In Go-Go Russia, the Fix Is In

Sergei Meshcherinov was more than happy to slip $50 to an overworked government secretary to get his housing registration changed in a day instead of a month.

Grigory Tsvetkov was equally unruffled by the $400 charged by friends and relatives of federal customs service agents to spare him five days of waiting in line to receive the used car he imported.

Real estate agent Sergei Zlotnikov is so familiar with the cost of speeding up the state documentation for apartment sales that the $200 charge for one-day transactions is factored into his fee.

Under-the-table encouragements long have been the grease in the gears of Russian bureaucracy. But in the go-go, gotta-get-ahead atmosphere now prevailing, they no longer are considered bribes as much as the cost of doing business. In a new twist on tradition, buying a way out of inconvenience is an increasingly open, legitimate option now called “express service.”

Russia is suddenly bustling with businesses that cut through red tape. From obtaining scarce subsidized railway tickets to having a phone installed to arranging for car insurance or a foreign visa, consumers now have the option of getting it done--pronto.

“Time is money. If you want to save time, you have to spend money,” Zlotnikov says matter-of-factly, trying to remember how long it has been since a seller chose to economize and brave the official channels.

While consumers and suppliers alike tend to applaud the advent of express service as an ingenious adjustment to what is arguably the most inefficient state bureaucracy in the world, there is--as always in Russia--a lot of cloud around the silver lining. The private companies popping up to run interference for those who can afford it are inevitably taking advantage of personal connections in the state agencies responsible for providing social services, from driver’s licensing to draft exemption.

Insider deals to clear official bottlenecks might be morally open to question and probably would be considered abuse of office in many countries. But in a society as accustomed as this one to the back channel, there is little public complaining.

On the contrary, Russian consumers often hail the express charges as a step along the road to making government more responsive.

“This is Russia! It is how we do things here!” Meshcherinov says, unmoved by a suggestion that state bureaucrats are actually being bribed to do their jobs. “This is a plus for everyone. I get my document, and the person providing it to me gets real payment for his work.”

Indeed, the official salaries for workers in state registries are pathetically low, providing both the motivation and justification for creating services to work around them. What bothers the fledgling consumer protection services taking shape in Russia is that those offering the solution are also usually part of the problem.

Take Sasha, an auto emissions and safety testing officer. He spends seven hours a day, Monday through Friday, inspecting private cars for the state certification needed for annual registration and insurance. At the state inspectorate, a car owner must line up three hours before the 8 a.m. opening to have any hope of getting Sasha or his colleagues to look at a vehicle before closing time. The official charge is about $5 and a lost day of work.

But after hours, Sasha becomes a private businessman, though still in uniform and carrying his office seals and stamps. For $120, he will provide technical certification for a car owner by appointment and in the comfort of the consumer’s driveway.

“All of these so-called services should not be looked at in the same light,” says Valery Stolyar, a lawyer with the Moscow Consumer Council. “Some are legitimate measures to cover the cost of doing business, while others are just outright ploys to get bribes.”

Express service for official documents--like land titles, birth certificates and bills of sale--often are legitimate charges for the extra work necessary to satisfy the request faster than usual, Stolyar says.

Zlotnikov’s Condor Agency pays the Moscow Department of Municipal Housing $200 for a certificate verifying apartment ownership within 24 hours. Otherwise, he says, it takes up to a month.

But those who are exploiting their positions in what amount to state monopolies hardly can be considered to be supplying a service to the community, Stolyar says.

Despite the expanding appearance of both legitimate and exploitative express services, the consumer council hears few complaints about them because most customers either get what they pay for or realize they lack legal recourse if they get swindled.

“Everyone knows about these practices and those who can afford to pay for them do so,” Stolyar explains. “Otherwise, a person has to take on the whole system. It has always worked this way in Russia, at least for the last 30 or 40 years. State workers’ salaries don’t depend on the quality or quantity of services rendered, so express services have emerged to fill the void.”

In some cases, the fees for jump-starting the bureaucracy are reinvested in the federal ministry or city department to improve the provision of services over the long run.

“I consider this a completely correct way of operating. I think we were the first ministry to try to generate income by meeting a consumer need,” says Yevgeny Vtyurin, head of consular affairs for the Foreign Ministry, explaining why a visa can be had free at a foreign consulate if the traveler can wait a few weeks but costs upward of $100 to be issued on the day of application.

“A significant amount of the money comes back to the central budget, but some stays at the consulate for local improvements,” he says, citing new furniture, work area repairs and better phone networks as examples of investments.

But in many manifestations of express service, Stolyar says, the money simply is split up among those conspiring to make it difficult for the consumer to get satisfaction any other way--thereby rewarding and encouraging the inefficiency. “In the case of the [traffic police], I can say with 100% certainty that any money collected for special services goes directly into their pockets,” says Stolyar, who reserves his strongest criticism for the federal customs and municipal police forces.

Tsvetkov, the sometime car importer, likewise labels the federal customs service as the industry leader in abuse of office--and government statistics tend to back him up. Of 400,000 cars imported into Russia last year, duties were levied on only 400, Economics Minister Yevgeny G. Yasin recently complained.

“The official duties have been set so unrealistically high that it creates incentive for people to get around the system,” says Tsvetkov, who has switched to buying used Russian-made cars after three years as a foreign-make importer.

Conversely, pay for the federal agents is so low that few feel any inhibition about using their posts for personal gain at the expense of the public coffers.

Import duties of 120% of the car’s value are so prohibitive that services have sprung up to put buyers in contact with Russians living abroad; they have the right to bring a car back with them duty-free after six months of foreign work or government service.

Moscow’s poorly paid diplomats have been drawn into networks in which cars are shipped to Russia as their property, then sold to real buyers--at a markup, but one still far below the import duty. There are also tax breaks for those working in hardship areas, such as Siberia and the far north, allowing residents with such status to provide cover for others at a price.

Aside from offering a means to avoid taxes, the private intermediaries provide important assurances that cars and other imported goods are cleared through customs immediately after they enter the country.

“Customs deliberately and artificially creates enormous lines so that it is impossible for someone to clear his goods within the five-day limit these same bureaucrats managed to get imposed,” says Nadezhda Golovkova, president of the Moscow Consumer Council. If the importer fails to get the paperwork done within that period, the government can seize the property as unclaimed.

The consumer council describes express customs services as shameless and often amounting to illegal extortion, since the expedited efforts usually involve collaboration between federal employees and friends or relatives who can circumvent bureaucratic obstacles only because of family ties. “What you tend to see are the wives or adult children of customs officials running these private services,” says Golovkova.

But little can be done to discourage such exploitative practices, she says, because most government investigative services are equally corrupt.

A spokeswoman for the federal Customs Service, Yelena Guskova, confirmed that cooperative agreements exist with private express services, which she described as “quasi-customs structures.” But she denied that they were tariff-dodging services or that inefficiencies within the government service forced customers to use private firms.

Travel agencies have worked out a system of higher payments for air and rail tickets to certain destinations for which demand still far outstrips supply because of federal subsidies for remote transport. For almost twice the usual price, passage can be purchased on the spot, whereas those wanting the subsidized tickets must apply days, weeks, even months in advance.

A chronic shortage of telephone lines also persists throughout much of Russia, giving local branches of the federal Ministry of Communications much leeway in parceling out the few new connections to the highest bidders, while those who cannot afford the express surcharge wait for years.

Some express charges are assessed for what is essentially line-cutting. Several travel agencies developed a clientele by doing the legwork in picking up air tickets and visas for their customers--until the airline and consulate clerks discovered they could cash in on the concept by setting their own express fees.

Despite the social inequity, there are few complaints heard from those who opt to--or who must--economize by waiting in line. And analysts say this acceptance is part of the maturing of consumerism in Russia, as people become comfortable with the notion that there is much that money can buy.

“To my mind, this shows how much Russians have changed,” says Thane Gustafson, a Georgetown University professor and author of several books on post-Soviet Russia. “Ten years ago, most people were willing to exchange time for money. Only a few paid and got through the back door. Now more are willing to spend their money to avoid waiting. I don’t think they resent inequality in the way they used to.”