Corruption in Russia is of endemic nature. This article traces its roots to traditional practices that formed a foundation of the present-day system of governance, often referred to as ‘sistema’. It demonstrates how the logic of ‘feeding,’ ‘joint responsibility’ and ‘Potemkin villages’ is reproduced in the reliance of Putin’s network-based governance system on such instruments as undeclared incentives, informal affiliations, hidden agendas and warning signals. Putin’s sistema gives dynamism to government’s economic and political projects by engaging personalized influence, but at the same time its informal and non-transparent nature creates a fertile ground for corruption and makes its mitigation difficult. I argue that corruption it Russia could not be effectively managed unless its leaders understand the system of governance they operate in and articulate its consequences, of which endemic corruption is one of the most devastating for the country.