Corruption scandal in the Far East

Hardly anyone will be surprised at news about corruption in Russian universities. Nevertheless, the arrest of the president of the Far Eastern Federal University, Sergey Ivanets, is different.

The university, located in Russia’s port city of Vladivostok, is a big deal in all respects: it employs over 3,000 faculty, enrols 33,000 students and has nine branch campuses in the region.

The university is the flagship of higher education in the Far East and was intended to become a world-class research university. If the allegations are confirmed, this will be, no doubt, one of the largest corruption scandals in Russian higher education in the past quarter century.

On 21 March, a story was put out by several Russian news agencies that the president of the Far Eastern Federal University had been arrested the day before. Just after his return from Moscow, Ivanets was apprehended at his campus-based living quarters by people in black, members of the federal security services. Russia’s Investigative Committee, under the Prosecutor General’s Office, later confirmed the news.

A few days earlier, Provost for Research and Innovations Alexey Tskhe and Provost for Finance Viktor Atamanyuk were placed under house arrest for two months. This may in part explain Ivanets’ arrest. But there is more to it.

Ivanets was arrested on suspicion of abuse of authority, but in essence the case is about financial fraud. According to the investigators, the university paid RUB20 million – which, as reported by the Russian Legal Information Agency, was equivalent to US$290,700 – for services not rendered.

“Between August 20 and September 11, 2015, Ivanets ordered two provosts, Alexey Tskhe and Viktor Atamanyuk, to process the payment, and on 15 September 2015, he ordered the chief accountant to transfer over RUB20 million to the contractor’s account.”

In 2011, the university signed a contract with a Moscow-based IT company, Modern University, for technical and information system implementation valued at RUB647 million, that is, around US$9.7 million, according to the Russian Legal Information Agency.

The services had to be rendered within two years, but delays led to the deadline being extended to 2016. Searches have already been conducted at the president’s office, financial documents seized and witnesses questioned. Ivanets could face up to 10 years in prison if convicted.

The contract was signed back in 2011 when Ivanets was not even in office. At that time, the university was led by Vladimir Miklushevsky, now the governor of Primorsky region in the Far East. As Ivanets remains under the house arrest, it is not clear who is running the university, making decisions and signing financial documents.

The same day that the university president was arrested, a verdict was announced in relation to the developer of the research and science oceanarium located next to the university campus. Oleg Shishov and two others were charged in connection with the embezzlement of around US$31 million of federal money. Shishov was sentenced to three years in prison and a fine of RUB300,000 [US$4,500] for complicity in the case.

The opening of the oceanarium, initially planned for the Asia-Pacific Economic Cooperation annual meeting in September 2012, has been delayed several times due to construction and financing problems and corruption scandals. The oceanarium was due to be the research base for the university’s oceanography programmes.

Endemic corruption

The case fits well into the context of endemic corruption in Russia’s public universities where kickbacks paid by private firms in exchange for state contracts are the norm.

Thus, the case is notable not because of the practice itself, but because of the university involved and its leader. Educated in applied mathematics, Ivanets was new to the academy, but not to the education sector.

Prior to his appointment to lead the Far Eastern Federal University, Ivanets served in different capacities in the Ministry of Education and Science, including as a deputy minister. And before that, he worked as the second secretary at the Russian Embassy in the US, where he coordinated issues of scientific and technological cooperation.

According to his latest income and wealth declaration, Ivanets is not a rich man. His income in 2013 – the last year for which information is publicly available – was US$160,000, while his wife brought in less than US$7,000. The family owns four reasonably small apartments, one small house and a plot of land, all in Russia, and a BMW 320. Ivanets resides on campus in hotel-like accommodation.

The story does not end here, though; it warrants a deeper look at the university itself and its presumed role in Russia’s much advertised academic comeback.

Back in the 1960s, Russia built Novosibirsk State University, a world-class research hub, designed as a scientific outpost to help explore and exploit the riches of Siberia. As Novosibirsk died out naturally in the 1990s, the Russian government turned its sights to the Far East, where it has a border with the ever-growing China.

Just a few years ago, Russia launched its new Far Eastern Federal University, a product of university mergers and the manifestation of the emerging trend of post-Soviet gigantomania. The university was formed in 2010 through the merger of the Far Eastern National University, Far Eastern State Technical University, Pacific State University of Economics and the Ussuriysk State Pedagogical Institute and got a brand new US$2 billion campus.

The Far Eastern Federal University was seen as a window to the Pacific Rim with a view to it fostering academic and research cooperation with the United States’ West Coast, China, South Korea and maybe also Vietnam and Malaysia.

Not everyone shared this optimism. In an interview given to The Chronicle of Higher Education, in 2012, the head of the oceanology and hydrometeorology department, Boris Lamash, criticised what he called “outrageous corruption” during the five years of the campus’ construction and said: “Out of RUB680 billion they spent on building our university, they could not find RUB3 billion for a clean water-supply system.”

Also in 2012, Yevgeny Yasin, a former economics minister who is now an academic supervisor at the Moscow-based National Research University Higher School of Economics, suggested that it might be too early to say whether the Far Eastern Federal University had a future or not. Four years later, with its president and two provosts arrested on suspicion of financial fraud, it is even less clear whether the university has a future.

Ararat L Osipian holds a PhD in higher education policy from Peabody College of Education and Human Development at Vanderbilt University, USA. Presently, he conducts fieldwork on corruption, hybrid war and the failed state in Ukraine. His research interests include corruption, corporate raiding and comparative education.