Publication: Monitor Volume: 6 Issue: 144

The scandal surrounding allegations that a US$4.8 billion IMF “stabilization credit” in the summer of 1998 was diverted before reaching Russia with the help of Mikhail Kasyanov is likely to intensify with the publication of a related journalistic investigation. The story was first reported by Italy’s La Repubblica, which cited a Geneva magistrate (see the Monitor, July 17). More recently, the latest issue of a Russian newspaper (Novaya gazeta) quotes an unnamed source in Switzerland as saying that the authorities there could soon summon Kasyanov, who is now Russia’s prime minister, to give evidence to investigators probing the alleged diversion of the IMF credit. The IMF has repeatedly denied that such a diversion took place. Further, the IMF’s Moscow representative recently said that Kasyanov, who was a deputy finance minister at the time of the alleged diversion, was never involved in negotiating with the IMF (see the Monitor, July 21).

Even more sensationally, the author of Novaya gazeta’s investigation, Oleg Lurye, claims that following the diversion of the IMF credit and the subsequent collapse of the ruble and Russia’s banking system, Edmond Safra, the late head of the New York-based Republic National Bank, gave evidence to the FBI concerning the diversion. Safra died in December of last year of asphyxiation as the result of a fire in his Monte Carlo residence. Lurye quotes Geneva prosecutor Bertrand Bertossa as saying that Safra was murdered for giving evidence to both the FBI and Swiss prosecutors concerning the diversion of the IMF credit. Both La Repubblica and Novaya gazeta claim that the US$4.8 billion credit went from the New York Federal Reserve Bank to Republic National Bank and then to various banks in Switzerland and elsewhere, but not to Russia. Lurye also claims that at the start of autumn 1999 Boris Berezovsky visited Safra at his estate in southern France. The two men, according to Lurye, had a three-hour conversation in “raised voices,” after which Safra fled in a panic to his heavily fortified Monte Carlo residence (Novaya gazeta, July 24).

Meanwhile, the Swiss High Court said yesterday that it had rejected a request by Berezovsky to unfreeze those of his Swiss bank accounts frozen in connection with the Swiss authorities’ investigation into the alleged diversion of revenues from Aeroflot, the Russian state airline (Reuters, July 24). Two Switzerland-based companies connected to Berezovsky–Forus and Andava–are alleged to have been used as conduits for hundreds of millions of dollars from Aeroflot.