WHITEWASHING IN WAKE OF MONEY LAUNDERING SCANDAL?

Western officials appear to be pulling out the stops in a public relations campaign aimed at squelching the perception that International Monetary Fund credits to Russia were stolen or misappropriated. U.S. Secretary of State Madeline Albright said in a speech at Stanford University in California yesterday that there is no evidence that IMF funds to Russia were improperly used. Albright did add that this is no reason to ignore the problem of corruption in Russia and other countries, which is becoming “global” in its dimensions. She stressed, however, the importance of continued financial aid to Russia, including funds directed toward ensuring the safety of Russia’s nuclear arsenals and finding work for Russian scientists, tasks she described as being in the interest of U.S. national security.

Meanwhile, IMF Managing Director Michel Camdessus sent out the same message in an interview with a French magazine, saying that even the U.S. Central Intelligence Agency has no evidence that “even one cent” from IMF credits were stolen. Camdessus conceded that the Fund is not able to follow the route of each dollar it lends in the international financial flows. He added that Russia will not be shown special “leniency” in meeting the IMF’s loan conditions, and repeated his comment of several months ago that he had told President Boris Yeltsin that the Fund’s relationship with Russia will be the same as it is with Burkina Fasso (Russian agencies, October 7).

Albright’s and Camdessus’ comments came in the wake of the announcement by New York prosecutors that three people had been indicted for illegally depositing money from Russia into the Bank of New York (see the Monitor, October 6). In August, some media–notably the Wall Street Journal and USA Today–cited unnamed Western officials as saying that the billions of dollars which passed through the suspected accounts in the Bank of New York may have included US$200 million or more in IMF funds. The Italian newspaper Repubblica, meanwhile, has repeated those charges (Repubblica, October 5).

DEFERRED LOANS BAD FOR RUSSIA, DEFERRED LOANS GOOD FOR RUSSIA.