February 7, 2009
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Home / Issue Archive / 2009 / January - December #1 / Editor's Letter

№ 1 (January - December 2009)

Editor's Letter

A Chicagoan in Russia Offers a Perspective on Bribery and Corruption Illinois-Style

I was talking to a guy from Texas the other day who wants to sell oilfield equipment to Russian companies. “It’s hard to work in Russia,” he said. Why? “They want bribes here and we’re a U.S. company. We can’t bribe. It’s against the law.” Since I had wanted him to sign an advertising contract, I sighed: “That is true,” I said. “Maybe you should try Nigeria?”
U.S. companies have long complained that the U.S. Foreign Corrupt Practices Act puts them at a disadvantage to European and Asian companies in competing for contracts abroad. Understand I’m not by any means defending bribery here but I must say that the news in early December from my native town of Chicago – as seen on Russian television across 11 Russian speaking time zones was ironic to say the least.
Regardless of your religious views, there’s not a soul on earth who is unfamiliar with the Bible quote: “He who is without sin shall cast the first stone?” (If you don’t know it, I’m sure you’ve got the equivalent in whatever moral code you acknowledge. So read on …)
Stunned by what I was seeing on Russia’s RBK television channel in Moscow, I quickly telephoned the guy in Texas. I told him: “If you want to practice your Russian business development skills without even getting a passport, catch the next flight to Chicago and take a train 180 miles south to Springfield, the state capital.” The State of Illinois has another governor who has been charged criminally in a bribery scandal! I then went to the Internet. The Washington Post was quoting The Los Angeles Times to the effect that five of the 10 Illinois governors who have run the state over the last 50 years have at some point in their lives been arrested on criminal charges. Three were convicted and one acquitted. (I knew that since I’m a native Illinoisan but after the first conviction, who’s counting?) No. 5 is Illinois’ current governor Rod Blagojevich who has just been arrested by the FBI.
Charges against Blagojevich, as Russian television pointed out (and websites of all U.S. major media detailed graphically to anyone who reads English), include – among other things – an alleged attempt to sell the U.S. Senate seat vacated by President Elect Barrack Obama. Under Illinois law, the governor has to appoint someone to finish Obama’s term. But, the problem was the way in which Blagojevich was assessing the candidates.
Blagojevich is of Serbian heritage. His father, like my Polish father (the Szymczak in my name) worked in the steel mills in Chicago. I understand him. He worked crazy jobs in pizza cafes to pay for university. I did too, like a lot of ethnic kids growing up in the late 1960s and early 1970s in Chicago. Like any kid that grew up poor, he wants to make it big. His luck was he married the daughter of a Chicago alderman (Russian translation: a city duma deputy).
I don’t know if the Illinois governor knows Russian language, but if he did, the FBI – which wire tapped his telephone – would have heard such phrases as “dengi na bochku” (put the money on the table) or maybe “dengi utrom, stuliya vecherom” (money in the morning, chairs (seats) delivered in the evening). After all, a “stul” is a “seat” as in that Senate seat.
I asked native Russian speakers on the Oil&Gas Eurasia staff and got other suggestions such as  “podogreyet” (heat up the deal), from a former resident of Baku,  and, from our Ukrainian staffer,  “podmazat” (apply grease).
Now wait a minute! How can Azerbaijan and Ukraine “podogreyet” and “podmazat”? U.S. companies are encouraged to do business there and the last thing a U.S. company can do is “podogreyet” or “podmazat”. These countries even want to join NATO! If you grease it and heat it up you’ll get burned!
OK, back to the news. When the scandal broke, The Washington Post quoted a 2006 article by The Chicago Sun-Times which noted that since 1972, 79 current or former Illinois, Cook County (the larger administrative area within which Chicago is located), and Chicago were found guilty of a crime. Remember, the article cited is now almost three years old. So the number could now be higher.
And then shock of all shocks, RBK television in Moscow started to flash a picture of the Michigan Avenue headquarters building of my old employer, The Chicago Tribune. (There’s a fragment of  Kremlin brick cemented into the side of that majestic skyscraper, brought back to Chicago by a former Tribune correspondent.) Horrors! Illinois governor Blagojevich allegedly tried to pressure that venerable media institution into firing journalists critical of the governor. If The Tribune didn’t “play ball” with the governor, the corporation owning the newspaper would have trouble getting the government approvals it would need to sell the Chicago Cubs baseball team, so the FBI allegations say.
Come on – I’m an American. This only happens in Russia! But unfortunately human nature is human nature. And to borrow from Judeo-Christian literature again, the Seven Deadly Sins cause us all to stumble no matter what. OK, so if you’ve got a hang up about the Big Three – Christian, Jewish or Muslim, surely you’ve heard, “power (and money corrupts) and absolutely power corrupts absolutely.” Nationality and language doesn’t matter.
What’s this all got to do with oil and gas and doing business in Russia, other than the fact that oil happens to be greasy wherever in the world it is found?
The Moscow Times recently published a survey by the anti-corruption organization, Transparency International. The survey asked 2,742 executives from 26 countries where they would most likely be asked for a bribe to secure business, and where they would be least likely to be asked. Russia came in first on the bribe-taker side, followed by China, Mexico, India and Brazil in that order. Notice we have here the BRIC countries plus Texas’ nearest neighbor, Mexico. And keep in mind that economists preach that “it will be upon this BRIC that a new world economy will be built” (BRIC, brick, rock, get it Peter?)
So if China comes in as a close No. 2 after Russia on the nefarious top five list, how come I’ve never heard a guy from Texas complain that he’s afraid to sell his oilfield equipment to the Chinese? No, in fact they usually go to China first, open a plant and then sell the equipment to Russia. Don’t tell me that Americans doing business in China are never asked to “podogreyet” or “podmazat.” Or are they too politically correct in admiring the intricate beauty of the character that expresses this in Mandarin?
The five cleanest countries when it comes to chances of being asked for a bribe? Transparency International says they are: Belgium, Canada, The Netherlands, Switzerland and Germany. The United States comes in 9th on the list which is quite good actually. Growing up Roman Catholic, I’d say that Illinois politics excluded, we’re probably in the venial sin category. (And remember most of us Chicago natives of East European descent grew up Catholic!) As the nuns in school taught me, if you die in the state of venial sin, God forgives you automatically and you go to heaven. Die in a state of mortal sin and it’s a one-way trip to hell if you haven’t had time first to talk to a priest.
By the way, I might have steered my prospective client in Texas a bit wrong. That Washington Post article which talked about Illinois corruption, actually said that Illinois was in good company with the states of New Jersey and Louisiana. I won’t get into the details of their sins. I’m from Illinois and I live in Russia and so I certainly can’t throw stones. However, if I can catch that Texas-base equipment manufacturer before he boards the airplane to Chicago, I can save him money. He can drive to Louisiana and perfect his Russian business skills in the state next door. Louisiana is, as anyone will tell you, a mere “stone’s throw away” from Texas.
Amen brother!

A Word About our Cover – The Year of the Ox
Chinese New Year symbolism is very popular in Russia. Every year the shops in the days before New Year are filled with little statues, stuff toys, etc. that end up being exchanged as corporate gifts or just little tokens of appreciation among friends. 2009 is the Chinese Year of the Ox. If you don’t know what an ox is exactly, look it up in the dictionary Р it is a Castrated Bull! No lie! I’ve always thought that God had a sense of humor but this is one is the best! Late in 2008, we came to a very dramatic end to the longest running Bull Market in history; an upward trend that the world’s bourses thought would never end. How deep the world will fall into recession in 2009 is anyone’s guess. And for Russia, how its economy performs in 2009 will depend a lot on oil prices and the level of growth or lack thereof in demand. And we wish all our readers, friends and advertisers a healthy and happy 2009! I’m told by Russian friends to wear yellow when meeting the New Year (this ox is yellow); don’t wear red (this ox still thinks it’s a bull) and don’t eat beef! (If you can afford to buy it.)

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