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Medvedev orders corruption investigation into Putin's Sochi Olympics

Russia President Dmitry Medvedev has ordered an investigation into allegations that a top Kremlin official took huge bribes in connection with the 2014 Sochi Olympics. Analysts are unsure whether it's a sincere crackdown.

By Correspondent / July 29, 2010

Russia's President Dmitry Medvedev chairs a session of the National Projects Council in Moscow's Kremlin, July 29. Medvedev has ordered an investigation into allegations that a top Kremlin official took huge bribes in connection with the 2014 Winter Olympics in Sochi.

Denis Sinyakov/Reuters

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Moscow

In an apparent bid to dramatize his flagging anticorruption drive, Russian President Dmitry Medvedev has taken the unusual step of ordering an investigation into allegations that a top Kremlin official took huge bribes in connection with the troubled 2014 Winter Olympics in Sochi.

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To drive home his point, Mr. Medvedev jotted down his order on a copy of an article from the crusading opposition newspaper Novaya Gazeta, which published details of the scandal in June.

The Novaya Gazeta story focuses on Vladimir Leshchevsky, deputy of construction in the Kremlin's Office of Presidential Affairs – a vast empire that owns about $500 billion worth of former Soviet Communist Party property. It alleges that he took about $5.7 million in kickbacks from the Moskonversprom consortium of construction companies in connection with the renovation of two Kremlin-owned Sochi area sanitoriums.

"To really fight corruption he would have to fire [Prime Minister Vladimir] Putin, who is at the center of the Sochi Olympic scandal, but that's not going to happen," says Boris Nemtsov, a former deputy prime minister and a leader of the liberal opposition who ran unsuccessfully for mayor of Sochi in polls last year that some criticized as Kremlin-manipulated. "So he orders an investigation of Leshchevsky, a nobody. It's just a PR action."

Neither the Office of Presidential Affairs nor Moskoversprom were returning phone calls Thursday. But the English-language Moscow Times reported that Mr. Leshchevsky, who is on vacation, has denied all the allegations.

'System of barefaced deception'

Moskonversprom's director, Valery Morozov, went to the press with the allegations after being squeezed out of the deal despite paying the alleged bribes.

Novaya Gazeta, the only Russian newspaper that would touch his story, quoted Mr. Morozov as saying that he funneled the cash, worth about 12 percent of the contracts, to Leshchevsky through various shell companies.

Morozov said that he learned in January that his company was being deprived of the construction contract. His main complaint appeared not to be that Leshchevsky took his money but that he failed to deliver the goods. That's a telling comment on the endemic nature of corruption in Russia, where many businesses include a line item in their budgets for keeping officials happy.

"It is a system of barefaced deception," Morozov said in June before fleeing to the UK. "A bribe is understood as a normal corruption tax, but they do not earn the money. They just go on deceiving people and companies."

Since Medvedev's election more than two years ago, Russia-watchers have been debating whether he is under the thumb of his powerful predecessor, Putin, or really trying to assert his constitutional prerogatives as president. Public opinion polls have consistently shown that about two-thirds of Russians believe that Putin is really in charge.

Medvedev takes baby steps

But some experts say Medvedev has made headway in his anticorruption drive: the increased scrutiny of officialdom has caused the price of bribes to accelerate. Russia's Interior Ministry, which controls the police, announced this week that the average bribe in cases it investigates has grown tenfold in the past two years and doubled in the past six months alone to about $1,500.

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