Publication: Monitor Volume: 6 Issue: 115

The Federal Security Service and tax police have reportedly searched the Moscow offices of Sokol-YuNS, a private security firm. What gives the raid significance is the fact that Sokol-YuNS provided security for Behgjet Pacolli, head of the Swiss engineering-construction firm Mabetex, which is under investigation in both Russia and Switzerland for allegedly paying kickbacks to top Russian officials in return for lucrative contracts to restore Russian government buildings. Sokol-YuNS also guarded property belonging to Mabetex both in Russia and abroad, including in Germany and Austria. The private security firm apparently took full advantage of its relationship with Mabetex. According to a report yesterday, law enforcement officials carrying out the raid on Sokol-YuNS discovered Mabetex documents and rubber stamps in the safe of Yuri Stenin, Sokol-YuNS’ director (ORT, June 12).

These raids on Sokol-YuNS were not the first: Last August, Russian media reported a raid on the firm’s offices in connection with alleged tax evasion, during which investigators found original documents recording more than US$8 million worth of payments, some of which had been signed by Pavel Borodin, who then headed the Kremlin’s property management department. It was not clear from press reports at the time to whom these payments were made, or for what purpose. During that raid, investigators also reportedly found stamps from the Interior Ministry and Moscow police department, equipment for intercepting pager messages, documents with details of the personal lives of top politicians and government officials–Deputy Prime Minister Viktor Khristenko was specifically named–and 500 audio- and videocassettes of surreptitiously recorded conversations (Kommersant, August, 5, 1999).

Earlier this year, the Swiss authorities issued a warrant for Borodin’s arrest in connection with alleged bribery and money laundering. Shortly after Boris Yeltsin stepped down as president last December 31, his successor, Vladimir Putin, removed Borodin as head of the Kremlin’s property department and recommended that he be named state secretary of the Russia-Belarus Union, the post which Borodin now occupies. Putin has identified Borodin as the man responsible for bringing him from the St. Petersburg city administration to the Kremlin. After moving to Moscow, Putin served as Borodin’s deputy.

While the reason for the authorities’ renewed interest in Sokol-YuNS is not clear, the reports of this latest raid on the private security firm coincided with a report in Newsweek that the Swiss authorities will soon file formal complaints against fourteen people involved in the Mabetex affair, including Tatyana Dyachenko and Yelena Okolona, Yeltsin’s two daughters. Back in 1993, they allegedly made purchases worth hundreds of thousands of dollars using credit cards provided by Mabetex. The Kremlin has denied the allegations (Newsweek, June 19; see also the Monitor, September 9, October 15, 19, November 19, 1999 and January 11, March 30). Last week, the Italian newspaper Corriere della Sera quoted a letter from Geneva investigating magistrate Daniel Devaud alleging that Mabetex had paid US$4 million in bribes to Russian officials, most of it to Borodin, and that another Swiss company, Mercata Trading and Engineering, had paid US$60 million in bribes, at least US$25 million of which went to Borodin. Earlier this month, Devaud reportedly informed Mabetex chief Pacolli that he would be charged with money laundering and membership in a criminal organization. Both Pacolli and Borodin have denied all charges and allegations connected with the case. Swiss prosecutors have complained that they have not received cooperation from their Russian counterparts in investigating Mabetex and other high-level corruption cases (Moscow Times, June 1, 9).