Yakunin Will Report For All

July 24, 2013
The government has made an exception for “Russian Railways”: the monopoly’s president Vladimir Yakunin is the only manager of a large state-owned company, who will report on his expenses.

Vladimir Yakunin, the head of Russian Railways, has been accused by opposition leader Alexei Navalny of spending more money than he makes each year. Now, the government has approved a list of organizations whose managers will report their income and major expenses. Of the major state-owned companies only Russian Railways is on that list. – Ed.

The government has approved a list of organizations whose managers will report their income and major expenses. Of the major state-owned companies only Russian Railways is on that list.

Prime Minister Dmitry Medvedev approved a list of 29 state-owned companies, corporations and government-established organizations, the heads of which are required to report their income, just like all civil servants. Medvedev announced this today at a regular meeting with his deputies.

Since 2010, civil servants and heads of state corporations had to report only their income. Effective this year, the Anti-Corruption Law requires them to declare major expenses as well if a purchase amount exceeds the total income received by managers and their spouses over a three year period. The requirement has been expanded to cover “organizations created to meet the objectives set for the government.” A list of these organizations was approved by the Prime Minister.

Officials incomes are still a secret (Russian)

Of the major state-owned companies only Russian Railways ended up on that list. In addition to that monopoly, the list includes Olimpstroy, the Housing and Utilities Fund; Rosatom, the Agency for Strategic Initiatives; leading universities and research institutes. The requirement to disclose information applies to the entities’ managers, and their deputies and chief accountants, who are required to submit information about their income and major expenses to the Department of Civil Service and Government Personnel on an annual basis. The same data on their spouses and underaged children should be disclosed.

The requirement applies only to those managers who are appointed by government order, explains the Prime Minister’s press secretary Natalia Timakova. According to the Federal Government official, when Russian Railways was set up, the charter of the company stated that its president shall be appointed by the government. As to the rest of the state-owned companies, such as Gazprom, Transneft, or Rosneft, no formal orders have been issued by the government. “There are guidelines for board members to vote for a particular candidate, but it is not a legal requirement,” she says.

Presidential spokesman Dmitry Peskov did not comment on the possibility of expanding the list in the future. He briefly stated that the decision has made by the government and it has been made.

In 2012, Russian Railways paid the members of the Board 2.5 billion roubels. This is 40% more than in 2011, while the net profit for the same period decreased by 54% (to 78 billion roubles). Members of the Board received a much bigger share of the net profit than the members of the Board of Gazprom: 1.8% vs 0.17%. In this respect, Rosneft is the leader among state-owned companies: 2.6%.

Who else lives in the community where “Yakunin’s country house” is located (Russian)

For the last two years Yakunin has been submitting information on his income to the Tax Inspectorate and the Ministry of Transportation, said a Russian Railways official. “In a case of a requirement to submit information on major expenses to the competent authorities, there shouldn’t be a problem.” The representative of the monopoly declined to comment further. An official of one of the federal agencies called the decision “half-hearted.” “They promised to seriously strengthen control over management of state companies,” and the only large company on that list is Russian Railways. This restriction in terms of who has to report their expenditures is difficult to explain, agrees Vladimir Yuzhakov, Director of the Institute of Modernization of Public and Municipal Administration. “The list should be expanded.”

It follows from the decree, signed by Medvedev, that employees of state companies and public entities must report their income starting in 2014, even though by law they can do it starting this year. Information on income and major expenses of the managers of the organizations included in that list will be published, a representative of the Labor Ministry promises. However, so far the Ministry of Labor is the only government agency that has published information on its employees expenses. The Central Bank followed suit. Other departments declared that their employees had not incurred any major expenses.

Interviewed by Vedomosti, representatives of state-owned companies and government agencies, included in the government’s list, promised to publish all the necessary information. “We will do what is required by the legislation,” said a representative of the Olimpstroy.

It was also argued in discussing that idea that the expenditure threshold is set too high, and it should be eventually lowered, Yuzhakov reminded. Now it’s time to do it. Experience has shown that with such parameters it is easy to evade any disclosure requirement, especially if an official or an employee of a state-owned company earns high income, said Yuzhakov.