An interview with independent Duma member Vladimir Ryzhkov

Independent lawmaker Vladimir Ryzhkov discusses the federal budget for 2007, legislation concerning the gaming industry, the proposal that mayors of major cities should be appointed rather than elected, and the corruption scandal at the Federal Compulsory Medical Insurance Fund.

The Duma majority would probably prefer the autumn session of parliament to be calmer and less attention-grabbing – but that isn’t happening. The bill on the gaming industry, very nearly passed, had to be re-edited to fit in with the spirit of the times. An unsuccessful attempt to bring local government under control was condemned by European representatives. A corruption scandal broke out at the Federal Compulsory Medical Insurance Fund, whose budget is approved by parliament. There’s only one piece of good news: the federal budget process has run like clockwork, and the budget for 2007 was passed by November 24. Independent lawmaker Vladimir Ryzhkov discusses the tranquil budget process and the Duma’s troubles.

Question: The Duma has been remarkably calm this year in the process of passing the federal budget. Is this because the budget is really good, or does the reason lie elsewhere?

Vladimir Ryzhkov: The main reason is that the parliament’s approval of the budget has become a formality. In the 1990s, lawmakers had the power to make changes worth hundreds of millions of rubles – but these days the budget is passed practically unchanged, exactly as we receive it from the government. The Duma has simply been superseded.

Question: In November, the Duma passed legislation that brings back confinement to the watch-house as a penalty within the Russian Armed Forces. Is this good or bad?

Vladimir Ryzhkov: I spoke out against that law, presenting the opinion of the Committee of Soldiers’ Mothers. In fact, the question of whether it’s good or bad will depend on what military commanders do. If watch-houses are not turned into “torture-chambers,” there is a grain of sense in using this practice. At present, soldiers who commit offenses are often simply beaten up.

Question: In the wake of a direct instruction from President Putin, everyone expected that the Duma would rapidly pass legislation establishing four special zones for the gaming industry. Yet that bill wasn’t passed in its first reading until the end of November. Why the delay?

Vladimir Ryzhkov: It’s due to intense resistance from the gaming industry itself. Gambling is a very wealthy business sector – comparable to oil and electricity. Even President Putin, when he met with United Russia leaders, had to call on them to be firm about passing this legislation. The gaming industry is lobbying for a ten-year transition period.

It’s also lobbying to postpone the establishment of the first gaming zone, since once that is done, all other gambling venues would have to close down. In principle, at least one zone should be established by July 1, 2007. But the decision on where and when this is done will be made by the government, not the Duma, and I think it will be easier for the gaming industry to defend its interests there. After all, the Duma operates publicly – the government does not.

Question: A bill submitted to the Duma recently proposed that the mayors of major cities should be appointed rather than elected.

Vladimir Ryzhkov: It proposes that the mayors of all regional capitals should be appointed – not only Moscow and St. Petersburg, but all regional capital cities, home to a third of Russia’s population. In effect, this means that the bill’s authors – members of the United Russia faction – are seeking to pass another unconstitutional law. The Constitution states that local government bodies are not part of the federal and regional administration system. Such legislation would also contravene the European Local Government Charter, which Russia has ratified.

Question: Why does this bill exist at all?

Vladimir Ryzhkov: Because regional leaders ususally have conflicts with the mayors of their regional capitals. But disagreements aren’t necessarily destructive. Disputes between regional leaders and mayors of regional capitals end in compromises that work to the benefit of regional capital residents, and especially residents of towns and rural districts. This is nothing to fear. But this bill’s authors propose that all regional capitals should be divided into districts. Each district would have its own mayor and its own legislature. And all of them would be supervised by an official who is appointed by the regional leader. There would be no overall municipal legislature. Actually, the authors of this bill are inviting us to repeat Margaret Thatcher’s least successful experiment. At one point, she tried to divide London into 50 or 60 parts – so that each part would have its own leader. And this idea was prompted by her conflict with the mayor of London. This practice has long been abandoned. But we’re setting out to repeat the same mistake. And there’s another section to this bill, which isn’t being challenged as yet. In effect, it means that regional leaders will be empowered to take land, money, and powers away from municipal governments. That’s a very dangerous principle.

Question: Do you have any comments on the recent arrests at the Federal Compulsory Medical Insurance Fund (FFOMS)?

Vladimir Ryzhkov: This is probably the first major anti-corruption process since the late 1980s. The FFOMS budget for 2007 is over 100 billion rubles, of which around 60 billion rubles should be spent on medications for people whose medical benefits status entitles them to receive medications at a discount. As far back as when the law on monetizing benefits was passed, people were pointing out that the FFOMS system is highly corrupt.

Let me explain. The government approves a benefits list of discount medications. Some are produced by several pharmaceutical companies – same ingredients, different names. A government official has to decide which of these identical products is included on the list. This offers an opportunity for bribery. The drugs are then delivered to the retail pharmacies network via intermediary companies – with their profits also set by a government official, offering further opportunities for fraud. In short, rumor has it that some of the intermediary companies are affiliated with Healthcare Minister Mikhail Zurabov himself. Next point: the whole country already knows that medications on the benefits list are more expensive than medications not on the benefits list. And that’s how huge sums are being pumped out of the budget. So the arrests and revelations are right and proper.

But two questions remain unanswered. First: Taranov, the arrested FFOMS director, is Healthcare Minister Zurabov’s personal friend and business partner. So how is it possible to arrest Taranov while acting as if Zurabov never suspected a thing?

Second: why did this corruption scandal break out in November? That’s when there was supposed to be a tender for distributor companies seeking to supply drugs to the retail pharmacies network. This leads to the suspicion that all these dramatic revelations are actually just a reflection of one business group being replaced by another. For example, some say that Zurabov’s Moscow-based group will be replaced by a St. Peterburg group linked to the security and law enforcement agencies, which will do exactly the same things, but its activities will not be regarded as criminal.