MORE HIGH-LEVEL ARRESTS TO COME?

Perhaps even more compelling than Koshel’s arrest was a report yesterday by Russian agencies that officials of the Prosecutor General’s Office last Monday (November 2) seized databases of the Moscow Interbank Currency Exchange, pursuant to a case involving the laundering of illegal revenues by top government officials. The seized databases concerned the accounts of individuals and companies who were operating in the market of GKOs–short-term treasury bills–over the last two years. That market collapsed this past August 17, when the government essentially defaulted on domestic debt payments. Last month, Prosecutor General Yuri Skuratov said his investigators were looking into the role which Central Bank officials played in the GKO collapse. Sergei Kirienko, then prime minister, and Sergei Dubinin, then Central Bank chairman, both lost their jobs in the wake of the GKO market’s collapse and the ruble’s devaluation (Russian agencies, November 5). Today, one newspaper–citing “operational information” from the Interior Ministry–reported that just prior to the August 17 collapse, “high officials of the government and the Central Bank warned certain participants in the GKO market about a default.” The participants were thus able to dump their GKOs in time (Kommersant daily, November 6). Members of the Communist opposition and others, such as Moscow Mayor Yuri Luzhkov, have called for criminal prosecution of those responsible for the GKO “pyramid” and the “criminal” privatization. Chubais, who was serving as President Boris Yeltsin’s liaison with Western financial institutions at the time of the August meltdown, has been the most frequent target of their wrath.

The issue of corruption was also on the mind of Interior Minister Sergei Stepashin, who addressed an international conference of the Council of Europe in Strasbourg yesterday to discuss joint anticorruption and anti-organized-crime efforts. Stepashin told the conference that US$1-$2 billion are being funneled out of Russia each month. During a press conference earlier in the day, Stepashin said that some US$1.2 billion were in Swiss banks alone (Russian agencies, November 5).

RUSSIAN FAR EAST JUMPS INTO ISLANDS DEBATE.