Publication: Monitor Volume: 5 Issue: 160

The Kremlin, clearly on the defensive about a host of allegations in Western media concerning alleged moneylaundering through the Bank of New York and alleged Swiss bank accounts held by top Russian government officials, appears to have moved yet again to purge unreliable members from its ranks. On August 27, Georgy Chuglazov, a top investigator in the Prosecutor General’s Office, and two of his colleagues were removed from the cases they had been working on. Chuglazov was set to fly to Switzerland that day in connection with the ongoing investigation into the alleged payment of kickbacks by Mabetex, a Swiss construction firm which had won lucrative Kremlin renovation contracts. He was quoted today as saying, “We possess material on the existence of accounts of high-level government officials and their relatives in foreign banks. And not only foreign ones. On the other hand, it is necessary to prove that the origins of these accounts were illegal” (Moskovsky komsomolets, September 1).

Yuri Skuratov, the prosecutor general who was suspended by Yeltsin earlier this year, has said in various interviews that the Mabetex case was the main reason for his removal. In an interview published yesterday, Skuratov predicted that Yeltsin’s “closest entourage” would obstruct any serious investigation into the billions of dollars from Russia allegedly laundered through the Bank of New York. Skuratov claimed that Russian law enforcement officials had obstructed an investigation into 800 officials, including senior ministers and central bank officials, who were believed to have speculated in GKOs, Russia’s now defunct short-term treasury bills (Financial Times, August 31).

Western media have reported that credits to Russia from the International Monetary Fund (IMF) wound up in the Bank of New York–a charge which both Russian government and IMF officials have denied. On August 29, a French newspaper claimed that French authorities “have known for at least three years, from their secret services, about machinations with IMF funds” (Journal du Dimanche, August 29). On August 28, another French paper quoted Aleksandr Kulikov, chairman of the Russian parliament’s anticorruption commission, as saying that he has seen documents indicating that former Prime Minister Viktor Chernomyrdin transferred US$1.5 million dollars in government funds to a research institute whose activities can be considered as “highly dubious.” Kulikov also claimed that funds transferred to the authorities in the republic of Komi were subsequently transferred abroad “for the needs of one of the members of the Yeltsin family” (Le Figaro, August 29).

Last week, the Kremlin denied that either Yeltsin or any members of his family have ever had a foreign bank account.

Meanwhile, a newspaper today claimed that the current “propaganda campaign” concerning high-level governmental corruption was initiated last year by Viktor Ilukhin, the radical communist who heads the State Duma’s security committee, and Veniamin Sokolov, auditor of the Audit Chamber, a watchdog agency set up by the Duma. The article condemned Ilukhin for a letter he sent to the U.S. Senate, in which he allegedly warned that IMF credits to Russia would end up in private accounts in German banks. The paper also attacked Sokolov for allegedly trying to convince U.S. Republican Party leaders, during a trip to Washington last year, that they should have no relations with the Russian government (Moskovsky komsomolets, September 1).