Publication: Monitor Volume: 5 Issue: 33

The controversy surrounding FIMACO–the little-known asset management company in which Russia’s Central Bank placed significant chunks of the country’s hard-currency reserves–took another turn yesterday. Sergei Aleksashenko, who was a top deputy to former Central Bank chairman Sergei Dubinin, said in a news conference that at least US$37 billion of the Central Bank’s reserves had moved through FIMACO. Aleksashenko’s figure was in the ballpark of the one given by Yuri Skuratov in a letter he wrote to the State Duma on February 1, the day before his apparently forced resignation. Skuratov claimed that US$50 billion in reserves had passed through FIMACO from 1992 to 1997. Earlier this month, Central Bank chief Viktor Gerashchenko, who also headed the bank from 1992 to 1994, revealed that Eurobank, a European affiliate of the Central Bank, held a majority stake in FIMACO, and that in 1993 the firm was used to hide more than US$1 billion from foreign creditors who, he alleged, were poised to seize Russian assets through lawsuits. Last week, Aleksashenko and Dubinin defended Gerashchenko’s actions in 1993 in an open letter.

During his press conference yesterday, Aleksashenko again defended the use of FIMACO to protect hard currency reserves. “A monument to Viktor Gerashchenko should be erected for the fact that he saved money from the threat of arrest that arose in 1993,” Aleksashenko said. He also denied rumors that the money placed with FIMACO was used to invest in Russia’s then-lucrative treasury bill market. He said that all Central Bank money placed in FIMACO was returned, and that the commission the firm received for managing the funds was one-sixteenth to one-eighth of 1 percent of the entire sum (if the sum was US$37 billion, this would put the commission in the range of US$2.5 million to US$5 million). Gerashchenko has also denied that the money was misused. For his part, Finance Minister Mikhail Zadornov reacted to the FIMACO scandal last week by saying: “It’s really not worth being discussed publicly” (Moscow Times, February 17). Former Finance Minister Boris Federov, however, said last week that government officials had used offshore firms like FIMACO to help their “friends” to earn “handsome profits.”

In a column published yesterday, Irina Yasina, Dubinin’s former press secretary, charged that in revealing FIMACO’s existence, Skuratov had divulged a “state secret” and worked “against the interests of his own country and for the interests of foreign creditors” (Moscow Times, February 16). Aleksashenko said in an interview published yesterday that Skuratov had broached a “commercial secret” (Segodnya, February 16). Ironically, Dubinin himself last November charged that when he headed the Central Bank, he had sent Skuratov information about “suspicious deals” involving the transfer of funds to Cyprus, Barbados and “other exotic places,” but that the prosecutor general had ignored such information (see the Monitor, November 17, 1998).