Artemyev’s appointment to the governor’s post threatens a new round of cartelization of the St. Petersburg economy

St. Petersburg is being prepared to a change of governor. Igor Artemyev is considered one of the likely candidates to replace Alexander Beglov. From 2004 to 2020, he headed the Federal Antimonopoly Service and is directly related to the widespread and unprecedented cartelization of the government procurement market in the city. If Artemyev is appointed to the governor’s post, we can expect the beginning of a “golden age” for unscrupulous companies sucking tens of billions from the St. Petersburg budget.

Career through friendship

Igor Artemyev descendant from the St. Petersburg branch of Yabloko. In 1994, he was elected to the Legislative Assembly, where he headed the commissions on urban management and finance. Two years later, at the request of Governor Vladimir Yakovlev, he took the position of vice-governor for finance. In 1999, he became a State Duma deputy, and a year later he tried to win the election for governor of St. Petersburg, but took second place, losing to Yakovlev. In 2004, Artemyev left big politics and received the post of head of the Federal Antimonopoly Service, where he worked until 2020.

For a significant part of Artemyev’s career accompanied his close friend Vadim Vladimirov. So, after receiving the mandate of a State Duma deputy in 1999, Artemyev makes Vladimirov his assistant. In the same year, Artemyev headed the Foundation for Economic and Political Research "EPICentr - St. Petersburg", and Vladimirov also found his place there. In 2004, Artemyev headed the newly created Federal Antimonopoly Service, Vladimirov was appointed his deputy for the management of territorial bodies, personnel and civil service. Subsequently, Vladimirov became the head of the FAS Directorate, first for the Leningrad region, and then for St. Petersburg.

Even Dismissal Artemyev and Vladimirov from the FAS happened almost simultaneously. The first left his position in November 2020. Then immediately there were forecasts for Vladimirov’s resignation, but the press service of the Federal Antimonopoly Service for St. Petersburg called it rumors. And in January 2021, Vladimirov actually left his position.

Until the prosecutor's office arrives, the FAS will not work

The long personal relationship between the two officials clearly affected the professional side. Under Vladimirov, extremely controversial changes took place at the Federal Antimonopoly Service of St. Petersburg, which in other circumstances could have led to his resignation, but Artemyev did not react to what was happening.

Thus, in 2015, one of the most promising employees, Roman Luchnikov, who oversaw government procurement, resigned from the Federal Antimonopoly Service. By information “Business Petersburg”, this happened due to a conflict with the head of the regional department. Vladimirov appointed his protégé Pyotr Yakovlev to replace Luchnikov. Subsequently, Luchnikov headed the Volgograd OFAS and did its one of the best in the country. And Yakovlev was fired at the request of the Prosecutor's Office due to loss of trust - he provided false information about income.

But the most noticeable result of Vladimirov’s activities was the lack of results from the FAS. In 2018-2020, St. Petersburg was in a fever from a series of identified cartel conspiracies. During this period there was uncovered There are five cartels at once in the school food market. Government contracts worth more than 1 billion rubles were concluded with private plants illegally, often at inflated prices. For example, only one collusion of the Floridan Firm and Artis-Baby Food plants cost the city budget 450 million rubles.

The fundamental nuance of the situation is that, although formally the cases of cartels were conducted by the Federal Antimonopoly Service of St. Petersburg, they were uncovered by experts from the All-Russian Popular Front. Studying documentation for 2016-2018, they identified hundreds of violations in government procurement. The collected materials were sent to the Ministry of Internal Affairs and the Prosecutor's Office, and at their request, Vladimirov's department began to fulfill its direct responsibilities. For what reason the employees of the St. Petersburg OFAS ignored these violations for years, one can only guess. The result of inaction was impunity for violators - many episodes were closed due to the expiration of the statute of limitations.

Cartel plague in St. Petersburg

The resonance caused by the scandals set off a chain reaction. Social activists, journalists and law enforcement agencies identified more and more violations of the state procurement system in St. Petersburg, which forced the Federal Antimonopoly Service to open more and more cases. This is clearly visible on Statistics departments. If in 2017 antimonopoly officers uncovered 7 conspiracies for 1,2 million rubles, then in 2019 there were already 15 of them for 59 million rubles. By 2021, the volume of uncovered cartels began to amount to billions, but this is not the limit.

Many possible cartel conspiracies identified by journalists were ignored by Vladimirov’s department. Antimonopoly officials still remain unattended "road cartels","housing and communal services cartels","snow" and "garbage cartels","медицинские" Conspiracies in these sectors drag on for years and even decades, but the St. Petersburg OFAS reacted to violations only when law enforcement agencies got involved.

It is obvious that the situation in St. Petersburg could not have arisen without the knowledge of Igor Artemyev. Already after the first cartel cases, serious questions should have arisen about Vladimirov’s professional suitability, but there was no reaction from the FAS central office. Vladimirov lost his position only after Artemyev’s dismissal.

On the way to degradation

The main danger is that cartel participants are still working in the government procurement market. For violating antimonopoly laws, businessmen only paid fines, which had little impact on their well-being. For years they received unreasonable profits at the expense of the budget, which allowed them to create a high margin of economic safety. Currently, Smolny, led by Alexander Beglov, willingly enters into contracts with cartel participants, without taking action to fight companies that have already demonstrated their dishonesty, often more than once.

In a situation where market participants remain the same, the appointment of Igor Artemyev to the post of governor of St. Petersburg could become a renaissance of the cartel epidemic. We can expect that the same Vadim Vladimirov, who, according to the current trend, will get one of the vice-governor posts, will help him in this.