COLUMN ONE : Graft: A Game All Russia Plays : With the country resembling a Monopoly board where the choice property is up for grabs, nearly everyone will cheat to win. Corruption takes on virulent new forms.

By CAREY GOLDBERG

July 10, 1992 12 AM PT

TIMES STAFF WRITER

MOSCOW — Police arrested Moscow lawmaker Alexander Bykovsky last month in a compromising position--just as he was allegedly accepting 1 million rubles in payola to prolong a land lease.

Muscovites were astonished at Bykovsky’s price, more than most people here can expect to earn in a lifetime, though it amounts to only $7,000 at current rates.

But the crime itself raised not an eyebrow: Tales of uncontrolled greed in government have become all too common here.

Bykovsky’s reported payoff paled next to the shady earnings pulled in by the governor of Russia’s northern Pskov region on millions of rubles in oil he sold under the table. Then there was the Russian tax inspectors’ ring that took in thousands of dollars for looking the other way; the bank officials booked for taking bribes in exchange for credit approval, and the police detectives who accepted hush money to stop a bribery investigation.

And those are only the ones who were caught.

Corruption, a centuries-old tradition in Russia, is reaching unprecedented levels here and taking on virulent new forms, according to police, politicians and the press.

Bribery and graft thrived under the czars and flourished in the waning years of communism. But now, with the onset of government programs to sell off state-owned factories, land and buildings, the stakes are higher than ever, and the prolonged chaos of both Russia’s legal system and its economy provide ideal conditions for slipping crooked deals through.

“I think our country has become the most corrupt in the world,” said Russian legislator Pyotr Filippov, who oversees the Parliament’s work on privatization. “Everyone knows a window of opportunity has opened, and now they have to grab everything they can.”

With Russia’s government intent on moving from socialism to a more Western-style economy by privatizing billions upon billions of dollars’ worth of state property, the country resembles the beginning of a Monopoly game, when all kinds of choice property is about to go up for grabs--and the players, seeing the chance of a lifetime, are willing to cheat to win.

Chief State Inspector Yuri Boldyrev, the top corruption fighter in President Boris N. Yeltsin’s administration, describes Russian corruption as “going beyond the limits of the imagination.”

Far from being limited to high officials, corruption here begins with the most mundane details of everyday life--from the traffic police, who generally prefer pocketing a bribe to writing out a ticket, to the professors happy to pass any student in exchange for a bottle or two.

Gas station attendants often claim there is no fuel unless paid double or triple the state-set price; airline clerks have a hard time finding available seats unless given a little something on the side; butchers hide away the decent cuts of meat for customers who pay the best personal premiums.

This kind of everyday cheating was common under the Communists. But it was expected to die out as a free-market system took hold. Instead, during this transition period, garden-variety corruption is growing as a means of survival in a tough new economy, said Tatyana Zaslavskaya, Russia’s best-known sociologist.

Even watering down drinks and thumb-on-the-scale weighing at produce markets are on the rise.

“As prices go up, people need to feed their families somehow,” she said. “People who work in the service sector need to earn money, so, logically, they start demanding more bribes.”

Corruption among sales clerks and tax collectors leads to depressing assessments of Russia’s moral fiber, such as film director Stanislav Govorukhin’s lament that Russia has become “a nation of thieves.” But it is higher-level corruption that poses the real menace, threatening to subvert Russia’s economic reforms--or at least block them long enough for a few choice fortunes to be made.

Yuri Shchekochikhin, a top investigative journalist for the weekly Literaturnaya Gazeta, said he has the impression that Moscow and much of the country are now being ruled by people who hold on to power “not for the sake of power itself but in order to defend their material interests.”

In a damning expose of the Moscow government, Shchekochikhin documented the amazingly widespread practice among Moscow officials, right up to the mayor, of also working for private companies--companies that often need an official favor or two--in clear conflicts of interest that “would be a major scandal anywhere else in the world.”

“On the shoulders of the democrats came the Mafia,” he said.

Konstantin Borovoy, a prominent businessman who has declared his own public fight against corruption, told a recent news conference that Russian bureaucrats and politicians “have created the mechanism for their own unlimited enrichment and a level of protectionism possible only in feudal states.”

This kind of corruption, Shchekochikhin said, penetrates all the way to the top--not, perhaps, to Yeltsin and his Cabinet of reform economists, who have never been publicly accused of dirty dealings, but to mayors and governors and ministers.

Anatoly Trofimov, head of the Security Ministry’s anti-corruption division, provided a classic portrait of an official on the take with his description of the case against a highly placed St. Petersburg bureaucrat, arrested along with Mayor Anatoly Sobchak’s chief of staff.

The bureaucrat and the mayoral aide “systematically extorted bribes, including in hard currency, in exchange for resolving questions on privatization and real estate,” Trofimov said. “They obtained profitable trips abroad, had their relatives fictitiously put on the payrolls of businesses and themselves were the co-founders of several businesses.”

Bykovsky, a district-level Moscow lawmaker, was accused of accepting a total of $120,000--besides the million-ruble bribe he was caught taking--for using his influence to prolong a lease; a deputy mayor in another district was caught last month taking $3,500 in a similar case.

The new head of the Arbat district was killed recently in what police believe was a corruption-related crime. Several Russian regional officials have also been caught and fired in recent months.

When Shchekochikhin privately complained recently to a top Russian leader that networks of self-serving officials were getting out of hand, the man answered: “I know. I have the impression that they think we’re the temporary government and they’re the permanent one. We’ll be brought down, and they’ll stay.”

Aware of the problem, Yeltsin issued an anti-corruption decree in April, barring officials from engaging in business and requiring them to declare their income and assets. But, thus far, the decree remains largely on paper, with no mechanism to enforce it, acknowledged Boldyrev of Yeltsin’s Control Directorate. The problem, he said, is that corruption is tough to prove.

One of the more mind-boggling examples of apparent corruption that the Russian government discussed this spring involved the Agriculture Ministry’s import-export division. In 38 of its 110 deals in 1991, the division bought goods at twice the normal world price, producing massive end-of-year losses. Only a system of kickbacks, officials believe, could explain such absurdly unprofitable deals.

Other examples of Boldyrev’s catches include a regional governor who sold cut-rate government cars to his cronies, instead of to the farmers who had been promised them, and the Pskov chief who claimed he needed special permission to sell oil at high prices to Estonia to buy food for his poor province. “They never saw a single loaf of bread,” Boldyrev said.

Boldyrev is working on ways to catch such officials, even in the absence of proof of bribery. But even now, he said, he finds little support from the lawmakers and business people who profit from corruption even while publicly condemning it. Legislators could enact tough new laws, but “whose interest would it serve?” Boldyrev asked cynically.

And business people, he added, tell him: “You’re right. We’re behind you. But today I have the opportunity to pay a bribe of 3 million rubles (about $21,000) and get a 300% profit. If I didn’t give the bribe, I wouldn’t get the profit. It’s against my interest to close that loophole. Let’s do it in a year or so.”

But while lawmakers balk at limiting their own powers and police complain of poor funding and staffing, choice chunks of Moscow real estate are being quietly sold off outside the government privatization program. Valuable natural resources filter out of the country without government approval. And factory directors amass personal wealth by selling goods at low state prices to their own private firms, then reselling them at market prices for a vast profit.

Victor Kuzin, an anti-corruption crusader in the Moscow City Council, estimated that corruption is an industry amounting to hundreds of billions of dollars, money that could go to fix Russia’s crying social needs. If bribes went into state coffers instead of private pockets, “we could meet our budget three or four times over,” he said.

Instead, the Russian people see government insiders growing rich, and new post-Communist regimes are gradually discredited. Even Boldyrev, a respected former activist and deputy, noted with a hint of bitterness: “In 1989, we were all equally poor. Now, some of the ‘revolutionaries’ are millionaires.”

The new politicians themselves are largely to blame for their tarnished reputations, with reform-minded economists like former Moscow Mayor Gavriil Popov arguing publicly that although bribery is not good, at least it moves deals along and loosens the old state stranglehold on the economy.

The Yeltsin government has allowed itself to be caught in a dangerous new ideology that virtually condones corruption, Boldyrev said. “There’s a persistent liberal idea that going from totalitarianism to capitalism can only be done through this wild accumulation of capital,” he said. “The problem is, you can get stuck in that stage for a long time. Look at Latin America. There’s no guarantee you’ll ever get out of it.”

Meantime, things have gotten so bad that Andrei Dunayev, the deputy interior minister, warned recently that corruption could reach the point that “the government loses its capacity for controlling itself, which is dangerous because people’s survival depends on it.”

With a system this seriously ill, said Filippov of the Russian Parliament, “You need radical measures to cure it.”

He proposes trying to reduce bureaucrats’ power--the power that allows them to demand bribes --by making many procedures less dependent on official approval and more automatic. For instance, businesses should be able to register themselves by mail, he said, with their legal existence beginning from the moment they send off a letter announcing it. He and other corruption-fighters also argue for beefed-up staffs for police as well as improved training for tax inspectors and prosecutors and looser laws on eavesdropping and hidden cameras.

But Boldyrev, Popov and others all admit that until this chaotic stage of the Russian economy shakes itself out, nothing can really stop corruption.

In fact, it can be expected to get worse as privatization programs move into full swing this year and next.

With hundreds, perhaps thousands of prime Moscow buildings and lots already sold by special dispensation, one Russian official joked that Muscovites could wake up one fine day and find that the Kremlin has been sold out from under them.

“The feeling is that it’s pointless to struggle,” Shchekochikhin wrote. “It’s already hopeless. And that was the saddest feeling I got from the investigation.”

Under the Table, Russian Style

Bribes vary widely and evidence about them is largely anecdotal. But here is an approximation of just how much Russians have been known to pay under the table and to whom. Foreigners generally have to pay more, and in hard currency: Traffic policeman, to ignore a violation: $1 to $5 Gas station attendant, for a fill-up: 75 rubles a gallon--about 53 cents--instead of state price of about 40 rubles Local council official, to be allowed to buy land for a country house outside Moscow: 100,000 rubles--about $700--per quarter-acre Moscow official, to be allowed to buy 2 1/2 acres of commercial-zoned land in Moscow suburbs: 1 million rubles--about $7,000 City official, to be allotted prime office space in central Moscow: tens of millions of rubles, although officials generally prefer a percentage of the firm rather than cash Government regulatory officials, to push through all the paperwork needed to create and register a new business: tens of thousands of rubles or hundreds of dollars Surgeon, to ensure a careful operation: from a bottle of cognac to thousands of rubles Cemetery manager, to get a gravestone without waiting for months: 1,000 rubles--about $7