State Duma member Igor Lisinenko says the government should properly manage $450 billion of Russian foreign property.

Igor Lisinenko, a member of the State Duma and deputy head of the Duma's property committee, said the Russian government could raise budget revenues significantly simply by properly managing the $450 billion in buildings, banks, land and other foreign property left over from Soviet times.

Lisinenko said the management of this worldwide property – including sites in London, New Delhi and Berlin – is currently a mystery.

He added that acting President Vladimir Putin appears to be the right president to set Russia in order on these matters and others. Lisinenko said that Putin, the favorite for the March 26 presidential election, would base his rule on democratic values and retain all major freedoms and rights.

From 1990-1997, Lisinenko was president of the Maysky Chai (May Tea) company, which created one of the best-known Russian tea and coffee brands. From 1997-1999, he was a member of the Moscow City Duma. He was supported as an independent candidate in his run for the State Duma by Fatherland-All Russia (OVR), but he said he has no ties to any particular political party.

Russia Journal: What made you change from business to legislative work?

Igor Lisinenko: I look at this in broader terms – this is not simply legislative work – this is public politics. It is very important for me that some values – freedom of speech, private property, rule of law and other fundamental principles on which any developed country is based – are accepted in society as a whole. I created a corporation from zero based on these principles, and I saw them working.

RJ: Now as a member of the property committee, what are the most important laws you think must be passed?

IL: The situation with property, especially state property, is like fallow land. There is no proper accounting of this property.

For example, there is no public inventory of the external assets of the Russian Federation, particularly foreign property. We do not know for sure what is left from the former Soviet Union, who now manages this property and to whose benefit. This information does not exist or is kept secret. I have heard estimates that the Russian Federation currently owns foreign property worth $450 billion.

The presidential administration's property department used to manage these assets when Pavel Borodin was its head. Now it is unclear who manages it at all.

In Russian society there is an accepted rule to avoid this issue. Politicians pretend it is of minor importance, and reporters do not ask questions. But if we are going cap-in-hand for an IMF $650 million loan for several years, we could put in the effort of thinking about our $450 billion property.

I am sure there are plenty of different interests around this property – and dark interests too. There is no coincidence that a taboo of silence exists around this issue. That means that some people hope to take bites out of this property.

RJ: Where did the figure of $450 billion come from?

IL: It was cited when the law on the foreign property of the Russian Federation was discussed in the Duma. The law was passed by the Duma [lower house of the Russian Parliament] and approved by the Federation Council [the upper house]. But President Yeltsin vetoed it in 1993 and in 1999 – the last time he had 18 objections to 15 articles of law. This draft is still gathering dust in archives, awaiting its fate.

As a member of the Duma, I will concentrate my effort on having this law adopted or a new law drafted. I think this law will be signed if Putin becomes president. He has already said that Russia has big resources that it must register. I think he meant foreign property among other things.

RJ: Is this property in the form of real estate or securities?

IL: The major part of it is realty – land, buildings and the former Soviet bank's assets in many countries where the Soviet Union was present.

RJ: Most Russian-based property was privatized, and isn't that situation even more complex?

IL: This is the second question we could discuss. There is Russian-based property inside of Russia. You can imagine how big it is. There is land – one-sixth of the Earth's land. We have vast natural resources.

Not everything was privatized. And not everything was stolen –mostly whatever could be carried away easily – like currency. Export goods are being stolen, things that could be easily exchanged into U.S. dollars like oil or gas. All of this goes abroad, and very little comes back in return.

RJ: Stealing is a strong word. What about the contracts that are needed when oil is exported?

IL: This is ridiculous. These contracts are often with offshore firms that are set up by the same people. All this goes in a very clear direction – Nauru or the British Virgin Islands. Let's stop pretending that we do not understand anything.

Creating a favorable investment climate is a major problem. And I would emphasize that money flows to stable countries. That is why our [government] officials like to fly to Switzerland and hold their currency accounts there. And they provide an example. Business people are no sillier than government officials – they also move their money to Switzerland.

This all reminds me of a phantasmagoria. As a result of corruption and incompetent government, a huge, potentially efficient country sees its economy broken, its moral standards devaluing and its image in the world's eyes deteriorating. Russia needs a new leader. Something should be changed; a new approach is needed.

RJ: Could Putin become such a leader?

IL: I think, yes. It looks like he could make it; he has a statesman's approach. Some people are trying to blame him, but I think he is just waiting for his time to come, and he has not revealed his real face. When he is elected, I think he will put an end to corruption, start fighting crime, and protect fundamental market values, our freedoms and rights. This certainly looks to be what is going to happen. I would not like to be mistaken here.

RJ: Putin's recent statements on property were interpreted as meaning that privatized property should stay that way. Do you agree, or do you think the privatization results will be reviewed?

IL: Putin should be supported in this respect. We must not allow de-privatization.

The major task now is to consolidate society. It is in a very bad state now. The government should care about the standard of living and its quality. In some sense we must forget past insults. This is clearly a political decision. Obviously, it might not be absolutely harmonious. There are no decisions in politics that are good for everyone.

…This dissatisfaction with the privatization results [in society] and the current "black" property redistribution is mostly due to the fact that minority shareholder rights were not protected. They had rights but were unable to realize that and receive their part of the property.

Their votes were too spread out and their voices not heard. Those who had majority stakes in privatized enterprises were selfish, and they have cheated small shareholders. As a result, some people received big property, often buying it for themselves with state money, and others did not receive anything. This was the mistake of the former privatization scheme.