By David Grant - With President Vladimir Putin effectively solidifying another 6 years of unopposed power, it is important to look at how the Kremlin's disregard for fairness and democracy has affected the behavior of Russian enterprise. Many companies, perhaps following an example set by governance, frequently engage in corrupt practices unabatedly, both at home and abroad. State aggression in Ukraine, compounded by alleged interference with U.S. elections and the Brexit referendum has emboldened Russian businesses to expand eastward, particularly in to the Baltics. Additionally, the interaction of Russian-backed “private” companies with contracts in the United States has also been affected. Lithuanian Railways’ shady business dealings with Transmashholding, a Russian rail manufacturer, was uncovered in late 2016 by local news media channel 15min. The report indicated that the Lithuanian company skirted public acquisition regulations to give preferential contracts to the Russian subsidiary, TMHB. A special investigation is still underway, working to uncover the depths of what has been referred to as a 'corruption-syndicate'. In Latvia, the arrest of Ugis Magonis, the head of Latvian Railways, was preceded by an intense police chase along the Tallinn-Riga Highway, brought to an abrupt end by an opportune construction project. Among the possessions seized at the scene were a briefcase with over 500,000 Euros in cash. Authorities later announced that the money was purportedly a bribe in exchange for a preferential contract to acquire locomotives from Skinest, valued at 8 million. The investigation later implicated Tallinn’s pro-Kremlin Mayor, Edgar Savisaar. Russian cargo airline Volga-Dnepr was recently blacklisted for service as enacted by the U.S. Pentagon, for undisclosed reasons. Of course, Volga-Dnepr was known to the United States government for three precedents: having the ability to transport oversized cargo, spending over $1m USD in bribes in acquiring U.N. contracts, and infamously handing to former National Security Advisor Michael Flynn $11,000. USTRANSCOM, the United States Transportation Command classified the cargo airliner as “Unsuitable for Use” as of 2015. While official documents are heavily redacted, a strong implication of the report is that the decision stemmed from a scandal in September of 2015, when Volga-Dnepr was one of 23 companies hit by sanctions for allegedly violating treaties. The 23 companies were accused of “spreading missile technologies.” Ever-boldening power grabs have shown Oligarchs and business magnates that they are near-untouchable for as long as their interests align with those of the ruling Party. It is also abundantly clear that State resources are being spent to further increase influence abroad. The Kremlin has no qualms with breaking the rules if it means preferential treatment for domestic companies. The Russian Kleptocracy has finally gorged itself on local business and is now looking outward, hungry for new markets to pilfer.
BY admin May 07, 2018, 14:13 PM
TAGS: Kemlin, Kleptocracy, Lithuanian Railways, Michael Flynn, Volga Dnepr
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