DUBININ JOINS GERASHCHENKO IN DEFENDING FIMACO.

Former Central Bank chief Sergei Dubinin has defended the Central Bank’s use of an unknown offshore asset management firm to manage hard currency reserves. In an open letter published yesterday, Dubinin–now a senior executive at Gazprom, Russia’s state natural gas monopoly–and his former deputy Sergei Aleksashenko wrote that the firm FIMACO, registered in the Isle of Jersey, “was a necessary measure to defend the economic safety of the nation” (Vremya MN, February 11).

As previously reported, Prosecutor General Yuri Skuratov wrote a letter to the State Duma on February 1, a day before his apparently forced resignation, in which he charged that the Central Bank, from 1992 to 1997, had placed nearly US$50 billion in the hands of FIMACO, which earned commissions for managing the funds (see the Monitor, February 9). Last week, Viktor Gerashchenko–the head of the Central Bank and its chief from 1992 to 1994–revealed that the Central Bank had created FIMACO, and said that the bank at one point had used FIMACO to hide more than US$1.4 billion from potential seizure by Western creditors. Gerashchenko defended FIMACO. In their letter, Dubinin and Aleksashenko charged that Skuratov, in revealing the existence of FIMACO, had placed Russia’s “economic security and state interests” in danger, given that, in their words, Russia may again need to protect is reserves, this time from the London Club of private creditors for Soviet-era debt. The two former Central Bank officials charged that the scandal was part of an attempt to “destroy” the bank’s independence and subordinate it to the parliament or the government, which could lead to high inflation (Vremya MN, February 11).

On February 10, Boris Federov, who served as Russia’s finance minister from 1992-1994, charged that FIMACO had been set up by government officials who “were simply allowing friends to earn handsome profits.” Federov said he had complained about this in 1993, but was told to mind his own business (Russian agencies, February 10).

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