Russia Pleads With IMF To Release Money
Russia pleaded with the West yesterday not to let the growing scandal over alleged money laundering delay the release of loans from the IMF and tip it into bankruptcy. John Howard reports.
The IMF has postponed a decision on a further US$ 1 billion of aid amid disquiet over the corruption tainting politicians, bankers and businessmen and the danger of it spreading to the West. A further $US 1.3 billion of loans from the West expected a few days ago has not materialised inflicting severe strains on Russia's already tight budget.
"We are doing everything and receiving nothing, we can't go on like this," Russian official, Mikhail Kasyanov said.
Parallel investigations in Switzerland into alleged payments made by a Moscow construction company to Boris Yeltsin's son-in-law, Leonid Dyachenko, have led to speculation that corruption is wide-spread in the Kremlin.
One of the first direct links between Swiss and American investigations emerged yesterday when it was reported that two Bank of New York accounts held indirectly by Mr Dyachenko had dealings with a company at the heart of the Swiss investigation. Mr Dyachenko has had his financial records subpoenaed by a Federal Grand Jury in New York but he is not, as yet, under investigation.
President Yeltsin, his daughters and senior officials also stand accused of pocketing kick-backs from a Swiss firm in return for business but this is denied by those involved.
Western governments have called for more stringent audits of all spending of past IMF aid packages before releasing further tranches of support. The issue will dominate hearings which are to be held by the US House of Representatives Banking Committee on Russia next week.
Investigators are focusing on Wall Street alleging that some of the money may have been dollars sold by Russia's Central Bank to support the rouble before the 1998 crash. The Central Bank has already been caught lying about its use of IMF aid when it emerged that it had set up a mysterious company registered in the Channel Islands to handle some of Moscow's reserves.
Russia needs prompt payment of each installment agreed with the IMF in July to avoid the risk of defaulting on its existing debts to the fund or having to cut state spending still further in an election year.
Russia's latest plea to the West has come after indictments were filed in New York against three Russian immigrants involved in the transfer of US$ 7 billion from Russia through accounts at the Bank of New York. The FBI said this was just the beginning of an ever-widening investigation into Russian and perhaps world-wide financial corruption.