Essay: The concept of sistema

The concept of sistema (система) is crucial for one’s understanding of how the Russian executive works, largely because of the fact that it is a phenomenon which is visible in the Russian constitution as well as in the personnel structure of the executive itself. It is no secret that the structure of Russian politics favours strong personalities and informal deals at the cost of the strong institutions and democratic principles. In this essay, I will focus my attention on how sistema is reflected in the functioning of the executive branch of government, which  is largely associated with the office of the president, who thanks to vast constitutional powers and a strong establishment enjoys near authoritarian power. The structure of this essay will be conducted in the following way. I will first look at the origins of sistema and the changing behaviour of actors taking part. Secondly, I will consider the constitutional framework in Russia, arguing that as far as sistema influences the way the executive works, the executive also influences how powerful sistema is. Lastly, I will attempt to give examples of how the executive, under sistema, has subjugated other branches of the administration.
The very existence of sistema goes back to communism, where people would conspire in a system of blat (блат), also know as a form of informal exchange of services which, during the period of socialism, were in short supply (Ledeneva,2009). The very purpose of such system was to circumvent official procedures of obtaining certain access to privileges, which, in the mind of people taking part in it, was not corruption, but an effective way of using their friendships. This legacy has stayed in Russia until this day, however it works somewhat differently. During  communism, especially throughout the “administrative-command” of the Brezhnev years, personal loyalty was substituted by loyalty to the system itself and did away with an emotional affection to the state, in the meantime making way for corruption, bribery and an elitist system (Zlobin, n.d). However, back then, the exchange of favours meant their usage, but not necessarily their accumulation, as the goods themselves could not be put into any private ownership. (Ledenva,2013). In sistema, as contemporary Russia has a monetised economy and operates in a free market, accumulating wealth is idée fixe to almost every bureaucrat. Paradoxically, the explanation for obtaining financial wealth is that the social norm of being a good friend or family member triumphs over with the morality of being a good state official. This contradictory morality can be summarised in a commonly used Russian proverb of “Ты мне, я тебе”, which in English would translate to “You scratch my back, I’ll scratch yours”.  However, power share in the executive branch of government is not equally distributed.  For the purpose of this essay I will define sistema as a social system of informal ties between formally recognised officials and businessmen, based on loyalty and trust, created and maintained by president Vladimir Putin, which influences the passing of legislation and the accumulation of assets (e.g  through tender agreements and industry privatisation) between elites. These elites include former and present members of the Russia’s security services, who are currently in executive government positions, Vladimir Putin’s old subordinates from St. Petersburg ,as well as powerful businessmen, commonly referred to as oligarchs.
Before analysing the particular groups of the “inner circle” (Gaaze, 2017) it is important to look at the constitutional powers the head of the executive has, as they not only give legitimacy to the executives action, but also fosters the development of sistema in the corridors of power. According to John Wilerton (2014) Russia is a democratic federation with a semi-presidential system with a separate president and prime minister. In the balance of powers, it becomes apparent that the president is the most powerful figure in Russian politics (Holmes, 1994). His constitutional prerogatives include appointing the prime minister, setting out the governments agenda in domestic and foreign relations, leading the most important ministries in the country, such as the ministers of defence, justice, foreign and internal relations (Russian Constitution, 1993). Unlike European presidents in semi-presidential systems, he has the power of legislative proposals through decree, discretionary veto power and  has the competence of nominating representatives of Russia’s eighty-five federal subjects. Also, the constitution makes it tremendously difficult to impeach the president, as is would be indispensable for both the constitutional courts and the Federal Assembly to remove him by a 2/3rd’s majority vote. Originally, the constitution of Russia was formulated in 1993 during a political crisis and the vast powers the president has were to fix the parliamentary deadlock, which at the time was the source of political instability (Holmes,1994). However, in reality, it merged the legislative and executive powers into the office of the president, which created a perfect environment for personalisation of power under which sistema flourished.
Richard Sakwa (2010) argues that Russian politics can be described as “dual”, where on one hand there is a constitutional order and on the other there are informal practices, in other words, sistema. He correctly comments that the Russian administration is characterised by “a network of social ties in which political and economic powers are entwined”. His main argument is that the two “blocks” are more than a facade and for the time being are locked in political stalemate, which prevents Russia from becoming a truly democratic country. His further analysis reveals that one of the main problems is the fact that after the break-up from communism, the Russian political class did not succeed in developing a new type of political culture which would change from previously mentioned blat, to genuine constitutionalism. 
This essay agrees with Sakwa’s judgment of the lack of political class, but does not share the view which describes the political stalemate. Instead, it argues that there is no stalemate between the Russian constitution and the informal behaviours of political actors, because the constitution itself, given its focus and preference to direct presidential power, instead of encouraging transparency and accountability, emboldens principal-agent relations.  On one hand, the president will appoint someone who shares his ideas and is willing to uphold the current status quo, whereas on the other, individuals are tempted by the power, prestige and financial gratification that the presidential positions offer.  Instead of a stalemate, it seems as if this is a perfect consensus. A study conducted by Schleiter (2010) reinforces the logic of this disagreement. Their central argument is that the selection of a particular cabinet ministers who possess a certain set of skill sets is dependent on the intention of democratic rule of the people in charge. In her view, pro-democratic presidents are more likely to look at professional competence, whereas anti-democratic heads will look for ministers who can contribute to improving the prepared structure of elite groups, or, like in the case of Russia, reinforce the idea of sistema. Therefore, it can be assessed, that sistema influences Putin’s choice of personnel, which later reflects on how the executive functions in day-to-day business.
Similar arguments had been by Lilia Shevtsova (2000) as she realises that the there is no real separation of powers between the executive and legislative branches of government, with the legislative being completely dependent on the president, subsequently violating the idea of checks and balances and the trias politica principle. In her mind, this has partly been subject to two factors. Firstly, she subscribes to the idea that a strong personality with vast formal and informal influence is partly due to the history of the Russian state. Prior to communism, Russia had tsars which, according to the Economist (2017) behaved very much like President Putin. Secondly, when Putin took over, Russia needed a strong leadership to tackle urgent economic, political and security issues. This reinforces the idea that as much as sistema influences the executive, the executive also influences sistema. It could be hypothesised for example, that had there been no history of dominant heads of state or inconsequential economic hardships, sistema would never flourish to extent it does today.
Andrew Monaghan (2012) also contributes to this debate, by describing the themes of sistema in functioning of the executive in Russia. His first theme of Russian politics is stability- from a constitutional point of view, the Russian president, despite being active in policy-making, rarely uses his veto power and only in crisis situations uses his power of decree, which could suggest that sistema trivialises potential disputes between the legislative and the executive, increasing the influence of the executive. Secondly, Monaghan claims that the group, although stable in membership, is also constantly evolving. The issue of constant group developments will be addressed in the following paragraphs.
As mentioned previously, there have been numerous ways of identifying the main groups in Putin’s sistema, mainly by introduced by  Ledeneva, Willerton and Monaghan. However, there are some difficulties. The first, most obvious, is the fact that sistema involves many personalities and sometimes even the relatives of these personalities, which could change it to an enormous database instead of an “inner circle”. Secondly, hardships come up with classifying some individuals, as they move from the public offices to the private sector and and vice-versa. Thirdly, as mentioned before, the group is constantly evolving, with some members joining and some leaving. Recently, the biggest changes were made in the position of the speaker of the house, where Putin’s long-term ally , Sergei Naryshkin, was replaced by a young aide of president Putin, Vyacheslav Volodin. Naryshkin was given the position of the chief of the SVR, one of Russia’s intelligence services. However, commentators asses that this new posting of Naryshkin was in fact a degradation, as the SVR is far less influential than the FSB (AP, 2016). Interestingly, it seems as though Vladimir Putin is changing the inner circle of sistema, replacing elderly allies with young, career hungry bureaucrats who would credit their success to only to him, simultaneously increasing his own influence. This would also correlate with the firing of Sergei Ivanov, the presidential chief of staff and replacing him with Anton Vaino, who likewise to Volodin joins Dimitry Rogozin and Vladislav Surkov in an “updated” version of sistema(CNN,2016).
 It is important to identify these groups as they will facilitate in answering how sistema influences the functioning of the executive. However, in this analysis, bearing in mind the academic literature and recent changes in sistema,  I will attempt to simplify the selection to two inter-related groups: the former and current members of security agencies and government postings, those who knew Putin from his time in St.Petersburg and hold important positions in the private sector. Some of them also are members of the Ozero Dacha Cooperative, which is a conglomerate that Putin is part of. 

Prior to reshuffling of the Kremlin with young aides of President Putin, it was said that the biggest group were the siloviki,  the former and current members of the security services (White, 2003). They included, among others,  the likes of former deputy prime minister and current CEO of Rosneft Igor Sechin, Director of the Security Service, Alexander Bortnikov,  The Head of The Investigative Committee of Russia, Alexander Bastrykin or The Prosecutor General, Yuri Chaika (Ledeneva, 2013). As seen, all these private contacts hold positions in vital organisations such as intelligence services or banks. They are considered to be the “old friends” of the current president, who have the ability to aide him with their position and contacts. They programme and develop the power network, making sure that the right people are included. The second group of people are those who previously worked with Vladimir Putin in St Petersburg and are usually divided between “the lawyers” and “the economists” (Willerton, 2014) . The lawyer group is considered to be Deputy Prime-Minister of Russia, Dmitry Kozak and Russia’s prime minister, Dmitry Medvedev, both of whom studied in St.Petersburg. The group of economists, however, are Herman Gref, the CEO of Sberbank and, the current minister of finance, Anton Siluanov. Lastly, it is important to mention the Ozero Dacha Cooperative, which is a subgroup of sistema, as most of its members do not hold official postings in the executive, but remains a vital component of the bigger picture. As seen, sistema is a mixture of businessmen and career politicians, which all have gathered considerable power and wealth. In practice, these groups in sistema either work with each other or have heated conflicts which sometimes end with dismissal, as in the case of Andrei Kurdin, the former finance minister, who was dismissed by Medvedev while Putin was prime-minister (Financial Times, 2011). It was claimed that the two competed against each other for approval from Vladimir Putin, with Medvedev eventually winning the battle. 


    So far, I have shown the origins of sistema, the way it influences the executive, the constitutional settings that favour it and have identified its key members. The question therefore remains- how does sistema look in practice? First and foremost, its influence can be seen in the paternalistic relationship between Vladimir Putin and Dimitri Medvedev at the top of the executive. The two have known each other since the early 1990’s when Medvedev was Putin’s subordinate (Oldberg, 2010) . The two famously switched roles in 2008, when Dimitri Medvedev replaced Putin as president, whereas Putin took Medvedev’s role as prime minister. This was possible due to the fact that article 81.3 states that “One and the same person cannot hold the office of the President of the Russian Federation for more than two terms running.”, however, it does not say that if the incumbent does not run for a whole presidential term, he is not able to serve another two terms. With this interpretation of the law, Putin used his close ties with Medvedev and “borrowed” the position of president until the next election. In return, Medvedev borrowed the position of prime-minister and when the next election was due in 2012, he endorsed the return of Vladimir Putin to the presidential office, knowing he would also return to his role as prime minister. The executive has therefore been shared by two very close people for the last fourteen years and with the forthcoming elections, and it could be argued that this would not have been possible had there not been a network of individuals accepting the actions of the two. 
However, political patronage is not the only proof that Putin’s sistema influences governance. In 2014, after Russia had completed its annexation of Crimea, the European Union and The United States imposed economic sanction on the Russian Federations, affecting many of  Russia’s  businessmen. Shortly after, the Italian authorities seized assets of the Rotenberg brothers of which the estimated value was $40 million dollars (Plus Biznesu, 2014). In response, President Putin signed off a law colloquially named “The Rotenberg Law”, which allows businessmen to get reimbursed from the Russian government if their assets have been taken away from them due to sanctions, whereas in the meantime the additional funds would be taken from assets foreign companies have in Russia. Therefore, sistema not only influences workings inside the executive, but also can be seen in the creation of domestic law (New York Times, 2014). 

However, Putin, through his powerful position in sistema has also extended his powers. For example, since 2005, the Russian president has the competence of recommendation of regional governors, who are later approved by the prime minister, which, as seen above is his close friend. The regional governors are the highest representation of the executive in their respective territories and hold considerable powers. Previously, they were chosen in a democratic election. According to Monaghan, it allows the executive to exercise manual control, as they micro-manage their subordinates and affect most of their decisions. Hence, sistema helps the executive to have top-bottom influence in the country, by using its most important feature- power (власть). There is a near vertical power management in the administration as the decisions made by Putin are passed down to the legislative and executive branches of the administration in the meantime omitting procedures (ibid). An example of “vertical power” is Russia’s so-called “telephone-law”, which generates the presumption that the verdicts of the judiciary depend on the will of sistema insiders (Hendley, 2009). The most notorious case has been seen in the famous imprisonment of Yukos president, Mikhail Khodorkovsky, who was accused of
tax evasion and money laundering, after refusing to follow Putin’s will for oligarchs to stay out of politics. Following proxy charges, which most likely were “ordered” by the Russian executive, Khodorkovsky spent a decade in prison before being freed prior to the Sochi Olympics in 2014. As the last point of this essay, the Yukos affair shows us that thanks to sistema, the executive has also control over the judiciary. More importantly, however, sistema has also control over society, as only few protested against the unlawful sanctions Khodorkovsky faced (Sakwa, 2009)
This essay has concluded that sistema is an intrinsic part of the Russian executive. It is correlated with the constitutional powers and has realistically personalised the executive power in Russia to the personality of Vladimir Putin. This essay argues that the concept of sistema is imperative of the analysis of the current Russian administration. From accumulating astronomical wealth in the private sector (like the shareholders in the Ozero Dacha Cooperative), through political patronage of its political members, all the way to influencing the verdicts on court procedures, sistema provides the executive with a pivotal position in the whole administration.