Publication: Monitor Volume: 7 Issue: 44

In an apparent attempt to turn the tables, the Russian Prosecutor General’s Office has put out an international order for the arrest one of the main witnesses in the Mabetex case, Filipe Turover. The case involves allegations that top Russian officials, including former Kremlin property manager Pavel Borodin, received kickbacks in return for giving two Swiss firms, Mabetex and Mercata Trading, lucrative contracts to refurbish Russian government buildings, including the Grand Kremlin Palace. The Prosecutor General’s Office closed that case last December, saying that they had found no evidence that a crime was committed (see the Monitor, December 15, 2000). Borodin, however, who was transferred to the post of Russia-Belarus Union state secretary at the beginning of last year on President Vladimir Putin’s recommendation, was arrested at New York’s JFK International Airport earlier this year in response to an international warrant the Swiss authorities issued in early 2000. Switzerland wants to question Borodin about charges of money laundering and involvement in a criminal group. A letter from Swiss magistrate Daniel Devaud to Russian Prosecutor General Vladimir Ustinov, which was leaked to the Russian media last year, alleged that in return for refurbishment contracts, Mercata Trading had paid out US$65.52 million in commissions, more than US$25 million of which went to Borodin and his relatives (see the Monitor, September 14, 2000). The Swiss have reportedly also been investigating whether Mercata kicked back to Russian officials, including Borodin, millions of dollars received from a contract to refurbish Boris Yeltsin’s presidential jet (see the Monitor, January 18).

According to Aleksandr Buksman, chief prosecutor for Moscow’s central administrative district, the Prosecutor General’s Office issued an arrest order for Turover more than a year ago and put him on Russia’s wanted list. Turover, a Russian emigre who was working in Moscow for Switzerland’s Banco del Gottardo in 1999-1999, is accused of having failed to pay rent on his Moscow apartment, of stealing a US$16,000 watch from a female acquaintance and of promising to use his connections with law enforcement agencies to get criminal charges against another acquaintance dropped. Last week, the Prosecutor General’s Office issued the international arrest order for Turover, who holds both Spanish and Israeli citizenship. While working in Moscow for Banco del Gottardo, Turover made allegations to then Prosecutor General Yury Skuratov that top Russian officials held foreign bank accounts and that kickbacks from Mabetex and Mercata had been transferred into these accounts. Turover also said that Borodin had received US$1 million in cash and jewelry in his office in the presence of top Banco del Gottardo executives. According to Skuratov, Russian investigators later discovered the same money and jewelry during a search of Borodin’s daughter’s home. In his book “The Variant of the Dragon,” Skuratov, who was eventually removed as prosecutor general by then President Boris Yeltsin, said that Turover’s evidence in the Mabetex case had helped him more than the combined efforts of the Federal Security Service, Foreign Intelligence Service and Interior Ministry. According to Skuratov these agencies actually launched a campaign to discredit Turover (Vedomosti, March 5; Kommersant March 3; see also the Monitor, December 15, 2000). Indeed, Turover called the international arrest order issued last week by the Prosecutor General’s Office “revenge by Mr. Borodin’s hirelings” and the charges against him a “typical fabricated case” (Segodnya, March 2).

Borodin remains in jail in New York awaiting a court decision on a Swiss request that he be extradited to Switzerland to answer allegations of money laundering and involvement in a criminal organization. Russian Prime Minister Mikhail Kasyanov and Belarusan President Alyaksandr Lukashenka have reportedly written letters to the U.S. authorities saying that Borodin was “urgently needed” back on the job as Russia-Belarus Union state secretary. Some Russian media have speculated that the arrest on drug charges late last month of John Edward Tobbin, a U.S. Fulbright scholar who was studying in the city of Voronezh, along with the recent arrest of a German citizen in Belarus, may ultimately have been aimed at arranging a swap for Borodin (Nezavisimaya Gazeta,, March 2; Izvestia, March 5; see also the Monitor, February 28). There is some question, however, as to whether the Swiss prosecutors would be able to convict Borodin even if he were extradited from the United States to Switzerland. Last month, the authorities in Swiss canton of Geneva ordered that bank accounts belonging to Mercata Trading and its head, Viktor Stolpovskikh, be unfrozen. Lawyers for the company pointed to this decision a sign that the Swiss prosecutors working on the Mercata case would ultimately fail to prove that the company and Stolpovskikh had received “dirty” money from the Russian government. Their failure to do so would, in turn, undermine the charge that Borodin had laundered kickbacks (Rosbizneskonsulting, February 2;, February 22; Segodnya, February 24). Oleg Lurye, an investigative journalist who was one of the first to dig into the allegations against Borodin, claimed last month that Geneva prosecutor Bernard Bertossa and his fellow investigators had not collected sufficient evidence to make their case against Borodin (see the Monitor, February 6).