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Feature Story January 27, 2006
 
Freaky Bribenomics
Why Are American Politicians So Cheap? By Jake Rudnitsky Browse author Email
 
 

Abramoff has created the biggest scandal in Congress in a generation. But nobody's asking the obvious question: why were the stakes so low?

When Jack Abramoff slumped in federal court at the beginning of the year and begged forgiveness, claiming "tremendous sadness and regret for my conduct," it was hard to feel sorry for him. Of all the people who are going to get taken down in the scandal swirling around him, he's the only one who seemed to enjoy the ride while it lasted. He spent the last decade jetting around on a private plane, golfing with the men who rule the world, owning casinos, bilking "troglodytes" out of millions. It sure beat producing films like Red Scorpion 2, which is what he did before he became Washington's star lobbyist.

It's the Congressmen - the DeLays, Neys, and Doolittles -0 who are really feeling tremendous sadness and regret. They're the ones who were ruling the world until a couple of weeks ago, only to watch their empires go up in smoke: all for little more than a few free meals no pricier than Starlite Diner, and some cash to run a campaign.

* * *

A lot has changed in the States over the last few weeks. Thanks to a hyperactive American media, which has regained its swagger ever since Katrina blew into town, revelations about the Jack Abramoff scandal keep piling up. It has already destroyed several Republican bigwigs' careers and, as it continues to grow, has now gotten folks talking seriously about regime change. Even a magazine like Time, which until recently was little more than People magazine for politics, has been publishing scoop after scoop, most recently about the damning photos showing Bush and Abramoff giving each other the equivalent of noogies in the Oval Office. While it's fun to watch the Republicans squirm a bit, one thing is apparent for those of us who live in Russia: it's making Americans look bad. The reason is simple: American politicians prove that they can be bought for a song compared to their Russian counterparts, in spite of the fact that the US economy is about 5000 times larger.

While Abramoff and his cohort Michael Scanlon have nothing to be ashamed of, thanks to their Abramovich-esque lavish spending habits, the amounts that the politicians were bought with are downright laughable. The highest netting congressman was Arizona's J.D. Hayworth, who came away with just $101,000 for his war chest: and now he's got to give it all back, meaning it was little more than an interest-free loan. More typical were the pols who netted somewhere in the mid-30s, including reps from NY, Michigan and Ohio. Now all that money - totaling about $4.5 million - is making its way to neutral charities. Bush, for example, picked the American Heart Association.

What else do they have to show for it? The memory of watching the Redskins or the Wizards endure another losing season from Abramoff's skyboxes? A few nice meals at one of his fancy-pants restaurants or, for DeLay, Abramoff's favorite, a weekend golf trip to Scotland? Golfing in Scotland! Can you imagine a Russian politician agreeing to so much as show up for a cup of coffee if the payoff is a shitty golfing trip to a rain-soaked dump! It begs the question, what's the point of being corrupt if it doesn't make your life much better?

Compare, for a moment, Republicans' woeful attempt at abusing power with another corrupt politician currently in the headlines: Leonid Reiman, Russia's IT and telecommunications minister. The Wall Street Journal wrote him up about a week ago after they got an insider close to Reiman to admit that he's worth about a billion dollars. Without getting bogged down in the details, the Journal talked to a director of a Bermuda-based holding that controls over a billion dollars in Russian telecom assets who said the fund's board had determined that "the point has come when it can no longer maintain" that Reiman isn't one of the owners. Other docs dug up by the Journal said he was the "ultimate beneficial owner of IPOC," the company in question. In other words, after years of denial, his people have finally admitted that he controls a billion dollars in assets. The Journal article concludes that Reiman, who is a close friend of Putin's going back to his St. Petersburg days, illegally amassed this huge sum and then concealed his stake through a series of laundering activities throughout Europe.

Ironically, because of different standards of enforcement in Russia and the US, Reiman hasn't resigned yet, and doesn't look like he's about to. Instead, he's issued a few half-hearted denials and mentioned that he might sue the Journal for libel. But whether he's made accountable for his shady dealings is beside the point. Unlike the Republicans currently getting nailed in Washington, Reiman at least had enough imagination to take as much as he could get his hands on. One billion - it sounds like a nice round number to our ears. If you're going to abuse power, why not get something out of it?

Some might argue there's a difference between Reiman's outright thieving and whatever the House's Republicans are guilty of. They're right - at least Reiman was looking out for himself. It's better than Ohio Rep. Bob Ney, who's been singled out for providing "official acts and influence" in exchange for some party favors, meals and campaign contributions. He was helping Abramoff for no good reason at all.

Besides, when Americans are guilty of taking bribes outright, they still settle for small potatoes. It's a national trait. Take Randy "Duke" Cunningham, San Diego's dyslexic congressional rep who was nailed last summer in a separate scandal. While there's not much good you can say about this hardliner anti-drug, pro-war fascist, at least he had the sense to line his pockets and get laid before he got busted. Thing is, he didn't really take all that much.

Cunningham used his position as a Vietnam vet to get himself on the House Appropriations Committee, where he bullied the Pentagon into buying military hardware they didn't want or need from his friends. In return, he was lent a yacht in Washington's Potomac River where he liked to entertain ladies under the light of a lava lamp. No joke: a couple of his ex-lovers have gone on record about the lava lamp. A right-wing ex-Marine!

Duke is, to date, the only pol to actually resign from office from all these corruption scandals, and he's got a good chance of getting locked up after his sentencing in February. And what'd he risk that for? He got caught taking about $2.4 million in bribes since 1990. That's it - $2.4 million over a 15 year period, plus use of that lava-lounge yacht. Com'on folks! We're talking monkey change here, a little more than $100,000 a year.

And it's not like he didn't deserve more; he supplied his buddies with defense contracts worth $10s of millions. But it's part of an American tradition to let the bribe givers get away on the cheap. It finely mirrors the lopsided wealth division in the rest of society. Amazingly, people are calling Duke the most corrupt American pol ever. And they might be right. Hell, he's a veritable Ferdinand Marcos compared to the paltry sums other congressmen are getting pilloried for in the Abramoff scandal.

In fact, when you start looking at corruption in America, there's a recurring theme: the corrupt folks take risks for laughable sums. Remember the Abscam scandal that brought down a senator and five House reps? When Representative Richard Kelly got caught on tape stuffing money given to him by agents posing as Middle Eastern businessmen, it was all for: $25,000.

Famous American spies gave the Soviets invaluable secrets for pennies. And it's not like these guys were doing it for ideological reasons; that at least would have explained their generosity. Unfortunately, it turns out they just lacked the vision to ask for more. Robert Hanssen spent two decades snitching on his colleagues at the FBI for a grand total of: $600,000! CIA spook Aldrich Ames fared slightly better, pocketing $2.5 million over 10 years. But again, over ten years, amortized and counting for inflation, that ain't much. As it was, he only ever managed to buy a slightly bigger house than he could've afforded otherwise, and lease a slightly nicer car. Even George Jefferson did better than that. But considering that this was money from the Russians, who have shown themselves more than willing to throw ridiculous quantities of money around, he could have pocketed much more.

After all, these are the same Russians who forked over a million bucks during the last Olympics for a gold metal in figure skating. That's right: a single judge in a single ice skating event earned, in one day, half of what the most corrupt American pol, and the worst American spy, earned over a decade.

Compare this to a genuinely impressive man in the world of corruption, Zhirinovsky. His ribald exploits are all there in Paul Volcher's UN report on the Oil for Food scandal. Part of what makes it such interesting reading is that it's not only the Russians who are implicated in it. While the Russians received about 30 percent of oil shipped by Iraq, the French made a killing too. And, while we're on the subject of old Europe, even the Germans seem to have less compunction about taking bribes than Americans, as witnessed by Gerhard Schroeder's willingness to take a million euros a year to stump for a Gazprom-led pipeline that he signed into being while still Chancellor.

But I digress. The Oil-for-Food scandal leads straight to the heart of Russian politics, and corruption here: the KPRF and Zhirinovsky's LDPR. These bribes were about as straight-forward as you can get: Iraq gave these parties extremely cheap oil in exchange for them agitating against sanctions and, ultimately, against the US-led war: as if having the LDPR in your corner's going to help. The only twist was that some of the money was kicked back to the Iraqis through deliveries of cash to the Iraqi embassy in Moscow (remember, they weren't allowed to sell their oil for cash), which was then transferred to Baghdad via sealed diplomatic pouches.

According to the report, which reprints a quaint letter from Zyuganov talking about "friendship of the peoples" and begging the Iraqis not to turn off the spigot, the Communists were allocated over 125 million barrels of oil, of which they skimmed - if that's the right word - almost 107 million barrels. Zhirinovsky was allocated 73 million barrels and, with the help of companies such as TNK and Sidanco, lifted 62 million barrels, earning about $9 million.

As an aside, documents point to the fact that Aleksandr Voloshin, at the time Putin's Chief of Staff, lifted almost 4 million barrels. However, Voloshin denies ever receiving any oil and, the signature on the docs obtained don't look anything like his. He wuz robbed! This was a case where a Russian stamp could have made a difference, and saved Voloshin's rep.

The money that the LDPR earned just on the oil-for-food program, coincidentally, was about the same that Abramoff charged the president of Gabon to meet with Bush - or $9 million. Could this mean there's a set price for foreign states to use bribes to influence policy? No; Bush's campaign only netted a mere $100,000 from Abramoff in donations, but Bush met the Gabonese prez anyway. So Abramoff is worth $9 mil, but Bush is only worth 100k. Oh, the shame!

Again and again, Abramoff comes across as the only likeable character in this charade. After all, he's the guy ripping everyone off, like a modern-day Osip Bender. And while he was paying out cents on the dollar, he still managed to blow through the millions he was raking. In 2003, for example, he fired off an email to Scanlon reading, "Mike!!! I need the money TODAY! I AM BOUNCING CHECKS!!!" Easy come, easy go: it's almost like he knew the ride couldn't last forever.

But it doesn't have to be like that. After you cross a certain threshold of corruption, like Chubais did, corruption starts working in your favor. Chubais has been caught with his hand in the cookie jar more times than you can count, like when Potanin's Oneximbank gave him $100,000 for a book deal to insure that they'd win an auction for Svyazinvest in 1997; or Smolnesky's $3 million interest-free loan that he offered Chubais in return for "winning" the AgroPromBank tender. By the time Chubais pulled off his biggest coup, when he squeezed the IMF for a final $4 billion, he was ready to be made an oligarch himself as the CEO of UES. Now, he regularly makes it on lists of the world's 50 most respected business leaders. All it takes is chutzpah. Don't be shy about it, that's the lesson.

And that's what American pols are lacking. Even minor players in Russia manage to pull in some serious corruption money. In an October sting operation, the FSB nailed a Central Bank official who teamed up with a Federal Tax Service official trying to extort a $5.3 million bribe. This crime - and figure - was so routine that it didn't even warrant front page coverage. The pair was nabbed while collecting the initial $1 million payment, made by a bank hoping to avoid a spurious $53 million tax claim. So one middling official netted nearly three times as much as America's most corrupt politician. When the FSB raided the home and office of the Federal Tax Service official involved, they found over a million bucks in three suitcases, no doubt from other bribes he'd gotten away with. Meaning for every scandal uncovered, hundreds never reach daylight - unless you mean daylight in Aruba.

According to a recent Indem think-tank survey, Russians pay about $316 billion in bribes a year, which is almost 2.7 times the federal budget! Even if this is an exaggeration, a range of voices from Transparency International to cab drivers say corruption is on the rise on all levels of society. But look on the bright side - at least these are zero-sum bribes that don't influence state policy!

The real question is, why do Russians earn so much more in bribes than Americans? Is it because of Russia's bad character, or America's? There are plenty of arguments both ways. After all, Chubais has been nailed at various points, as has former Kremlin property manager Pavel Borodin of Mabetex fame. In spite of the millions in bribes they've been busted for, they're still in positions of authority and prestige. So you could argue that accountability checks American corruption. (But then you could argue: Dick Cheney. Period.)

Maybe being cheap is just in Americans' blood. Just read the "Buy/Sell" section of the expat.ru site. Western businessmen scrounging around to save $5 on a used DVD player. Or listen to our clients: they've become less and less interested in attracting Western customers to bars and restaurants because Westerners "are too cheap" compared to Russians.

But cheapness is only a symptom of something else. The real culprit is fear. Fear that dominates American life. Politicians, even when they know they're acting unethically, are just too cowardly to cash in big when they're cashing in. If they were worried about getting caught, they wouldn't take bribes. But since they take bribes, what they're clearly worried about is taking too much. It's the American Way: no joy in anything, even in sinning. It doesn't help 'em get off any easier, but who knows. Maybe it helps 'em sleep at night.

Great Bribes in History!

Rank

Name

Date

Bribe

Recipient

Service Supplied

1.

IMF, World Bank

'92-'98

$40 billion

Yeltsin's Family

Kept Russia out of the hands of the Commies, acquiescent to American expansionism

2.

Loans for Shares

'95-'96

$1.2 billion

Yeltsin's government

Oligarchs gained control of $25 billion in return for ensuring Yeltsin won the 1996 presidential elections

19.

Oil for Food

'97-'02

$10s of millions

Zhirinovsky, Zuganov, Russian Presidential, Council

Got Iraq a voice on the UN Security Council

45.

Kasyanov's dacha

'03

$27 million

Misha 2 Percent

Rewarded himself for promoting interests of certain oligarchs

53.

Mabetex

'99

$22.4 million

Pavel Borodin

Swiss construction firm awarded $335 million in contracts to remont the Kremlin

164.

Nuclear disarmament

'01

$9 million

Yevgeny Adamov

Russia disassembled some warheads, keeping them out of terrorists' hands

221.

Balchung handoff

'05

$5.3 million

Oleg Alexeyev and Alexei Mishin

Dismissed a $53 million back tax charge for a major bank

436.

Smolensky's interest-free loan

'97

$3 million

Anatoly Chubais

Smolensky won auction for Russia's second largest bank AgPromBank

635.

Gazprom post

'05

1 million euros a year

Gerhard Schroeder

Gazprom got a Western pol on its side

11062.

Khalyava at Australian Open

'02

four block ad worth $300

Mark Ames

Expats flocked to rancid restaurant after a glowing review in the eXile

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