Publication: Monitor Volume: 6 Issue: 225

Sergei Stepashin, head of Russia’s Audit Chamber, the state agency set up to monitor the use of federal budget funds, reported on December 1 that federal money earmarked for rebuilding war-torn Chechnya has been embezzled. Stepashin claimed at a press conference that top officials in both the Finance Ministry and the Economic Development and Trade Ministry had been involved in the embezzlement, but refused to name them. He said that out of the 1.3 billion rubles (some US$46 million) set aside for Chechen reconstruction since the beginning of this year, 65 million rubles (US$2.3 million) were spent improperly, including 27.4 million rubles (just under US$1 million) misused by the provisional administration in Chechnya, which is headed by Akhmad Kadyrov. The Audit Chamber found that 4.1 million rubles (some US$146,000) earmarked to pay the wages of teachers and doctors had been used by officials of Kadyrov’s administration for travel and purchases. The Audit Chamber also found that the Finance Ministry had allocated only 60 percent of the budget funds earmarked for Chechnya from January to August of this year. The Audit Chamber’s investigation was carried out over a number of months with the assistance of officers from the Defense Ministry, Interior Ministry and Federal Security Service. Two of the investigating officers were killed during the investigation, and the family of another received threats.

Deputy Prime Minister Aleksei Kudrin, who is also Russia’s finance minister, denied that his subordinates had anything to do with “serious violations” involving Chechen reconstruction money and said that the Audit Chamber needed to review its evidence. The Economic Development and Trade Ministry, which German Gref heads, refused to comment on the Audit Chamber findings. Stepashin–calling the situation “pathetic”–said that, in general, nothing had been done to rebuild Chechnya. According to the Audit Chamber’s report, not one large installation has been rebuilt in Chechnya; the republic has no real working infrastructure, including roads and electrical power; there is neither agricultural equipment nor seed for planting; 80 percent of the republic’s teachers, not having been paid salaries in five months, are in effect working for nothing (Moscow Times, December 2; Vremya novostei, Izvestia, December 4; see also the Monitor, December 1).

Newspaper coverage of Stepashin’s comments is worth noting. The English-language Moscow Times led with the fact that Stepashin accused unnamed top officials of the Finance Ministry and the Economic Development and Trade Ministry of complicity in misusing Chechen reconstruction funds. That information was buried, however, in the middle of the Vremya novostei article and absent altogether from Izvestia’s coverage. Izvestia has become perhaps the most consistently pro-Kremlin of Russia’s newspapers.

Stepashin’s observation, ironically, echoed comments made by Kadyrov, who charged recently that no apartment block in Chechnya had been rebuilt and that Russian troops were looting oil and metals from the republic. Kadyrov has, however, refused to take responsibility for the looting of Chechen reconstruction funds, arguing that it is impossible to know what happens to such funds because there are no working financial institutions in Chechnya (Izvestia, December 4). At the same time, the fact that Bislan Gantamirov is now serving as mayor of Djohar [Grozny], the Chechen capital, does not enhance the credibility of the republic’s provisional administration, given that during his previous tenure as mayor–in 1996, at the end of the first Chechen military campaign–Gantamirov was accused of stealing Chechen reconstruction funds and jailed. However, Vladimir Bikovikov, the deputy presidential representative to the Southern federal district, which includes Chechnya, said that none of the Chechen reconstruction funds for which either he or Gantamirov were responsible had been misused. Bikovikov, however, conceded that “certain” officials knew where the misappropriated funds went (NTV, December 3).

The absence of any real rebuilding efforts combined with ongoing guerrilla warfare help explain why large numbers of Chechen refugees continue to pour into neighboring republics. Hundreds of Chechens have reportedly been leaving the republic each day for Ingushetia, North Ossetia or other parts of southern Russian. Tens of thousands of Chechen refugees are now living in Stavropol krai (NTV, December 3). The bulk of Chechen refugees, however, are living under harsh conditions in Ingushetia. Supplies of food, gas and electricity to refugee camps there are episodic, and Ingushetian authorities have said that they will stop giving humanitarian food aid to the refugees because the federal government has failed to reimburse the republic. Yet despite these problems, only a small number of Chechen refugees in Ingushetia have been willing to return home (Radio Liberty, December 2).