Russia's shady financial deals under official investigation

Two men who know a great deal about the financial operations of leading political and business figures arrived in Moscow at the…

Two men who know a great deal about the financial operations of leading political and business figures arrived in Moscow at the weekend.

The Russian prosecutor, Mr Nikolai Volkov, flew in from Switzerland with 80 boxes of files, weighing over half a tonne, on the activities of the businessman and power broker, Mr Boris Berezovsky. He also claimed to have learned from the authorities in Bern of the misuse of $4.8 billion lent by the IMF to Russia in 1998.

The former Duma deputy, Mr Viktor Gitin, from the liberal Yabloko party, arrived from the Siberian city of Krasnoyarsk to receive treatment for a heart ailment at a Moscow clinic. He has been under arrest since March on charges of receiving bribes equivalent to more than $70,000 from a bank while a member of the parliament's finance committee.

Mr Gitin had accused Russia's Prime Minister Mr Mikhail Kasyanov of involvement in moving the IMF funds to Switzerland. Russian authorities at the time of his arrest seized documents which, he claims, back up these allegations.

READ MORE

In an unprecedented move, 365 Duma deputies of almost all political persuasions voted to demand that charges against Mr Gitin be dropped. The Yabloko leader, Mr Grigory Yavlinsky, described his arrest as politically motivated.

The loan, made in July 1998, was intended to help Russia overcome severe economic difficulties. A month later the economy collapsed in a wave of bank failures and the rouble's value fell from six to more than 20 to the US dollar in a matter of days.

Mr Kasyanov was at that time first deputy prime minister with responsibility for foreign debt. Sections of the Russian press claimed recently he is wanted for questioning by the Swiss authorities but this has not been confirmed.

In Switzerland, an inquiry by the investigating magistrate, Mr Laurent Kasper-Ansermet, has led to further allegations. Extracts from a letter from Mr Kasper-Ansermet to banks in the canton of Ticino have appeared in a local newspaper, La Regione. The newspaper reported that the $4.8 billion was routed by the Russian Central Bank through Swiss banks to the US, Australia and other countries on August 14th 1998, just three days before Russia's financial system imploded.

According to La Regione, $1.7 billion went to the Bank of New York, which US prosecutors claim was a conduit for money of dubious origins from Russia.

Mr Volkov has promised to bring all of this to the attention of the office of the Russian Prosecutor General, but in the meantime he will deal with the 80 boxes of files concerning a separate case with Swiss connections. The documents relate to allegations that hard-currency earnings by the national airline, Aeroflot, were diverted to companies in Switzerland controlled by Mr Berezovsky. On Friday, President Putin held a meeting with a group of businessmen known here as "the oligarchs", who have been accused of wielding undue political influence. Mr Putin promised the business chiefs there would be no revision of the controversial privatisation of Russian state assets from which the oligarchs initially gained their wealth.

The three leading influence-brokers - Mr Berezovsky, the oil magnate, Mr Roman Abramovich and the media tycoon, Mr Vladimir Gusinsky - were not invited to the meeting, at which Mr Putin was accompanied by Mr Kasyanov and the Kremlin Chief of Staff, Mr Alexander Voloshin. Mr Kasyanov and Mr Voloshin are believed to have had close links with Mr Berezovsky and Mr Abramovich.

Mr Gusinsky, whose media empire opposed Mr Putin in this year's presidential elections, has had his offices raided by tax police and the successor agency of the KGB. He has also been held without trial in Moscow's Butyrka prison.

Last week, however, all charges of corruption against him were dropped and he left Russia for Spain. His NTV channel is now being closely watched for any signs that a deal may have been done to temper opposition to the President.