Publication: Monitor Volume: 3 Issue: 134

Clan warfare has once again erupted in the pages of the Russian press, and a central theme of the most recent round of charges is the allocation of interest-free credits by commercial banks. The latest volley was fired off in the government newspaper Rossiiskaya gazeta, which published an article accusing two former state officials, now working for Oneksimbank, of organizing a fraudulent loan in February of this year. (Rossiiskaya gazeta, July 9)

The paper says that the $100 million loan to the MiG-MAPO company, supposedly an advance credit for the purchase of MiG-29’s by India, was approved by former deputy finance minister Andrei Vavilov and ex-first deputy prime minister Vladimir Potanin, who was ousted in March and who returned to his former position as chairman of Oneksimbank. The publication can be seen as a response to the articles in Izvestia on July 1-2 accusing First Deputy Prime Minister Anatoly Chubais and Central Bank chairman Sergei Dubinin of corrupt dealings.

Such accusations of fraud should be investigated by the independent State Auditing Chamber. However, as the deputy director of that office, Yury Boldyrev, explained in a recent interview, the chamber is starved of resources, is often ignored by the executive and legislative branches, and lacks the authority to bring cases directly to court. (Pravda-5, July 8) The agency’s actual budget was a mere 19 billion rubles ($4 million) in 1995 and 30 billion in 1996, despite the fact that it uncovered 5.8 trillion rubles of waste in 1995 and 9 trillion in 1996.

Boldyrev noted that much fraud involves the granting of low-interest loans by commercial banks, a practice which is apparently not a punishable offense under current law. On June 4 the Duma asked the Chamber to investigate the financing of Russian Public Television (ORT): Boldyrev said he had uncovered a dubious low-interest loan to ORT from Stolichny Bank in 1995. He also questioned the income and wealth declaration recently filed by President Boris Yeltsin, noting that Yeltsin’s wages amount to only 10 percent of his income, and that he seems to have depended on interest-free loans to buy his dacha and land. The Auditing Chamber itself came under criticism last month, however, for building itself a lavish new headquarters.

Russian Procurator Defends His Agency’s Record.