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. Last Updated: 07/27/2016

Yeltsin Re-Targets Corruption

President Boris Yeltsin declared yet another war on political corruption Thursday, pledging to free government purchases to open bidding and have officials make public their incomes and property holdings.


Although Yeltsin has called for crackdowns before, with little effect, economists expressed approval, saying the measures were overdue.


"I appeal to leaders at every level. Today, as never before, it is necessary to carefully select personnel, to expel officials who have not lived up to expectations," Yeltsin said in a radio address.


From the local traffic cops to the highest rungs of government and business, endemic corruption is one of the few aspects of life to have made a smooth transition from the Soviet era to present-day Russia.


Aware of citizens' continuing distrust of politicians and their unhappiness with the country's chaotic condition, Yeltsin, 66, has made the war on corruption a key element of his political comeback after spending seven months isolated with heart and lung ailments.


In his state-of-the-nation address March 6, Yeltsin's first speech since being re-elected last July, he promised to crack down on politicians -- most of them his own appointees -- who had "grown fat" in his absence.


"Corruption is one of the chief reasons why authority in the Russian state is low today," Yeltsin said Thursday. "This is preventing us from bringing order to the country and threatens the very security of Russia."


Yeltsin's radio address comes two days after he signed a new anti-graft decree. He promised to require that all government purchases be made through a process of open bidding effective May 1, and to abolish customs and tax privileges that "allow officials and entrepreneurs to enter into collusion."


The anti-graft offensive will be led by youthful reformers, Yeltsin said, referring to two recent Cabinet appointees -- first deputy prime ministers Anatoly Chubais, 42, and Boris Nemtsov, 37.


Nemtsov is scheduled to chair a government session this weekend to work out the details of a decree on open bidding.


The president also said he has requested that a code of political ethics be drawn up by Nov. 1 that would, among other things, require public servants and their families to disclose their earnings and assets.


Government figures, including Prime Minister Viktor Chernomyrdin, the former head of natural gas giant Gazprom, have long been suspected by Russians of being far more wealthy than their tax records show.


"I will carry this difficult struggle to the end," Yeltsin said. "People will be afraid to steal and take bribes."


Observers welcomed Yeltsin's message, but cautioned that similar offensives have been launched in Russia before, but to little avail.


"It's about time," said Peter Ekman, a professor of finance at Moscow State University, referring to Yeltsin's pledge to make government purchases undergo competitive bidding.


"But it's not going to work until they fire a few people," Ekman added.


Economists said if the decree goes through as planned, Western firms used to competitive bidding should come out the big winners, claiming a larger share of contracts in fields like construction and high technology.


Some Russian politicians warn, however, that freeing all spheres of business to open bidding may lead to economic ruin for local industries.


Alexei Arbatov, deputy head of the State Duma defense committee and member of the liberal Yabloko faction, said open bidding would save money for the cash-strapped armed forces.


"Should this happen in the military's civilian sphere, there would be less corruption and expenses would be reduced."


But Arbatov said more specialized military technologies should be protected from outside competition in order maintain Russia's defense capabilities.


"Other countries do this too," Arbatov said.


Analysts do not predict a smooth transition to a system of open contracts. One Western diplomat said he expects the most important deals to still be made behind closed doors for some time to come.


Another diplomat disagreed, seeing the announcement as an honest attempt to change the way government does business.


"Anything that can tighten spending controls is an important part of Russia's overall fiscal policy," said Lawrence Broyd, an economist with the British Embassy. "Making the economy more transparent is good for Russia. It must be seen as a welcome step."