Publication: Monitor Volume: 4 Issue: 213

The controversy surrounding charges that former Central Bank officials used insider information to make money on the now-collapsed treasury bill market is heating up. “Profil” magazine reported this week that some of Russia’s largest banks, including SBS-Agro, Most-bank and BaltOneksim (an affiliate of Oneksimbank)–along with Bank of Moscow, Guta-bank and Promradtekhbank, which are close to Moscow Mayor Yuri Luzhkov–sold the bulk of their holdings in GKOs (Russia’s now-defunct short-term T-bills) in the two months prior to the GKO market’s collapse last August. “Profil” strongly suggested that someone had tipped off the banks about the state’s impending default. It reported that the investigation may also focus on privatization architect Anatoly Chubais and former State Tax Services chief Aleksandr Pochinok, both of whom indicated on income declarations last year that they had made significant money in the GKO market (Profil, November 16).

Last Tuesday (November 10), Yuri Skuratov, Russia’s prosecutor general, announced that his office had opened criminal cases against several top Central Bank officials for various violations, including insider trading involving GKOs. Skuratov said his suspicions were confirmed by information gleaned from computer databases of the Moscow Interbank Currency Exchange (MICEX), which investigators had seized the previous week. The MICEX records concerned T-bill operations dating back to 1993. While Skuratov did not name names, Sergei Dubinin, who headed the Central Bank until last August’s financial collapse, responded by saying that he knew nothing about the alleged insider trading or other illegal activities at the Central Bank during his tenure (Russian agencies, November 10). Dubinin is currently a vice president of Gazprom, the state natural gas monopoly.

In an interview published today in “Trud,” Dubinin again denied any wrongdoing, and said he believed the charges were politically motivated. The former Central Bank chief said corruption charges have been leveled exclusively against those who “actively worked” with President Boris Yeltsin and “participated in the reforms.” Dubinin included among these Sergei Stankevich, the ex-Moscow deputy mayor and one-time leading light of the reform movement, who fled to Poland last year in the face of five-year-old bribery charges; former St. Petersburg Mayor Anatoly Sobchak, who went to Paris last year for heart surgery after being summoned for questioning concerning alleged corruption during his tenure (Sobchak has yet to return); Anatoly Chubais, the target of many corruption allegations and hate figure for the opposition; and former Deputy Prime Minister Boris Fedorov, who has been named in the press in connection with a case involving the alleged embezzlement of gold and precious stones. Dubinin told Trud there have been no “loud statements” about corruption involving “people with a nomenklatura past.”