KASYANOV SIGNS DECREE ORDERING CONTROL OVER MINISTERIAL PROFITS.

Prime Minister Mikhail Kasyanov has signed a decree ordering that any profits made from entrepreneurial activities carried out by federal government ministries or agencies must be placed in the country’s federal treasury system. According to the decree, the treasury has until December 1 of this year to open accounts in the Central Bank or credit organizations used to hold any profits made by governmental bodies. According to news reports, the decree listed the Justice Ministry, the Interior Ministry, the State Customs Committee and the Federal Border Guards Service among the bodies that would be required to hand over profits to the treasury.

The newspaper Kommersant, however, was quoted as saying that neither the Railways Ministry, which has a reported annual turnover of US$10 billion, nor the Ministry of Atomic Energy, with an annual turnover of US$3 billion, were mentioned in the decree. Both of these ministries are known to accrue huge profits, and Kommersant referred to their heads, Railways Minister Nikolai Aksenenko and Atomic Energy Minister Yevgeny Adamov, as “oligarch-ministers” (Russia agencies, October 5). It is also unclear whether the Kremlin itself, which manages billions of dollars in property and, according to former Kremlin “property manager” Pavel Borodin, earns profits from this property, was mentioned in the decree. It should also be noted that profits earned by the Central Bank itself, and how they are used, have been the subject of controversy in the past. In addition, it is not entirely clear whether the treasury system is fully equipped to manage such funds. Starting in the Yeltsin period, Russia’s various governments pledged to set up a fully functioning treasury system in which to place state funds prior to their budgetary distribution. In the past, so-called “authorized” commercial banks were used to hold federal budget money, and the Audit Chamber, a federal watchdog agency, reported widespread abuses and the misuse of billions of dollars in state funds. However the transfer of federal funds from commercial banks to the treasury was repeatedly postponed.

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