The failure to record envelopes, pay taxes, or issue receipts is a major cause of corruption and personal loyalty.
"This system had its historical reasons during the revolutionary era and the early stages of construction. At that time, conditions were harsh and resources were scarce, so the state's use of this method to guarantee the basic livelihood of cadres had a certain degree of rationality."
But now the Soviet economy has developed. Our supply of consumer goods has improved, and our cadres no longer need to rely on a single envelope to ensure their livelihood. More importantly—the contributions of our cadres should be publicly and dignifiedly recognized, and should no longer be treated like underground work!
The remark, "It shouldn't be done like an underground operation," elicited a low chuckle in the room.
Actually, everyone wants to work underground.
Lukyanov then announced the core content of the bill—
First, the envelope-based salary system was officially abolished. From February 1, 1994, no public official was allowed to issue or receive informal, off-the-books monetary subsidies in any form, including but not limited to cash and electronic transfers.
Second, it was replaced by a position allowance—or job responsibility subsidy. This money was incorporated into the formal salary system, with clear grade standards, from section chief to department chief to bureau chief to ministerial level, with each grade corresponding to a fixed allowance amount. It was funded through the treasury, allocated by the Ministry of Finance, and disbursed via bank transfer. It was subject to personal income tax and deductions according to the standards of the Communist Party of the Soviet Union.
Third: The amount of job allowance is made public.
The amount of allowance for each rank was clearly written down and visible to all cadres in the Soviet Union. Lukyanov displayed this table on the podium.
Senior officials sitting in the front rows were not happy. Many Central Committee members and ministers looked unhappy because the new allowance was about 20 percent less than the amount in envelopes during the 28th Congress of the CPSU.
But everyone held back their dissatisfaction, as Slava and Director Nian were watching them closely. They had barely escaped those crazy three months last year, and they didn't want to go through that again.
Many committee members have had their power reduced. Previously, the amount in the envelopes was flexible; if you had a good relationship with someone above you, the envelope would be thicker; if you were a confidant of a powerful figure, the envelope had to be exceptionally thick. Now it's a fixed standard, and the flexibility is gone!
Flexibility is power. If you give your subordinates a thick envelope, they will be loyal to you. If you hold the thickness of dozens of envelopes from your subordinates, you hold dozens of threads of personal loyalty.
After the meeting, the expressions of many mid-to-lower-level government officials, such as those at the division and section levels, were completely different. This was because the new standardized allowances had actually increased for them!
Under the old system, the amount in envelopes given to lower- and middle-level cadres depended entirely on their direct superiors. If the superior was generous, the envelope would be thicker; if the superior was stingy, or if you weren't on their side, the envelope would be pitifully thin. Some section chiefs received 50% less in envelopes per month than another section chief of the same rank, simply because they hadn't chosen the right side!
This was Slava's deliberate act, intended to prevent the entire bureaucratic system from uniting against the reforms. Since the allowances of the vast majority of middle and lower-level cadres and civil servants were increased due to his reforms and the new system, they would naturally be more inclined to pledge allegiance to the system rather than to a particular individual power network.
After the congress, Slava launched a new campaign to purge the "factions," "gangs," and "interest groups" within the Communist Party of the Soviet Union. His advisor helped him write speeches and would speak on his behalf on some important occasions when Slava was busy.
"...Some cadres believe in the 'clique culture' of forming cliques and factions, spending all their time thinking about building relationships and finding connections, analyzing who so-and-so is someone's person, who so-and-so was promoted by, and who they should cultivate relationships with and get close to, to see whose coattails they can get on. Some leading cadres like to act like paternalistic figures, hoping that others will obey their every command, believing that a good cadre is one who is completely obedient to them, while ignoring how others and the masses are treated, making the Party's internal life very abnormal."
—Excerpt from "Selected Important Documents Since the 28th Congress of the CPSU," Volume 1, June 14, 1994, Comrade Ivanova's speech at a plenary session of the CPSU Discipline Inspection Commission.
Over the years, the Soviet people have gradually become accustomed to the "overstepping" behavior of the Foreign Minister. On the one hand, the Ministry of Foreign Affairs has always been a very important department in the Soviet Union. On the other hand, the General Secretary and the Foreign Minister have gone through thick and thin together for more than a decade. They are husband and wife and have never shown any public political conflict.
Some cadres thought this might threaten the General Secretary's power, and some even compared it to Lao Zhong's Chairman Mao and his wife Jiang Qing. Slava just smiled and waved his hand after hearing these words.
Fourteen years! They've been through thick and thin together! What is he afraid of? What is she afraid of?
He will never forget the burning hotel in Uzbekistan more than a decade ago, and the words that Director Nian said to him later.
“You can always trust me, Slava.”
Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.
In February 1994, the Soviet Union began its tax reform. This reform was complementary to the envelope-based wage reform, and its core content was that the salaries of all cadres, including new position allowances, would be incorporated into an electronic system.
How were cadres' salaries paid in the past? Through the finance departments of various units, finance personnel would withdraw cash from the bank and distribute it to the cadres or deposit it into their personal accounts. This process involved a large amount of manual operation—finance personnel, bank tellers, various signatures and seals... Each manual step was a potential point of error or tampering.
Salaries are now paid through the financial module of the OGAS system. The Ministry of Finance generates monthly salary and allowance data in the OGAS system, which automatically calculates personal income tax and party dues, generates disbursement instructions, and the funds are transferred directly to each cadre's personal account through the electronic system of the Soviet State Savings Bank.
The entire process is electronic, and the flow of every penny is fully recorded in the system.
This means that the discipline inspection commission can access the salary and allowance records of any cadre at any time!
In theory, a member of the Communist Party of the Soviet Union should only have two sources of income: salary and position-based allowances. If an official's bank account showed an income that could not be explained by salary and allowances—
Then explain the source of your assets to the disciplinary committee.
When announcing the reform, the Central Committee of the Communist Party of the Soviet Union declared: "This is a further strengthening of anti-corruption measures, and the Soviet Union will promote administrative modernization and increase the transparency of cadre treatment."
At the end of February, the Central Committee of the Communist Party of the Soviet Union officially abolished the "Little Birch Tree" special supply stores, giving this shaky system its final push.
The rapid economic development, the abundance of consumer goods, and the closer economic ties between the Soviet Union, Europe, and China in recent years have led to the replacement of the niche of the "Little Birch Tree" special supply store by larger supermarkets. Imported luxury goods are subject to heavy taxes, so those who could afford them before can still afford them. The vast majority of ordinary people who cannot afford them would rather buy two more chickens so that today's families can achieve "socialism with potatoes and chicken stew," which is more important.
If you want freedom and democracy, you need to have meat to cook in the pot first!
People used to pull strings to get into the Little Birch Tree Shop because basic consumer goods were scarce in the Soviet Union. They didn't want to queue for hours or buy from the black market (which sometimes sold out too), so they went to special supply stores that provided necessities. Now, people don't need them anymore; even the black market has shrunk by 76% compared to ten years ago!
Therefore, it was only natural to abolish this special supply system.
In addition to the birch trees, the special supply system for major party and government organs has also been abolished. With no pressure on the supply of daily necessities, there is naturally no need to differentiate between certain cadres. Previously, party and government organs at all levels had specially set up internal stores, restaurants, cold storage and other supply networks, and enjoyed different levels of special supplies according to their official rank and status.
The special supply system for Party and government organs at all levels will be abolished within the next four months. Specially designated internal stores will be closed; those wishing to purchase high-end foreign goods should go to the market. Restaurants will be merged, eliminating the practice of small canteens for cadres, but a special service window will be opened to supply high-end or imported ingredients, with subsidies available to senior cadres...
Many foreign official newspapers commented on this reform by the Communist Party of the Soviet Union as follows:
"...With the gradual abolition of the special supply system in the Soviet Union in 1994, this symbolized the further demise of the privileges of CPSU party and government cadres. The Soviet Union was moving towards an era of fairness, just as Ivanov had promised, and it also symbolized that the Soviet Union's supply of basic materials was sufficient to meet the needs of the vast majority of the people..."
For many left-wing parties in Western European countries, the Soviet Union's reforms in this area were more significant than its creation of 10,000 atomic bombs!
The Soviet Union was now using its systems to suppress the breeding ground for corruption, cracking down on informal, opaque mechanisms for distributing benefits based on personal relationships. France was particularly concerned about this.
Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.
France was interested in the Soviet Union's anti-corruption reforms because France itself was facing the same problem.
The political situation in France was escalating between 1993 and 1994.
François Mitterrand, the president of the Fifth French Republic, is watching his party die. He has led the French Socialist Party for 12 years, but now, only heaven knows what the future holds for it.
At this time, the Socialist Party was being dragged down by a series of scandals: illegal political donations, the contaminated blood products scandal, and fierce infighting between Mitterrand's successors, Jospin and Fabius. France's unemployment rate exceeded 10%, the economy stagnated, and voters were reaching their limit of fatigue with the Socialist Party's 12-year rule.
In the March 1993 French parliamentary elections, the Socialist Party suffered a devastating blow, losing 53 seats after previously holding 260, while the right-wing coalition (the Rally for the Republic and the Rally for Democracy) won 486 seats!
This is one of the most serious electoral defeats in the history of the French left.
The Socialist Party's crushing defeat significantly weakened the left wing, and its allies, such as the Radical Left and the Green Party, were also affected. As for the French Communist Party? The French Communist Party withdrew from the Socialist Party's left-wing alliance in 1984 because it was unwilling to compromise on many issues.
The French Communist Party itself relinquished its chance to participate in governing, which led many right-wing parties to attack it, saying it lacked governing experience and urging voters to abandon the corrupt left-wing Socialist Party and vote for the right.
The collapse of the Socialist Party was the final eruption of the decay accumulated over twelve years of rule.
There are many sources of the ulceration, the first being the Urba incident.
This is the French version of the envelope wage, and it's also the reason why France paid the most attention to the Soviet Union's anti-corruption reforms—because the French version of the envelope wage was even more outrageous!
France had no public funding system for political parties in the 70s. Campaign costs continued to rise, but the legislature never passed a public funding bill.
In this environment, the Socialist Party established a centralized financing system centered on fake invoices. Specifically, the consulting firm Urba was established in 1971 (two years after Mitterrand reorganized the Socialist Modern Party at the Épinay Congress), ostensibly to provide infrastructure and public works consulting services to Socialist-controlled municipalities. In practice, companies in Socialist-controlled cities had to pay Urba and other affiliated companies a 4% "consulting fee" on the contract amount to secure public works contracts.
These affiliated companies can keep 40% for themselves, hand over 30% to the Socialist Party headquarters, and give 30% to local party organizations.
This doesn't mean that only the Socialist Party did it; right-wing parties had the same problem, and everyone was doing it! It's just that the Socialist Party's 12 years in power made this gray system more centralized and larger in scale.
The law does not allow political parties to obtain public funds → political parties can only raise funds through gray channels → after long-term rule, gray channels become systematic → when they become systematic to a certain extent, they will inevitably be exposed!
French voters have become desensitized to these kinds of scandals—every ruling party has similar issues, left and right alike. But the scale and systemic nature of the Urba scandal, which suggests it was an organized act by the entire party, has led many voters to believe that the Socialist Party is rotten to the core.
The second is the scandal involving contaminated blood products.
In 1985, the French National Blood Transfusion Center continued to supply untreated blood products to hemophilia patients for economic gain, despite knowing that the blood products were contaminated with HIV.
This resulted in thousands of people being infected with HIV.
Subsequent statistics showed that approximately 1000 patients who contracted HIV through blood transfusions died, and Laurent Fabius, the successor designated by President Mitterrand, was implicated and charged with manslaughter.
Although Fabius was ultimately acquitted (the court ruled he was "unaware"), the public was unconvinced—how could a prime minister not know about such a serious problem with his country's blood supply system?!
Similarly, this isn't corruption unique to the Socialist Party; the inertia of the bureaucratic system is the real culprit. Knowing the risks but delaying action to protect the interests of the French national financial system, this act, now etched into the Socialist Party's record, became an outlet for voter anger.
Thus began a fierce infighting between the Socialist Party's two most promising young leaders—Fabius and Jospin—under the shadow of this scandal.
Fabius wanted to clear his name, while Jospin wanted to replace Fabius as Mitterrand's successor. The struggle between the two tore the Socialist Party apart, and the already limited energy was wasted on infighting.
The third issue is the fundamental problem of the universe – the economy. France's unemployment rate has exceeded 10%. The economy is stagnant, young people cannot find jobs, and voters are exhausted by twelve years of Socialist Party rule.
The economic problems cannot be entirely blamed on the Socialist Party. At that time, the French economy was managed by Pierre Bellegout, a proletarian socialist, who devoted himself to curbing the deteriorating economic situation. Thanks to his efforts, the franc remained strong, the inflation rate continued to decline, and foreign trade even showed a surplus.
But Bellegova couldn't erase the enormous shadow looming over the French economy—high unemployment, a major reason for his predecessor's downfall, a fact that must have left Bellegova deeply uneasy. To address this thorny issue, Bellegova introduced some bold measures:
Lowering the base interest rate to boost investment; reducing value-added tax to stimulate consumption; and launching housing renovation and construction plans to stimulate the construction industry. He even announced a partial privatization plan, raising funds to expand employment by selling some shares of the state-owned "705u.com-Reading Club" company. Beregova had hoped these clever measures would initially be effective, but they all failed.
The voters then gave the Socialist Party an answer with their ballots.
On May 1, 1993, International Workers' Day, Pierre Beregova committed suicide. Beregova was the descendant of Ukrainian immigrants; his father was a blue-collar worker. He climbed the ranks through the labor union, without attending elite schools, relying on decades of grassroots work and loyalty to the Socialist Party to rise step by step to the position of Prime Minister.
He was known for his integrity and was one of the few people in the Socialist Party's political circles who had no scandals.
It wasn't until the media revealed that Berregovar had accepted a one million franc interest-free loan from a friend in 1986 to buy an apartment in Paris. But was this corruption? Not really, because Berregovar later repaid the loan, and besides, he wasn't even a member of the ruling party in 1986!
However, against the backdrop of his crushing political defeat, it shattered the image of integrity that Beregovoi had built up over decades. He became a target of the media, with newspapers publishing articles about it every day. A blue-collar politician known for his integrity was branded with shame by a loan of one million francs!
The opposition, unwilling to give up, sought to create a scandal and use it as a pretext to attack the Socialist Party. Journalists persisted, with right-wing parties not only focusing on Beregova's €100 million loan but also launching a fierce attack on Beregova's economic policies over the past few years—a common tactic used by parties in electoral competition.
In the legislative elections of March 1993, the Socialist Party lost power and Beregovo was forced to resign. Internal strife subsequently erupted within the Socialist Party, with Rocard seizing power and former First Secretary Fabius resigning, leaving the party fragmented.
Berregoy is deeply disappointed with the current corruption of the Socialist Party. Right-wing parties, under the guise of "reckoning with the economic reality," have completely blamed Berregoy for France's current economic difficulties and launched vicious personal attacks.
The Socialist Party's long period in power led to rampant corruption and scandals, many of which implicated the Ministry of Finance, headed by Beregovário, and resulted in the forced resignation of his two chiefs of staff, who then continued to attack him. Beregovário, who had dedicated his life to integrity and public service, found himself shrouded in mystery and unable to defend himself in these events.
Ultimately, it was President Mitterrand who pushed him to his doom. Before Labor Day, the court ordered Beregova to testify in the corruption trial. Knowing that the cases involving him implicated high-ranking party officials, Beregova was eager to meet with President Mitterrand to discuss countermeasures.
President Mitterrand refused to see him, and didn't even answer his phone, only sending a message to him to stay home and "reflect on his actions."
At this point, Beregova realized his predicament of being made a scapegoat to draw attention to his predicament.
He joined the partisans to resist Nazi Germany during World War II and was a staunch socialist who lived by the principles of integrity and public service. Yet, he could only watch helplessly as he was embroiled in this mess. Unwilling to be made a scapegoat by the Socialist Party and nailed to the pillar of shame, he was willing to die to prove his innocence.
On May 1st, International Workers' Day, Beregoy walked to the bank of a canal on the Loire River, next to a poster he had chosen, a microcosm of his life's struggles.
Then a gunshot rang out, and he ended his life with a pistol, proving his faith and innocence with his death.
Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.
Mitterrand attended the funeral, his voice hoarse and eyes red, as he spoke to the camera, accusing:
"They threw a man's honor to a dog!"
They were referring to the media, honor to Beregova’s decades-long innocence, and dogs to the newspapers and television stations that turned a loan into a scandal.
But Mitterrand's anger couldn't change reality. The Socialist Party was finished, Beregovário, the scapegoat, had committed suicide, parliament had been taken over by the right wing, and Mitterrand's own cancer had spread; he himself wouldn't live for more than a few years!
He was forced to appoint right-wing Edward ElBaradei as prime minister.
This was the second time the French Fifth Republic had a co-governance between the left and right wings, with the president being a left-wing prime minister and the prime minister a right-wing leader. The two disliked each other but had to work together—because that was stipulated in the constitution.
Balladur's emergence marked the beginning of the right-wing split in France. He was a member of the RPR (Republic for the Republic), a party that included Jacques Chirac. Chirac, the leader of the RPR and a leader of the French right wing, had previously run for president against Mitterrand in 1988 (but lost).
In 1993, Chirac appointed ElBaradei as prime minister because his own strategy was to "not be prime minister, but save his energy to prepare for the 1995 presidential election." He wanted ElBaradei to work with Mitterrand to deal with the economic mess and deplete his political capital, while Chirac would conserve his strength and make his move in 1995.
This plan has one condition: that ElBaradei does not run for president.
Balladur promised to support Chirac's presidential candidacy, but power can change people, and after becoming prime minister, Balladur surprisingly maintained high approval ratings. He governed against the backdrop of economic recession and high unemployment, but his calm, pragmatic, and uncontroversial style made French voters feel that things had at least not gotten worse.
His approval rating once led Chirac by 14 percentage points, so ElBaradei broke his promise and announced his candidacy for the 1995 presidential election.
The French right wing is divided.
Chirac did not back down; he changed course and began to talk about "social fractures."
"Fracture sociale"—the term "social fracture" became the core slogan of Chirac's campaign. He said that French society was fractured: a fracture between the upper and lower classes, between the elite and ordinary people, between Paris and the provinces, and between those who had jobs and those who couldn't.
He criticized the "mainstream thinking" represented by Ballard, a right-wing mindset that advocates a globalized free market and believes there is no other way out but to cut public spending and reduce labor costs.
"Wages are not the enemy of employment!" Chirac shouted at a rally. "Lowering wages will not create jobs, it will only create poverty!"
These statements may not be entirely accurate from an economic perspective, but voters don't understand economics. What voters care about are jobs and wages!
Like voters in all countries, French voters chose change during a time of great hardship. Chirac's poll numbers began to catch up with Ballard's, and right-wing parties descended into civil war.
Meanwhile, on the left wing, another force is quietly moving amidst the ruins of the Socialist Party.
That was the French Communist Party.
The French Communist Party (CP) was once the largest left-wing party in France. At the end of World War II, the CP garnered over 25% of the vote, meaning one in four French voters voted for the Communist Party! It played a central role in French politics, culture, and the workers' movement.
However, the French Communist Party (CCP) began its decline in the 1970s. The Socialist Party, a social democratic party led by François Mitterrand, rose to prominence, stealing a large portion of the CCP's voters. The CCP's vote share plummeted from 25% to 15%, and then to 10%.
The Socialist Party's crushing defeat in 1993 presented a historic opportunity for the French Communist Party.
With the Socialist Party gone, where will the votes from the French left go? If the French Communist Party can absorb these outflowing votes, it can reverse its decades-long decline and once again become the largest party in the left wing!
But for the French Communist Party to win these votes, it must first solve its internal problems.
The French Communist Party is currently internally divided, with the core issue being: what kind of party should the French Communist Party be?
One faction was the traditionalists, based on retired veteran party members and grassroots working-class branches. They insisted on following the Soviet model: democratic centralism, Leninist organizational principles, fundamental opposition to capitalism, and maintaining close ties with Moscow.
The other faction is the reformists, represented by young, highly educated party members who grew up in non-working-class environments. They believe the French Communist Party must modernize, abandon revolutionary rhetoric, embrace parliamentary democracy, cooperate with the Socialist Party rather than compete with it, and be more open on cultural and social issues.
The leading figure of the reformists was Robert Hugh. Hugh didn't discuss class struggle; he believed the problem with the French Communist Party was its image—in the eyes of the French public, the party had become an "outdated, rigid, and Soviet-bound relic." To attract voters, especially young voters and the middle class, the party needed a complete transformation.
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