Publication: Monitor Volume: 5 Issue: 14

First Deputy Prime Minister Yuri Maslyukov said yesterday that Russian law enforcement agencies were continuing to investigate what happened to credits given to Russia by international financial institutions. Maslyukov said, “The Americans themselves ask: ‘What did you [Russia] do with US$10 billion?’–and say [that these credits] are in [bank] accounts in offshore zones” (Russian agencies, January 20). The investigation is part of a wider probe into the activities of Russia’s Central Bank. Last September, Prosecutor General Yuri Skuratov announced his office was looking into how the US$4.8 billion credit the IMF gave Russia last July was used. Around the same time, Veniamin Sokolov, a top official with the Audit Chamber, a state watchdog agency, claimed that Central Bank officials had stolen some of the IMF tranche. Analysts said the Central Bank had simply used up most of the IMF money in an unsuccessful attempt to defend the ruble prior to the August devaluation, but that some commercial banks may have profited by buying up the IMF dollars and repatriating them offshore.

While the Primakov government’s desire to blame its predecessors is understandable and even justified, the government is living in a glass house. “The Moscow Times” reported today that some businessmen and bankers are using hundreds of millions of probably unrecoverable dollars, stuck in technically insolvent banks, to pay their taxes. The cheaters are exploiting a legal loophole which allows a company to use a bank wire transfer statement as sufficient proof that taxes have been paid (Moscow Times, January 21). Rather than declaring such moribund financial institutions officially bankrupt, however, the government intends to save a number of them. The Central Bank has already floated some of them stabilization credits worth hundreds of millions of dollars.