Global Policy Forum

5 NGOs Dole Out $33M in State Grants

The Russian government has recently announced its 2010 budget to fund local NGOs. 1 billion rubles - $33 million equivalent - will be distributed to the NGO community through five Moscow based organizations which all possess intimate relations with the ruling United Russia party. Such channeling of funds has been criticized by members of civil society as lacking in accountability and transparency. Yelena Panfilova of Transparency International says that allocation of funds by the five appointed organizations has frequently been questioned.

By Nikolaus von Twickel

The Moscow Times
May 10, 2010

President Dmitry Medvedev has ordered that five nongovernmental organizations distribute 1 billion rubles ($33 million) in state aid earmarked for nongovernmental organizations this year.

The presidential order, published on the Kremlin's web site Monday, names the same organizations that did the job last year and that experts say are close to the state and the ruling United Russia party.

The biggest chunk of money, 320 million rubles, will go to the National Welfare Fund, a sprawling organization that focuses on social projects and is run by Vladimir Nosov, a longtime KGB and Federal Security Service commander.

According to the organization's web site, its political advisory body is headed by Patriarch Kirill and also includes billionaires Viktor Vekselberg and Oleg Deripaska.

Another 280 million rubles will be dealt out by an organization called State Club - Fund for a Personnel Reserve, which focuses on youth projects and is headed by three prominent United Russia lawmakers, including Mikhail Margelov, who chairs the Federation Council's International Relations Committee.

Some 160 million rubles each were allocated to Resistance, a group that says it supports groups focusing on workers' rights, and to the Institute for Civil Society Issues, a think tank.

The smallest chunk, 80 million rubles, will be dealt with by the Social Concepts Institute, headed by Valery Fadeyev, the Kremlin-friendly editor of Expert magazine.

Yelena Panfilova, director of Transparency International's Moscow office, said that while there was no direct evidence of misallocation, there were open questions about how the funds were spent last year.

"I have not seen any accounts that report what the money was spent on," she told The Moscow Times.

Panfilova added that apart from Resistance and the Institute for Civil Society Issues, the main beneficiaries of the grant-giving system were relatively obscure.

"It is not really clear what they are doing," she said.

Resistance is headed by Olga Kostina, a former adviser to jailed Yukos founder Mikhail Khodorkovsky, who later accused the company's security chief Alexei Pichugin of plotting an attempt on her life.

"These are all organizations with very close ties with the Kremlin," said Jens Siegert, a Moscow-based NGO expert and head of the Boell Foundation, a think tank associated with the German Green party.

The system in which five Moscow-based organizations exclusively decide on government funding has recently been challenged by a group of regional NGOs that say that in 2008 two-thirds of the funds did not leave the Central Federal District, with 52 percent being given to Moscow-based organizations. The group, led by the Novosibirsk-based Siberian Center for Support of Civic Initiatives, complained in an open letter to Medvedev in April.

Spokespeople for the Kremlin and for the five NGOs were unavailable for comment Monday, a public holiday.

Overall state support for NGOs has declined for a third year in a row. In 2009, the Kremlin allocated 1.2 billion rubles, while in 2008 the figure was 1.5 billion rubles.

Meanwhile, Russian NGOs have been waiting for two years for the government to publish a list of foreign organizations eligible to offer tax-free grants. Barring that list, many grants from abroad cannot be paid out because they are conditioned on nontaxation.


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