Bribe to Illegally Seize A Firm Put at $30,000

Need to ensnare a senior executive of a rival company in a criminal investigation? Be prepared to fork over $30,000 to an official. Tack on another $35,000 if you want a court to rule in your favor.

These are just some of the estimated fees that so-called raiders pay corrupt officials to help them illegally seize businesses, according to a new report on how to battle such seizures.

Based on interviews with more than 100 businessmen and lawyers in Russia, the report, released last week by the National Anti-corruption Committee and the Phoenix Group, gives the going market rates for giving a veneer of legality to criminal raiders, whom President Dmitry Medvedev has described as the "shame" of the country.

It costs $5,000 to obtain copies of a company's real estate documents — acquiring prime real estate is often raiders' key aim — while altering a company's charter to replace the CEO or founders costs around $10,000, according to the report. Securing a delay of court proceedings also costs $10,000, but getting a court to close a criminal investigation costs $50,000.

The report gives only the minimal rates, while the prices can run higher depending on the size of the company's assets, said Kirill Kabanov, head of the National Anti-corruption Committee.

"Usually it costs raiders no more than 40 to 45 percent of this amount to seize the company" Kabanov said, adding that the report "demonstrates that corruption plays a key role in the raiding phenomenon in Russia," Kabanov said.

Since taking office, Medvedev has ordered the introduction of anti-corruption measures to protect small and medium-size businesses, and at the end of June, Kremlin chief of staff Sergei Naryshkin submitted a plan for tackling the problem to the president.

Despite early measures in the anti-corruption campaign, raiders appear to be continuing their criminal activities undisturbed, especially in the regions, where businesses are more at the mercy of the local authorities than in Moscow.

Yelena Panfilova, head of the Russia office of Transparency International and a co-author of the report, said her organization decided to collaborate on the project because the government had been separating the fight against corruption from the battle against raiding.

"Fighting raiding is impossible without fighting corruption"' Panfilova said.

The report proposes an amendment to the Criminal Code defining "raiding" as a separate statute. Criminal investigations of suspected raiders are complicated by the fact that the crime intersects with several various statutes, including extortion and fraud, Panfilova said.

"It's difficult adequately punish raiders under the current law," she said.