* Financial police needed to fight illegal capital flight -
* Anti-corruption battle plagued by turf wars, police graft
By Jason Bush
MOSCOW, Feb 21 Russia needs to create a
specialised financial police force to combat illegal capital
flight and monitor state spending, Alexander Bastrykin, the
country's top investigator, said on Thursday.
Bastrykin, the head of Russia's Investigative Committee,
appeared to be responding to concerns raised by the central bank
over illegal schemes to siphon tens of billions of dollars out
of the country each year.
"A range of measures has been worked out to decriminalise
the Russian economy and oppose the illegal export of capital
abroad," Bastrykin said at a meeting of Committee officials,
linking the creation of a financial police to these measures.
His comments, reported by Russian news agencies, came a day
after the head of the central bank, Sergei Ignatyev, said that
$49 billion was illegally transferred out of Russia last year.
More than half of that sum was shifted out of the country by
"one well-organised group", Ignatyev told the Vedomosti daily in
an interview, also published on the central bank's web site,
The claim has highlighted the rampant scale of corruption in
Russia under President Vladimir Putin, raising embarrassing
questions about law enforcers' effectiveness. Russia has several
agencies responsible for investigating financial crimes.
Both the Ministry of the Interior, which controls the
police, and the Federal Security Service, the successor to the
KGB, have economic security departments tasked with fighting
fraud and corruption.
In addition, most ministries and state companies have
internal security and oversight divisions that are tasked with
Bastrykin said that this system of internal control was
ineffective, referring to recent scandals at the Defence
Ministry that have cast a spotlight on high-level government
Last year, losses from corruption in the armed forces
amounted to 7.5 billion roubles ($248 million), the
Investigative Committee's top military investigator told RIA
news agency on Thursday - two-and-a-half times more than in
Bastrykin's proposal to create a single financial police
force is likely to run into resistance from the existing
agencies as they jealously guard their powers.
For example, Bastrykin's Investigative Committee is
frequently at loggerheads with the Interior Ministry. The two
agencies have recently clashed in public over the investigation
into Defence Ministry corruption.
An additional complicating factor may be widespread
corruption within the law enforcement agencies themselves.
Russian investigators have frequently been accused of
complicity in financial crimes - including ones that they are
In one of the highest-profile cases, London-based investment
fund Hermitage Capital Management accused Interior Ministry and
FSB officials of complicity in the theft of its subsidiaries and
$230 million in budget funds - a charge Russia denies.
Bastrykin told the Rossiyskaya Gazeta newspaper in 2009 that
state officials were "in almost all cases" involved in thefts of
companies, including police who "frequently" steal corporate
documents and accept bribes to open criminal cases.
An opinion poll by the Levada Centre last year showed that
83 percent of Russians regard corruption of the law enforcement
agencies as a serious problem, compared with 11 percent who