Russian Audit Committee Finds Mind Boggling Financial Violations at Roscosmos

Deputy Prime Minister Dmitry Rogozin. (Credit: A. Savin)
Deputy Prime Minister Dmitry Rogozin. (Credit: A. Savin)

More bad news for Russia’s struggling space program:

Russia’s Audit Chamber has discovered $1.8 billion of financial violations in the Roscosmos space agency. According to Chamber head Tatyana Golikova, this included accounting violations, misuse of budget funds and inefficient spending on construction.

“At first I didn’t believe the inspectors,” Golikova said, Interfax reported.

The Audit Chamber has observed a sharp rise in violations at Roscosmos since last year, she said. “It was an absolute surprise for me. I conducted a budget inspection last year, and now in 2014, the number of violations has grown sharply.”

Earlier, Russia’s Deputy Prime Minister Dmitry Rogozin blamed corruption in the space industry for the recent high accident rate of Russian spacecraft. Speaking in the State Duma on Tuesday, he said Roscosmos’ partner, the state company producing Proton rockets, is facing eight criminal cases.

One of the projects apparently seething with violations is the new Vostochny (Eastern) Cosmodrome. According to Golikova, its construction saw an overspending of about 13 billion rubles ($260 million). She says this resulted from overpricing and use of fraud schemes. The numbers are being looked into by the Russian Investigative Committee.

Meanwhile, Rogozin is blaming “moral decay” for repeated launch failures rather than the failure of the reform efforts he oversees.

“You can compare it to the fall of the Roman Empire,” said space industry analyst Pavel Luzin. “The Russian space industry is collapsing.”

Until 2010, Proton was considered to be the most reliable rocket in the world. Since then, it has crashed an astonishing seven times. Angara has yet to experience a crash, but has only ever flown twice.

Because of this, the problems facing the Russian space industry cannot be attributed to design flaws, but a general decline in how well the rockets are built. The government has fired several industry bosses and launched several major restructuring efforts, but rockets continue to explode.

Shifting the blame away from the government’s failure to fix the state-owned industry, Rogozin pinned the spate of rocket disasters on “the moral decline of space industry managers,” RIA reported Tuesday.

Rogozin warned on Tuesday that unless Russia’s space industry drastically overhauls its production techniques, it risks losing its dominance of the global space industry to the U.S. space industry.

There are reliable reports  that the “moral decay” Rogozin decries is presided over by none other than his boss, Ruler for Life (RFL) Vladimir Putin. The guy’s reportedly worth more than $40 billion. Billion. That’s more than the Google guys. You can’t make that much from your president’s salary.

Watch Frontline’s full documentary, Putin’s Way.