Publication: Monitor Volume: 6 Issue: 234

Geneva Prosecutor Bernard Bertossa has criticized the Russian authorities’ decision to shut down the Mabetex case. Ruslan Tamaev, the former chief Mabetex investigator who is now deputy head of the Prosecutor General’s Office’s department of high-profile cases, announced on December 13 that the case had been dropped due to a lack of evidence (see the Monitor, December 13). The case involved allegations that two Swiss firms, Mabetex and its affiliate Mercata Trading, paid bribes to Kremlin officials, including former Kremlin property manager Pavel Borodin, in return for lucrative contracts to refurbish Russian government buildings. The Swiss authorities were conducting their own investigations into whether the companies and Russian officials had engaged in money laundering.

“In Russia a double standard of justice is being established: one for its friends, the other for its opponents,” Bertossa said in an interview. “Pavel Borodin has wonderful relations with the regime and he is being cleared of guilt despite the fact that bank account numbers and information concerning the transfer of funds to Mr. Borodin… were transmitted to Moscow. At the same time, others, who have criticized the regime, are subject to prosecution. I mean [Boris] Berezovsky and [Vladimir] Gusinsky. All of this testifies to the fact that the organs of justice are not independent… While the Russian law enforcement organs do not… allow investigations to be carried out in connection with some, they display excessive zeal in connection with others” (Segodnya, December 15). In January of this year, Borodin, a long-time close associate of former President Boris Yeltsin, was named Russia-Belarus Union state secretary on the recommendation of President Vladimir Putin, who had earlier served as Borodin’s assistant in the Kremlin property department. Several weeks later, the Swiss issued an international arrest order for Borodin (see the Monitor, January 11, 28).

Tamaev said during his December 13 press conference that while the Prosecutor General’s Office had dropped its investigation of Mabetex, it viewed the Mercata Trading case as separate and would still respond to any Swiss inquiry regarding Mercata (Russian agencies, December 13). Bertossa’s interview, however, raises questions about Tamaev’s sincerity in this regard. What is more, on December 14, the day after Tamaev’s press conference, a Geneva court ordered that bank accounts belonging to Mercata and its chief, Viktor Stolpovskikh, be unfrozen. According to Bertossa, the court based its decision on the fact that the Russian side is not cooperating with the Swiss investigation of Mercata (Segodnya, December 15). In July of this year, Swiss magistrate Daniel Devaud wrote a letter to Russian Prosecutor General Vladimir Ustinov, in which he alleged that Mercata Trading had concluded contracts with the Kremlin property management office worth US$492 million, out of which “commissions” worth US$65.52 million were paid into to various offshore bank accounts belonging to various companies and other entities. Of these payments, the letter alleged, US$25 million went to Borodin and his relatives. The letter, which described the “commission” payments in detail, was leaked to the press this past September (see the Monitor, September 14). Later that month, however, Devaud got into a legal battle concerning the case: A Swiss court ordered that bank accounts belonging to Mabetex and Mercata Trading be unfrozen, after which Devaud essentially reversed the court order, citing unspecified “new information” (see the Monitor, September 27).

Last month, Borodin predicted that the Mabetex case would be closed down, and said that he would then sue both “the media which accused me of corruption and the investigators and prosecutors who participated in this ordered-up affair.” Borodin claimed that the case had been “ordered up” to discredit Yeltsin (see the Monitor, November 9). Earlier in November, Tamaev had declared that documents presented in an article published last year in the newspaper Versiya bearing Borodin’s and Yeltsin’s signatures and thus showing that they held accounts in Switzerland’s Banco del Gottardo were fake (see the Monitor, November 2). In his press conference this week, Tamaev said that no evidence was found concerning alleged kickbacks to Borodin. He also said that while investigators had found evidence that Yeltsin had paid 55,000 Swiss francs (about US$23,000) using a Eurocard credit card issued in his name, the charges were covered by a money transfer from Yeltsin’s official account in Mezhprombank (Moscow Times, December 14).

Yet, besides Devaud, others–including former Russian Prosecutor General Yuri Skuratov–have alleged that the Russian authorities’ decision to drop the Mabetex investigation was politically motivated and premature. In an interview this week, Skuratov, who launched the Mabetex probe in late 1998, cited various evidence and allegations which he suggested were given insufficient attention. He noted, for example, that Filipe Turover, the Russian emigre who once worked for Banco del Gottardo, which handled Mabetex accounts, alleged at the start of the Mabetex probe that Borodin had been given a large sum of money and jewelry in his office in the presence of top Banco del Gottardo executives. According to Skuratov, Russian investigators later discovered the same money and jewelry during a search of Borodin’s daughter’s home (Kommersant, December 14). In a separate interview, Skuratov claimed that other questionable deals connected to the restoration of Russian government buildings have not yet been properly investigated. He claimed, for example, that a company called Mezhdunarodnoe Economicheskoe Sotrudnichestvo, or International Economic Cooperation, received a quota for the export of oil, the proceeds of which were supposed to go towards paying for the reconstruction of the Kremlin. According to Skuratov, US$770 million earned through the company’s oil export quota disappeared and remains missing (NTV, December 13).

Besides raising doubts about President Putin’s oft-repeated claim that he will establish a level playing field–one set of rules for ordinary citizens and tycoons alike–the decision to end the Mabetex probe also raises doubts about the now-popular theory that Putin has irrevocably broken with his predecessor, Boris Yeltsin, and the Yeltsin-era Kremlin inner circle. Indeed, despite the recent public disagreement between Putin and Yeltsin over restoring the country’s Stalin-era hymn as its new national anthem, the decision to drop the Mabetex case suggests, as one newspaper put it, that “the rumors about a lessening of the influence of Boris Yeltsin, members of his family and representatives of his inner circle are greatly exaggerated” (Vedomosti, December 14).