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Tax Officials Invade Russia's Defense Ministry


Defense Minister Anatoly Serdyukov appears intent on putting his house in order.

Defense Minister Anatoly Serdyukov appears intent on putting his house in order.

Russian Defense Minister Anatoly Serdyukov's campaign to civilianize, bring financial accountability, and improve fiscal policy within the Defense Ministry culminated in the appointment, on August 6, of Tatyana Shevtsova as the ninth deputy defense minister (filling the final vacancy).

Shevtsova's background and professional skills indicate the level of seriousness attached by Russia's political leadership to tackling difficult issues confronting the armed forces and to separating financial affairs from the generals.

Shevtsova was tasked with coordinating the work of the ministry's structure, controlling their organizational, financial, and economic activities, with a special brief on housing for servicemen both serving and retired. Among the nine deputy defense ministers, there were only two serving generals (the chief of the General Staff, Army General Nikolai Makarov, and Colonel General Dmitry Bulgakov, responsible for logistical-support services) and seven civilians (two civilianized generals) including two women: First Deputy Defense Minister Colonel General (retired) Vladimir Popovkin, Deputy Defense Minister and State Secretary Army General (retired) Nikolai Pankov, Deputy Defense Minister for financial and economic matters Vera Chistova, Deputy Defense Minister Grigory Naginsky, Deputy Defense Minister Dmitry Chushkin, and Deputy Defense Minister and secretariat head Mikhail Mokretsov.

Since Serdyukov arrived at the Defense Ministry in February 2007, more than 50 women have been appointed, in what some commentators refer to as the "feminization" of its personnel structure. In April 2009, Deputy Defense Minister Lyubov Kudelina, responsible for budget and finance, was sacked and replaced by Vera Chistova, a career economist and Federal Tax Service (FNS) official.

Bringing In The Tax-Women

From 2001 to 2004, Chistova led the FNS department for the defense complex and law enforcement organs. Until her appointment as deputy defense minister, she headed the FNS department of budgetary policy in the sphere of the state military and law enforcement service.

Shevtsova, born in the city of Kozelsk in the Kaluga Oblast in 1969, also possesses impressive credentials. A graduate of the Leningrad Finance and Economics Institute in 1991, Shevtsova holds a doctorate in economics. Since 1991, after working in tax agencies, her career rapidly progressed from a state tax inspector to the head of a department in the Ministry for Taxes and Customs (MNS, later reorganized into the FNS). From November 2006 until May 2010, Shevtsova was the deputy head of the FNS.

According to one former Defense Ministry official, Shevtsova is a competent economist and was a very exacting official during her time at the FNS and was "greatly feared" by her subordinates. She had a reputation for getting things done.

While her professional qualities no doubt proved a factor in her appointment, no less important were her connections. In 2004, as head of the FNS, Serdyukov was instrumental in bringing Shevtsova from St. Petersburg to Moscow. Since early 2010, Serdyukov intensified the pattern of recruiting FNS employees into the Defense Ministry. Part of that pattern -- which was particularly highlighted after Serdyukov's former FNS deputy Mikhail Mokretsov was brought to the ministry as chief of staff in April -- involved packing the civilian element in the Defense Ministry with former FNS officials, especially from Mokretsov's former inner circle.

Mokretsov was Serdyukov's deputy in the FNS based in St. Petersburg, as the latter's team was formed between 2000 and 2004. Since Serdyukov was appointed to head the Defense Ministry, he has taken former members of his team and key FNS officials with him. In addition to Mokretsov, former FNS deputy chiefs Dmitry Chushkin and Yevgeny Vechko have made the move, as well as at least an additional 10 other high-ranking tax officials.

Shevtsova served as deputy chief of the FNS since November 2004, during which time she was considered Mokretsov's most influential deputy. Overseeing the work of sector-based interregional inspectorates for major taxpayers, Shevtsova was also responsible for the FNS's auditing activities. When Serdyukov moved from St. Petersburg to Moscow in 2004, he took Shevtsova with him, along with Nadezhda Sinikova, who worked as chief of the FNS administration for Moscow. Sinikova, as deputy chief of the FNS since August 2009, oversaw three administrations: covering support, pretrial auditing, and the settlement of arrears.

In May, the FNS dismissed both Shevtsova and Sinikova, and Serdyukov immediately appointed both as his advisers. On June 14, President Dmitry Medvedev appointed Sinikova as the new head of Rosoboronpostavki, the federal agency for the supply of weaponry, special equipment, and supplies. In July, Mokrestov was named deputy defense minister.

Following the appointment of Shevtsova as an adviser to Serdyukov in May 2010, two months later Mokretsov, Defense Ministry chief of staff and Shevtsova's former chief in the FNS, was appointed as a deputy defense minister.

Putting The House In Order

Serdyukov has been planning these moves since shortly after he became defense minister. One leaked report in September 2007 named Shevtsova among a small group of FNS officials that were likely to be summoned by the Defense Ministry after serving for a time as an adviser to Serdyukov. At that time, the ministry only confirmed that FNS officials Sergei Khursevich and Mikhail Motorin had been named as advisers to Serdyukov.

Conceivably, the delay was part of the lengthy process of Serdyukov forming his new team within the Defense Ministry, overcoming institutional opposition to civilianizing critical aspects of its work, and finding a suitable and challenging opening for Shevtsova. It also may be explained by reference to the rumors in the summer of 2007 that Shevtsova would be appointed to head a department not yet formed, which would prove crucial in the ministry's work. Some also linked the rumor to the possibility of impending serious military reform.

"The point is that the post of adviser is usually held by people who know about something but do not carry any responsibility. They subsequently move into jobs as deputy ministers or heads of department and are key figures in the areas handled by the minister," explains Aleksei Mukhin, director of the Moscow-based Political Information Center.

Defense Ministry spokesman Aleksei Kuznetsov explained that the new deputy defense minister would coordinate the supervisory services and activities of the defense department. There were 10 various supervisory authorities, and Shevtsova will optimize these into a more efficient system.

Russian analysts consider the appointment, and Shevtsov's future role, as an important step toward civilianizing the control of defense financial and economic activity. Ruslan Pukhov, director of the Center for Analysis of Strategy and Technologies, described the "invasion" of the Defense Ministry by former FNS officials as entirely logical and justified, noting that Western defense ministries are also packed with civilians who supervise the large public funds that pass through the hands of the military.

Aleksandr Pikayev, an international security expert in the Institute of World Economics and International Relations, also links the arrival of the finance experts in the Defense Ministry as marking a concerted effort to rid the ministry of its financial problems.

While not constituting a breakthrough by itself, the appointment of Shevtsova serves as an additional indication of how determined Serdyukov is to put the Defense Ministry's house in order, and his recognition that financial management will be the key to successful defense reform.

Roger McDermott is a senior fellow in Eurasian military studies at the Jamestown Foundation. His most recent article on the Russian armed forces is "General Shamanov And The Russian Airborne Forces," Journal of Slavic Military Studies, Fall 2010). The views expressed in this commentary are the author's own and do not necessarily reflect those of RFE/RL

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