Under Special Supervision: Corruption Scandal in Russia’s Refineries

It was only recently that a series of corruption scandals have been revealed in the supervisory institution of Russia’s refinery industry. An investigation led to the deputy head of Rostekhnadzor; interestingly, she is a friend of Rosneft CEO Igor Sechin. It is another example of his huge influence in the Russian oil and gas sector; in addition, it constitutes a blatant manifestation of a high-level corruption in this industry.

SOURCE: GAZPROM-NEFT.RU

The scandals broke our in one of Russia’s most powerful control and surveillance institutions, namely the Federal Service for Ecological, Technological and Nuclear Supervision (Rostekhnadzor). In May, Russian officers detained the head of the North-West Rostekhnadzor Grigory Slabikov. During the search, the operatives found 1.5 billion roubles in cash. The investigation is underway; the FSB officers arrested also the daughter of the official, Yelena Slabikova. She was accused of accepting bribes. In April, the investigators detained the Chief of Rostekhnadzor’s Volga Region, Igor Isayev. Before having been released, he had signed a special commitment that he would not leave the country. Even though, he fled Russia; as a result, he is wanted by the state’s officials. He was also convicted of corruption offenses. In addition, Isayev allegedly maintained intimate relations with the main character of the text. She is believed to be responsible for all corrupt practices in the oil industry. At the beginning of July, the Russian Prime Minister dismissed the head of the Federal Service for Supervision of Use of Natural Resources (Rosprirodnadzor). His position may be assumed by the hitherto deputy head of Rostekhnadzor, Svetlana Radionova. She is associated with Igor Sechin. Radionova has been working in Rostekhnadzor since 2009. Thanks to her practice in the prosector’s office (she dealt with the Yukos issue), she quickly came to high-rank position in the supervisory insitution. For years, she has been closely associated with Anton Ustinov, former adviser to Deputy Prime Minister Igor Sechin and President Vladimir Putin. Ustinov has been recently appointed chief executive of Sogaz insurance company.

Rostekhnadzor is in charge of issuing licences for oil refineries. Nonetheless, many of companies had to buy themselves out during these controls. In order to “resume” their activities, each enterprise was expected to pay an amount ranging from 50 to 250 million roubles, depending on its production volume. Radionova was to receive bribes by intermediaries. Large amounts of many were transferred as “fees” for experts’ artificially high pricing. Extortion money had to be paid mostly by small refineries. Since the time Radionova was appointed deputy head of Rostekhnadzor, about 60 percent of institution’s regional heads have been dismissed. Radionova’s corrupt practices had to be accepted by higher authorities, including Anton Ustinov. He also belongs to a group of people loyal to Igor Sechin. He is currently holding the position of the head of Sogaz; the Gazprom-controlled entity is the main insurance company in Russia.

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