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  • Print publication year: 1999
  • Online publication date: September 2009

7 - Toward the rule of law?


On a spring day a few years ago Aleksey Liubchik, a 36-year-old unemployed man from Tomsk, brought his wife and young son from Siberia to the offices of MMM, a notorious investment pyramid, on Moscow's Varshavskoe Shosse. There he opened a canister of gasoline, poured it over himself, and threatened to set himself on fire. It turned out that Liubchik had sold his apartment the previous year for $25,000 to buy shares in MMM. The shares were now worthless and the Liubchiks had no place to live. For months Liubchik and his family had been wandering from one official to another to get his money back. They had been to the mayoralty of Moscow, to the parliament, to the police – all to no avail.

One place Liubchik did not bother to go was the courts. That would have been hopeless. The judicial system has been overwhelmed by thousands of cases brought by the victims of fraudulent investment companies and insolvent banks. The law has been helpless to counter the epidemic. Most of the culprits are not actually bankrupt, but have simply closed their doors and removed their shingles, ignoring the long lines outside. It is suspected that they still own property and have foreign bank accounts, but their assets are beyond the reach of the courts. In some cases, well organized plaintiffs have been able to obtain judgments and get them enforced. But these are the lucky exceptions.