Medvedev's Corruption Scissors

The landscape of government relations in Russia is changing drastically. This is happening along with the whole business environment of this country, which is trying to adjust itself to the new severe conditions of the global economic downshift. However, it is quite interesting to observe the sharp change in lobbying practices which, set up in the 1990s, have not been significantly influenced by any economic turbulence until last year.

In the 1990s, lobbying in Russia was somewhat simple and naive. I remember seeing a letter signed by the speaker of the State Duma addressing some state body and lobbying a license for a minor hemp rope-producing plant. We all knew how this kind of letter was possible, and everyone in the government relations industry had a handy price list for almost every state authority service or document.

Things only started to change recently, and the crisis will make these changes something close to a government relations revolution. This will happen for two reasons: first, companies no longer prepared to spend big money on government relations, and second, the state officials are quite reluctant to let themselves be pressed by the new anti-corruption measures introduced in Medvedev's plan.

Both reasons are quite important. Companies demand a more civilized means of lobbying from their in-house government relations teams and outsource advisors. The latter can still be paid a small retainer (though the majority of my colleagues have had these replaced by success fees), but they are not given "opex" (operational expenditure) money any longer, for sorting out the problems with the authorities. Instead of just bringing a piece of paper to a state servant for a signature along with a gift in the other hand, they now have to sit down and prove that this is what the country needs. Without budgets, the army of lower level, corrupt state officials will have to restructure their understanding of how to deal with the business community. This is exactly what companies could not do before: to join together and refuse to pay bureaucrats. The crisis has given them such an opportunity.

The straightening out of the state policies will also contribute. It is now not all that easy to get a signature from a State Duma deputy: he will, in most cases, require an approval from his parliament faction, and to go there he will need a strong substantial ground behind the paper he is going to sign. He will need to re-estimate the recent anti-corruption laws and the risks any violation can result into. So, he can't go for a small budget any longer. And the company is not ready to offer more. Aren't these the "corruption scissors" of Medvedev?

Thus, the substance of what the officials are requested to do is starting to prevail over the financial side of lobbying. This process will definitely take a long time to create a new system of government relations. The lobbying law, which has been widely discussed, can fix the new situation, but to create it, only the business and the authorities themselves can, by a mutual agreement that the 1990s have passed in Russia.

I remember a case that happened to me about six years ago in one of the Russian regions. An industrial group was lobbying for a new plant construction in a distant district, and finally the regional government's approval was received. We faxed the paper together with an official letter to the district's head of administration. In about one hour, we got our fax back, with the only two words inscribed on top of it: "Gde ya?" -- "Where am I?"

We didn't understand it, but a local official to whom we turned for advice got it from the first glance: "The head of administration asks what his share in the project is."

I am sure: this story is the past now, it won't happen again.