CHUBAIS DEFENDS EX-PRIVATIZATION CHIEF.

Russian first deputy prime minister Anatoly Chubais has taken the politically risky step of defending Alfred Kokh, former deputy premier and head of the State Privatization Committee who is presently under investigation in a bribery case. The two men are old colleagues and friends. President Boris Yeltsin dismissed Kokh in August, making him the scapegoat for several controversial privatization auctions during the summer and accusing him of being "partial" toward Oneksimbank, Russia’s largest commercial bank and one that beat out rival banks to win the deals. Since then, allegations have surfaced that Kokh took a $100,000 advance for an as yet unwritten book from an obscure Swiss publisher believed to have links to Oneksimbank. Earlier this week, the Moscow’s procuracy announced an investigation to determine whether the book deal was really a bribe. The prosecutor’s office said the fee was well above the income a publisher could expect from the publication of a scholarly study, and that Kokh signed the book deal with the help of Dmitry Ushakov, deputy head of Oneksimbank. Kokh has revealed that he spent some of the money on a summer holiday in France with Oneksim chairman, Vladimir Potanin. (AP, October 1)

Chubais defended Kokh yesterday, calling him "a man of integrity" and saying the investigation was based on "a pack of lavishly-funded lies" specially commissioned by newspapers owned by Oneksimbank’s rivals. "I have known Kokh for ten years and I know he is an honest man," Chubais told journalists yesterday. Chubais said that, before the start of the summer auctions, he warned interested bankers that none of them would have an easy time during tenders. In reply, he said, he received threats of media attacks and warnings that "criminal proceedings will be mounted against you and your friends." (Itar-Tass, October 1)

Public opinion is convinced that the summer’s privatization auctions were fraudulent and Chubais’s defense of his former colleague is unlikely to do either man much good. But, while Yeltsin made Kokh the scapegoat for the summer’s scandals, he has signaled continuing support for the privatization process this week by promoting the government agency Kokh used to head from a state committee to a ministry. The move has little practical but much symbolic importance.

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