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. Last Updated: 07/27/2016

Luzhkov: No Corruption in Moscow

Boris Yeltsin may say that corruption is an illness affecting all realms of Russian society, but Moscow's mayor said Wednesday that city officials are completely free of the disease. "Absurd!" the mayor retorted when asked about frequent complaints that Moscow's bureaucrats demand bribes to issue licenses and routine permissions. The mayor painted his rosy picture of Moscow's economic landscape in a speech at a luncheon sponsored by the American Chamber of Commerce. During his remarks, Luzhkov also chided Americans for their hesitation to invest in the capital. "America and its businesses are still taking a very cautious view of the Russian market," he said. "The market for consumer products, services, tourism and other fields is virtually bottomless," Luzhkov added. Many foreign and Russian businesspeople strongly disagree, and say that low and middle level officials drag out simple procedures in search of money on the side. Even officials in the mayor's press office have requested money to provide ordinary decrees and statements. "It's the biggest bull ever," said William Serbin, a Russian-born American businessman, referring to Luzhkov's remarks. "It's commonplace knowledge that you have to pay money if you want something done quickly." On Friday, Yeltsin said he had instructed Prime Minister Viktor Chernomyrdin to purge the government of its many corrupt mid-level bureaucrats. But at the same press conference, Yeltsin said he had given Luzhkov authority to manage the city's privatization separately from the federal program. The decision gives Luzhkov more authority over the local economy than any other city official in the country. Luzhkov said European and other foreign firms were seizing some of the capital's best investment opportunities. Among the hot tickets Luzhkov cited was the City Center, a proposed business center, and a massive local beer factory. "Again, Americans are noticeably absent from the project," he said, referring to the Prince Rurik beer factory. He cited a few U.S. companies as examples of success, including Pepsi, Philip Morris and Coca Cola, which he said is adding a third shift to its Moscow plant because of the success of its soft drinks in the Russian market. During his remarks, Luzhkov said that Russia's voucher privatization program spearheaded by minister Anatoly Chubais had produced meager results. "Vouchers are definitely a flop," he said, referring to the program which ends July 1st. "The people's privatization, conducted by democrat Chubais, realized by the worst Communist principles, has failed dismally." As Moscow takes command of its privatization program in the post-voucher period, Moscow will sell its assets for full-market price, Luzhkov said.Chubais' privatization program sold property for "virtually nothing," he said. Luzhkov also charged that thanks to low property prices during the early stages of privatization, criminal organizations had expanded their influence, which makes caution the watchword for the future. "Chubais asks us 'why don't you privatize the produce markets?'" Luzhkov said. "It's very difficult to find the Mafia groups working around those markets when the city owns these markets. It would be completely out of hand if they owned it."