumenty i fakty,May 28, 2010)1

The profession of private security guard is perhaps the most popular andwidespread profession, while the image of a raider entered the annals of the national folklore.

This book has the goal of showing the heterogeneity of the raiding phenomenon in Russia.We recommend this book to all those who own property or pretend on someone else’s property,

including professors, students, businessmen, bureaucrats, civil servants and other rationaleconomic agents, those who share and those who oppose the ideas of privatization. This book isnot intended to scare foreign investors away from Russia. To the contrary, Soros’s losses inSvyaz’-Invest should not be the reason for holding investments from Russia in fear of corporateraiders.

1 Sergei Kapitsa: “Rossiyu prevrashchayut v stranu durakov” [Sergei Kapitsa: “Russia is turned

into a country of idiots”]. Argumenty i fakty, May 28, 2010. Retrieved May 28, 2010, fromhttp://www.aif.ru/society/article/29249

http://www.aif.ru/society/article/29249





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TABLE OF CONTENTS

INTRODUCTION

I. DIVIDE AND CONQUER: A THEORY OF PREDATORY RAIDING

II. KREMLIN, INC.: STATE AND RAIDER AND STATE-RAIDER

III. BY SWORD AND BY FRAUD: RAIDING IN POSTSOVIET RUSSIA

IV. BRIBE SET BY LAW: CORRUPTION AND RAIDING

V. THIS LAND IS MY LAND: PERSPECTIVES OF RAIDING

CONCLUSION

BIBLIOGRAPHY

APPENDICES



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TABLE OF CONTENTS

Preface

LIST OF TABLESLIST OF FIGURES

INTRODUCTION

I. DIVIDE AND CONQUER: A THEORY OF PREDATORY RAIDING1.1. Theoretical explanation of raiding in a transition economy

Am I a trembling creature or do I have the right? Defining raidingAlienation-appropriation: the inverted character of raidingNature, causes and basis of raiding

1.2. Takeovers without mergers: a culture of raiding

Takeovers without mergersAnti-raiding culture: if you can’t pay with money, pay with respect1.3. Concluding remarks

II. KREMLIN, INC.: STATE AND RAIDER AND STATE-RAIDER2.1. State and raider

Optimization of the stateEconomically active bureaucracyState against raiding

2.2. State-raiderAmorphous state: who owes whom

A pair of each animal: The Noah’s Ark of court bailiffsNon-economic factors of influence2.3. Concluding remarks

III. BY SWORD AND BY FRAUD: RAIDING IN POSTSOVIET RUSSIA3.1. Problem of raiding in the transition economy

Ways of hostile takeovers: reforging robber wooden clubs into baseball batsObjects of raiding: risks and victimsScale of raiding

3.2. Spheres of raidingUnusual spheres of raidingWorkforce reserves of the raiders movementDiscussion and condemnation of raiding

3.3. Concluding remarks

IV. BRIBE SET BY LAW: CORRUPTION AND RAIDING4.1. Links between corruption and raiding: not a thief if not caught

The fact that you don’t have a criminal record is not your merit but our mishap Ties between corruption and raiding

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1112

13

161616222632

324045

48484852555959

677483

8787879496

100100104108110

113113113122



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Crime in the Soviet era as a basis for modern raiding4.2. Bureaucracy, corruption, raiding and struggle against it

Russian bureaucracy and corruptionOffered a bribe to the state official equal in value to the bribe established by the law


V. THIS LAND IS MY LAND: PERSPECTIVES OF RAIDING5.1. Prospects of raiding evolution: from merchant ship to court takeovers

Perspectives of raiding movement: prognosis is optimisticFrom Lenin to Sonin: a revolutionary theory of permanent lawlessness

5.2. Land of opportunity: changing value, changing ownersBattle for land: take no prisonersLand brings raiders in


CONCLUSION

REFERENCES

AUTHOR INDEX

SUBJECT INDEX

About the author

125127127137

141

144144144147151151154159

161

165

171

173

184



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LIST OF TABLES

TABLE Page

PART II2.1. State budget revenues from the oil and gas industry in Russia, 2000-2006

PART IV4.1. Number of employees in the state and municipal government in Russia, 1995-2007,

thousand

51

127



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LIST OF FIGURES

FIGURE Page

PART I2.1. Relation of raiding to other similar themes 21



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INTRODUCTION

The great questions of the day will not be settled by means of speeches and majoritydecisions but by iron and blood.

Otto Won Bismarck



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PAGES 14-164 ARE NOT PART OF THIS PREVIEW



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171

AUTHOR INDEX

Allen, David,

Almond, George,Andreski, Stanislav,Anechiarico, Frank,Aslund, Anders,Astakhov, Pavel,

Banfield, Edward,Barnes, Andrew,Black, Bernard,Blasi, Joseph,Borisov, Yuri,

Buzgalin, A.

Chapaev, Roman,Chubais, Anatoly,Coleman, James,Cooke T. E.,

Darden, Keith,Demekhin, Aleksey,Dmitrieva, E.,Dolgova, A.,

Dostoyevsky, Fyodor,Dugin, Aleksandr,

Egorova, Ol’ga,

Firestone, Thomas,Frye, Timothy,

Glaz’ev, Sergei,Gritsenko, A.

Harabet, K.,

Il’f, Ilia, Ivanova, K.,

Jacobs, James,

Karatnicky, A.,

Karatuev, Aleksandr Grigorievich,

Kireev, Aleksei,Kolganov, A.Kotin, V.,

Ledeneva, Alena,Lowenstein, Louis,

Mazur, Irina,Medvedev, Roj,Montesquieu, Charles-Louis de Secondat,

Neutze, J.,

Osipian, Ararat,

Payne, Robert,Petrov, Evgeny,Pistor, Katharina,Pivovarsky, Alexander,Proudhon, Pierre-Joseph,Pushkin, Alexander,

Rose-Ackerman, Susan,

Sachs, JeffreyShlapentokh, Vladimir,Shlyapnikova, O.,Simis, Konstantin,Skidanova, Lilia,Sonin, Konstantin,Starovsky, V.N.,Sychev, Pavel,

Tarkhanova, Zarina,Thyrêt, Isolde,Tkachenko, N.I.,

Vaksberg, Arkady,Varnalij, Zakharij,Volkov, Vadim,Voslensky, Michael,



172

Waite, Duncan,Weber, Max,Whitefield, Stephen,

Woodruff, David,

Xu, Chenggang,

Zadorozhny, G.,Zhdanov, I.,Zimmer, Kerstin,

Zon, Hans van,



173

SUBJECT INDEX

abuse of authority

abuse of public officeabuse of the officeabuse of trustAcademy of the National Economyaccountabilityadministrative pressureadministrative resourceAgeev, AlexanderAgropromAkademiya narodnogo hozyajstvaalienation

Altay regionamendmentANHAnti-abuseanti-corruptionAntiproizvolanti-raidingAnti-Raiding 2008anti-raiding campaignanti-raiding cultureanti-raiding legislation

anti-raiding measuresAntiterrorist UnitappealsappraisersappropriationArbatArbat PrestigeArms ChamberAscanioassetsAstrakhanAttorney GeneralAuditing Chamberauthoritative bureaucratic hierarchyautonomyaverage bribesAvtoVAZ

bailiffs

ban

Bank of Moscowbankruptcybankruptcy casesbankruptcy claimsbankruptcy costsbankruptcy law of 1998barterBashkiriaBastilleBatistaBaturina, Elena

Belgorodskaya oblast’ Berezovsky, Borisbiblical camelblack marketBlack SeablackmailBogatikov, AlexanderBoyarskaya DumaBoyko, MaximBratanov, ViktorBrezhnev, Leonid

bribe-giversbriberybribesbribe-takersBritainBritish ParliamentBuddhistBukato, VictorbullyingBulavabureaucracybureaucratbureaucratizationburial servicesbusiness ethicsBykov, Anatoly

Californiacapital flight



174

causing nightmares for businessCentral AsiaCentral Election Committeecentralization of production

certificate-based privatizationChajka, YuriChamber of Tax ConsultantsChamber of Trade & CommerceChavez, HugoChechnyacheck privatizationChicagoChief of the Investigations Committeechild supportChina

ChristianChubais, Anatoly BorisovichChurchChurch of Christ the SaviorChurov, Vladimircity cemeteriescivil complaintscivil servantsclancodes of conductColbert, Jean-Baptiste

collective farmscollectors’ business

Colton, Timothycommercial arbitration courtcommercial disputecommoditycommodity exchangecommodity raidingcompetitioncomplaintscomplexityconfidential informationconfiscation of propertyconflict of interestconflict regulationconsolidationconspiracyConstitutionconstruction companies

consumer creditcontract killingsConvention Against Corruptioncooperator

corporate controlcorporate lawcorporate lawyerscorporate raiderscorporate raidingcorruptibility of courtscorruptioncorruption in courtsCouncil of NoblesCouncil of the Federationcourt bailiffs

court decisionscourt systemcourt-ordered restrictioncovercreditorscrimeCrimeacriminal activitiesCriminal Codecriminal investigationscriminal justice

criminalizationCuban revolution

D’Estourvilledachadamage of raidingdebt repaymentdebtorsdecentralizationdefaultdefendantsdelaysdemocratizationDenisenko, FilaretDepartment of Land ResourcesDepartment for Organized Crime PreventionDepartment of Economic Security of the

Chamber of Trade & Commerce of the Russian Federation



175

Department of Economic Security of theMoscow city government

Deputy Head of the Prosecutor GeneralDeputy inquiry

derivativedesyatinadetectivedetectivesdevelopersDiocletianDirector of the Chamber of Tax Consultantsdirectors of Soviet enterprisesdisclosurediscretiondisintegration

distributiondividendsdocument frauddol’shchikiDubrovskyDuma

Eastern EuropeEBITDAeconomic crimeeconomic crimes in the military

economic developmenteconomic disputeseconomic growthEdinaya Rossiyaeffective ownerseffectivenessefficiencyelection commissionselectricityembezzlementembezzling fundsEnglandenterpriseentrepreneurial talententrepreneurshipethicsEthics Committee of the State DumaEuropean Court of Human RightsEvroset’

expropriationextortion

fair market price

fairnessfalsificationsfamily relationsFar EastFederal Migration ServicesFederal Security ServicesFederal Services of Court BailiffsFederal Services on Financial MarketsFederal Tax ServicesFederal’naya nalogovaya sluzhbaFederal’naya sluzhba bezopasnosti

Federal’naya sluzhba po finansovymrynkamFederal’naya sluzhba sudebnyh pristavovFederal’noe gosudarstvennoe unitarnoe

predpriyatieFederation CouncilFeniksfeudalismfiduciary responsibilityFIGFili

Filimonov, Alexanderfinancial crisisfinancial documentsfinancial inspectorsfinancial pyramidsfinancial-industrial groupFinansgrupfineFirst Vice Mayor of MoscowFirst Deputy Prime MinisterFive-Hundred-Day-PlanFNSforced laborForeign Intelligence Servicesforeign investmentsforeign investorsFrancefraudfree market



176

FSBFSFRFSSP

Gaidar, Egor Timurovichgambling businessesgangster operationsGazpromGDPGDRGeorgiaGeorgian thief-in-lawGermanygiftGolden Calf

golden parachutesGolubkov, Leniagood governanceGorbachev, MikhailGosdumaGreat October Socialist RevolutiongreenmailGref, Germangross wasteguaranteesGusinsky, Vladimir

Head of the Ministry of EconomicDevelopment

healthcarehierarchyhigher educationhigher education institutionhostile takeovershotbed of corruptionHotel de Neslehousinghyperinflation

IA AdvisersIcahn, CarlIllarionov, Andreiillegal accessillegal actillegality

IMFimmunityimprisonmentindividual entrepreneurship

inflationinformal normsinformationInformation analytical agency “Advisers”

Information Center of the Presidentinsider informationinsidersinstitutionalizationinstitutionsintentional bankruptcyInternational Foreign Trade Agency

internationalizationInvestigations CommitteeinvestmentsIoann the IV, GroznyItalian creditorsItalyIoann GroznyIvan the TerribleIvankina, ElenaIvanov, SergeiIvanov, Vyacheslav

Japan joint stock companies judges judicial system jurisdictionJust Russia

Kabanov, KirillKadyrov, RamzanKapitsa, SergeiKapliev, AndreiKGBKhatsernov, SergeiKhodorkovsky, MikhailkickbacksKiselev, EvgenyKokh, Alfred ReingoldovichKol’tsovo airport



177

kolhozyKommunisticheskij soyuz molodezhiKomsomolKrAZ

KremlinKubarev, ValeryKuzbass

landLand CommitteeLand Laws of the Russian Federationlandlordslaw enforcementlawful ownerlaws

lawsuitslawyersLDPRLebedev, Vyatcheslavlegal dimensionlegal disputeslegal gapslegal loopholeslegal nihilismlegalitylegislative process

legitimacyLenin, VladimirLeningradskaya oblast’

Liberal Democratic Party of RussiaLiberal’no-demokraticheskaya partiya

RossiiLieutenant-General Viktor Vasil’ev

liquidationliquidityLiterary Fundlocal authoritieslocalizationlockoutsLogunov, OlegLower Chamber of the Russian ParliamentLuzhkov, Yuri

M&Amafia

malfeasanceMalyuta SkuratovmanagementManahov, Sergei

manipulationsmarket cleanersmarket economymarket reformsmarket valueMarx, KarlMaski-ShowMasks-Showmass privatizationMChSmeans of production

Media-MostMedvedev, Dmitrymeetings of creditorsmeetings of shareholdersMember of ParliamentMergers and acquisitionsMerriam-Webster DictionarymetallurgymethodologyMiddle AgesMikhal’chuk, Il’ya

militarymilitary basesmilitary commissariatsmilitary trophiesMinisterstvo chrezvychajnyh situatsijMinisterstvo kul’tury

Ministerstvo vnutrennih delMinistry of Agriculture and Agricultural

IndustryMinistry of CultureMinistry of DefenseMinistry of Emergency SituationsMinistry of HealthcareMinistry of the Interiorminority holdersMironov, SergeiMitrofanov, Georgymixed market type economy



178

Model Law on International CommercialArbitration

Moldovamonopolization

monopolyMoonmoonshinemoratoriummortgagesmosaicMoscowMoscow City CouncilMoscow governmentMoscow MayorMoscow oblast’

Moscow oblast’ CouncilMoscow regionMosrybokombinatMPmunicipalityMVD

NAKNaryshkin, SergeiNational Anti-Corruption CommitteeNational Bolshevik Party

National BolsheviksnationalizationNatsional’ny antikorruptsionny komitetNatsional-bol’shevistskaya partiyanatural exchangenatural monopoly Nazran’

NBPnegligenceNekrasov, VladimirNemtsov, Borisnepravitel’stvennye organizatsii NerpanesunyNGOs Nizhegorodskaya oblast’

Noah Ark Nobel laureatesnomenklatura

non-economic enforcementnon-economic mechanismsnon-economic methodsnon-economic spheres

non-governmental organizationsNorilsk nickelNornikelNovgorodchina

OBEPoffice malfeasanceOgonek oil and gas industryoil pipelineoil refinery plant

oligarchOMONOn actions with agricultural landOn anti-corruption expertise of normative

legal acts and projects of normativelegal acts, Federal law

On appraisals code in the RFOn autonomous legal entitiesOn combating corruptionOn investigation and search operationsOn joint-stock companies

On leaving the Russian Federation andentering the Russian FederationOn monetization of subsidiesOn policeOn state civil service in the RFOn the amendments to Federal Law on

supply of products for federal needsopen accessopportunistic behaviorOprichnikiOprichniksOprichninaOrder “On the measures against corruption”

Order of the Government of the RF №864 Order of the Government of the Russian

Federation №354, April 15, 1993Order of the President of the Russian

Federation №1403, November 17,1992



179

Orenburgskaya oblast’

organized criminal groupsOruzhejnaya palataOstap Bender

Otdel po bor’be s ekonomicheskimiprestupleniyamiOtryad militsii osobogo naznacheniyaoutsidersoversightownership

Padva, GenrikhPakistanPanfilova, Εlenaparatroopers

ParisParkin, RuslanPastukhov, Vladimirpaymentspension fundsPeople’s Deputy

PeredelkinoPerestroikapersonal connectionsPetrozavodsk phenomenon of raiding

Pinkov, Aleksandrpiracyplaintiff planned economyPodmoskov’e

poison pillpolicePolish “shock therapy” political clanpolitical raidingpopulismportfolio investmentspost-Soviet spacepotential for corruptionPovolzh’e

Pozgalev, Vyacheslavpredatory incursionPrefectPresidential Anti-Corruption Council

preventionprimary capital accumulationprivate security firmprivate security guard

private workshopsprivatizationprivatization vouchersprocedural violationsprofessional conductprofessional ethicsprofit sharingprofiteeringProhibition eraproletariansproperty relations

property rightsProsecutor’s General Officeprotectionprovisionsprovocation by bribeProvostpublic recognitionpublic sectorpublic servicesPutin, Vladimir

racketeerracketeeringracketeersRAGSraiderRaider, novelraidingraiding attacksraiding movementRajkov, GennadyRailways Military ForcesRajonnoe upravlenie po bor’be s

organizovannoj prestupnost’yuRANRAO EESrate of returnreal estatereal estate marketredistribution



180

refineryregulationsreiderstvoRenaissance

re-nationalizationRenova Companyreplacement of managementre-saleResearch Instituteresponsibilityrestructuringretail tradeReturn of the Prodigal SonRFRoman Emperor

RosatomRosbildingRosbuilding Investment CompanyRoslyak, YuriRosoboronexportRossel’khozbank

Rossijskaya akademiya gosudarstvennojsluzhby

Rossijskaya akademiya nauk (RAN)Rossijskaya FederatsiyaRossijskoe aktsionernoe obshchestvo

“Edinye energeticheskie sistemy” Rostovskaya oblast’

Rovenska oblast’

RovnoRPCRublevskoe HighwayRUBOPrulesRussian Academy of the National Economy

and the State Services under thePresident of the Russian Federation

Russian Academy of Sciences (RAN)Russian Academy of State ServicesRussian ArmyRussian Black Sea FleetRussian fairy taleRussian FederationRussian Joint-Stock Company “Unified

Energy Systems”

Russian Ministry of StatisticsRussian National Anti-corruption

CommitteeRussian Oprichniks

Russian Orthodox ChurchRusskaya pravoslavnaya tserkov’

sanctionssavingsSberbank scale of raidingSchetnaya palatasearchesseizure of propertyself-financing

shadow economyShalakov, YuriShatalinShatalin’s “500 days” Sheremet’evo International Airport

sheriff deputiesShuvalov, IgorShvartsman, OlegSilovikiSilovye vedmostvaSK

slave laborSledstvennyj komitetSluzhba vneshnej razvedkismall entrepreneurshipSmith, AdamsmugglingSobyanin, Sergeysocial obligationssocialismSocialist Blocsocialist propertysocialist Yugoslaviasoldiers as a workforceSoros, GeorgeSotheby’ssoul raidingsovhozySoviet peopleSoviet socialist property



181

Soviet UnionSoyuz sotsial’noj spravedlivosti Rossii

special police forcesspeculations

Spravedlivaya RossiyaSt. Petersburgstaged bankruptciesStalin, Josephstarting pricestate cannibalismstate contractsState Dumastate evaluatorsState Registration ChamberState savings bank

stock holdersstock marketstock valuestorm troopersstormingsStrasburg courtstructure of property relationsStyrova, Tatianasub-contractingsubmitted claimssubsidiary

subsidized regionsSukhorukova, SvetlanaSupreme Council of the USSRSupreme Courtsurprise attack Sverdlovskaya oblast’

Sviato-Nikolaevski monasterySVRSvyato-Voskresenski templeSvyaz’-Invest

targettargeted companytargeted firmTax Administrationtax collectorstax debtstax evasiontaxation

thefttheft of socialist propertyTorgovo-promyshlennaya palata Rossijskoj

Federatsii

TPPtrade union raiderstraffic policetransaction coststransactionstransfer of propertytransition economytransparencyTransparency International, Russian Office

of travel abroad

trophiesTrotsky, LevtrustTsar Ioann the IVtsekhovikitserkovnaya desyatina

UFMSUgandaUKUkraine

Ul’yanovskaya oblast’undercover police detectiveunemploymentUnion of the Social Justice of RussiaUnion of the Soviet Socialist RepublicsUnited KingdomUnited Nations Convention against

CorruptionUnited RussiaUnited Statesunlawful actionsUpravlenie federal’noj migratsionnoj

sluzhbyUSUSPPUSSR

velvet re-privatizationVenezuela



182

violationsviolenceviolent deathsviolent entrepreneurship

violent storming and assaultsvirtual realityVladivostok Vneshekonombank Vneshtorgbank VolgaVolgogradVologodskaya oblast’

voucher auctionsvoucher privatizationvouchers

wage arrearswestern investorsWestern Siberiaworkers’ collectiveWorld Bank World War IWorld War IIwould-be bribewrongdoingWWII

YekaterinburgYeltsin eraYeltsin, BorisYoung Communists LeagueYugoslaviaYUKOS

Zamoshkin, SergeiZemel’ny Kodeks Rossijskoj Federatsii

zero tolerance policiesZhirinovsky, Vladimir



183

ACRONIMS and ABBREVIATIONS

ANH, Akademiya narodnogo hozyajstva [Academy of the National Economy]Duma, Lower Chamber of the Russian Parliament

FIG, financial-industrial groupFNS, Federal’naya nalogovaya sluzhba [Federal Tax Services]FSB, Federal’naya sluzhba bezopasnosti [Federal Security Services], former KGBFSFR, Federal’naya sluzhba po finansovym rynkam [Federal Services on Financial Markets]FSSP, Federal’naya sluzhba sudebnyh pristavov [Federal Services of Court Bailiffs]Gosduma, State Duma, Lower Chamber of the Russian ParliamentIMF, International Monetary FundKomsomol, Kommunisticheskij soyuz molodezhi [Young Communists League]LDPR, Liberal’no-demokraticheskaya partiya Rossii [Liberal Democratic Party of Russia]M&A, Mergers and acquisitionsMP, Member of Parliament

MVD, Ministerstvo vnutrennih del [Ministry of the Interior]NBP, Natsional-bol’shevistskaya partiya [National Bolshevik Party]NAK, Natsional’ny antikorruptsionny komitet [National Anti-Corruption Committee]OBEP, Otdel po bor’be s ekonomicheskimi prestupleniyami [Department for Economic Crime

Prevention]OMON, Otryad militsii osobogo naznacheniya [special police forces]RAGS, Rossijskaya akademiya gosudarstvennoj sluzhby [Russian Academy of State Services]RAO EES, Rossijskoe aktsionernoe obshchestvo “Edinye energeticheskie sistemy” [Russian

Joint-Stock Company “Unified Energy Systems”] RF, Rossijskaya Federatsiya [Russian Federation]RPC, Russkaya pravoslavnaya tserkov’ [Russian Orthodox Church]

RUBOP, Rajonnoe upravlenie po bor’be s organizovannoj prestupnost’yu [Department forOrganized Crime Prevention]Sberbank, State savings bank SK, Sledstvennyj komitet [Investigations Committee]SVR, Sluzhba vneshnej razvedki [Foreign Intelligence Services]TPP, Torgovo-promyshlennaya palata Rossijskoj Federatsii [Chamber of Trade & Commerce]UFMS, Upravlenie federal’noj migratsionnoj sluzhby [Federal Migration Services]USSR, Union of the Soviet Socialist RepublicsYUKOS, YUganskneftegaz and KuibyshevOrgSintez



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About the author

Ararat L. Osipian is a PhD candidate in the Department of Leadership, Policy, andOrganizations at Peabody College of Education at Vanderbilt. He holds a PhD in Political

Economy from Kharkov National University (Ukraine) and an MA in Economics fromVanderbilt University, where he came as a fellow of The US Department of State. Dr. Osipianserved as an Assistant Professor of Economics at Kharkov University of Construction andArchitecture before he came to the US. His publications include four books, Raiderstvo: Corrupt

Raiding and Hostile Takeovers (Ukraine, 2011), The Impact of Human Capital on Economic

Growth: A Case Study in Post-Soviet Ukraine, 1989-2009 (New York: Palgrave Macmillan,2009), Economic Growth: Education as a Factor of Production (Ukraine, 2007), and Economy

of the Welfare State: Foundations and Creation under the Conditions of Market Transformation (Ukraine, 2001). His articles appeared in Demokratizatsiya: The Journal of Post-Soviet

Democratization, Research in Comparative and International Education, European Education:

Issues and Studies, Canadian and International Education Journal, Economics of Education

Review, Prospects: Quarterly Review of Comparative Education, International Journal of Educational Development, Transition Studies Review, Journal of Eurasian Studies, Journal of

Economic Issues, International Journal of Sociology and Social Policy, Brigham Young

University Education and Law Journal, East European Politics and Societies, Global Crime,

Soviet and Post-Soviet Review, Laboratorium: Russian Review of Social Research, FedUni

Journal of Higher Education, European Dialog, Business-Inform, and Region. He is also awinner of several awards, including grants from Soros Foundation, Open Society Institute,Edmund Muskie/FSA, Yale, Vanderbilt, and Central European University. His research interestsinclude corruption in higher education and inequalities in access to higher education ininternational perspective, corporate, property and land raiding, nexus of education and economicgrowth, modern welfare states and political economy of transition.

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