Too Soon to Cheer Putin

Russian President Vladimir V. Putin’s tax commissars have stepped up their assault against the financial “oligarchs,” but it’s too soon to cheer. Tax evasion remains widespread, disrupting even the payment of government salaries and pensions. But Putin must show fairness and respect for due process of law, as well as firmness in dealing with lawbreakers. Tax enforcement should be part of a broader plan to set the government and the economy on a firm legal footing and sever the government’s corrupting links to business.

Moscow’s prosecutor general’s office has been especially busy this month, raiding offices of some of the biggest business names in Russia, jailing a few and handing out indictments. Avtovaz, the country’s biggest auto maker and linked to the richest Russian, Boris Berezovsky, has been accused of a huge tax evasion scheme; similar charges were leveled at Vagit Alekperov, chairman of the oil company Lukoil. Vladimir Gusinsky, the media magnate who angered Putin by his critical coverage of the war in Chechnya, was jailed briefly and stands accused of embezzlement. Another industrial mogul, Vladimir Potanin, was charged with underpaying $140 million for one of the companies in his sprawling industrial empire.

Most of the oligarchs have something in common. They bought up Russia’s most valuable assets--oil, mineral resources and more--for a pittance in the infamous privatization campaign of the mid-1990s, then built up powerful industrial and media conglomerates. They used their muscle to get Boris N. Yeltsin elected president in 1996 and acquired political influence reaching all the way to the top. Corrupt Kremlin officials were a key ingredient in the rise of the oligarchs and were part of the “family” ruling Russia.

Although the crackdown is widely popular among the mostly impoverished, resentful Russians, many outsiders, and some Russians themselves, see the campaign merely as a way to replace Yeltsin’s cronies with Putin’s. The president, who rose to the top from an obscure apparatchik post at the secret service agency with the help of the “family,” has offered little more than Soviet-style rhetoric in explanation. He needs to do more.

Tax enforcement should be part of a broader plan to establish the rule of law, something neglected in the switch to Russia’s rough-and-tumble market economy. Putin also needs to overhaul the convoluted tax code and complete market reforms. Even the oligarchs, who are restyling themselves as legitimate businessmen, are complaining about Russia’s chaotic legal system.

Putin is seeking world-class status for Russia, hobnobbing with American, European and Asian leaders at the G-8 summit over the weekend. To be credible, however, he must first establish law and order at home, and for that, he doesn’t seem to have a plan. There is every reason to be skeptical.