Publication: Monitor Volume: 6 Issue: 142

The International Monetary Fund has denied charges made in an Italian newspaper that all or part of its US$4.8 billion “stabilization credit” sent to Moscow in July 1998 was diverted, and that Prime Minister Mikhail Kasyanov, who at the time was a deputy finance minister, was responsible for the diversion. Last weekend, Italy’s La Repubblica quoted what it said was a letter from Geneva magistrate Laurent Kasper Anserment, in which he ordered that a number of Swiss banks be investigated for signs of the missing IMF money, billions of which allegedly passed through a European subsidiary of Russia’s Central Bank to the Bank of Sydney, National Westminster of London, Credit Suisse and the Bank of New York (BONY). The paper claimed that Kasyanov was responsible for the funds’ “tortuous” movements (see the Monitor, July 17). Martin Gilman, head of the IMF Moscow office, subsequently told a newspaper that he was surprised by La Repubblica article, given that the Swiss authorities had not approached the Fund in connection with an investigation of the alleged diversion of the Russian stabilization credit. Gilman said that the allegations in the newspaper “almost completely” coincided with charges made earlier by Viktor Ilyukhin, a radical Communist Party deputy, and that the accusations had been refuted by an audit carried out by PricewaterhouseCoopers. Gilman also questioned La Repubblica’s claim that Kasyanov was responsible for the alleged misappropriation of all or part of the credit, saying that Kasyanov, who in 1998 was a deputy finance minister in charge of Russia’s foreign debt negotiations, was not involved in negotiations with the IMF (Vremya novosti, July 20).

In early 1999, Viktor Ilyukhin, who then headed the State Duma’s security committee, claimed he had evidence that part of the IMF’s US$4.8 billion credit was “distributed, with the participation of the president, among Yeltsin’s nearest top associates and most trusted officials,” and that US$235 million from the credit went to an Australian company in which Tatyana Dyachenko, Yeltsin’s daughter, had a 25-percent stake. Ilyukhin offered no proof for his charges (see the Monitor, March 24, 1999). The PricewaterhouseCoopers audit which Gilman referred to was ordered after it came to light that Russia’s Central Bank officials had placed billions of dollars of its hard currency reserves in FIMACO, an obscure Channel Islands assent management company. The audit found, among other things, that Russia’s Central Bank had kept a separate set of books for transactions involving FIMACO, used parts of its reserves to extend credits to Russian commercial banks, used funds from both its hard currency reserves and IMF loans to speculate on the Russian treasury bill market, and kept the returns from those operations off its books. IMF Deputy Director Stanley Fischer later admitted that Russia had “lied” to the Fund about FIMACO (see the Monitor, August 2, 1999).

A Russian newspaper today reported that the Swiss Prosecutor’s Office has launched an internal investigation of the “leak of information” concerning Kasyanov’s possible involvement in the disappearance of the IMF credit. It also reported that prosecutor in the Swiss canton of Tichino had “partially” confirmed the leaked information and, further, that the federal authorities in Switzerland had not availed themselves of the opportunity to refute La Repubblica’s report (Moskovsky komsomolets, July 21).