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Corruption In Russian State-Linked Industry And Miraculous Management Decisions

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Corruption In Russian State-Linked Industry And Miraculous Management Decisions

Recently, Russia’s military industrial complex and space industry appeared in the center of several corruption scandals.

On May 15, Investigative Committee chief Alexander Bastrykin said that Billions of rubles were funneled out of Russia’s federal Roscosmos space agency over the past five years in corruption schemes. Last year, investigators uncovered 1.6 billion rubles ($24.6 million) worth of fraud in the Roscosmos and the Rostec. According to prosecutors, fraud involving state-run space and defense corporations totaled $1 billion in 2018.

“There’s no end in sight, billions are stolen,” Bastrykin said. “It’s a very simple scheme: The money is first moved abroad, then the family leaves, and then the defendant follows.”

Meanwhile, it appeared that Yury Yaskin, the director-general of Roskosmos’ Research Institute for Space Technology (NIIKP), fled Russia in the midst of audits and inspections of the satellite and ballistic-missile research center that he headed. Yaskin was sent abroad by Roskosmos for official business in April and did not return when audits started.

The NIIKP is one of the key companies in the industry. In particular, it is responsible for creating ground-based instruments of navigation equipment, capable of determining the location of weapons facilities and military equipment.

On May 14th, the former director of the Russian Experimental Design Bureau Simonov, Alexander Gomzin, was arrested on charges of fraud. He is charged of stealing more than 494 million rubles (7,5 million dollars) from the Defense Ministry.

According to the prosecution, Gomzin, being the Director General of the Design Bureau, and unidentified persons “within the framework of non-fulfillment of obligations under state contracts to perform research and development work by concluding fictitious contracts with legal entities under control, stole money from the Russian Defense Ministry for a total of 494.3 million rubles.”

Since 2014, the experimental design bureau named after M.P. Simonov (the former Design Bureau “Sokol”) has been developing a project for a heavy drone that is intended for solving combat missions in the Arctic and the Altair large attack UAV. The Altair was supposed to be ready by May 2019, but it was not finished. Currently, the project is being transferred to to the Kazan division of the Ural Civil Aviation Plant.

Earlier, the helicopter manufacturing based in Russia’s Republic of Tararstan, Kazan Helicopters, also appeared to be in the center of series of corruption-linked scandals. The company finished 2018 with the net loss of 5.3 billion rubles (over 820 million dollars). Additionally, entities of the JSC Sukhoi Company implicated in several scandals.

The aforementioned cases may serve as a general example highlighting the state of the managing system in many state-linked Russian companies. Nepotism at the highest levels of power and the widespread conspiracy of silence irreparably harm the statehood.

Some experts explain assignments to top state-linked positions of people with bad reputation suggesting that the Russian leadership lacks trusted people. In this event, corruption incidents are being ignored because they allegedly serve as a tool to gain or keep the loyalty of these persons. However, in practice, this often leads to the growing assertiveness and always leads to millions-worth malversations that damage state-linked companies and defense programs.

Another group of experts says that the current situation became possible because of the lack of the proper ideological motivation of the top management. One more explanation is that such situations and scandals appear because of mistakes in the organization of the structure of relations between the state and state-linked companies.

Furthermore, monitoring institutions often evaluate actions of the top management using very formalistic approaches and closing their eyes to entire tendencies.

We can only guess which one of these explanations is the real reason of the high level of corruption in state-linked corporations. However, some personnel appointments set wondering.

On May 13, the sate-owned United Aircraft Corporation (UAC) appointed Anatoly Serdyukov as chairman of the board.

“The board members elected Anatoly Serdyukov as chairman of the board,” the UAC said in a statement, adding that the decision was taken on May 8.

Serdyukov is a former defense minister, who has became widely known for his involvement in the biggest ever corruption scandal in the Russian military. He left his post in 2012 over his role in a multi-million-dollar illegal property scam. He only ever faced one minor charge, however, and his case was subsequently closed.

Background: Since 2007, the country’s defense minister was a civilian official with education in economics, Anatoliy Serdyukov, who was appointed to carry out “long overdue reforms within Russia’s MOD.” Russia’s military operations during the 2008 conflict with Georgia revealed a mass of problems related to troop command systems, obsolete weapons, equipment, and communications.

However, Serdyukov teams actions, particularly those related to the so-called “optimization” of MOD’s property holdings, the closure of military academies and the destruction of the military health care system, caused growing astonishment within the majority of experts and career soldiers. On top of that, Serdyukov deliberately replaced the top leadership of the MOD, appointing civilian specialists from the private sector in the place of career soldiers.

In the fall of 2012, Russian investigative agencies discovered large-scale embezzlement at the MOD and the linked Oboronservis commercial entity. Financial losses were estimated at no less than $100 million, resulting in criminal cases launched against almost 20 individuals, many of whom were close to Serdyukov.

After many inspections and a lengthy investigation that lasted for over a year, Serdyukov was also formally charged with negligence. However, in February 2014 the Main Military Investigative Directorate of the Russian Investigative Committee decided to cease investigating Serdyukov since he was covered by the amnesty issued on the 20th anniversary of the Constitution of the Russian Federation. Other key individuals named in the corruption scandal received insignificant prison terms. MORE HERE

The UAC is the Russian aerospace and defense corporation consolidating private and state-owned aircraft manufacturing companies and assets engaged in the manufacture, design and sale of military, civilian, transport, and unmanned aircraft. The UAC’s total equity in 2016 was 155 billion rubles.

After the 2012 scandal, Serdyukov “miraculously” avoided a proper punishment and vanished in the dark. However, over the past years, he had been carefully and gradually returning to the public stage.

  • In November 2013, Serdyukov became the director of the Federal Research Testing Center for Machine Building of the Rostec.
  • In October 2015, Serdyukov was appointed as an Industrial Director of Rostec State Corporation.
  • In December 2016, Serdyukov entered the board of JSC Russian Helicopters.
  • In 2017, Serdyukov became the chairman of board of directors of JSC Rostvertol and entered the board of the UAC.

However, we want to be optimists and believe that in his second career life, Mr Serdyukov changed his worldview and became a scrupulous person and an effective manager.

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  • FlorianGeyer

    Sooner or later ,President Putin will need to clear out the 5th Column in Russia who worship money more than loyalty to the nation that has ‘fed them’.

    Many of the miscreants belong to the cult that has been despised for millennia.

    Tis time to clear them all out , and place better controls over the finances of all industries, state and private.

    • paul ( original )

      Co-incidentally I recently viewed a video which contained actual recording of a House of Commons committee investigating ‘dirty’ Russian money flowing through the City of London. Up to then I had no awareness of this subject. But if the testimony I listened was accurate the amounts involved exceed a billion every month. Now by ‘dirty’ money what is meant is money embezzled from the Russia economy and I like you feel this is a scandal that needs crushing. The trouble is this may go a lot higher than we think and so it is difficult to see who will do the cleansing.

      • FlorianGeyer

        Yes, the sewage flowing into the UK can never be cleansed by the ‘shitwashing’ of those who rule.

    • daniel

      You forgot the many oligarch , are they clean now?!

      • Justin

        Youre right! He did get some though! unfortunately the ones that are still there have too much power! Some of them are so powerful that they could turn the Chechen war back on with one phone call! Russia cant afford that!

      • FlorianGeyer

        The 5th column of course includes oligarchs who worship money before all else :)

    • Justin

      What i cant understand is why these directors think they will survive! Even Berezovsky was chocked by his own silk scarf IN ENGLAND and he was the MOST powerful of them all (former prime minister and propaganda machine).
      It is so easy for Russia to kill people with ricin or anything else they choose! But now, this guy puts his entire family at risk! Russia may decide to stop such theft by sending a message to all! (even if u escape with a billion dollars with your family, we will find you and end all of you)!

      It just doesnt seem escapable!

      • Harry Smith

        There is a story or a tale in Russia. Czar Peter 1st named a man for a governance and asked him how much he must pay the salary so man doesn’t thief. The man told an amount of money and Czar agreed. After awhile the man was caught on thief. Before his execution, Czar approached and asked him, why. Because Czar had always payed him the money he asked. The man said he just couldn’t resist.

    • Bessarabyn

      He has been doing this , but sadly all too cautiously.
      I encourage labour camps for parasites, zio 5th columnists, traitors, genital mutilators, mental castrates, rapists, double passportians, liberasts, talmudists, Khazars, gender confusionists, sectarian perverts, Jesuits, Fundamentalists, Churchianists, Armageddonists, Roman Satanists , Jiduists, Salafists , Wahabiists, Zionist supremacists, Vaccinators, Materialists, reductionists, Scientism dogma inquisition , Fascists, Western colonialists, Fabian Societyists, Round Table Masturbators, CFRists, putrid Stink Tankers , Babylonin Magick financial kabbala bankster manipulators , Fakeanists, … : Not to be released!

      • FlorianGeyer

        That’s a long list of miscreants :)

    • Albert Pike

      “5th Column in Russia”, is that what anywhere else is the first column, and is called USraHell. Serdyukov, and his father in law Zubov, and the running Yaskin are all jewish or crypto jewish, most of the oligarchs are. It’s everywhere the same, and all leads to Lubavitch and the ‘comming’ messiah…

      ‘Grinda’s 488-page petition to the Central Court in Madrid filed in 29 May 2015 depicts links between the criminal enterprise and top law-enforcement officials and policy makers in Moscow, including some of Vladimir Putin’s closest allies, Viktor Zubkov, the chairman of gas exporter Gazprom who was prime minister and first deputy premier from 2007 to 2012, and Zubkov’s son-in-law, former Defense Minister Anatoly Serdyukov. Shortly after his rise to power, Putin exploited his influence over the Russian legislature to create an oil and gas monopoly under Gazprom, Russia’s largest company, as a state-controlled operation that has exclusive rights to export natural gas from Russia.’
      https://www.conspiracyschool.com/blog/donald-trump-chabad-lubavitch-and-oligarchs

      http://db.yadvashem.org/righteous/family.html?language=en&itemId=4035796

      • TS

        monopolies in politic and industry usually after 20 or so years become quite corrupt.. only with real competition can this really be overcome.

        • John Hanson

          No real market competition can exist when the Jewish bankers create fiat currency wealth out of thin air.

          They just “buy” up and manipulate all the competition.

  • Tommy Jensen

    Its a culture. Impossible to get rid of. If you fire or jail one, 10 worse pops up to replace him.

    • Rhodium 10

      They fled to western countries where they have banks accounts( obviusly they know that never will be freeze because have the support of USA- CIA or others western intelligence service in exchange of information and secret tech!…yes its a culture..remember Victor Belenko and the Mig 25..

      • daniel

        Remember many oligarch that today share power i Russia!

    • Albert Pike

      It’s more then a culture – it’s loyalties. Serdyukov and Yaskin are both jewish. They are selling out the Russians in favour of Israel. Serdyukov even leased Israeli drones, and stopped the supply of arms to Syria. Hadn’t the Russian airborn troops with the slogans demonstrated: “The Khazaria Khaganate shall not pass!” and “Jewish Fascism! There is nothing more frightening today!”, he would be still in power…

    • FlorianGeyer

      The US is a good example of that :)

  • Tudor Miron

    Remnants of Eltsin’s era western imposed “elites”. Its actually too early to call them remnants because roughly 70 to 80% governing apparatus are still the same from Eltsin’s times. Sometime I wonder how my country is doing what it is doing while havingto deal with such a powerful 5tb column which is dreaming about returning to 90’s.

    • occupybacon

      Lots of resources to steal…the rest of the people are happy just because they have what to eat next day.

    • seawolf

      The fact that Putin put some things in normality doesn’t change the reality that Russia is that the powerful oligarchs are even more powerful and have financial connections with west, and there are also wannabe oligarchs ruling the state control enterprises which are slowly turning to be private companies. Russia is in the state of barbaric capitalism until the whole wealth of the state and the natural resources are sold for pennies to private companies. This is capitalism, what is it that you don’t understand? They want to be like the US

      • Tudor Miron

        It is wrong to say that oligarchs are even more powerful now than they where in 90s – fact is that their power was largely deminished but they are still strong.

        • seawolf

          Please read the Forbes list for facts.

        • FlorianGeyer

          A bullet in the back of their treacherous heads would stop the Oligarchs plotting with the West I would think :)

  • Rob

    $1 billion in 2018 is just tip of the iceburg. The Jewish corruption roots are too deep in Russia. They have stolen in trillions.

    • Assad must stay (gr8rambino)

      I’d sure like to see an end to it!!!

      • seawolf

        There is no end, just think of this basic rule of capitalism, ” every time money change hands creates income”

  • Xoli Xoli

    Putin buy face Livrov play gentleman.Russian army sells s-500,Su57 and Kinzal secret to Pompeo and Bolton, France,Germany and Britain. Bravo sleeping ignorant Putin.

    • AM Hants

      Can you translate that?

      • HardHawk

        that to do requires brains he dont have. Dont make to him difficult questions he only write what is on the yellow notes they supply him with.

        • Xoli Xoli

          I wish you can help me as you are very clever.

          • FlorianGeyer

            You are beyond help and redemption.

          • Xoli Xoli

            No wonder Jihadists like you run in fire arms thinking your Allah will save you.Let me correct you stop thanking Narrow minded.Where did USA got S-300 system which their are using in USA for testing and training.Who shows new weapons systems of Russia during commemoration day and how it work.Who is selling Indians Russian weapons systems and who trained them how it work and need to service. Were did Israel gain experience to attack S-300 systems. Who’s terrorist are testing S-400 in Syria and who provides them with advanced drones.Dont blame one side and protect another side.Be impartial.Who suggested de-escalation zone.USANato is threatening Venezuela and Iran is there de-escalation zones and green bases.

          • FlorianGeyer

            The S300 systems that the US has are about 30 years old I think. The Israeli S300 is nearly as old and was supplied to Greece. Both were export Versions that have been extensively modernised since then.

            What type of phone or PC, or even a car, were you using back then , and what do you use today:)

          • Xoli Xoli

            USA supreme agent and judge of fake news congratulation bloody paedophil = islamic rapefugee.

          • Xoli Xoli

            Really your opinions are like fake news.I thought that you are the most brilliant and clever guy.While people are suffering both Russian and USA officials sits around the same table and ate together.Jerusalem has been declared Israel capital.Golan Heights were given to Israel.Guiado were made illegal President. Criticism were made no solutions.Business as usual.

          • FlorianGeyer

            If Russia had eschewed diplomacy as the US has done, we would all be enduring a nuclear winter now.

            Diplomacy is the art of balance on a tripwire of deception that is continually kicked by those who have a base mind and the morals of a rat.

          • Xoli Xoli

            USA has used nuclear weapons in Iraq and Libya so what.Your excused permit USA to do what it wants.If only 10000 USA or Israelis dies then their will stop recklessness. What to you think was the purpose to built nuclear weapons.Simply just to kill.Wither with you or without Russia soon nuclear war will break out.It will be cause by the leader of God chosen people.

          • HardHawk

            it is easy think before you write and be correctly informed as to what you say. Unless of course you working base on an agenda. In that case none can help you. As for the clever remark …….. you just too slow and you repeat yourself in every post so it looks as the others are clever compared to your monotonous posts.

          • Xoli Xoli

            All Russian tactical weapons have USANato neutralized weapons systems.The questioned remains were are USA getting acxact infor to built counter measured defense weapons.

        • AM Hants

          Well said. Poor love (the previous commenter, not you).

      • Xoli Xoli

        Russian weapons manufacturers are very corrupt. Their sell all clandestine information of hi tech weaponry to USA NATO for few us dollars.All USA NATO weapons from shape to standards are built on Russian weapons principles.Emergin for years USA was struggling to master hypersonic missiles. But all of sudden their started mass manufacturing after raiding Russian embassy and Venezuela embassies.

        • Sinbad2

          If that was the case, why are American weapons so inferior?
          The US is not mass producing hypersonic weapons, they have had a few tests, which they say worked, but they are probably lying.

        • AM Hants

          LOL. I know BAE, over in the UK, where I come from, were found guilty of bribing for contracts.
          Then you have the fact that the US defence budget is $717 and rising, owing to middle man costs.
          Russia is $47 billion and decreasing, owing to leaving the middle man out.

          Corruption, is a human fault and can be found in all countries going, sadly.

      • FlorianGeyer

        I translated it.
        He wrote ‘ The Khazar narrative of the day is just the usual Anti Putin Bollox ‘.

        I researched that in Kikepedia.

        • AM Hants

          Brilliant, thanks Florian. They follow the mantra, devotedly. Guess it must be the Bill Gates, medication, they take at the start of the day.

    • Gary Sellars

      dafuq are you saying? idiot…

      • Xoli Xoli

        Be neutral if you want to see progress of friend and distruction of enemy.If Russia wants it can stop Syrian war in weeks.But secret agreements delay this.

  • daniel

    The top of this culture are the oligarch, They are many and every one of them has rubbed Russia people for billions and billions,up to trillions and today they are clean(?!) and share the power in Russia,

  • Sinbad2

    Normally these criminals would face extradition spend years in prison and the money would be recovered.
    However the US and Israel protects these criminals from the law.
    It’s a difficult problem, the only real solution is to ban Jews from positions of power, but that would have all sorts of negative political repercussions.
    Sadly Russia will have to wait until the US and Israel can no longer flaunt the law.

  • Assad must stay (gr8rambino)

    If only this also happened to US/izrahell…lol

  • James

    I’m wondering if this is to do with the value’s system the Elite has passed down and it has been the rare exceptions, such as Putin’s ilk, that have steered Russia back on course recently. If so, that would explain all the blatant corruption and really should come as no surprise.

    I do remember something written a while back about how younger, better people are quickly rising through the ranks, and hopefully we see a lot less of this in the future despite how frustrating it is now.

    Can these traitors be tracked down and their ‘justice’ served on the spot? I would like to think so!