Corrupt Clans Lead Siberian Regions to Ruin
Published: September 11, 2013 (Issue # 1777)
I took an active part in the elections held in two beautiful republics of Siberia: Tyva and Khakasia. They offered a clear example of the dysfunctional political and economic system that has developed during President Vladimir Putin’s rule, as well as the chaotic way in which it is disintegrating before our eyes.
First, that system could be called a “businessocracy.” In both Tyva and Khakasia, career businessmen hold office and use their authority to enrich themselves, their families and their close friends.
Tyva is led by the ruling Kara-ool family’s three brothers: Sholban, Leonid and Yury. Leonid Kara-ool recently served a prison term for drug trafficking, the local media implicated Yury in illegal seizures of businesses and Sholban, as the Moscow-appointed head of government, controls not only a large number of businesses, but also the republic’s budget. A gas station belonging to Sholban Kara-ool’s wife stands at the entrance to the Tyva capital, Kyzyl, and all state employees are required to fill their tanks there. The sale of alcohol is forbidden during evening hours in Kyzyl, but Sholban Kara-ool-owned shops sell vodka around the clock. The Kaa-Khemsky coal mine has a monopoly on supplying Tyva with coal but went bankrupt in 2009 and was sold to entities owned by billionaire Oleg Deripaska. The local opposition press reports that Kara-ool and Defense Minister Sergei Shoigu both own shares in the enterprise.
Local officials also make big money on state contracts. For example, over the past 10 years the cost of building a single kilometer of road in Tyva has risen from 1 million rubles ($30,000) to 100 million rubles ($3,000,000). The leadership of Kyzyl, with close ties to the Kara-ool brothers, is also actively engaged in business. They distribute state money to hand-picked businesses and occasionally seize control of other people’s firms. These dealings are often reported by Risk, the republic’s only opposition newspaper.
There is a similar system of government in the neighboring republic of Khakasia. The regional government is headed by Viktor Zimin who, like Kara-ool, was appointed by Moscow. Zimin was a businessman before coming to power. Both he and Kara-ool are united by their long friendship with Shoigu — a Tyva native — and a mutual love of horses, hunting and fishing.
The local press has linked Viktor Zimin to an automobile business and a coal mine. His wife, Tatyana Zimina, owns Prommetall, a business that was charged in 2009 with exporting expensive, high-grade steel from the Sayano-Shushenskaya hydroelectric power plant after the disastrous explosion there and listing it as cheap scrap iron in an attempt to export it to China. Criminal charges were filed in the case, but were later mysteriously dropped.
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