Incidentally, the Baidukov who was doing all this explaining is the chairman of the provincial council of the bench, the corporate conscience of the judiciary. The case of Olga Vasilieva had passed through his office several times, and each time he had endorsed it, as required by Ovcharuk. The council of the bench is another institution of the community of judges, like the College of Qualifications. Only people agreeable to Ovcharuk belong to either group, and whatever representations he makes to the members produce the desired conclusions. Although Valerii Baidukov is chairman of the Kirov District Court, one has no sense that he is capable of standing up to, or for, anyone. If he ever does have an opinion of his own, it remains hypothetical. He can pontificate about the district court as “the basic link of the Russian judicial system” but falls silent when asked to discuss facts.
Ninety-five percent of all criminal and civil cases in Russia are heard in the district courts, and to that extent they are indeed the basic link in the country’s judicial system. In reality, however, this is a fiction. The district court is highly dependent and manipulable, because the senior judges of the provincial and republican courts have no wish to implement reform and lose the control they enjoy over their inferiors in the district courts. The latter enjoy independence only according to the constitution, and the fact that this document has legal preeminence makes no difference. The district courts have simply not been given procedural independence.
The law gives provincial courts procedural control of district and municipal courts—that is, the responsibility for monitoring their judicial practice. The verdicts of district and municipal courts are reviewed and evaluated by the provincial courts, which decide whether they are correct or flawed. Procedural dependence develops into organizational and career dependence. A lower judge who does not play by the rules of the game is as vulnerable as a baby. A superior judge has the right to criticize and annul his verdicts as he sees fit, without any accountability. The provincial court can overturn the verdict of a district court without explaining what is wrong with it or how it should be improved.
The provincial court does not take responsibility for the final verdict, but it does keep statistics to show how many cases, and from which district judges, have been found to be “erroneous.” Such data are the basis for calculating bonuses for judges, awarding or depriving them of various privileges, such as holidays in the summer or winter months, advancement in the waiting list for an apartment (which is in the hands of the provincial court and matters because judges’ salaries are insufficient for them to buy flats), confirmation of their tenure of office, and so on.
This is the mechanism through which the district court judges—who, according to the constitution, are “fundamental” to the system—have found themselves more dependent on their superiors than under the Soviet regime. The constitution seems to preclude such hierarchical relations, since it declares that all judges are equal and independent, individually appointed by directive of the president. The reality is rather different. They may be equal when they are appointed, but they are not equal when they get the sack. The chair of a provincial court who wishes to get even with a district judge holds all the aces; but if the chair of a provincial court is objectionable to district judges, that is just their hard luck. They cannot facilitate his removal.
Thus the laws and rules regulating the bench, as they have developed since the end of the Soviet era, have allowed Ivan Ovcharuk to become what he is: the official who protects the Urals from judges who might deliver an unpredictable verdict. The legal system has no safeguards to curtail the activities of those at the top of the hierarchy who might go off the rails. The constraints are purely moral. The only way the system could function satisfactorily would be if the person occupying Ovcharuk’s office had different moral and ethical attributes. What sort of a system would that be?
To COME BACK to District Judge Balashov. Could he have acted differently in the Fedulev case, and, if so, what should he have done? He had only to postpone consideration of the injunction, which he had every right to do.
In the course of preparing their seizure of Uralkhimmash, Fedulev and his accomplices checked out many district courts in Yekaterinburg to see whether they would play ball.
They all agreed to act like Balashov with the exception of one, the Chkalov court. Ivan Ovcharuk invited the chairman of that court, Sergey Kiyaikin, to work in Magadan, in the extreme northeast of the country. Traditionally, “to be sent to Magadan” has meant to be exiled there, but Kiyaikin, an obstinate judge who had grown up in Yekaterinburg, a man with roots and pride in the city and the Urals region who had graduated in chemical engineering from the prestigious Uralkhimmash, was only too glad to get as far away as possible from his native region. He did not want to be killed or to have his family attacked.
Balashov is a loyal guardian of Fedulev’s interests. He has gotten the production of verdicts to safeguard his friend down to a fine art. Here, for example, is one of Balashov’s rulings, delivered on February 28, 2000.
Fedulev had decided to sell Uralelektromash, not a factory but a company that handled transactions in shares he owned. They happened to include his shares in the Kachkanar OEC and in Uralkhimmash.
Fedulev decided to sell in exchange for a certain sum of money, as he had every right to do. Sometime later, the new owners of Uralelektromash discovered that, although they had paid the money, they had not received the corporation’s documents. Fedulev had sort of sold Uralelektromash, but he had kept all the shares. The purchasers realized they had been swindled and naturally demanded an explanation. Fedulev told them he had changed his mind. They countered, “Give us our money back. Then you can keep everything yourself.” Fedulev replied, “I’m not going to give you any money back. You haven’t got any documents. You are nobody. Go away.” His Uralkhimmash shareholding was in the same situation. Emerging from prison in Moscow and eager to hold on to what he had already sold for several million dollars, Fedulev said, “I know nothing about it. It wasn’t registered in the prescribed manner. The deal is invalid.” He went to Judge Balashov, who found in Fedulev’s favor.
To understand what Fedulev did, you need to appreciate that Russian legislation still has many loopholes. In this instance the flaw was that any company, when it issues shares, is required to register the fact. In the early days, nobody in Russia knew how to go about this. There had been no stock market in the Soviet Union and hence no shares. After the collapse of the Soviets, the relevant governmental institutions took a long time to find their bearings. They could neither explain nor decide how shares should be registered. As a result, shares in many companies were unregistered. They were, and still are, traded in. The stock market continued on its way.
What should be done? Naturally, it was assumed that you just needed to be honest with your partners. That is not the basis on which Fedulev operates, however. Having spotted an opportunity, he first contracted to sell the shares of Uralelektromash and only then applied to have them registered with the appropriate state agency, the Federal Commission for Securities. When the shares were eventually registered, after a long delay because the transactions were bogged down in a morass of discoordination, Fedulev informed his purchasers that the contract to sell Uralelektromash had been concluded before the shares had been registered. He looked them straight in the eye and said, “The money is mine, too. It was your mistake, and you have to pay for it.” The court once again rubber-stamped in Fedulev’s favor.