Russian leader Vladimir Putin is furious that rich Russian depositors in Cyprus banks will be forced to take a haircut as part of the European Union’s bank bailout deal with Cyprus. Some reports say that as much as 40% of deposits in Cyprus banks come from Russians; depositors with over $130,000 in their accounts may lose up to 40% of their money.
But Putin’s hypocrisy is so great it begs for a new term to describe it, a term that means chutzpah to the nth degree.
Much of that Russian cash is believed to be “hot” money which Russians park in Cyprus banks because the taxes are low and the money becomes untraceable. Back in Russia, Putin has yet to attack the stupendous corruption and diversion of public funds that undercuts Russia’s economy and future. Bloomberg Businessweek reported that a big chunk of the $270 million defrauded from Hermitage Capital – a theft whose exposure by the brave Sergei Magnitsky led to his arrest and death in prison – can be traced to Cyprus.
But Putin’s umbrage is even harder to take in a week where Russian anti-corruption activist Aleksei Navalny is about to be tried on trumped up charges that could send him to jail.
I interviewed Navalny, a 30ish blogger and leader of Moscow’s middle-class opposition to Vladimir Putin’s autocracy, in Moscow in March. He described how he trolls through documents leaked by disgruntled bureaucrats in order to reveal the mafia-like criminal behavior of the regime.
Navalny’s pursuit of corruption has been fearless, even accusing Alexander Bastrykin, the head of Russia’s FBI-style Investigative Committee and a Putin buddy, of criminal property violations. But the regime has struck back, leveling ludicrous corruption charges against Navalny and his brother, a common tactic to silence dissidents.
Now Navalny will be tried on charges of embezzlement, just as Magnitsky was accused – after his death – of stealing the funds whose theft he revealed. Magnitsky died in prison, after being beaten and denied medical treatment. Who knows what awaits Navalny for having the courage to challenge criminality at the highest levels?
Instead of railing about Cyprus, Putin should go after the embezzlers who use the island to launder Russian rubles. But in today’s Russia, embezzlers go free while anti-corruption crusaders face prison or worse.