Publication: Monitor Volume: 5 Issue: 157

The dimensions of the Bank of New York moneylaundering scandal in Russia appear to be growing exponentially. Yesterday’s edition of USA Today led with an article devoted to it, which included allegations that, if true, are nothing short of sensational. The paper, citing unnamed “senior U.S., British and Russian law enforcement officials,” claimed that:

(1) at least US$15 billion dollars–not US$4.2 billion to US$10 billion, as reported by the New York Times and other media–were laundered through four accounts at the Bank of New York and one at Republic National Bank, also in New York;

(2) at least US$10 billion loaned to Russia by the International Monetary Fund (IMF) was among the laundered money. The Wall Street Journal previously reported that investigators believe that US$200 million in IMF loans had washed through the accounts. USA Today quoted unnamed British officials as saying that the rest “is believed to have come from bilateral loans and World Bank projects directed to Russia’s government,” along with “criminal rackets such as prostitution and even contract killings” controlled by reputed Russian mafia boss Semyon Mogilevich;

(3) according to unnamed officials in the Russian Prosecutor General’s Office and Britain’s National Criminal Intelligence Service, among those being investigated for possible involvement in the moneylaundering scheme are Tatyana Dyachenko, President Boris Yeltsin’s daughter and image adviser; United Energy Systems chief and former privatization tsar Anatoly Chubais; former First Deputy Prime Minister Oleg Soskovets; former Yeltsin economic adviser and Finance Minister Aleksandr Livshits; and former First Deputy Prime Minister and Oneksimbank founder Vladimir Potanin;

(4) “members of the Russian government” sought out Mogilevich–whose phone, fax and emails were monitored by Western intelligence services–“because of his expertise in moneylaundering.”

USA Today also quoted unnamed officials in the Russian Prosecutor General’s Office as saying that it was “hard to believe” that Yeltsin was not involved in or at least unaware of the moneylaundering (USA Today, August 26).

If these allegations are true, it would mean that the degree to which Russia’s political elite has looted foreign assistance has been truly staggering, and that this elite has entered into a virtually symbiotic relationship with organized crime.

On the other hand, USA Today’s use of only anonymous sources is understandable, given the possible risks involved, but it means that the paper’s allegations are a long way from being proved. Indeed, a spokesman for Britain’s National Criminal Intelligence Service yesterday denied having provided any information on the investigation to USA Today or any other media, adding that the Service was “exceptionally unhappy” about the article (Moscow Times, August 27). Meanwhile, Russia’s acting Prosecutor General Vladimir Ustinov asked the Federal Security Service (FSB) yesterday to look into the assertions cited in Russian and Western press reports concerning the Bank of New York scandal. Russian Deputy Prosecutor General Vasily Komogorov said that his office has ordered the FSB to contact the FBI concerning the Bank of New York investigation, adding that while his office had received no requests from U.S. law enforcement concerning the case, the Prosecutor General’s Office was prepared to render “the necessary assistance” if such a request were made (Russian agencies, August 26). Two days ago, Finance Minister Mikhail Kasanov said that the Russian government had nothing to do with the moneylaundering scandal and that there was therefore no need “to interfere in this situation” (see the Monitor, August 26).