KHODOROVSKY: THE POLITICIANS ARE COMPLICIT, NOT THE BANKERS.

Among the Russian newspapers, only Novaya gazeta accepted the Western press charges, with Yuri Shchekochikhin, its deputy editor and a Yabloko deputy in the State Duma, asserting that the “largest part” of the laundered billions–which, he claimed, ultimately ended up in such places as Cyprus, Gibraltar and Switzerland–was “official credits allocated to Russia” (Novaya gazeta, August 30).

Interestingly, Mikhail Khodorovsky, head of the Yukos oil company and founder of Bank Menatep, which has been mentioned in connection with the Bank of New York scandal, has been less dismissive of the charges. In a pair of interviews, he said that a significant portion of the billions that passed through the Bank of New York may have originated with top government officials who had bought GKOs, Russia’s now-defunct short-term treasury bills, and, having insider knowledge that the government was planning to default on the paper, sold them off while their yields were still high. Indeed, some observers have noted that the bulk of the transfers into the Bank of New York occurred in the weeks and months before and after Russia’s August 1998 financial collapse, when the government of then Prime Minister Sergei Kirienko froze the GKOs, effectively defaulting on them.

Khodorovsky was highly critical of what he characterized as the Russian government’s silence on the accusations, which he said should be thoroughly investigated in order to save the dwindling reputation of Russian business. He denied, however, that Bank Menatep had ever engaged in moneylaundering (New York Times, August 28; Vremya MN, August 30).

Khodorovsky’s suggestion that top government officials engaged in insider GKO trading is very similar to accusations made by Yuri Skuratov, Russia’s suspended prosecutor general.

RUSSIANS STILL BARRED FROM ORAHOVAC; NEGOTIATIONS FALTER.