Russia's Orthodox Church is a "gigantic corporation" tainted with the vices of the country's shadow economy, from bribery and corruption to money-laundering and tax evasion, says the first serious study of its finances.  Exploiting its privileged status in the new Russia, the Church has developed huge business interests with an annual turnover of millions and possibly billions of pounds, but priests in rural parishes are languishing in poverty, the report claims. Researchers from a Moscow university say that the Church is "a grandiose offshore zone with its own independent financial and manufacturing activity and huge potential for money-laundering by the economy's shadow and criminal sectors."

The world's largest Orthodox Church publishes no accounts but, directly or through opaque investments, has been and may still be involved in oil exports, importing cigarettes, and diamond mining, their study says. Its impenetrable finances and exemptions from many taxes and duties encourage corruption inside the church and attract criminals from outside, the report by Moscow's Centre for Research on Extralegal Economic Systems concludes.  Criminal money can be laundered simply by being donated to a monastery, which then hands it back after taking a cut itself, one priest interviewed for the report discloses. Criminals also use the Church's freedom from paying excise on the sale of gold ornaments to avoid the state's scrutiny of the precious metal business, another says.

Patriarch Aleksiy II has sent conflicting signals on the issue of the Church's financial activity.  In the mid-nineties, at the height of the Church's involvement in importing cigarettes to Russia duty-free, he is known to have given a dinner for executives from the tobacco giant, Philip Morris, at his residence.  He has said commerce and the Church are "incompatible."   But in a recent interview to mark the tenth anniversary of his enthronement he defended its commercial dealings, saying they guaranteed its independence from big business.  The Church's business interests were "demonized" by "convinced atheists and haters of Orthodoxy," he added.

And from Giles Whittell, London Times

The Russian Orthodox Church is mired in illegal or dubious business schemes ranging from money-laundering to selling candles at extortionate mark-ups, according to a report that was condemned by the Church as the work of atheists. A church spokesman attacked the authors of the report--one of whom, Mikhail Edelstein, is the son of an Orthodox priest--as "the heirs of militant atheism" of the Soviet era. "There are forces in this country that disapprove of the Church's new independence and its role in society," Viktor Malukhin, of the Moscow Patriarchate, said. "It's a great shame that Soviet prejudices live on in some academic circles."

Mr. Malukhin denied that the Church was involved in money-laundering but did not address the report's more detailed claims. These include bribe-taking by senior clerics in return for sought-after jobs; the failure of larger churches to declare profits from the sale of icons, candles, and grave sites; and criminals' use of the Church's tax-free status on sales of gold ornaments.  One myth destroyed by the Moscow study is that of tight control from the top. Geraldine Fagan, of Britain's Keston Institute, which monitors religious freedom in the former Soviet Union, said: "The impression is one of complete and utter chaos."

Source:  Marcus Warren, "Criminals Cashing in on Orthodox Business Empire," Electronic Daily Telegraph, 30 June 2000; Giles Whittell, "Russian Church Accused of Illegal Rackets," London Times, 20 September 2000, Russia Religion News Web site: http://www.stetson.edu/~psteeves/relnews/.

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© 2001 East-West Church and Ministry Report
ISSN 1069-5664