Right now I don't think Russia can be considered an Empire in the true historical sense of the word. It depends though on your operational definition of the word. Is the US an empire? If we're going off of traditional definitions, then neither are really. Russia does however has a clear sphere of influence, controls territories beyond her ethnic boundaries consisting of dozens of religious, ethnic, and linguistic homelands once independent and who still see themselves as something other than 'Russian.'

However, I don't think empire and democracy are mutually exclusive. One could be either, or both, again - depending on the usage of each term.