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. Last Updated: 07/27/2016

Karpov Risks Own Freedom To Collect Tax

The deputy director of the Federal Bankruptcy Department, Pytr Karpov, recently returned to Moscow after being released from a Saratov prison, although he still awaits trial.

He was arrested three months ago on charges of taking a bribe of 5 million rubles ($917) from the deputy director of the Saratov refrigerator factory. Karpov allegedly promised to declare the factory bankrupt in exchange for the bribe.

As the investigation shows, however, Karpov couldn't have declared the factory bankrupt even if he had wanted to. At the moment of his ill-fated visit to Saratov, the refrigerator factory was already a stock company, and the bankruptcy department's powers do not extend to companies in which the government's share is less than 25 percent.

The most likely reason for the quick isolation of Karpov was his speech on the so-called treasury tax bonds before the government commission on non-payment of taxes. These certificates, which are vouchers that can be used to pay taxes, were issued to oil companies last year to compensate for the debts they incurred from supplying fuel to agriculture, the armed forces and other budget consumers.

The Finance Ministry's tax vouchers soon became difficult to control. The oil industry, which was the budget's largest source of income, stopped paying taxes altogether. Moreover, empty certificates were flowing back into the budget, which could not be used to pay wages and pensions. The oil companies' vouchers, which made their way into the hands of other taxpayers, were widely misused and soon became an extremely profitable business.

When Karpov left the prison, he said he personally knew a man who during a one-month operation with the tax vouchers made $8 million. This summer, more than half the tax receipts into the budget were in the form of these very vouchers.

It is not difficult to imagine the wide interests that Karpov had touched on when he asked the government commission who was benefiting from the vouchers. He was arrested exactly two days after publicly speaking before the government.

Karpov says that while in prison, he was asked to provide compromising material on high officials. His cell-mates were told that he was an aide to the presidential chief of staff Anatoly Chubais. They were apparently told this so that they would treat him like a man who had helped Chubais "rob the people." But no class hatred either toward Chubais or his "aide" was aroused.

Those who put Karpov away in Saratov nonetheless turned out to be extremely powerful. According to Karpov, not even representatives from the Federal Security Service could speak with him while he was in prison. The Interior Ministry guarded him like their most prized catch.

Karpov managed to send out two letters all the same. One of them was addressed to Alexander Lebed, who was still secretary of the Security Council, and the other to Chubais.

Karpov is planning to resume his duties this week. His boss, the general director of the bankruptcy department, Pyotr Mostovoi, confirmed that Karpov still has all his powers. Karpov is getting ready to continue doing what he was severely punished for. That is to say, he will continue fighting to stem money from leaking out of the budget. As his own experience shows, however, those who try to collect taxes do so, at the very least, at some risk to their personal freedom.

Mikhail Berger is economics editor for Izvestia.