This is the key: it is exactly how Russian business has worked for some time. Doing business there over many years the hardest thing has always been to understand exactly who is the real owner. A long time ago I learned that the real owner had little to do with what you read on title deeds etc., and that ownership was often held by a crony to help out Mr. Big. This is one cause of the various business ‘disputes’ that can’t be resolved in court. Also, wasn’t there something about a Gazprom trading company that was registered to 2 bomzhiki in a village in Romania a few years ago? This is how it works.

There was a stage a few years ago when people started to go legit – remember Yukos publishing its full ownership structure online? – but then after Khordokovsky went down most went running for the shadows.

It doesn’t seem so unlikely to me that he ‘owns’ these shareholdings, that the value of them now is far larger than when he first obtained them 5 – 10 years ago (given the asset price boom), and that “yes” they are held in just the opaque manner this implies. I’d be willing to bet he has always taken advantage of all the usual perks of any high level Russian bureaucrat (property abroad, elite foreign schooling for the kids, etc.), just he got lucky and now does it at the mega level of President.

However, based on this way of working, the exact %ages are impossible to know, so the published number is probably rubbish, so I wouldn’t pay much attention to the headline of 40bln.

In the US it probably happens a bit more often than that, but the point (for me) is that one can easily get by without getting involved in it. I found this very liberating after living in places where you could not lead a normal life without unwillingly involving yourself in petty corruption–bribing traffic cops to not get a ticket for a violation you did not commit, giving a “gift” to a bureaucrat to ensure that documents you need from them don’t languish in limbo or somehow get lost, and so on.

Some Americans often respond to such statements by saying that there is indeed plenty of corruption in the US. Yes, there may be too much corruption in the US (any corruption is too much, isn’t it?), but it simply does not compare to how pervasive it is (at all levels of society) in many other countries.

Man I wish I lived in Iowa. In my entire 25 years of life in the US, I was never offered free food or goodies by a politician. Must not have been in the right demographic.

Not true. Right now, the average person in Iowa encounters plenty of ‘corruption in real life’, being personally courted by dozens of Presidential hopefuls, lavished upon with little gifts like free DVDs and such, free food, free kids care centers on election day and so on.

Come to think of it, Russians might benefit from such ‘corruption’, with higher-ups trying to curry favor with regular folks. Unfortunately they mostly encounter the reverse kind.

It is also true that many practices in the US and Western countries more generally have been legalized and systematized and so are no longer considered corruption (financing of political campaigns in return for favorable legislation, pork politics, etc.), even though effectively they are.

Perhaps from the world perspective such politicians are rare, but in certain countries such politicians are not rare at all. As to human beings, once again it depends on the country, but I don’t think such individuals are as rare as you imply.

In any event, when people ask me why, despite all my criticism, I like to live in the US, I often reply that it is because it is easy to be honest here. It is not too hard to live a comfortable life while staying honest and not involving oneself in corruption–even petty corruption such as paying off a traffic cop or feeling the necessity to give a “gift” to some bureaucrat for one reason or another. This does not mean that there is no corruption in the US, but a normal human being can get by without it with little difficulty.