StratFor Intelligence Briefing 7/10/98 "With its economy in a state of collapse, coup rumors flying, and the recent murder of an opposition political leader, Russia's situation is more grave than at any time since the collapse of the Soviet Union. Caught in a cash crisis stemming from its inability to collect taxes and from declining petroleum prices, Moscow is facing increasingly hostile state workers and miners to whom the government owes billions of dollars in unpaid wages."

Freeper Anochka post 7/10/98 "The last six year's of Russian "economic reform" is a story of empire. No, not the Soviet empire or even the Russian empire, but the evolving American empire of finance capitalism, whose front-line soldiers' are equipped not with helmets and rifles, but with Brooks Brothers suits and US fiat dollars. Ambitious American policymakers, who were so busy "reforming" Russia in the most appallingly cavalier and self-serving fashion, failed to grasp the lesson Russia has to teach, i.e. liberty and empire do not cohabit. The Russian philosopher Aleksandr Berdiaev remarked long ago, "The Russian people were crushed by a vast expenditure of strength, such as the scale of the Russian state required.".The current situation in Russia is unsustainable; the economy will loose $12 billion this year alone due to depressed commodities prices, taxes can not be collected in an economy that functions mostly underground on barter, and in which a whopping 45% [up from 6% in 1995] of the national budget is consumed by debt payments for foreign loans. When Russia undergoes the inevitable devaluation, another massive bailout is guaranteed on account of Russia's 20,000 nuclear weapons. This will precipitate devaluations in Eastern Europe and may possibly threaten Latin American currencies. By the time the euro comes on line as the EU's unit of account in January 1999, we'd all better have our safety belts buckled; the ride is going to get pretty choppy.I've been on the phone with Moscow most of the day. Events there are moving very rapidly and I continue to monitor them. Once I'm satisfied I've sorted out the red herrings and am reasonably confident I can give you solid information, I will post again"

Freeper Anochka Johnson Russia List 7/11/98 Dmitri Glinski "Despite the brevity of his thorny political career, Lt. Gen. Lev Rokhlin was one of that handful of the Russian military officers whose names are easily recognized by ordinary Russians. It is striking that his murder, on the night of July 3 at his dacha in Naro-Fominsk, has been barely noticed by the Western press. In Russia, even if no direct evidence of the political character of his assasination is ever found, this tragedy is still likely to have far-reaching repercussions. . Unfortunately, all opposition to Yeltsin - which covers a wide range of views and thinking not easily synopsized here - are branded as "red browns" or "ultranationalists" in our media just as freepers are known as "extremists". But whatever their political persuasion, the overwhelming majority are patriots who are trying to save their country. It is our lending and our meddling that are bringing on the conditions for a national socialist to exploit in a time of chaos, but not a one of those guys could get elected. The globalists are not merely evil - they are INCOMPETENT! Especially when aided and abetted by WH influence peddlers and crony capitalists...Clinton, no matter his fate, will leave behind a harvest of sorrow for citizens to reap on the foreign policy front.."

7/13/98 Bloomberg Website "Russia will receive a total of $22.6 billion in financing led by the International Monetary Fund in 1998 and 1999 to bolster reserves and support the ruble, IMF, World Bank and Russian government officials said. Russia will receive $14.8 billion this year, and $7.8 billion next year."

7/24/98 Stratfor Intelligence Briefing "According to its leader, State Duma Security Committee Chairman Viktor Ilyukhin, the All-Russia Movement in Support of the Army, the Defense Industry, and Military Science (MSA) has begun preparations for a nationwide protest. Ilyukhin told a news conference in Moscow that preparations were to begin on July 23 and last ten days. He asked that all regional branches of the Movement report their readiness for the nationwide action by July 30. Ilyukhin also told reporters that, since the most active members of the Movement had received "threats of physical liquidation," the MSA had "decided to set up its own security force." ."

Sunday Times of London 8/23/98 Mark Fanchetti & Robert Service "GLOOM hung over Moscow's White House last week as Russia's most powerful tycoons departed in a solemn fleet of armoured black limousines. Their meeting at the government building, convened by Sergei Kiriyenko, the embattled prime minister, to seek ways out of Russia's financial crisis, had ended without agreement. The oligarchs, who claim to control 50% of the economy, were agreed on only one thing: that the rule of Boris Yeltsin, the president they helped to elect, must end. . .The Kremlin owes $10 billion in back wages to millions of workers who are becoming increasingly militant. Strikes, especially in the depressed coal-mining sector, have become commonplace and Russia's trade unions have announced a series of protests across the country this autumn.

8/28/98 More on Russian from Freeper Anochka ".Western assistance, IMF lending and the targeted division of national assets are what provided Boris Yeltsin the initial wherewithal to purchase his constituency of ex-Komsomol [Communist Youth League] leaders, who were given the freedom and the mechanisms to plunder their own nation in tandem with a resurgent and more economically competent criminal class. This new elite learned everything about the confiscation of wealth, but nothing about its creation. Functioning as Boris Yeltsin's political base, the Russian president's government has been doomed to sustain them ever since it took power. And it is that reality which explains the return of Viktor Chernomyrdin to the Prime Ministership.The Harvard teams' second mistake lay in a profound misunderstanding of Russian culture and, in accordance with the many ironies of the Clinton regime, in their astonishing disregard for the very basis for their own country's success; property rights. .Russian property rights are tricky; property has never been distributed, but only confiscated and awarded on a cyclical basis. Today property exists, as it always has, only where there is power. For the common man, the property right hasn't advanced much beyond what Blackstone identified as "usage rights" in that custom prevents the taking of any man's shelter, clothes or tools so long as continuous usage is demonstrable. An additional, purely Slavic feature of the Russians' concept of property is the shared belief that each has a claim upon some part of the whole.. The years-long sugarcoating of what the Clinton administration's policies have wrought in Russia is just one more lie bequeathed Americans. Unless Mr. Clinton can resist his lifelong predilection for influence peddling and not hand Al Gore's special pal, the re-installed Viktor Chernomyrdin, yet another bag of other peoples' money, the degradation of Russia will continue. .For the Clinton administration, the US Treasury and the IMF, all of whom sought to command the global economy, and the American electorate, which unwittingly funded their effort, now is the time to recall that the fundamentals of a successful country - private property, sound money, the rule of law, minimal government and public accountability - still apply, no matter how much time or how many taxpayers' billions go by."

8/23/98 Wall Street Journal "Russia's President Boris Yeltsin fired Prime Minister Sergei Kiriyenko and the rest of his government on Sunday and said he was reappointing former Prime Minister Viktor Chernomyrdin just five months after he dismissed him. The surprise announcement came as Mr. Kiriyenko and the government were struggling to overcome one of Russia's worst economic crises since the Soviet collapse.."

New York Times 8/29/98 "The scramble was on again Friday among President Clinton's already seriously scrambled aides. Three days before they are scheduled to depart for a summit meeting in Moscow, senior administration officials wondered which Russians they would face across the conference tables. Clinton's aides began rewriting his planned remarks on the future of U.S.-Russian relations. "You've got an economy collapsing and a president on the verge of resignation, and we're about to go there for a summit," one administration official said Friday afternoon, referring to Russia and President Boris Yeltsin. "."

Stratfor Systems Inc. 9/1/98 "Citing a "highly positioned source at the Defense Ministry," the Russian newspaper "Komsomolskaya Pravda" reported Monday that commanders of the Tamanskaya and Kantemirovskaya Divisions and the Tyoplyi Stan Brigade, all stationed near Moscow, as well as the Tula, Ryazan, and Tver Divisions, have been ordered to "prepare themselves for extraordinary situations." Officers have reportedly had their leaves canceled, and the units have been ordered to increase their guard on ammunition, food, and fuel stockpiles. Komsomolskaya Pravda also reported that acting Defense Minister Igor Sergeyev had assured Russian President Boris Yeltsin of the troops' loyalty during a recent meeting. Additionally, the newspaper reported that the Interior Ministry had been ordered to prepare to "act under extraordinary circumstances" in Moscow, should civil unrest arise. Finally, the newspaper reported that Russia's Federal Security Service, the successor to the KGB, is monitoring the situation in Moscow and the Far East for any signs of destabilization.."

8/31/98 Barry Renfrew AP "Lawmakers voted overwhelmingly today to reject the appointment of Viktor Chernomyrdin as prime minister despite warnings that Russia was on the verge of political and economic collapse. The Duma, the lower chamber of Parliament, voted 251-94 not to confirm Chernomyrdin after more than three hours of bitter debate in the chamber. Hard-line delegates called for President Boris Yeltisn's resignation..Yeltsin's parliamentary envoy, Alexander Kotenkov, warned the opposition that both sides could be swept aside if there is no swift action to end the crisis. ``If this chaos lasts for several more weeks, it may happen that there will be neither Communists nor us,'' he said. ``I mean a popular uprising, merciless and senseless.'' .

Electronic Telegraph 9/3/98 Marcus Warren "ALEXANDER Lebed, the outspoken Siberian governor, warned President Clinton yesterday that Russia's current position is even more desperate than in 1917, the year the Bolsheviks seized power. "I told him today the situation in Russia is catastrophic," Gen Lebed said after a reception in Mr Clinton's honour. "The situation is worse than in 1917. Now we have stockpiles of poorly-guarded nuclear weapons." The rhetoric was the most alarmist that Mr Clinton had heard on his two-day summit with President Yeltsin. But it reflected increasing nervousness in Moscow that the country's financial and political crisis could take a tragic turn for the worse."

AP 9/9/98 Mitchell Landsberg "In one Russian region, the local government has created a barter bank where people can swap timber or cardboard for food. In another, local officials manufacture macaroni to feed the hungry. With only a temporary government in Moscow, power in Russia quickly is devolving to the country's regions, where governors are adopting widely divergent policies to deal with the worst economic crisis since the 1991 collapse of the Soviet Union. Where it will all lead, nobody knows. But more than one observer has warned that Russia could be heading down a road toward division, separatism and collapse.."

Greg Myre AP 9/16/98 "Boris Yeltsin today appointed four deputy premiers - three moderate reformers and one Communist technocrat - but the government's plan for tackling Russia's economic crisis remained fuzzy and the ruble showed new signs of weakness.."

Reuters 9/21/98 "The leader of the Russian Communist Party warned on Monday that the military might take power if the new government headed by Prime Minister Yevgeny Primakov failed. ``It is important for us to support Primakov's government, but if it fails we cannot exclude the possibility that the next government will very probably be made up of soldiers,'' Gennady Zyuganov told reporters while on a visit to the Council of Europe."

St. Petersburg Times 10/2/98 Bradley Cook "It's been six weeks since former prime minister Sergei Kiriyenko took a deep breath, sighed, and unapologetically announced to the world that Russia had decided not to honor its debts. And although the dust from Kiriyenko's bombshell has yet to settle, some analysts are saying that Western investors alone could end up losing as much as $100 billion thanks to the Kremlin's unilateral and financially dubious decision. Oddly enough, that figure - $100 billion - is the same figure some analysts say investors will lose as a result of last week's failure of one of the world's largest private investment funds. Long-Term Capital Management of Greenwich, Connecticut - a hedge fund run by two former Nobel Laureates and a former governor of the Federal Reserve Board in Washington - had, at the end of August, $1.25 trillion (with a "t") invested in international markets, including everything from Japanese yen and Danish mortgages to U.S. treasury bills and Russian and Brazilian bonds .. The fact that the Strategic Rocket Forces has found the money to modernize its fleet of ICBMs while the Russian Space Agency is saying it doesn't have the funds to finish its share of the work suggests that NASA cash is being used to build Russia's new ICBMs. "NASA policy to date has been to allow the Russian Space Agency to write itself checks from a U.S.-funded bank account in New York, with no auditing on how the money was spent, and the U.S,. has no mechanism to make sure NASA money is not used to maintain Russia's nuclear weapons infrastructure," according to Russian Reform Monitor, a publication from Washington's American Foreign Policy Council think tank. ."

LA Times John-Thor Dahlburg 10/20/98 ".In July the wheat crop failed, roasted alive in the dust as the sun baked the hard earth of Russia's southern steppe to 160 degrees. Soviet-era collective farms around here lie in ruins, the livestock killed and butchered, barns and dwellings pillaged by scavengers. The local administration of this isolated, semidesert area has run out of cash, and in the largest town, half of the adult population is jobless. On the threshold of winter, when temperatures on the wind-scoured plains near the Kazakhstan frontier can drop to nearly 40 below, many families have no money and virtually nothing to eat.."

Washington Times 11/6/98 Bill Gertz ".The Clinton administration is considering whether to send up to 9 million military field rations to help feed the disintegrating Russian army that is struggling to cope with severe food shortages. A retired Russian general informally asked the U.S. government to help by supplying the packaged food called Meals, Ready-to-Eat, or MREs, said administration officials who spoke on condition of anonymity. "They are in dire need," said an administration official. "Officers are selling off stuff left and right" to get money for food."

Economist 11/7-13/98 Moscow ".AS THE country's tax revenues, reserves and credibility shrivel, the question facing Russia and its creditors is no longer whether there will be a default on over $160 billion of outstanding debt. It is when it will come, and how messy it will be. The answers are all too likely to be "soon" and "very..Russia is several hundred million dollars behind in interest payments. But because western governments have been eager to spare the new government's blushes, the fall-out has been limited. Not that Russia has shown much gratitude. One odd idea was that the debts should be offset against money owed to Russia by Soviet satellites such as Vietnam."

DAWN (Pakistan) 11/11/98 Jonathan Landay ".It was to have been a partnership that would make the world a safer place. But the Clinton administration's grand vision of helping transform Russia into a free-market democracy with which it could work to ease international tensions and consolidate the new global economy has vanished. With President Boris Yeltsin's authority ebbing and his people facing a winter of food shortages amid deepening economic tumult, the US is being forced to rethink relations with Russia. Its size and atomic arsenal hold profound implications for the security of the US and its allies. Mr Yeltsin and his team of youthful pro-West reformers were driven on to the political sidelines by the economic collapse in August. Now Yeltsin's new health problems have compelled him to hand many of his responsibilities to Prime MinisterPrimakov and raised the possibility that he could be forced to resign before his term ends in 2000. "There is a general fear that we are at the beginning of the crisis and we don't know who will be in the Kremlin" in a year, says Russia expert Michael McFaul. But recent speeches by senior US officials show that concerns over Russia's struggle to shed its communist legacy run deeper.."

11/20/98 Bob De Maria Freeper Reports ".Last week after Clinton used $885 million of the U.S. Taxpayer's money to send 1.5 million tons of free wheat to Russia, we found that Russia was exporting 1/3 of this for profit. We were told that the Russian people were starving. It appears that Clinton feels that he has had success with his wheat project for he is about to use more of the U.S. Taxpayer's dollars to send free wheat to other parts of the world. Meanwhile, the Taxpayer pays the wheat farmer substadies, pays for the free wheat and now every indication is that the "wheat futures" is going up.." And from Reuters 11/17/98 ".The Clinton administration is looking at making additional donations of wheat beyond the 2.5 million tonnes already allocated this year for various countries, a top U.S. Agriculture Department official said on Tuesday. In remarks to the Commodity Club of Washington, USDA undersecretary Gus Schumacher also said final work had begun on a package of at least 3.1 million tonnes of U.S. food aid for Russia. But he said no decision had been made on a separate initiative to help U.S. poultry growers make sales to Russia.."

Reuters 11/21/98 ".The murder of a leading liberal deputy in the lower house of parliament shocked Russian leaders and overshadowed efforts to resolve the country's economic crisis Saturday. Outspoken State Duma deputy Galina Starovoitova was shot dead in the stairwell of her apartment building in St Petersburg by two unknown attackers overnight, moving President Boris Yeltsin to express his "deep outrage." In a statement read out by top Kremlin aide Oleg Sysuyev on Ekho Moskvy radio, the president said he was taking personal control of the investigation and would see that the killers were brought to justice. Yeltsin described Starovoitova as a "passionate tribune of democracy" and one of his own "closest comrades in arms." "The shots that have cut short her life have wounded every Russian for whom democratic ideas are dear. This impertinent challenge is thrown to the whole of our society," he said.."

Washington Post 11/27/98 David Hoffman ".Tons of highly enriched uranium and plutonium at Russian scientific institutes and research facilities have been left more vulnerable to possible theft and diversion because of the country's economic crisis, according to experts from the United States who recently inspected some locations. The specialists have expressed alarm about the buckling of the "human factor" in protecting nuclear materials since the Russian ruble was devalued Aug. 17, effectively slashing the meager salaries of nuclear plant workers and guards and further draining funds available for security. "The Russian economy is the world's greatest proliferation threat today," said William C. Potter, director of the Center for Nonproliferation Studies at the Monterey Institute of International Studies in California, who visited five Russian nuclear materials sites last month and has seen 10 sites over the past year. "I think the situation is extremely dire," said Kenneth N. Luongo, a former Energy Department official who is now executive director of the Russian-American Nuclear Security Advisory Council, which seeks to promote U.S.-Russian cooperation on the issue. "We have taken a gigantic step back to the beginning of the 1990s, when the Soviet Union collapsed and we worried about a breakdown of their security system." ."

FoxNews AP 12/4/98 Greg Myre ".The Russian ruble tumbled today, trading at about 20 to the U.S. dollar and threatening to hit its lowest point since the country's economic crisis struck in August. The ruble's latest slide is an ominous sign for the government, which desperately wants to stabilize the economy as Russia heads into the difficult winter months. He blamed previous governments for the country's economic turmoil and said a lack of stability, as well as the loss of confidence in the country's future, had jeopardized economic reform efforts. Primakov's government is urgently seeking foreign help, but International Monetary Fund chief Michel Camdessus came and left this week without giving any signal that a frozen loan package will be released soon. With the country's financial markets essentially wiped out by the economic crisis, the value of the ruble is one of the leading indicators of economic confidence.."

Center for Security Policy 12/2/98 ".As the International Monetary Fund's Michel Camdessus wrestles with how to squander still more taxpayer-subsidized financial assistance in Russia, the Center for Security Policy's William J. Casey Institute today offered powerful reasons why further good money should not be thrown after bad.. Specifically, the Symposium pointed to the following mistakes by the Clinton Administration and, to varying degrees, by its G-7 partners: Focusing on government-to-government financial transfers rather than measures that would promote entrepreneurialism, small business, small farms, private ownership, and start-up enterprises and individual Russian republics.. Allowing U.S. policy and bilateral and multilateral financial aid decisions concerning Russia to be driven by an unconditional commitment to Yeltsin regime, predicated on the dubious proposition that the latter was dedicated to genuine political and economic reform...Ignoring the increasingly serious divergence of U.S. and Western interests from those being advanced pursuant to the "Primakov Doctrine" -- what Mr. Moore called a "national socialist" agenda for: reasserting Russian influence around the world, generally at American expense; forging (or resuscitating) ominous strategic relationships with the likes of China, Iran, North Korea, Iraq, Syria, Cuba and Libya; and reversing the decline of the Kremlin's military power...Last month, Deputy Secretary of State Strobe Talbott -- the man who might be said to bear the greatest responsibility in the U.S. government for its part in "losing Russia" -- launched the Clinton Administration's effort to distance itself, at least rhetorically, from its historic open-ended and unconditional embrace of Yeltsin's government.."

Freeper pea eye adds ".The point is the Clinton Administration's complicity with those mob connected oligarchs who plundered Russia and left the Russian people to the wolves.. The only one we know about for sure, thanks to a report in the Jerusalem Report of December 28, 1995, was Grigori Louchansky, who was invited to what appeared to be a fund raising dinner with Clinton at the Hay Adams Hotel in Washington DC on July 11, 1995. The invitation was signed by Richard Sullivan, DNC Finance Director. According to the Report, Louchansky is suspected of maintaining close connections with the Russain Mafia, laundering KGB money, and involvement in illicit trade in nuclear materials and missile technology. Loutchansky now holds an Israeli passport, but his company, Nordex, located in Vienna, reportedly had a $3 billion turnover several years ago. Louchansky never made that 1995 dinner with Clinton, according to the Jerusalem Report, because he had discreetly learned that he might be arrested or denied entry to the U.S. because of highly detrimental information in his intelligence dossier. But Louchansky did dine with Clinton at a similar dinner two years earlier, and even had his photo taken with Clinton which was printed up in a hometown paper back in Latvia. Time Magazine even did a big Special Investigation report called The Russia Connection, featuring Louchansky on July 8, 1996. The Jerusalem Report story stated that Louchansky's 1995 invitation from the Finance Chairman of the DNC, "was an invitation to a select dinner of some two dozen international Jewish businessmen." ..

USA Journal Online 12/14/98 "..Republican Sen. Richard Lugar [R-Ind.] and Democrat Sen. Carl Levin [D-Mich.] say that unless the U.S. commits to giving the Russian government more money to dismantle nuclear weapons, it risks "playing into the hands of terrorists." The senators' comments were made at press conference in Moscow November 19, during a visit to push the Russian Duma - roughly equivalent to the U.S. Congress - to ratify the START II nuclear arms reduction treaty. If the Duma were to ratify the treaty, Lugar and Levin said even more U.S. funds would be needed. "If START II is ratified by the Duma, particularly in light of the softness of the Russian economy, the increased number of weapons that would then need to be dismantled . . . would create an additional challenge," Levin told Reuters. "So we need to increase our efforts and not hobble them and cut them back." Lugar agreed. According to the American Foreign Policy Council, however, the funds being supplied to Moscow under the 1994 Nunn- Lugar agreement to destroy obsolete nuclear weapons are instead being used to upgrade and build new nuclear weapons and other weapons systems In fact in early September, the architect of Russian economic "reform" and chief negotiator of a recent $20 billion bailout package financed by U.S. taxpayers and the IMF says Moscow "conned" Western countries out of the money. Anatoly Chubais told Kommersant Daily September 8 that lying to Western lenders was the right thing to do. If Moscow told Western lenders the truth, Chubais said, Russia's economy would have collapsed last spring and Western lenders "would have stopped dealing with us forever."."

Freeper Conservative Arts AP 12/20/98 ".Foreign economic intelligence has become a focus for Russia's secret services, an intelligence service spokesman said Sunday. The Foreign Intelligence Service had predicted that the Asian financial crisis would affect Russia, said Yuri Kobaladze, the spokesman for the service, according to the ITAR-Tass news agency. Vladimir Putin, the head of the Federal Security Service, says that besides being responsible for counteracting subversion by foreign intelligence, the service is working to preserve Russia's territorial integrity, fight extremism and battle corruption at the highest levels. The Federal Security Service, the main successor to the Soviet-era KGB, has come under strong public criticism recently. Several of the service's officers have accused their bosses of ordering contract killings, extortion and other crimes.."

AP 1/9/99 ".Five of Russia's 10 largest banks are effectively insolvent, the Interfax news agency reported Saturday. The agency said the five banks were hit hard by the country's economic crisis and are no longer able to meet their debts to customers and creditors. Before the crisis hit in August, Russian banks were known for risking their money in highly speculative investments, including government treasury bills that yielded extremely high rates of interest. The devaluation of the ruble and the effective default on treasury bills left many banks deeply in debt. The collapse has been disastrous for Russians with savings in the insolvent banks. However, the vast majority of people are unaffected because they either have no savings or have kept all their savings in cash due to their distrust of banks. ."

On IMF and World Bank Lending for Russia, Venyamin Sokolov "Under the guise of establishing a market in Russia, the authorities have created an economic monstrosity that has nothing to do with a market system. First of all, in the Russian market there is no money, without which it is impossible to buy or sell. Consequently, the owners and directors of firms, instead of selling what they produce and buying what they need, are forced to exchange what they produce for something they need. Our present barter system is much the same as that which existed in primitive societies when people exchanged stone axes for mammoth skins. Only today our producers of jet planes, a product unknown to primitive societies, are forced to exchange aircraft not only for fuel, but for eggs, butter and sugar as well...All loans made to Russia go to speculative financial markets and have no effect whatsoever on the national economy . Giving more loans to the Yeltsin government is comparable to giving a drug addict a fresh supply of narcotics.

Union Leader 8/39/98 Patrick Buchanan ".Russia has now admitted it cannot pay its foreign debts and has demanded that short-term bond holders accept long-term paper at 30 percent of face value. Panicked investors are fleeing Russia and every Third World market. Worldwide, stocks are plummeting, and billions of dollars of equity are being wiped out daily. Since mid-July, the U.S. stock market has probably given up a trillion dollars in value. Who is responsible for this global disaster, which began in Asia? Last week, on CNN's "Moneyline," Nobel Prize-winning economist Milton Friedman nailed the villain. Said Dr. Friedman, the IMF "is largely responsible for the Asian crisis." Instead of letting Mexico default in 1994, and Goldman Sachs take its hit, the IMF rushed in to bail out Mexico City and its New York creditors. That bailout sent a message: The risks of investing billions in emerging markets are minimal. Huge sums poured into these markets. It is those investments that are being wiped out today. To stanch the bloodletting, the IMF, since last summer, has put taxpayers at risk for $130 billion in loans to Asia and Russia, most of which we will never see again..In 1991, Russia was pro-American and on the road to freedom. Today, this nation, with thousands of nuclear weapons, is a basket case seething with anti-Americanism and ripe for an explosion.."

New York Post 8/23/98 John Dizard "A TRADING friend commented last week: "If people didn't know these people were criminals before, they found out Monday." And feelings are certainly running high among investors in Russian paper these days. Up to now, the more restrained Wall Streeters thought I was being alarmist in my views of the Russian government. But I was if anything understated about the criminal nature of the country's "leaders." Last Monday's devaluation and debt moratorium was drawn up the previous weekend in a meeting of Russian oligarchs in Nice, on the French Riviera. (Somerset Maugham called it "a sunny place for shady people.") Then the gangster/bankers handed it over to Boris Yeltsin on Sunday, who signed it without understanding it .The Russian banks are not banks in the sense of the word we know. They are conduits for gangsters to siphon money out of companies they control in what is left of the real Russian economy. Then the oligarchs either spend it on buying more influence or ship it out of the country. If they can make a little money on the side by signing their names to worthless guarantees and derivatives, fine.."

Global Intelligence Update 2/22/99 "...A series of unconnected problems are coming together as different aspects of a single problem: Russia. The G-7 met this weekend in Bonn and made it clear that major help for Russia is not going to be forthcoming without the implementation of impossible reforms. Russia made it clear that it was going to stand against the U.S. and the West on the three critical issues of the week. Russia let the U.S. know that it would oppose any stationing of NATO troops in Kosovo without Serb permission, and it would also oppose air strikes. Leaks appeared throughout Western newspapers about Russian arms sales to Iraq. We believe that these reports were deliberate leaks from Moscow and Minsk designed to warn the West. The Russians condemned the Turkish invasion of Iraq, and a Russian General said that the S-300 missiles shipped to Armenia were designed to protect the CIS from Turkey and NATO. At the same time, high-level meetings were being held with German and Japanese leaders. Russia is putting pressure on these two countries, and particularly Germany, to get the West to provide financial help to Russia. The Russian lever on Germany: the threat of a return of a mini-Cold War...."

AP 2/22/99 "...Some U.S. money intended to help find civilian work for unemployed weapons scientists in the former Soviet Union has gone to scientists currently working on Russian weapons programs, a congressional study found. The General Accounting Office study, released Monday, also said that only a small percentage of money in the program, which is overseen by the Energy Department, seems to be getting to the intended recipients. The report said that scientists working on nine ``dual use'' projects ``could unintentionally yield useful defense-related information and therefore negatively affect U.S. national security interests.''...Sen. Jesse Helms, R-N.C., who requested the study, said the findings were ``of enormous concern to me and others in the Senate.'' ``It is absolutely unacceptable for the Clinton administration to donate the U.S. taxpayers money to Russian scientists who spend their time working on poison gas, biological agents and new nuclear weapons designs for the Russian government. That must stop,'' Helms said...."

Reason Magazine 3/99 Thomas W. Hazlett "…After seven years of economic 'reform' the majority of the Russian people find themselves worse off economically. The privatization drivehelped to create a system of tycoon capitalism run for the benefit of a corrupt political oligarchy." Curiously, the media has mostly ignored the successes of places such as Estonia and the Czech Republic, where rapid and sweeping privatization programs--along with relatively secure property rights --created momentum for the legal, political, and cultural changes necessary to make the transition from a command economy to a market-based one. When the Soviet Union imploded in 1991, virtually all productive assets (not counting human beings) belonged to the state and were controlled by Communist Party hacks--the nomenklatura…. Since the reformers who brought on capitalism and democracy in Russia consciously chose not to employ Bolshevik methods to pry assets loose, they "left 'red directors' in possession of all the economic assets and privileges that they enjoyed in Soviet times," observes Russia expert Leon Aron of the American Enterprise Institute…. By 1996, just one-fifth of Russian firms featured majority shareholding by people outside the company they worked for. The result, in other words, was capitalism without capital markets. Bad things are bound to happen in such a scenario…."

Forbes Digital Tool 3/22/99 Paul Klebnikov "…Russian capitalism is at a crossroads. In the first six years after President Boris Yeltsin came to power, a mad rush to privatization put valuable assets into the hands of a small circle of well-connected businessmen. Western investors bought into this transformation, putting $8 billion into equities and $40 billion into loans. Now the economy is in a meltdown. Western capital has pretty much evaporated. The population is poor and sick; people eat dog food for protein; the cities are home to hundreds of thousands of orphaned street kids scavenging for food. Russia's businessmen, even those as well-connected as Berezovsky, are going to take some blame. "Privatization in Russia goes through three stages," Berezovsky explained to this magazine in 1996. "First, the privatization of profits; second, the privatization of property; third, the privatization of debts." …"

NewsMax 3/15/99 Christopher Ruddy "…In 1997, Russia’s Parliament allocated some $12.8 billion for new weapons development. Pravda (Russia’s leading newspaper) cited a General Staff official who says that new weapons systems include directed-energy weapons, new "smart" weapons, deep penetration munitions, and electronic warfare technologies. Funding also went for the Topol-M, new tactical nuclear weapons, miniaturized nuclear weapons and seven new ballistic missile submarines. Previous Russian spending has paid off. In February of 1996, the Times of London reported that Britain’s Royal Navy was concerned about "Russian nuclear hunter-killer submarines" stalking British Trident submarines operating off Britain’s coasts…. The Times also disclosed that Russia had deployed a new "Akula-class" submarine that carries SS-21 nuclear missiles aimed at American targets. The head of US Naval Intelligence, Admiral Mike Cramer, said the new submarine "has demonstrated a capability that has never been demonstrated before to us ..." …"

Drudge Report 3/18/99 "…Treasury Secretary Robert Rubin told a congressional panel that he suspected that much of the $4.8 billion in loans sent to Russia last summer by the International Monetary Fund "may have been siphoned off improperly." Rubin's comments marked the first public confirmation by the Clinton administration that much of the bailout money the U.S. Treasury Department organized last year went to wealthy Russian oligarchs who move billions of dollars to Switzerland and other safe havens…."

World Net Daily 3/23/99 Anne Williamson "…The man best able to strike a decisive blow against world tyranny is in Washington today, but his name isn't Bill Clinton. He's the visiting Russian prime minister, Yevgeny Primakov. Primakov hopes to loosen the strings on the IMF's moneybags so that the arrested $22 billion bailout agreed to last summer before Russia's August meltdown might proceed. Russia needs new IMF loans just to pay the $4.8 billion due the IMF this year on over $20 billion in previous IMF lending. Failure to pay risks exclusion from the world's credit markets. According to the conventions of international finance, a nation can stiff private investors, but never the IMF….. Private banks and bondholders left in the lurch are paid off routinely through a shell game known as "round-tripping" in which taxpayers' funds are channeled to the deadbeat nation through new public loans…. Though such practice cheats the rules of sound banking and of government accountability, the Clinton administration recently browbeat another $18 billion from the U.S. Congress for the fund's capitalization…

Should Yevgeny Primakov rightly declare Russia's IMF debts odious, the IMF could not survive. Were he to follow-up with an invitation for an orderly workout of Russia's private debt in the international court system, he would strike a decisive blow against the monopolistic Russian bankers who cannibalized their own country while making a stand for financial prudence, justice, and the rule of law. In so doing, the Russians could lay claim to having slain not one, not two, but all three of the monsters this century has produced, which presume to exploit entire peoples while telling them how to live; Fascism, Communism, and the IMF…."

Reuters 3/21/99 Gareth Jones Freeper LPH2 "…Prime Minister Yevgeny Primakov heads to Washington this week for talks with U.S. leaders and international creditors which are widely expected to either make or break his government's efforts to rescue Russia's economy. ---- Treasury Secretary Robert Rubin said today the International Monetary Fund made the right decision last summer in providing emergency loans to Russia even if part of the money ended up in foreign bank accounts held by rich Russians .... Rubin sought to clarify remarks he made to Congress on Thursday in which he seemed to indicate that much of the $4.8 billion in loans ``may have been siphoned off improperly.'' …"

AP 3/30/99 Freeper TexMex "…Two leading House Republicans said Tuesday they oppose more International Monetary Fund loans to Russia until the IMF provides a full accounting for previous outlays to Moscow. House Majority Leader Dick Armey, R-Tex., and Rep. Jim Saxton, R-N.J., vice chairman of the Joint Economic Committee, said the United States ``should use its influence to any deny further IMF loans to Russia'' until Congress is told what happened to $4.8 billion lent last August…."

USA Today 4/7/99 Ariel Cohen "…Drug addiction is terrible. So is an addiction to someone else's money. In both cases, the worst thing you can do is hand over more to the addict. That, however, is precisely what is about to happen in Russia, where a delegation from the International Monetary Fund is supposed to meet today with Moscow officials to hash out details of a plan that would give Russia billions of dollars in additional loans. More IMF loans to Russia means more money for a country that has become a financial junkie. IMF bailouts amounting to $27 billion since 1992 have failed. Russia has defaulted on most of its foreign loans since its August ruble crisis, and it threatens further default on its debt if the IMF does not provide the new credits….."

Baltimore Sun 4/10/99 Kathy Lally "...In a solemn ceremony that bore the air of a religious crusade,Russia sent off its first shipment of humanitarian aid to Yugoslavia this week, with officials preaching that even a poverty-stricken, aid-receiving nation could give unto others. "Isn't there some discrepancy here?" a Russian reporter asked Sergei K. Shoigu, the head of the Ministry of Emergency Situations. "We were receiving aid, and now we are rendering aid ourselves." ..."

The Washington Times 4/16/99 Freeper NotAvailableFor Abuse "...The World Bank will lend $650 million to Russia for social programs and retraining coal miners. The bank could reach an agreement for an additional $1.2 BILLION [freeper emphasis] ... in loans by the end of the month...."

US Embassy - Moscow 4/26/99 "...On January 25, 1999, Secretary of State Madeleine Albright announced in Moscow that the United States will commit USD 10 million to fund training and support for Russia's independent media. This commitment builds on more than five years of assistance programs to promote the professionalism and financial viability of the regional independent media in Russia. Assistance will be implemented primarily through non-profit Russian media assistance organizations selected by the U.S. Government for their expertise and extensive networks of contacts with regional Russian broadcasters and print media...."

AP 4/26/99 "....Chernobyl radiation victims are still praying for better treatment. The leaky concrete-and-steel shelter covering the ruined reactor still needs repairs. And Ukraine says the plant won't be closed unless the West gives it $1.2 billion for two new reactors. On the 13th anniversary of the world's worst nuclear accident, a grim legacy lingers from the explosion and fire at reactor No. 4 of Chernobyl's atomic power plant...."

AP 4/28/99 Martin Crutsinger Freeper Brian Mosely "...The International Monetary Fund announced Wednesday it had reached an agreement in principle with Russia on a new economic reform program that will allow the agency to resume lending to the country...."

WorldNetDailyn 5/3/99 J.R. Nyquist "....An American businessman with intimate ties to Russia, who wishes to remain anonymous, spoke to me recently. He said that living conditions in Russia have sunk dramatically. "The children are suffering," he explained. "There are no hospitals. The social safety net has collapsed." I asked this businessman about the tens of billions we have poured into Russia, in support of free-market reforms. "What reforms? The Russian leaders are mostly Communists!" he exclaimed. "I mean, basically, they think in terms of power, lines of organization, personal contacts -- to gain personal control." In other words, Russia's political machine has not adopted a true market system. The old system of bureaucratic back-scratching and favor-swapping continues to control economic outcomes much as before. Consequently, Russia's economy is not based on a capitalist model. State control dominates in sector after sector. Even Russia's largest private company, Gazprom, is 40 percent state-owned. More suggestive still, the Russian economy remains heavily militarized, with weapons production and heavy industry at the forefront....."

Christian Science Monitor 5/26/99 Frank Cilluffo and Todd Nelson Freeper Stand Watach Listen "...Still, a new IMF loan disbursement to Russia is imminent and for a very bad reason: to assuage Russian hurt feelings. If the IMF follows through, it will make two grave mistakes: rewarding Russia's antagonism of the West, and addressing political rather than economic considerations. The abysmal track record of Russian economic reform - inability to implement a true market economy and lack of fiscal accountability and transparency - doesn't justify further loans. .....Last summer, a $22.6 billion loan package put together by the IMF, World Bank, and Japan at the urging of the Clinton administration was intended to help stabilize the Russian economy. The justifications given at the time were some of the exact concerns listed above. Within weeks the ruble collapsed, and in the aftermath of the financial crisis, former Finance Minister Anatoly Chubais admitted publicly that the loan package had been "swindled" from the West. ..."

Washington Post 7/1/99 David Hoffman "...A secret audit of the Russian Central Bank's dealings with an obscure offshore investment company has concluded that Russia misreported its foreign currency reserves to the International Monetary Fund by $1 billion in 1996, well-informed sources said today. The audit, carried out by the international accounting firm PricewaterhouseCoopers, was made in part to satisfy IMF demands for full disclosure of Russia's connection to the offshore firm during the IMF's recent negotiations with Moscow on whether to resume lending to debt-laden Russia. The issue is important to the IMF because it put billions of dollars into the Central Bank's reserves in recent years as part of a program designed to bolster economic reform in Russia. Evidence that the IMF money was misplaced or mishandled could further complicate Russia's efforts to attract new lending. Analysts said Russia was unlikely to be cut off from IMF loans, because the fund is more interested in changing Russia's ways than in penalizing it. But the case may represent a clear breach of Russia's promises to the fund, and could fuel criticism of IMF support in Congress and elsewhere. While the results of the audit have been presented to the IMF and the Central Bank, Central Bank Chairman Viktor Gerashchenko has vigorously resisted making the document public, according to the well-informed sources. Gerashchenko classified previous audits on the same subject...."

Russia Today 7/12/99 "…President Boris Yeltsin is getting ready to sign a decree launching on to world markets a stockpile of diamonds worth up to $1.5 billion. These are being released for export because, according to government documents, they have "special qualities" that make the stones unsuitable for jewellery…..By fudging the classifications of diamonds for export, western traders claim, Russia is threatening to release on to world markets substantial volumes of small gemstones. They say this is likely to upset De Beers's intended supply-side tightening this year, necessary because demand for diamonds fell sharply in Asia two years ago… Russian Special Technologies, a source said, is already hard at work sorting and preparing diamonds for export that are classified Type XXII, according to a Soviet-era classification. That classification was originally identified nitrogen-free diamonds which are known in western classifications as Type 2a. The special properties of these diamonds, say industry experts, makes them valuable in electronics, but unfit for cutting and polishing into jewellery…."

Washington Post 7/27/99 Boris Fyodorov "..For the past six years our governments have been living from one International Monetary Fund infusion to the next. In the first stage we are short of money and hold hasty talks with the IMF. Next, we receive the money with after considerable difficulty. Then we forget our promises, get into a crisis and ask for money again. The Russian authorities have learned the craft of pulling the wool over the eyes of the West, and the West has learned to pretend not to notice it. For political reasons, the West periodically tosses money at us. The main idea is to keep us quiet and non-threatening. The West does not believe that any economic reforms are underway in Russia, and so it simply aims at producing the appearance of decency with the help of the IMF missions and negotiations..... The problem of our budget consists of collecting taxes and other debts. This requires strong fiscal bodies and a true tax reform -- that is, the establishing of order. At the same time, we cannot have a realistic budget, because no one in Russia can predict the level of inflation or the currency rate. It is impossible to expect that economic activity will grow under the current conditions of instability and lack of encouragement. The circle closes. Still, with today's level of federal revenues we have no funds for the army, law-enforcement bodies, education or health care. It becomes increasingly obvious that the state is falling apart and is not coping normally with its most elementary functions. Periodic financial injections from the West delay only slightly the need to take decisions that are a matter of principle...."

TampaBayOnline 7/31/99 AP "...dAuditors have found that Russia's Central Bank kept its transactions with an offshore company off its accounting books and hid the profits it made on the nation's treasury-bill market, a newspaper reported Saturday. The report comes just days after the International Monetary Fund approved a new, $4.5 billion loan program for Russia. The news again raises questions of whether Russian finance officials have been straight with Western lenders, whether they are truly committed to reforming the battered economy and whether they have violated not only IMF guidelines, but also Russian law...."

AP 7/30/99 "...Russia will receive the first installment of a $4.5 billion loan from the International Monetary Fund on Sunday, Russia's Finance Ministry said Friday. But the $640 million will be used to make a loan repayment to the IMF that falls due on the same day, the ministry said. ..."

Washington Post 7/29/99 Paul Blustein "...The International Monetary Fund formally approved a $4.5 billion loan to Russia yesterday, a move aimed at keeping Moscow from disintegrating economically by giving it money to help avert default on its previous IMF loans. Approval of the loan by the IMF's board reflected Russia's geopolitical importance as a nuclear power rather than the belief that it has put its economy on a sound footing...."

New York Times Magazine 8/15/99 John Lloyd "…Russians, free to get rich, are poorer. The wealth of the nation has shrunk -- at least that portion of the wealth enjoyed by the people. The top 10 percent is reckoned to possess 50 percent of the state's wealth; the bottom 40 percent, less than 20. Somewhere between 30 and 40 million people live below the poverty line -- defined as around $30 a month. The gross domestic product has shrunk every year of Russia's freedom, except perhaps one -- 1997 -- when it grew, at best, by less than 1 percent. Unemployment, officially nonexistent in Soviet times, is now officially 12 percent and may really be 25 percent. Men die, on average, in their late 50's; diseases like tuberculosis and diphtheria have reappeared; servicemen suffer malnutrition; the population shrinks rapidly. This is the Russia that many in the West now say we have lost. Lost not in the sense of having mislaid, by accident, but through our own actions and mistakes. Lost as a selfish, thoughtless man loses a woman who loves him -- through indifference or by pushing her away. Lost, the critics say, because we pursued agendas that were hopelessly wrong for Russia, and lost because we encouraged and supported precisely these men in the Government dacha, who were also hopelessly wrong for Russia….."

New York Times Magazine 8/15/99 John Lloyd "…When Bill Clinton came to the Presidency in early 1993, Summers was appointed Under Secretary of the Treasury for International Affairs. The official who covered the former Soviet Union and Eastern Europe was David Lipton, who had worked closely with Sachs on Polish and Russian reform. Sachs, on a leave of absence from Harvard, had installed himself and his team in the Finance Ministry -- where he spent a large part of one morning chiseling away a portrait of Lenin that had been embedded in the plaster of a colleague's office wall. Both men proselytized for shock therapy -- Sachs, vocally and impatiently, and Summers, behind the scenes, nagged and pushed the I.M.F. and the World Bank to lend, lend, lend. The money, tens and tens of billions of dollars, would be used for the essential first step in the reform, making the ruble convertible on world markets. Only with a hard currency, they believed, would investors commit the substantial sums needed to transform the Russian economy. That never happened. Yegor Gaidar needed much more help than the Clinton Administration -- or any other Western government -- was willing to give him. He had come to Government at a time of collapse. At the end of 1991, as Mikhail Gorbachev left office and the Soviet banner was pulled down from the Kremlin tower, most Russians were lining up around the block for the basics. As Gaidar tells it, he had no choice but to let prices rise to increase supply and to scrap trade barriers so that foreign commodities could begin to fill store shelves…."

Boston Globe 8/14/99 Brian Whitmore "…When the president of the world's second largest nuclear power wants to make an important political decision, he consults the family. Not his family, but The Family, a collection of business tycoons, cronies, and Kremlin bureaucrats who wield enormous - and many say destructive - influence on Russia's President Boris N. Yeltsin since his reelection three years ago. In Russia, The Family has taken on legendary proportions, with many of the country's ills being laid squarely at its doorstep. Some media here speculated, for example, that The Family's hand was behind last August's financial meltdown, when Russia's currency lost 70 percent of its value in a matter of weeks. The oil business of prominent Family member Boris Berezovsky's, reports say, stood to benefit from a weak ruble to increase his export earnings, and he allegedly lobbied for a devaluation that devastated the savings of ordinary Russians. Many observers also say that Yeltsin's decision Monday to sack his government was The Family's dirty work…."

Associated Press 8/25/99 "….The chairman of the House Banking Committee said Wednesday that Congress must investigate whether the Bank of New York was duped or willingly aided a money-laundering scheme that federal investigators say involves the Russian mob. In Moscow, Russia's finance minister denied his government was linked to the multibillion-dollar scheme, which has been described as potentially one of the biggest cases of money-laundering ever uncovered in the United States. ``I have no information indicating that Russia has anything to do with this problem, so there is no need for the government to interfere in this situation,'' Finance Minister Mikhail Kasyanov told a news conference….. Rep. Jim Leach, R-Iowa, the House Banking Committee chairman, said the panel will hold hearings next month on the alleged activities at Bank of New York, the nation's 15th-largest bank. Federal investigators believe as much as $10 billion was laundered through the bank in an operation run by Russian organized crime. Some $4.2 billion passed through a single account in more than 10,000 transactions between October and March, The New York Times reported last week, citing unidentified investigators…."

Fox News 8/21/99 AP "…Federal investigators reportedly raided the Wall Street office of the Bank of New York in connection to a major international money-laundering scheme that authorities say involves the Russian mob. During Friday's raid, investigators seized the files of Natasha Gurfinkel Kagalovsky, a senior vice president who supervised the bank's East European division, a source close to the bank told The New York Times in Saturday's editions. She and a bank vice president in London, Lucy Edwards, were suspended on Wednesday. Both women are married to Russian businessmen. British authorities also searched Ms. Edwards' home and office. Her husband, Peter Berlin, had authority over some accounts at the bank. Neither she nor her husband has been accused of any wrongdoing. However, investigators told the Times that the couple may be involved in one of the largest money-laundering operations ever conducted in the United States. As much as $10 billion allegedly was laundered through the bank in what investigators say is an operation run by Russian organized crime, the Times reported…."

Timothy O’Brien Raymond Bonner 8/22/99 "…At the intersection of illicit Russian money and the Bank of New York is Bruce Rappaport, a Swiss banker who has had brushes with governmental investigators in the past and who has long had an important connection to the bank. Together with the Bank of New York, Rappaport owns a bank in Switzerland that helped provide the American bank with important business contacts in Russia, according to Western bankers familiar with the operation. And millions of dollars that were channeled through the Swiss bank, known as Bank of New York-Inter Maritime, are linked to what Federal investigators describe as possibly one of the biggest money-laundering schemes in the United States, according to a person close to the investigation. …. The interest of investigators is heightened, one official said, because Rappaport, who is 76 years old and lives in Switzerland, was recently appointed Antigua's Ambassador to Russia. Antigua, this official noted, has been a major center of Russian money-laundering for many years. Rappaport has long had close business, banking and political ties to Antigua, where the Government once granted him a near-monopoly on the fuel-oil market…."

Fox News Wire 8/26/99 Reuters "…Russian organized crime figures laundered at least $15 billion through two New York banks at the direction of President Boris Yeltsin's government, USA Today reported Thursday. Quoting unidentified senior U.S., British and Russian law enforcement officials, the newspaper said the money might include $10 billion in International Monetary Fund loans. The money was laundered through four accounts at the Bank of New York and one account at the Republic National Bank, also based in New York, according to the report. The officials said they do not know where the money is. The new figure is $5 billion more than previously reported. The officials told the newspaper all the accounts were under the name of a company called Benex Worldwide Ltd., which was founded by a leader of Russia's largest organized crime group….."

Reuters 8/26/99 "…Russian organized crime figures laundered at least $15 billion through two New York banks at the direction of President Boris Yeltsin's government, USA Today reported Thursday. Quoting unidentified senior U.S., British and Russian law enforcement officials, the newspaper said the money might include $10 billion in International Monetary Fund loans. The money was laundered through four accounts at the Bank of New York and one account at the Republic National Bank, also based in New York, according to the report…."

Wall Street Journal 8/26/99 Bob Davis "…Al Gore and the International Monetary Fund are among those who have the most to lose as a result of an alleged scheme by Russian mobsters to sneak billions of dollars into U.S. accounts. Vice President Gore's vulnerability comes by virtue of his co-chairmanship with Russia's prime minister of a commission that oversees U.S.-Russian relations. The IMF is on the hot seat because of allegations that $200 million of its funds may have been diverted into the banking accounts of Russia's organized-crime families. The money-laundering questions deepen an already bitter debate about whether Clinton administration and IMF policies worsened Moscow's post-Cold War plight, and thus should be blamed for "losing" Russia. Foreign-policy issues rarely dominate presidential campaigns. But billionaire Republican presidential candidate Steve Forbes, who has the financial wherewithal to spend millions of dollars on television advertising, says he intends to put Russia front and center in the coming campaign. "Gore has been the point man with Russia," says Mr. Forbes. "His policies have been an unmitigated disaster. They have piled billions of dollars into the hands of kleptomaniacs."…."

New York Times 8/28/99 Timothy O’Brien"…A powerful Russian industrialist whose empire is under investigation in the money laundering inquiry at the Bank of New York said Friday that a large part of the billions of dollars moved through the bank was controlled by Russian officials protecting their fortunes by shipping their money abroad before Russian markets collapsed last year. In in his first interview since the money laundering investigation became public last week, the industrialist, Mikhail Khodorkovksy, said by telephone from Moscow that many Russian officials began selling Government securities in 1998 because they had inside knowledge about Government deliberations in the months leading to a decision to permit the devaluation of the ruble. That move occurred in August 1998, and caused the Russian economy, and the value of Government debt, to spiral sharply downward. …"

New York Times 8/28/99 Raymond Bonner "…The Bank of New York said Friday that it dismissed a vice president who is involved in a federal money laundering investigation. The bank officer, Lucy Edwards, was fired for "gross misconduct," violating the bank's code of conduct, falsification of bank records, and failure to cooperate with the investigation, according to a person with direct knowledge of the dismissal. A bank spokesman declined to provide any details. People with direct knowledge of the investigation said this week that documents found in Ms. Edwards' London home indicated that she used the Bank of New York name for dealings unrelated to her job at the bank…."

Associated Press 8/26/99 Greg Myre "…Wealthy Russians, whether their money was earned legally or not, have established a pattern of moving their money outside Russia, a place where your bank can go belly-up at any time. The Russian mob, which is believed responsible for much of the capital flight, sends money abroad to hide its illicit profits. Genuine businessmen face the uncomfortable choice of paying extremely high taxes or sending the money on a trip to Europe where the tax man won't find it….. "We know there is money missing from the government coffers, but no one seems to care," said Nikolai Gonchar, an independent member of parliament, who has been pushing for a more detailed investigation of the Central Bank. "For four-and-a-half months I've been urging the prosecutor general to investigate, but he has been doing his best not to open a criminal case," Gonchar said. In an effort to boost the struggling economy, the government has limited the amount of money Russians can take out of the country so moving funds abroad is often illegal. …."

Washington Post 8/27/99 Cecil Connolly John Harris Dan Balz "…New revelations about Russian money laundering through a major U.S. bank have presented Vice President Gore with a potentially difficult campaign issue, and once again illustrated the pitfalls of running for the White House from the vice president's chair. ….As the chairman of a joint commission on bilateral ties with former Russian prime minister Viktor Chernomyrdin -- a role Gore once proudly embraced -- the vice president has been one of the targets of past attacks. ….The Gore team has responded to the emerging issue with uncharacteristic speed, offering one of the most detailed accounts to date of the vice president's conversations with Russian leaders about the country's crime problems. At the same time, aides have stressed that Gore, although touted as the "most involved vice president in history," had no idea federal investigators were looking into allegations that the Bank of New York laundered billions for Russian criminals, including some with close connections to the government of President Boris Yeltsin. …."

Washington Post 8/27/99 Ceci Connolly "…A criminal investigation into charges that Russian mobsters and politicians may have laundered money -- including diverted international aid funds -- through accounts at the Bank of New York has revived a long-standing debate in Washington over whether the Clinton administration has given too much support to a Russian government known to be plagued by corruption. As the chairman of a joint commission on bilateral ties with former Russian prime minister Viktor Chernomyrdin -- a role Gore once proudly embraced -- the vice president has been one of the targets of past attacks….. The Gore team has responded to the emerging issue with uncharacteristic speed, offering one of the most detailed accounts to date of the vice president's conversations with Russian leaders about the country's crime problems. At the same time, aides have stressed that Gore, although touted as the "most involved vice president in history," had no idea federal investigators were looking into allegations that the Bank of New York laundered billions for Russian criminals, including some with close connections to the government of President Boris Yeltsin…. Among those caught by surprise, officials said, was White House national security adviser Samuel R. "Sandy" Berger. A senior administration official said Clinton aides are pressing to learn more about the investigation, and hope to be briefed soon…."

Washington Post 8/29/99 David Hoffman "…The economy of modern Russia is hemorrhaging cash: every month, $1 billion to $2 billion slips out in wire transfers, phony import-export documents and insider price manipulations. About $100 billion to $150 billion has fled abroad since 1992, according to Russian and Western estimates, outstripping the international aid coming into the country…."

NEW YORK (Reuters) 8/28/99 Mary Kelleher "…Russian investigators Friday joined a worldwide probe into whether Russian mobsters funneled billions of dollars through accounts at the Bank of New York Co. Inc., in what may be the biggest money-laundering case ever pursued. Meanwhile, in the United States, the Bank of New York, one the country's oldest commercial banks, fired a key figure tied to the probe…."

Wall Street Journal 9/8/99 Bob Davis "...U.S. Treasury, State Department and White House officials learned this spring of allegations of a massive Russian money-laundering operation involving Bank of New York Co., but didn't pass the information to the vice president or president. Vice President Al Gore, in particular, has been criticized by Republican presidential candidates for being "out of the loop" on the money-laundering probe, despite his position as chairman of a binational commission that oversees many aspects of U.S.-Russia relations. "If there was a loop of people, that loop was formed on the day we received a briefing" late last month, said a Gore aide. "It didn't exist before then." But senior administration officials yesterday detailed, for the first time, a series of contacts by which federal officials learned of the money-laundering probe by U.S. investigators.....Treasury officials learned of the existence of the investigation in April from regulators at the Federal Reserve Bank of New York. Treasury officials were told there wasn't any evidence that U.S. or International Monetary Fund resources were involved in the money laundering, a senior administration official said. The Treasury Department then relayed the information up the chain of command to then-Treasury Secretary Robert Rubin. Mr. Rubin has told former colleagues that he doesn't remember being told of the matter. But the information wasn't passed to senior White House officials because it was considered to be the province of the Justice Department, the administration official said. .....Separately, in March 1999, State Department officials learned from a foreign government that Bank of New York was being investigated. State Department officials then alerted their colleagues who work on crime and corruption issues at the White House's National Security Council. Together, the State Department and NSC officials briefed the Justice Department and Federal Bureau of Investigation on the allegations, two senior administration officials said. Neither the Justice Department nor the FBI would confirm the existence of the probe at that time, the officials said.....Afterward, the Clinton officials said, State Department and NSC officials would "remind" the Justice Department and FBI of their interest. But investigators didn't tell the State Department or NSC about the probes or whether foreign-policy issues were involved. As a result, said a senior Clinton administration official, the allegations concerning money laundering and Bank of New York weren't passed on to policy officials at the White House or to the vice president's office...."

Washington Post 9/8/99 Sharon LaFraniere "…A Swiss investigation has uncovered evidence that a construction company that received major Kremlin contracts paid tens of thousands of dollars in bills on credit cards in the names of President Boris Yeltin and his two daughters, according to law enforcement authorities. The contractor, a Swiss firm called Mabetex, also provided $1 million that was transferred to a Hungarian bank account several years ago for Yeltsin's benefit, the authorities said. In all, Mabetex made between $10 million and $15 million in payoffs to high-ranking Russian officials, including Yeltsin, and their families, according to one official familiar with the inquiry…..The State Department first heard about the movement of huge amounts of money from Russia to the Bank of New York in March, officials said. Authorities in another country brought the case to their attention and suggested that Russian organized crime might be involved. At the time, there was no suggestion that any U.S. or Russian government officials or U.S. or IMF money was involved, officials said. The State Department then contacted the National Security Council and, with officials from the NSC, took the information to the Justice Department, officials said. Justice officials declined to discuss the matter, which was already under investigation by the Federal Bureau of Investigation. The Treasury Department, meanwhile, learned about the FBI investigation in April from officials at the Federal Reserve Bank of New York. Because the FBI was investigating, officials said, the Treasury Department took no action….."

Reuters 9/1/99 "…A Geneva investigating magistrate said on Tuesday he had blocked bank accounts as part of an inquiry into money-laundering allegations linked to Swiss-based construction firm Mabetex, which renovated Kremlin buildings. "I have frozen accounts in connection with (the) Mabetex (inquiry)," Daniel Devaud told Reuters in response to an query. "I cannot say how many accounts or how much money is involved as the investigation is covered by judicial secrecy." Devaud did not make clear whether the accounts were directly held by Mabetex or just associated with the investigation. "I blocked the accounts after the Geneva prosecutor informed me he had opened an inquiry on suspicion of money-laundering," the magistrate said. "That was in early July." The head of Mabetex, Behgjet Pacolli, said none of his company's accounts had been seized and reiterated that his firm had done nothing wrong. "No accounts from Mabetex have been frozen. None of my private accounts or those of Mabetex have been frozen," he told Reuters. "Our business is very clean. It is not my problem." He said Mabetex, which is based in the Italian-speaking Swiss canton of Ticino, had no accounts in Geneva except for a "very old consortium account". …"

NYPost 9/6/99 Editorial "…First, Treasury Secretary Lawrence Summers gave an interview in which he said the Clinton administration opposes any further International Monetary Fund loans to Russia without adequate safeguards and accounting. Hours later, the White House insisted that the administration hasn't reached a decision on whether to support new IMF loans. Then Summers' spokeswoman said flatly that the U.S. opposes any delay in new loans. Welcome to the wonderful world of Bill Clinton's Russia policy. The White House is scrambling, and with good reason - mounting reports indicate that billions in foreign-loan payments were siphoned off by top Russian political officials and laundered through western banks Like the Chinese nuclear-espionage scandal, the question here is what did the Clinton administration - and most particularly in this case, its point man on Russia, Vice President Al Gore - know, and how did it respond. ….Ironically, the real tipoff may have come from Deputy Secretary of State Strobe Talbott, the architect of Clinton's Russia policy. "We have been aware from the beginning that crime and corruption are a huge prob-lem in Russia and a huge obstacle to Russian reform," Talbott recently told Newsweek in urging the West to "calm down." By all accounts, Talbott is entirely correct - except that new reports suggest strongly that Clinton and Gore tried to keep a lid on the stunning extent of government fiscal corruption. Which means Talbott was himself involved. Which means his reassurance isn't very reassuring. The New York Times reports that Gore was shown a CIA report in 1995 detailing the personal corruption of the vice president's Russian counterpart, Viktor Chernomyrdin. According to the Times, Gore "rejected their report - a move that [CIA analysts] said had led them to understand that Gore was not interested in further information on the topic." …."

Wall Street Journal 8/30/99 "…Most of the details of what officials are calling one of the biggest money-laundering schemes to be uncovered in the U.S. are still sketchy. Bank of New York (BNY), under investigation in the case, on Friday fired Lucy Edwards, a senior official in London who oversaw its East European operations. Ms. Edwards' husband, Russian businessman Peter Berlin, allegedly had access to at least one of the accounts under investigation. Federal authorities are reportedly investigating whether U.S. credits to the Russian government for buying farm products, not to mention some of the $20 billion the International Monetary Fund has loaned Russia since 1992, also may have been diverted into suspect Western accounts. On Friday, House of Representatives Banking Committee Chairman Jim Leach (Republican, Iowa) called for a moratorium on IMF lending to Russia "unless and until firm methodologies for safeguarding funds are established." The IMF, for its part, pleads that it has very little means of knowing where its money goes after it reaches a foreign central bank. A moratorium sounds like a fine idea to us. Russia's oligarchs--many of them apparatchiks from the Communist days--have stripped the country's best assets and transferred their winnings to off-shore companies they control….."

Reuters 8/30/99 "…Looking for a safe place to stash your cash? Some Russian companies say they can solve the problem for you in 15 minutes and there's nothing illegal about it, provided you can get your money out of the country. A U.S. federal investigation into a suspected Russian mafia money-laundering scheme has been splashed across newspaper front pages in recent days, highlighting Russia's alarming levels of capital flight, estimated at $20 billion a year. But if you turn to the classified ad pages, there are invitations galore to invest in offshore companies or accounts…."

The Financial Times 8/31/99 John Thornhill Andrew Jack "….Warning of obstruction in bank's money laundering investigation. Yuri Skuratov, Russia's former prosecutor general, warned yesterday that President Boris Yeltsin's closest entourage was likely to obstruct any serious investigation into the money laundering scandal surrounding the Bank of New York. Without Russian co-operation, Mr Skuratov said, the US authorities would never be able to find out how much of the $10bn of the Russian money - alleged to have passed through the Bank of New York accounts - was dirty. "The first source of information about whether this money is criminal or not cannot be answered without the involvement of the Russian law enforcement agencies," he said. "But the closest entourage of the president does not want an objective investigation. And our security organs fulfil political orders 100 per cent," he said, in an interview with the Financial Times…."

AFP 8/24/99 "….The International Monetary Fund (IMF) is very concerned about an alleged money laundering scheme in Russia using IMF loan monies, an IMF spokesman said Tuesday. "The allegations of money laundering in Russia are extremely serious, and the fund is highly concerned about claims that they allege money laundering involved IMF resources," said Graham Newman in a statement read over the telephone. A top IMF team descended on Moscow Tuesday to pore over Russia's finance books to check if hundreds of millions of dollars in earlier loans were illegally shipped out of the country. On Monday, the Wall Street Journal reported that Russia illegally shipped some 200 million dollars of IMF money to private bank accounts in the Bank of New York….."

AFP 8/24/99 "…A top IMF team descended on Moscow on Tuesday to pore over Russia's finance books amid reports that hundreds of millions of dollars in earlier loans were illegally shipped out of the country. International Monetary Fund (IMF) Russian point-man Gerard Belanger was to meet Central Bank and finance ministry officials on Wednesday as his delegation considers a new tranche of a recently agreed 4.5-billion-dollar 18-month loan to Moscow. The 630-million-dollar payment is eagerly expected here by October as Russia seeks to side-step a potentially-devastating default on repayment of old loans back to the Fund…."

New York Times 8/31/99 Celestine Bohlen "…A Russian investigator said in a television interview Monday night that published accounts of bribes paid to Kremlin officials by a Swiss construction company were "98 percent true" and could be backed up by evidence in his files. The investigator, Georgi Chuglazov, a deputy in the prosecutor general's office, made the comments after he was barred at the last minute from joining a delegation from the office that is to leave Tuesday for Switzerland. Chuglazov confirmed that he had been removed Friday as head of the investigation into Mabetex, a Swiss-based construction company that has been at the center of a probe into kickbacks allegedly received by top Kremlin officials. Chuglazov had hoped to wind up his investigation with a trip to Switizerland. Instead, he said, he discovered not only that his airplane tickets had been canceled but that his phones had been cut off. "I realized that no one here is interested in this case," he said in an interview on NTV, Russia's largest independent station, which has taken an increasingly strong stance against President Boris Yeltsin in a politically charged media war….."

New York Post 8/31/99 Al Guart "…The Bank of New York has launched a review of its internal money-wiring procedures to look for flaws that could have let Russian mobsters launder billions, The Post has learned. News of the bank's internal review came a week after The Post reported that BNY officials allowed two executives in charge of Russian accounts run roughshod over money wire protocol for years. "Our controls environment and practices are sound and effective," BNY Chairman Thomas Renyi wrote yesterday in memo to bank staff. "Nevertheless, we will take every opportunity to enhance them. "Working with our staff and with our outside advisors, we are thoroughly examining our funds transfer controls and processes," Renyi stated. "If any investigation into this matter indicates flaws in the bank's internal procedures, they will be addressed immediately."…."

WASHINGTON TIMES 8/31/99 David Sands "…A defensive International Monetary Fund said yesterday it has found no evidence that Russia's burgeoning money-laundering scandal involved any of the billions of IMF dollars lent to Russia this decade. Reports that a New York bank may have been involved in a scheme to launder up to $10 billion in illegal profits from crime and official corruption in Russia broke just weeks after the IMF approved the first installment of a new $4.5 billion financial-rescue package for Russia. "The subject matter is serious, but we just don't believe there is any grounds for believing that any IMF money has been diverted," IMF spokesman Thomas Dawson said in a conference call with reporters yesterday. The Clinton administration also has had to defend its unstinting support for the government of Russian President Boris Yeltsin, contending that Western financial support was vital given Russia's bumpy transition to democracy, its staggering economy and its still-sizable cache of Cold War-era nuclear weapons. Republican critics have singled out Vice President Al Gore, who has been given a large role in developing the administration's approach to Russia….."

UPI 8/31/99 "…Yuri Skuratov, Russia's controversial former prosecutor general, is warning that President Boris Yeltsin's closest advisers would try to obstruct any investigation into alleged money laundering through the Bank of New York. In an interview published in today's Financial Times, Skuratov, who was the country's top law official until he was suspended earlier this year following a sex scandal, said the "closest entourage of the president does not want an objective investigation. And our security organs fulfil political orders 100 percent." …."

UPI 8/31/99 Martin Sieff "…The wave of American newspaper reports of huge Russian corruption scandals reflects a fierce secret struggle within Russia's intelligence services between supporters of President Boris Yeltsin and those of his former prime minister, Yevgeny Primakov, according to some Russian and American intelligence sources and analysts. Reports over the past two weeks in the New York Times, the Wall Street Journal and USA Today - based in part on U.S. and British law enforcement sources - have alleged that Russian, U.S. and British authorities are probing enormous illegal exports of up to $15 billion dollars from Russia. USA Today reported Thursday that up to $10 billion of that total has been looted from International Monetary Fund loans. The other $5 billion came from prostitution, drug-dealing, gangsters' protection rackets and many other illegal activities, the paper says. The IMF on Monday denied its funds were linked to the money- laundering accounts. But according to the published reports, the money was laundered through two major New York banks - the Bank of New York and the Republic National Bank…."

British Broadcasting System Online 8/31/99 "….The head of the International Monetary Fund says it will continue to lend to Russia even as it investigates allegations of corruption. Michel Camdessus was commenting on allegations that up to $15bn in funds had been siphoned off from Russia into bank accounts in New York, some of it allegedly from IMF loans. There have been calls in the US Congress to suspend further loans to Russia until the matter is fully investigated. But Mr Camdessus vigorously defended the IMF's lending programme to Russia, while accepting that the Russian central bank had lied to the fund in 1996. …"

Associated Press 8/31/99 Barry Renfrew "…At its core, corrupt members of Russia's political and business elite have plundered billions of dollars in government funds and assets with the aid of criminal gangs, authorities say. The money has been sent overseas to secret bank accounts or used to create hundreds of Russian companies and banks that combine legal and criminal activities. Through these companies and other rackets, the Russian Interior Ministry estimates that organized crime controls 40 percent of the economy, although other observers say the figure is higher. Corrupt officials and gangsters work with these criminalized businesses, helping them get insider deals, avoid taxes and even kill rivals…."

AP 8/24/99 "…Russia and the International Monetary Fund are inching toward a compromise that would allow Russia to receive more IMF loans, a news report said today. The sides are discussing the size of the primary surplus in the 1999 Russian federal budget, the revenue left over when all spending is accounted for apart from debt service. A larger surplus would be good for Russia as it shows the government is collecting more taxes. The IMF's approval of the budget is necessary for Russia to continue receiving funds from a $4.45 billion loan program begun last month with the release of a first installment of $640 million. The rest will be loaned over an 18-month period…."

New York Times 9/1/99 Jane Perlez "…The Clinton administration, pressed by investigations into money laundering and capital flight out of Russia, is being forced anew to justify its policies of bold economic assistance to Moscow over the last seven years. This time the reassessment has raised questions of what the administration knew about Russian corruption and what should have been done differently, officials said. Some figures inside the administration, as well as outside critics, said that the indications of corruption were put aside to ensure President Boris Yeltsin's support for American national security interests, including the safekeeping of Russia's nuclear arsenal. These officials also assert that the administration played down what it knew about corruption at the top levels of the Russian government and chose instead to trumpet success stories as the country limped toward a free-market system….."

USATODAY.Com 9/1/99 Rich Miller and Beth Belton "…Treasury Secretary Lawrence Summers said Tuesday that the United States will not support any more International Monetary Fund credits for Russia until there has been an adequate accounting of the money that has already been lent. In his first public comments on allegations that IMF money might have been diverted by organized crime through at least one U.S. bank, Summers told USA TODAY that the Justice Department has said it does not have evidence "at this time" to back up the charges. But he added that law officials are investigating suspected money laundering by Russian mobsters through the Bank of New York…."

Los Angeles Times 9/5/99 Richard Paddock, Maura Reynolds "…Suspended Prosecutor General Yuri I. Skuratov, alleging widespread corruption within the Russian government, said Saturday that 780 high-ranking current and former officials are under investigation for improperly trading in lucrative government treasury bills. Among those suspected of abusing their positions by speculating in high-yield securities before the market collapsed last year are two former deputy prime ministers, former Cabinet ministers, and officials of both the Russian Central Bank and the Finance Ministry, Skuratov said…."

AP 9/5/99 "…Relations between Russia and the United States must not be damaged by allegations of money laundering through a New York bank, Prime Minister Vladimir Putin said in an interview Sunday. Putin said Russian law enforcement was working with U.S. officials to investigate allegations that up to $10 billion was laundered by Russian organized crime through the Bank of New York, but gave no details. He called for calm to avoid a deterioration in U.S.-Russian ties, already strained in recent months by the conflict in Kosovo and other international disputes. The reputations of Russia and its businessmen were being unfairly tarnished, Putin said…."

Reuters 9/5/99 "…White House National Security Advisor Samuel Berger said Sunday that U.S. and International Monetary Fund (IMF) support for Russia had yielded tangible benefits and should continue. Berger, writing in The Washington Post, said IMF assistance has helped create the beginnings of a market economy in Russia after decades of communism. ``Tens of thousands private businesses have been created. Russia's first modern middle class has emerged. With IMF help, Russia has beat hyperinflation,'' Berger wrote….."

The strategist Albert Wohlstetter(3) liked to observe that when policymakers talk about a "calculated risk," it usually means they haven't done any calculation. What they're really describing is a simple gamble, a roll of the dice. Wohlstetter's remark is a useful rejoinder to recent characterizations of the Clinton administration's policy toward Russia as a calculated risk -- a reasoned bet that the benefits of economic reform would outweigh the dangers of corruption....

It would be more reassuring if these folks told the truth: Our policy toward Russia has been a crap-shoot, and growing evidence -- symbolized by recent news reports on the alleged $10 billion Russian money-laundering operation through the Bank of New York -- suggests that it hasn't worked....The bottom line is that Clinton and Gore had lots of warnings about Russian corruption under Yeltsin's banner of reform. And the question continues to be: Why didn't the Administration do more to stop it? …."

London Times 9/2/99 Alice Lagnado "…ALLEGATIONS of money laundering and bribe taking have shaken all those who move in lofty government and business circles in Russia, but the man who is most rattled is President Yeltsin. Commentators say he is so scared that he might break the law and remain in power after his term expires next June. The recent flood of scandals has hit Russia's elite hard and politicians have been quick to claim they never held foreign bank accounts, knowing that they were in power when the alleged corruption took place. Yesterday Igor Ivanov, the Foreign Minister, took a wildly over-defensive line unlikely to convince investigators. In the first official reaction to the allegations, Mr Ivanov accused the West of trying to undermine his country. "Russia will never agree with Western attempts to cast a shadow over our country using unconfirmed facts," he said…."

Fox Newswire 9/3/99 AP "…The International Monetary Fund's next loan installment to Russia may be delayed, the country's finance minister said Friday as he insisted that no previous IMF money was misspent. Finance Minister Mikhail Kasyanov said the IMF board in Washington, which had planned to meet later this month, may not convene until October to discuss releasing the second installment of a $4.5 billion loan to help Russia pay its debts. Russian officials have said ..."
Russia Today 9/2/99 Reuters "…Moscow on Wednesday called allegations of Russian involvement in money laundering a smear by Westerners and insisted its credit with the International Monetary Fund was good. It was the first strong official reaction to a probe into whether billions of dollars had been laundered by Russian organized crime and others through at least one U.S. bank. Foreign Minister Igor Ivanov said some in the West wanted to tarnish Russia's image…."

Los Angeles Daily News/New York Times 9/2/99 "…The Clinton administration said on Wednesday it wants assurances that international financial aid already sent to Russia has not been lost to corruption, but stopped short of calling for a halt in future loans to Moscow from the International Monetary Fund Seeking to defend the administration's policy of supporting aid to Russia-and to defuse an issue that could have political ramifications for Vice President Al Gore--Treasury Department officials and John D. Podesta, the White House Chief of staff, said the administration wanted to be certain that no money loaned to Russia by the IMF had been moved surreptitiously out of the country. They were responding to reports of alleged money laundering in which billions of dollars were sent by Russians through the Bank of New York….."

The Associated Press 9/2/99 "…Russia's envoy to the International Monetary Fund abruptly quit Thursday, but insisted the decision was unconnected to reports that IMF aid to Russia may have been illegally diverted through the Bank of New York. Mikhail Zadornov said all IMF money had been spent properly, and that he was resigning to run for parliament in December. The Russian press, meanwhile, denounced the Western reports of a money laundering scandal allegedly involving Russian organized crime, calling it an anti-Russian witch hunt and a return to the Cold War…."

CNSNews.com 9/2/99 Julie Stahl "…The US Treasury Wednesday called for International Monetary Fund officials to examine new loans slated to be given to Russia after allegations that Russian businessmen, crime bosses and government officials were involved in widespread money-laundering schemes, prompting concerns that they also had their hands on IMF funds. American and international investigators are checking reports that $10 billion to $15 billion worth of funds from Russia were laundered through the through the Bank of New York and other banks…."

The St. Petersburg Times (Russia) 9/3/99 Brian Whitmore "… A revival of McCarthyism. A new Iron Curtain. The freshly erected Berlin Wall. Monica Lewinsky and Kenneth Starr. These are the images several Moscow newspapers were evoking Thursday to explain a two-week-old money-laundering scandal - in which Russian mob bosses, with Kremlin complicity, reportedly spirited as much as $15 billion in embezzled public and corporate funds through the Bank of New York. And analysts say that this paranoia, denial and finger pointing will find a fertile audience among Russia's disillusioned population…."

AP 9/3/99 Vladimir Isachenkov "…President Boris Yeltsin and his daughters are the subjects of an investigation into an alleged bribery scandal in the Kremlin, Russia's suspended chief prosecutor said Friday. Yuri Skuratov, whom Yeltsin suspended as prosecutor general in March, told The Associated Press that he received documents from Swiss prosecutors alleging that the president and his family received kickbacks from the Swiss construction firm Mabetex. …. Skuratov, the first official to confirm that the Yeltsins are linked to the investigation, had previously dodged questions about the alleged involvement of Yeltsin and his family. Skuratov, who is himself under investigation for allegedly accepting prostitutes in return for diverting criminal investigations, technically remains Russia's top prosecutor since parliament has refused to accept his dismissal…."

Wall Street Journal 9/3/99 Zbigniew Brzezinski "…The major premise of the administration's policy has been that Russia under Boris Yeltsin is a democracy and hence deserves America's trust and its treasure. In countless public statements, the Russian leadership has been hailed as America's genuinely democratic partner. Giving generous aid was thus "the right thing to do." In adopting that premise, the administration simply closed its eyes to the fact that the current, and all recent, post-Soviet Russian governments have been composed of men who would have felt fully at home in any government of the former Soviet Union. The current Russian governing elite is composed in toto of former Communist Party nomenklatura aspirants. Their attachment to democracy is no deeper than their entrepreneurial rectitude. The misappropriation of foreign aid and the laundering of funds to the West has been taking place for years. There have been countless public warnings to that effect from genuinely democratic Russians and from some Western analysts, including Central Intelligence Agency experts, whom top officials chose to discount. Very troublesome are hints that, given very sloppy U.S. oversight, some portion of Western aid may have also been diverted to purposes for which it was not intended. Potentially most serious is the possibility that some Russian weapons programs may have benefited from such diversion. The Russian governing elite has been engaged in a massive heist of Western aid and of Russian public assets. Western admirers have euphemistically described the process as "privatization." It has been breathtaking in its brazenness, for it has involved many billions of dollars. Particularly tragic has been its political consequence: Millions of Russians have come to view democracy and the free market as synonymous with theft and criminal self-enrichment. Continued and glowing American endorsements of Russia as a democracy have thus been a disservice to the very cause Washington was seeking to promote…."

The New York Press 9/7/99 "….If you thought comedy was dead, you obviously haven't heard of Strobe Talbott, the State Dept.'s factotum where Russian affairs are concerned. The Strobe used to be a Time hack, a man who took, and continues to take, himself extremely seriously. The reason I find him so funny is simple. There is no bigger mess than Russia right now, but the Strobe, who should have resigned in shame five years ago, remains unaffected by the intrusion of fact and continues to bang on endlessly. If the Strobe were a politician, I would understand. Politicians have no shame, no honor and are as likely to fall on their sword as Hillary and Bill Clinton are to tell the truth. But the Strobe is a hack, and he should know better. The great swindle that is Russia took place under his watch, and as William Pfaff wrote in The Los Angeles Times, "Ambition was involved... Strobe Talbott wanted the reputation of an important influence on reform in Russia, a country that always intrigued him." But let's not be too beastly with the Strobe. He is only a Clinton-Gore catamite, yet another bald-faced phony working for the most corrupt administration since Huey Long bit the bullet. The real criminals are the Draft Dodger and the Bore. Here's William Pfaff again: "Bill's friendship with Boris, and Al's with Victor Chernomyrdin, served to identify them in the eyes of voters as patrons of the new Russia and as men of state. They used American resources to keep friend Boris Yeltsin in power-itself an inducement to corruption." I don't think there has ever been a greater swindle in the history of the world. While visiting the Riviera last year I saw firsthand the scale of it. Sixty percent of all luxury yachts priced at more than $5 million belonged to Russians; 65 percent of luxury villas renting out at more than $100,000 per month were taken by guess who. Fifty percent of the clientele of the most expensive hotels in the area were Russkies. (Ironically, the house I used to rent on Cap d'Antibes, Les Cloches, included by F. Scott Fitzgerald in Tender is the Night, later on Irwin Shaw's favorite rental on the Riviera, is now owned by, according to some reports, Victor Chernomyrdin, as part of the Chateau de la Garoupe property that he reputedly paid for in cash to the tune of 70 million greenbacks!)

The New York Press 9/7/99 "…. Back home in Russia, needless to say, things ain't what they used to be. People are practically dying of hunger, and child mortality is on an African scale. Every penny the American taxpayer sent over has been stolen. Still the Draft Dodger refuses to accept blame. Let me give you a little example of Clinton's handling of your money. Since 1995 $5.1 trillion in aid has been provided for Bosnia. More than a billion has disappeared. Bosnian President Alija Izetbegovic's son, Bakir, is allegedly one of the richest men of the region. Bakir shares in the extortion money extracted by Sarajevo gangsters from local businessmen and owns 15 percent of state-controlled Bosnia Air. These are the same people we shielded from the Serbs and into whose coffers have poured over $5 trillion. Does it surprise you, then, that the average Russian sees an American moral complicity in the greatest swindle ever? ….Make no mistake about it. This is the dark side of American politics. And of the American media. Back in 1992 we had a candidate who had dodged the draft, had absurdly lied about pot smoking and marital infidelity, and pretended to be all things to all people. Despite the transparency of his lies, and the obvious lack of character, the media gave him a pass. And the people chose him over a man who had a long record of public service, including distinguished service during the war (despite the lies put out by Sid the Scumbag Blumenthal) and was as honorable a man as has ever served as commander-in-chief. …."

Kansas City Star via AP 9/1/99 Barry Renfrew "…Perhaps the most successful business in Russia today is organized crime, which is spreading across the world and threatens to do more damage than Soviet spies ever did in the Cold War. Reports of alleged money laundering that link Russian organized crime to billions of dollars channeled through the Bank of New York could show how Russia's crime syndicates are multinational operations. Russians have become used to scores of bomb attacks each year, often involving organized crime groups or business rivals seeking to settle turf battles. On Tuesday, an explosion ripped through a video game parlor in a shopping mall near the Kremlin, injuring at least 30 persons. Authorities said it could have been an attack by terrorists or by organized crime….. Organized crime and corruption reach the highest levels of the Russian government. Some analysts say it's no longer possible to distinguish between the two. "It has been known for a long time that the entire government system is corrupt," said Konstantin Borovoi, an independent liberal member of parliament. "Corruption has drained the nation's resources beyond all imaginable limits." …."

New York Post 9/9/99 Editorial "....A criminal investigation has uncovered evidence that a Swiss company bribed Russian President Boris Yeltsin and his family to the tune of over $1 million in return for lucrative construction contracts. The news is profoundly troubling - but hardly surprising. Russia these days is an enormous cesspool of economic corruption, and there's no reason not to believe that Yeltsin, like too many other high officials in Moscow, had his finger in the pie. Still, it's a tragic comedown for the father of Russian democracy - a man who, just a decade ago, was poised to become one of the landmark figures of the 20th century. .......As Russia's president, he stood up courageously to the diehard Stalinists bent on restoring authoritarian rule and reconstituting the Soviet Union, and to the extreme right-wing nationalists as well. But Yeltsinhas long turned a blind eye to economic corruption in Russia - as well as to organized crime's growing stranglehold on the nation's natural assets. Now, perhaps, we know why. During an hour-long phone call yesterday with President Clinton, Yeltsin heatedly denied receiving any bribes. But if the Swiss allegations are true - and reports suggest the one company paid out close to $15 million in bribes to Yeltsin and his cronies - they undoubtedly represent only the tip of the iceberg. ....."

Wall Street Journal 9/8/99 Wayne Merry "...With each new revelation of Russian money laundering or the failures of reform, accusing fingers point at Vice President Al Gore. Why? Aren't the State and Treasury departments more likely culprits? Obviously Mr. Gore is a partisan political target, but the real reason he finds himself in the hot seat is his involvement in a little-known government body called the Gore-Chernomyrdin Commission. The commission is a bilateral coordinating mechanism co-chaired by the American vice president and whoever is the Russian prime minister (originally Viktor Chernomyrdin). It meets formally twice a year in alternating capitals, but the working level never stops. The American delegations travelling to Moscow total 700 to 800 officials, including many hangers-on who never see the inside of a meeting room. The Russians, from poverty and good sense, are more austere in their staffing. The Gore-Chernomyrdin Commission was launched early in the Clinton administration as the keystone of its partnership with Boris Yeltsin's government. The new administration recognized that vested interests and bureaucracies on both sides were stuck in Cold War thinking. The idea was to engage the No. 2 man in both political systems to force initiatives through their respective red-tape factories. Expectations were high. Indeed similar commissions were created for Mr. Gore to co-chair with Ukraine, Kazakstan and South Africa. Political and economic reforms in Russia have largely failed, and part of the blame must go to Mr. Gore and his commission. Over time the commission has taken on a bureaucratic life of its own; it now impedes rather than encourages innovation. U.S. agencies cannot conduct normal cooperation with Russian counterparts because the commission needs fodder for its twice-yearly summits: new programs to unveil, documents to sign, photo-ops for the principals....."

New York Post 9/9/99 Al Guart "....U.S. intelligence officials are keeping tabs on the Bank of New York money-laundering probe for clues about whether mobsters control the manufacturer of Russian fighter jets, The Post has learned. BNY is at the center of an international probe into whether it knowingly laundered billions in illicit cash for mob-dominated Russian banks. U.S. intelligence officials have been quietly questioning people involved in the mushrooming BNY scandal about the failure of two Russian banks that jointly owned a 39 percent stake in the high-tech Sukhoi line of fighter jets. The coveted Sukhoi jets, sold to air forces from Iraq to India, run from $30 million to $45 million, and include models capable of carrying nuclear warheads. U.S. officials are worried Sukhoi could be under the control of Russian organized-crime figures and are following a twisted money trail from Russia to Cyprus through BNY to at least three off-shore accounts, sources said. "If the manufacturer of arguably the world's deadliest military aircraft is controlled by Russian organized crime, it makes the world a little more dangerous place to live," said one source who was questioned about the matter. "The problem right now is, nobody really knows." ..."

LA Times 9/9/99 Tyler Marshall Richard Paddock "....President Clinton's senior Russia policymakers, including Vice President Al Gore, were kept in the dark for five months about a Justice Department investigation of alleged money laundering involving Russian criminal elements and a major U.S. bank, U.S. officials disclosed Tuesday. Clinton administration officials said the lack of notification is significant because efforts to curtail corruption in Russia, including money laundering, have been a key issue in U.S.-Russian relations and the subject of discussions within a bilateral commission co-chaired by Gore. Those officials, who requested anonymity, said Gore and others involved in formulating U.S. policy toward Moscow were informed about the investigation only after it was described in media reports late last month. They said the information had been withheld by federal law enforcement officials on grounds that the investigation into Russian money channeled through the Bank of New York had turned up no clear connection either with Russian government officials or with public funds. The administration sources said the investigators apparently concluded that, because they had no proof of official involvement, the scandal contained no significant national security or foreign policy ramifications......"

USA Today 9/9/99 Bill Nichols "....State Department and White House aides first alerted the Justice Department in March about possible Russian money laundering at the Bank of New York, administration officials said Tuesday. However, Justice did not brief President Clinton, Vice President Gore and Secretary of State Madeleine Albright until Aug. 27 - despite repeated requests from the National Security Council (NSC) for Justice to alert senior officials if national security or foreign policy were compromised. Administration officials said that Clinton, Gore and Albright were not alerted when the State Department and NSC learned of the allegations because of fear of interfering with a possible ongoing Justice investigation and because it was unclear what the facts were. A Justice Department official defended the department's lack of providing notification, saying that the investigation had produced no evidence of Russian government involvement or misuse of U.S. or International Monetary Fund loans to Russia. Administration officials said the briefings Aug. 27 for Clinton, Gore and others were prompted by press reports of alleged money laundering and not because of any evidence of government involvement or misuse of U.S. or IMF funds....."

New York Times 9/10/99 Rep James Leach "....Recent allegations that American and European banks have facilitated money laundering for Russian organized-crime figures underscore how intractable a problem corruption in Russia is and how vulnerable Western institutions are to the lure of servicing the world's most virulent kleptocracy. Russia is hardly the first country to be victimized by a culture of corruption. The plundering of the Philippines under Marcos, the looting of Zaire by Mobutu and Indonesia's crony capitalism during the last years of Suharto stand as parallels. What sets Russia apart is the pervasiveness of politically tolerated corruption in a country of such size and geopolitical significance. The Russian Government estimates that criminal syndicates control 40 percent of the economy and perhaps half of the country's banking assets, though others put the figures higher. In any country where political stability is questionable and legal protections of property are unreliable, those who come to control wealth, legally or otherwise, can be expected to invest abroad. In Russia, theft exceeds investment, resulting in negative economic growth and a disillusioned society...."

The Center For Security Policy / http://www.security-policy.org/latest.html 9/10/99 "....The American people's understandable ennui with such tripe might be called "Excuse Fatigue." Unfortunately for Messrs. Clinton and Gore, the excuses with respect to their implication in what the Economist has called the Russian "climate of corruption"(1) are becoming so implausible as to render them not just fatiguing, but laughable. Their Administration's culpability is laid bare by two op.ed. articles that appeared earlier this week in the New York Times and Wall Street Journal......Authored, respectively, by Harvard's Jeffrey Sachs and a former State and Pentagon official, Wayne Merry, these essays confirmed a longstanding contention of the Center for Security Policy and its Casey Institute(2): The Clinton-Gore Administration's stewardship of U.S.-Russian relations has been defective from its inception. Matters have been greatly exacerbated by the Vice President's personally micro-managed and self-serving co-chairmanship of a non-transparent, out-of-channels bilateral committee that bears his name. Its lasting legacy has been to diminish the chances for real, systemic reform in Russia, accentuate conditions for massive corruption and expose the United States to new, dangerous national security abuses......"

The Center For Security Policy / http://www.security-policy.org/latest.html 9/10/99 "....With the scrutiny on "What did the Vice President Know and When Did He Know It" intensifying day by day,(3) high-level policy officials in both Washington and Moscow are trampling over one-another to find exit doors. Indeed, the sheer magnitude and suddenness of the Clinton-Gore policy meltdown vis á vis Moscow has turned briefing rooms into political infernos and left leadership figures scrambling to blow the whistle on their fellow officials..... Cases in point are the recent assertions by National Security Advisor Samuel Berger, and the Vice President's staff, that they only learned of the international investigations of the Russian connection to multi-billion dollar money-laundering/corruption schemes involving the Bank of New York when it was revealed in press reports. As Berger put it in his press conference on [8] September:.....An editorial in yesterday's Washington Times puts this blather in its proper light: "Given that the White House's National Security Council, as well as the State and Treasury departments, were all intimately aware of the money-laundering investigations conducted by the Justice Department, White House assertions that Messrs. Clinton and Gore learned of the investigation by reading their morning newspapers are simply, and utterly, preposterous. Congress' impending investigation has become all the more urgent in the face of the White House's incomprehensible explanation." ...."

New York Times 9/12/99 Celestine Bohlen Michael Gordon "....Irritated by allegations of money laundering, some of Russia's leading businessmen insist that the West has overlooked a simpler explanation for the billions of dollars that have flowed through several suspicious accounts at the Bank of New York. While acknowledging that some Russian money stashed abroad may have been gained from organized crime or other criminal activity, they suggest that many of the thousands of transactions now under investigation can be attributed to Russian importers engaged in old games of dodging Russian tariffs and taxes. The businessmen agree that laws may have been broken, but insist that they were Russian, not foreign, laws. A government was cheated, they say, but it was the discredited Russian administration, not the United States Government or the International Monetary Fund. And yes, funds were used in dubious ways to buy goods, but it was furniture, food and electronics for consumers. There is no question that these businessmen have their own motives in touting this explanation. They want to remove the taint of money laundering and organized crime that has cast a cloud over all Russian companies, legitimate and corrupt. Still, in the context of Russia's chaotic economy and get-rich-quick approach to capitalism, their explanations appear largely plausible, if incomplete....."

New York Times 9/12/99 ".... Certainly there are limits to what outsiders, including foreign lenders, can do within Russia. But American and Swiss banking regulators can take the lead in investigating this problem, forcing Russian regulators to act and teaching them some monitoring techniques at the same time A separate issue relates to evidence of official corruption, possibly involving illegal diversion of billions in aid from the I.M.F., the World Bank and other institutions. The suspicion is also growing that in a bid to speed privatization, stabilize Russian currency and encourage greater private investment, American policy makers may have looked the other way when charges of wrongdoing first surfaced. Some Republicans have suggested that Vice President Al Gore was among those in the Administration more interested in propping up Mr. Yeltsin than in holding his Government to account. These are significant questions. Later this month, Representative Jim Leach of the House Banking Committee will open hearings on what he says is a Russian kleptocracy. ...."

New York Times 9/12/99 Fritz Ermath "....Of course the Administration has been aware of the crime and corruption and has known that this has been much more than mafia-type activity. It has known that "reform" was the entrenchment of a kleptocracy in which corrupt officials ally with a very few business magnates to send wealth out of the country. It has been crony capitalism without much capitalism. But the Administration wrote off the top-to-bottom corruption of what it proclaimed as Russian reform. It also discouraged candid intelligence and diplomatic reports about it, as former officials are now revealing. ..."

New York Times 9/12/99 Fritz Ermath "....This silence protected our policy, especially International Monetary Fund lending. No audience has found this more offensive than have the Russians themselves, for they, along with anyone who bothered to read their press, knew the truth. In Washington a few months ago, Georgi Arbatov, the old warhorse of Soviet propaganda, recalled President Clinton's saying in Moscow last September that if the Russians continued down the path of reform, they would get more international support (that is, I.M.F. and other lending). Given the plundering and impoverishment that "the path of reform" has meant, Mr. Arbatov asked, how could Russians not suspect that the United States was deliberately conniving in the wrecking of their country? For once, after decades of sparring over cold war issues, I had to tell Mr. Arbatov that I agreed with him fully....."

New York Times 9/12/99 Fritz Ermath "...But we have to ask: is our overall security relationship with Russia in better shape today than it was in 1993? The answer is clearly no. Diplomatic relations are testy. Arms control is frozen. The danger that nuclear and other weapons might leak out of Russia is hardly diminished. Russian elites are more interested in undermining American superpower status than in cooperation. Worst of all, we have largely lost the admiration and respect of the Russian people that we had six years ago, because of the perversity of the reforms we have been applauding....."

Houston Chronicle 9/12/99 R C Longworth "....The vast criminal society that post-communism Russia has become is the direct descendant of the criminalized Soviet Union. Casual corruption was not only an everyday feature of Soviet life, but it was also vital to keeping that sclerotic, stupendously ill-planned planned economy going. Let's say you, an honest Soviet citizen, worked in a food warehouse and needed a new set of tires to keep your old Zhiguli running. The few auto supply stores had long waiting lists. But fortunately, your brother-in-law had a pal who worked in one of those stores and craved fresh fruit that was reserved for the upper classes that, officially, didn't exist. The solution was simple, even automatic. You stole the fruit at work, with a little gift to your supervisor for turning a blind eye. The fruit-lover pinched the tires. The swap was made. Everyone was happy. It was an example of the free market at work, in a place where the free market was a crime. Nearly everyone stole because not to steal was not to live. Small people stole to get life's necessities. Big shots stole, with the state's approval, to live luxuriously. If wealth in America bought power, power in the Soviet Union bought wealth. Factories stole through an elaborate barter system outside The Plan, simply to keep running. There even was a class of officially tolerated outlaws, called tolkachi, or fixers, who acted as middlemen in these elaborate schemes. Apart from this everyday corruption, of course, was some of the serious crime -- extortion, theft, prostitution -- that exists in every society. The Soviet Union had its professional criminal class that was no more tolerated than in any other society. From time to time, newspapers reported executions of "economic criminals," which was taken to mean truly big-time thieves. ...."

The Toronto Sun 9/12/99 Eric Margolis ".... In recent weeks, two new scandals have cast more light on the greatest theft in modern history. Swiss authorities are preparing a criminal investigation of a Russian-owned firm, Mabetex, involving money laundering and massive bribery. According to Swiss investigators, members of President Boris Yeltsin's entourage, known as "the family," and his two daughters received payoffs from the recent US$1.5 billion renovation of the Kremlin, an incredible ostentation worthy of stupid Czar Nicky Romanov. A Russian prosecutor estimated Mabetex had accumulated at least $10 million in bribes from the renovation. Meanwhile, American investigators are investigating allegations that staff at the Bank of New York, founded by Alexander Hamilton, laundered what may amount to a whopping $10 billion stolen by Russian officials and their gangster cronies. And this is just the tip of the Russian iceberg. Ever since the Soviet Union collapsed in 1991, Russian officials have been looting their nation's treasury and hawking its resources at below market value, pocketing huge bribes and stealing nearly all the aid provided by the United States, the European Union, Japan, Canada and the International Monetary Fund. My own estimate of the mega-theft to date is a minimum $30 billion, which could well reach $100 billion or more if ever properly investigated, which is doubtful. Virtually every import-export deal done with Russia goes through shell companies in Switzerland, Cyprus, the West Indies the Channel Islands and the U.S., where the profits are skimmed off and concealed from tax collectors. Billions earned from exports of oil, timber, arms, furs and minerals never touch Russia but are secreted abroad. Billions more in western aid to Russia is instantly diverted abroad. ...."

AP 9/12/99 "....Swiss bank accounts linked to Russian tycoon Boris Berezovsky have been frozen, a top prosecutor said in an interview broadcast Sunday. Berezovsky, one of Russia's richest businessmen, is reputed to have close ties to President Boris Yeltsin and his family. Russian media have linked him to an investigation into whether money belonging to the state-controlled airline Aeroflot was misappropriated through two Swiss companies. Prosecutor Nikolai Volkov said Swiss bank accounts belonging to Berezovsky or "those firms relating to him'' have been frozen. Volkov, speaking on Russia's Itogi news program, did not name the firms or say how much money was in the accounts. Swiss authorities confirmed that they froze several bank accounts at the request of Russian investigators. Russian prosecutors suspect that Berezovsky set up two firms, Andava and Forus Services, to hide $250 million of Aeroflot's hard-currency earnings outside Russia. Berezovsky has denied the accusations. Volkov is also investigating whether the Swiss company Mabetex paid bribes to senior Russian officials for lucrative construction contracts to renovate the Kremlin. Mabetex and Kremlin officials have denied wrongdoing. In Madrid, Spain, police were investigating two Russians they believe are behind one of Moscow's most dangerous crime gangs and were found to be working from luxurious villas in the south of Spain, a leading daily reported Sunday. ....."

Washington Post 9/13/99 John Harris "...President Clinton warned Russian Prime Minister Vladimir Putin here today that money laundering and other forms of financial corruption purportedly plaguing his country are problems that "could eat the heart out of Russian society." Clinton was meeting for the first time with President Boris Yeltsin's newest premier, a session that came as long-standing concerns about financial corruption at the top levels of Russian society are flaring anew and U.S. critics are charging that the Clinton administration has based too much of its Russia policy on support for Yeltsin......Clinton's vivid language in his meeting with Putin about the perils of government corruption--recounted afterward by Berger--was cited by administration officials as a reflection of how seriously the president regards the problem. In a telephone conversation last week, the Russian president told Clinton that allegations of corruption involving his family were being spread by his political adversaries. Those allegations, involving purported illicit payments by a Swiss construction company, surfaced last week amid reports that U.S. prosecutors suspect billions of dollars of Russian money may have been laundered through the Bank of New York. ....."

USA TODAY 9/13/99 Jack Kelley Douglas Stanglin "....U.S., British and Russian investigators have told USA TODAY there is "strong evidence" that 780 Russian officials used a bond-selling scheme to transfer billions of dollars out of the country last year, beginning just 72 hours after the International Monetary Fund (IMF) deposited a $4.8 billion loan into Russia's Central Bank. The list includes high-ranking current and former officials such as former deputy prime minister Anatoly Chubais, architect of Russia's privatization after the 1991 fall of communism, and former foreign minister Andrei Kozyrev. Both deny any wrongdoing. ...."

New York Times 9/9/99 William Safire "...Surprise, surprise: corruption has been rampant in the Kremlin. Swiss investigators are finding funny money in secret bank accounts of President Yeltsin's personal and official family members. In the U.S., the Bank of New York is being forced to explain the laundering of billions ripped off by favored oligarchs. "Five years ago," says Grigory Yavlinsky, the reformist leader who has long been blowing an unheeded whistle on the grandest larceny of the century, "you could have asked any little child in the smallest village in Siberia about this, and he would have told you all about the criminal conspiracies. Why is it news today? Because of your elections and ours." The Gore-Chernomyrdin Commission, with its hundreds of junketeering bureaucrats, treated the corruption as a mere bump on the road to a market economy. Vice President Al Gore even famously scrawled a barnyard epithet across a C.I.A. memo warning of the diversion of foreign aid into the pockets of Yeltsin's clique. (Why doesn't Al enliven his speeches with such colorful expressions?) .......In Russian politics, three main forces are also taking shape: On the left is the Communist Party, its members aging and dying, its Stalinists and Agrarians splintering off. Though it holds nearly half the Duma seats now, that could drop to below a third in December's elections. In the sinister center is the front-running team of the old spymaster Yevgeny Primakov and Moscow's Mayor, Yuri Luzhkov. They have the main money men and the media moguls behind them. Cozy corruption would most likely continue in this "Yevgeny and Yuri Show." On the right is Yabloko, the democratic party headed by Yavlinsky, the only reformer not to have been suckered and dumped by Yeltsin. He's just been joined by Sergei Stepashin, also 47, one of the revolving-door prime ministers; this cop expands the party base by bringing along not-nutty nationalists. Yavlinsky insists he's clean, and should help Yabloko in its goal of doubling its strength to a fifth of the Duma seats. ...... "

Reuters- UPI 9/16/99 "…The head of Interpol said Thursday that the alleged Russian money-laundering scheme involving a New York bank was the biggest such affair the global crime-fighting agency had come across so far. Interpol's British Secretary General Raymond Kendall told Reuters during a visit to Geneva that his agency was cooperating with U.S. investigators in the probe but that no arrests had been made so far. "We are involved," Kendall said. "In dimension terms, it is the biggest affair we have seen up to now," he added. "What is complex in the Russian situation is that you seem to be dealing with corruption taking place at such high levels that the normal ways of cooperation you'd use are not necessarily the valid ones," said Kendall. "You want to be sure that the information that you are dealing with doesn't get to the wrong people...I could not send a message to anyone in Russia, I have to be sure that it's not going to get into wrong hands."….U.S. and British prosecutors are investigating whether Russian mobsters, businessmen or officials siphoned more than $15 billion of dollars out of the country and laundered them through accounts at the Bank of New York…..Separately, prosecutors are also probing reports that a Swiss firm may have bribed Kremlin officials to win hundreds of millions of dollars in contracts to renovate public buildings….."

New York Post 9/18/99 Jesse Angelo "....Some of the biggest companies in the world received money from Bank of New York accounts at the center of a massive $10 billion Russian mob money-laundering probe. Investigators have discovered that General Electric, Sony, Hewlett-Packard and Motorola were among hundreds of companies wired money from accounts linked to a company called Benex. Probers believe the wire transfers were payments from Russian clients diverted through the Benex accounts at BNY so that the Russian companies could avoid paying taxes and customs' duties in their homeland. While the Russian companies may be in trouble with the Moscow tax police, there is no suggestion that any of the companies that received the funds did anything wrong, authorities said. A spokesman for GE said the company was reviewing its Russian customers' payment practices to ensure they were legit. The other companies declined to comment. ...."

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….The first mistake was the West’s perception of the elected Russian president, Boris Yeltsin; where American triumphalists saw a great democrat determined to destroy the Communist system for freedom’s sake, Soviet history will record a usurper. A usurper’s first task is to transform a thin layer of the self-interested rabble into a constituency. Western assistance, IMF lending and the targeted division of national assets are what provided Boris Yeltsin the initial wherewithal to purchase his constituency of ex-Komsomol [Communist Youth League] bank chiefs, who were given the freedom and the mechanisms to plunder their own country in tandem with a resurgent and more economically competent criminal class. The new elite learned everything about the confiscation of wealth, but nothing about its creation. Worse yet, this new elite thrives in the conditions of chaos and eschews the very stability for which the United States so fervently hopes knowing full well, as they do, that stability will severely hamper their ability to obtain outrageous profits. Consequently, Yeltsin’s "reform" government was and is doomed to sustain this parasitic political base composed of the banking oligarchy.

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….The second mistake lay in a profound misunderstanding of Russian culture and in the Harvard Institute of International Development advisers’ disregard for the very basis for their own country’s success; property rights. It was a very grave error. Private property is not only the most effective instrument of economic organization, it is also the organizational mechanism of an independent civil society. The protection of property, both of individuals’ and that of a nation, has justified the existence of and a population’s acceptance of the modern state and its public levies. Russian property rights are tricky; property has never been distributed, but only confiscated and awarded on a cyclical basis. For the big players property exists, as it always has, only where there is power. For the common man, the property right hasn’t advanced much beyond custom which prevents the taking of any man’s shelter, clothes or tools so long as continuous usage is demonstrable. An additional, purely Slavic feature of the Russians’ concept of property is the shared belief that each has a claim upon some part of the whole.

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….In ancient ‘Rus, property existed for the individual as a claim - or an entitlement if you will - to a shared asset, a votchina or "estate", held by all the members of a particular clan. This understanding of property still informs the culture; though Westerners bemoan Moscow mayor Yury Lyuzhkov’s retention of the system of the residential permit ("propiska") as an impediment to a flexible labor force, the policy is one of Lyuzhkov’s most popular. Muscovites are well-satisfied with a mayor who polices outsiders as they believe any proprietor of such a great estate as Moscow should. The Russians’ failure to accept the Roman concept of private property has compelled them to suffer the coercive powers of the state so that at the very least a civil order, if not a civil society, might be established and sustained. The hackneyed idea that Russians have some special longing for tyranny is a pernicious myth……. Since only the Tsar or the Party had property, no individual Russian could be sure of long-term usage of anything upon which to create wealth. The property right matters most of all to the poor because property is the poor man’s ticket into the game of wealth creation. The rich, after all, have their money and their friends to protect their holdings, while the poor much rely upon the law alone. In the absence of property, it was access - the opportunity to seek opportunity - and favor in which the Russians began to traffic. The connections one achieved, in turn, became the most essential tools a human being could grasp, employ and, over time, in which he might trade. Where relationships, not laws, are used to define society’s boundaries, tribute must be paid. Bribery, extortion and subterfuge have been the inevitable result. What marks the Russian condition in particular is the scale of these activities, which is colossal. Russia, then, is a negotiated culture, the opposite of the openly competitive culture productive markets require…..When the Administration says it had no choice but to rely upon the bad actors it did select for American largesse, Congress should recall Larisa Piasheva. How different today’s Russia might have been had only the Bush Administration and the many Western advisers from the IMF, the World Bank, the International Finance Corporation, the European Bank for Reconstruction and Development and the Harvard Institute of International Development then on the ground in Moscow chosen to champion Ms. Piasheva’s vision of a rapid disbursement of property to the people rather than to the "golden children" of the Soviet nomenklatura….."

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….The improbable yields (290% on 3-month paper at one point) on the Russian market’s GKO instruments were paid with US taxpayers’ money via IMF loans. Guess where all investment went? By yielding those kind of non-market returns, the bond market insured that all the country’s resources and all that it was capable of attracting went to the support of the state, just as Tsarism and Communism had done previously.

So lush were the bond market’s rewards that dubious market participants included the Russian Central Bank itself through an off-shore firm known as Fimaco. The involvement of the Harvard Institute of International Development’s [HIID] honchos in the same conflict-of-interest activities has already been admitted publicly and remains the object of a Boston grand jury’s scrutiny…..One particularly striking aspect of Bill Clinton’s presidency is how aggressively his administration has worked to capture the political support of the financial sector, offering up heretofore unseen gobs of government favor. (A disproportionate number of firms receiving OPIC guarantees, Export-Import bank lending, and IFC and Russian Enterprise Fund participation were generous contributors to both Clinton campaign coffers and the DNC.) The basic formula was simple, it’s not the rocket science Russia’s Harvard advisers intimated it was: The bread and butter of all equity markets are bonds. Wall Street wanted a debt market. You build it and we’ll come, they said…."

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….In an interview published in a 1993 issue of VIP, the vanity organ of the commercialized nomenklatura., Shcherbakov reported excellent relations with the new regime of "eager young reformers" – Gaidar, Chubais et al – and their leader Boris Yeltsin. All hail-fellows-well-met. So too did FPI enjoy similarly sympathetic connections to the EBRD, the IMF and the UN Industrial Development Organization. Shcherbakov even boasted about FPI’s "new approach to the problem of the property of the Western Army Groups in Eastern Germany that comes down to its joint exploitation by Russian and German businesses", an eyepopping admission worthy of considerable note since a year after the interview was published, the Russian scandal was Bonn’s claim that Soviet weaponry sales to rogue regimes originating in the Western Army Group had amounted to a $4 billion criminal take. A former employee of FPI, speaking through clenched teeth, reported, "It’s [FPI] not a well-known organization, but it’s one of the most wealthy and most powerful organizations in Russia," and their work was engineering commission-paying deals for money or privilege with the Kremlin, thereby organizing a pipeline of tribute typical of corrupt regimes. "I can’t say it publicly, I can’t prove my position with documents, but I know they were privatizing companies, the very best companies, before we had a privatisation program." …"

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….The CIA has been determined that through Nordex, FPI seized the export earnings from Russia’s natural resource companies – oil, gas, platinium, gold, diamonds – and from industrial firms exporting items such as steel and aluminum and then stashed the outrageous profits in Western bank accounts. And only now, eight years almost to the day later, do US taxpayers learn that the "eager, young reformers" to whom their resources were sent for the purpose of building a new Russia were in league from day one with the exhausted Soviet nomenklatura in a scheme to loot Russia’s wealth and park it in the West….."

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….However, Gaidar really was under pressure, but the pressure was coming from the West to open Russia to unrestricted imports in return for multilateral lending. Gaidar soon delivered a trade policy that was 100% back-to-front, accommodating as it did the self-serving demands of both the West and Russia’s nascent banking oligarchy; Russian manufacturing was to take the brunt of unrestricted foreign competition, but domestic banking was to be protected from competition! Even Russian Central Bank Chairman Viktor Gerashchenko protested, but the Russian bankers were accommodated and the IMF continued lending. So much for the "leverage" foreign policy elites claim foreign assistance programs provide the U.S…."

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….Unsurprisingly, the entire jury-rigged effort has collapsed in flames. The bond market has gone bust, Russia is crushed by her IMF loan payments, and OPIC’s nearly $2 million in U.S. taxpayer-provided guarantees are yet to be resolved. The West’s best course under whatever new government the Russian people elect is to take its own advice, stop meddling, cease all subsidies and allow what few market mechanisms that do exist in Russia to work. The sooner the banking industry’s pylesos ("vacuum cleaners") are allowed to fail, then the sooner the national property can return to market where more able and productive hands might yet grasp it. Until Russians have resolved for themselves how property is to be held and secured their decision de jure, all the destructive economic arrangements and cultural behaviors crowding Russian history will continue. Wealth will not be created without private property; without transferable property secured legally to protect no Russian will pay taxes; without revenues no Russian government can endure without falling back upon what is every state’s final reserve; coercion…."

House Banking Committee Russian Corruption Hearings 9/21/99 Statement of Ann Williamson "….Once the criminal financial flows from Russia and Asia were combined with the easy money common to presidential election cycles and began pumping into the economy in the spring of 1995, it wasn’t long before asset inflation hit US corporate share valuations. Throughout 1995 and 1996, the money supply kept rising, and along with it mutual fund holders’ paper wealth. Attracted by the double-digit yields found in risky, unregulated environments abroad, the banks - given the election year liquidity the Fed wished to export - lent unwisely and to excess. The moral hazard the 1995 $40 billion bailout of Mexico unleashed (the debt was refinanced, not repaid, with additional IMF lending and proceeds from eurobond sales in 1996) led to a tripling of international capital flows. Investors took greater and greater risks in the belief that the "new paradigm" promised taxpayer-provided redemptions if necessary. The consequence of all those dollars frolicking in exotic locales is a $141 billion bailout for Asia, more than $20 billion for Russia in 1998 alone, and $30 billion for Brazil in 1999…."

International Herald Tribune 10/15/99 Marshall Goldman "....Every day there are new revelations and now even indictments stemming from the avalanche of hot Russian money passing through the Bank of New York on its way to a myriad of other U.S., European and offshore banks. Yet almost no responsible officials in the U.S. and Russian governments, nor those in international lending organizations, will admit publicly that their funds or foreign aid have been misused. Admittedly, there may have been a failure to report the sudden influx of a few billion dollars now and then, but otherwise, as Strobe Talbott, the deputy secretary of state, put it in a slightly different context, ''Calm down world.'' Without doubt a substantial portion of the $7.5 billion that was filtered through Benex, a Potemkin-like office set up in 1996 by a Russian émigré in Queens, New York, was not criminally derived money. Much of it was from Russian and foreign businessmen seeking to evade Russian taxes. That is unethical but not criminal. But some of this money did come from corporate theft, organized crime and government kickbacks as well as from misuse of U.S. foreign aid, World Bank support and IMF loans. ....."

New York Times 2/17/00 Timothy O’Brien Raymond Bonner "…. After more than 18 months of investigation, federal authorities delivered Lucy Edwards, a former Bank of New York vice president, and her husband, Peter Berlin, to the United States District Court in Manhattan. They described how between 1996 and last year, more than $7 billion left Russia illegally and flowed through a network of front company accounts at the Bank of New York that were controlled by Mr. Berlin. From there, the money was transferred to offshore accounts. The network, according to the couple, was designed by Russian bankers to whisk money electronically between Russia and the United States for three broad purposes: to evade Russian taxes on money from legitimate business transactions, to avoid Russian customs duties on imports, and to "wash" the profits of outright criminal enterprises through legitimate banks, including a $300,000 ransom payment in 1998 to the kidnappers of a businessman in Russia. The couple, who said they were paid nearly $2 million for their services, said the scheme allowed Russian bankers to conduct illegal banking activities in the United States that circumvented the scrutiny of federal banking regulators and law enforcement officials……Court documents and the couple's oral confession named several Moscow banks as being part of the scheme. According to previously unpublicized documents and to Western financiers with direct knowledge of the banks' affairs, one of the banks, Sobinbank, is controlled by members of a powerful group of Russian financiers known as the oligarchs, who own much of Russia's wealth and have wielded enormous influence within the Kremlin…… Ms. Edwards, Mr. Berlin and three companies controlled by Mr. Berlin -- Benex, Bec International and Lowland -- pleaded guilty to laundering money to promote criminal activity and defraud the Russian Government; conducting unlicensed banking operations; establishing an unauthorized branch of a foreign bank; operating an illegal money transmitting business; bribing a bank employee; receiving illegal payments as a bank employee and laundering those payments abroad; tax evasion; and fraudulently obtaining visas for hundreds of Russians to enter the United States……"

New York Times 2/17/00 Timothy O’Brien Raymond Bonner "…. Mr. Berlin, 45, testified that Benex, Becs and Lowland all had accounts at the Bank of New York that he opened on behalf of his overseers in Moscow. He said that the companies were staffed by DKB employees and that Ms. Edwards helped install Bank of New York computer software in the Forest Hills, Queens, office of a Benex affiliate to allow money to be moved electronically. The couple said that DKB representatives told them in the fall of 1998 that they had acquired control of another bank, Flamingo, and wanted a new company created to move money from that bank through the Bank of New York. Mr. Berlin opened Lowland in Jersey City for that purpose. According to a series of confidential financial audits, a Moscow bank controlled by Aleksandr Smolensky, SBS-Agro, owned sizable stakes in both Sobinbank and Flamingo Bank. ……"

New York Times 2/17/00 Timothy O’Brien Raymond Bonner "…. "Today's pleas starkly demonstrate the serious dangers of unlicensed and unregulated entities operating within the American banking system as cover for money laundering and other criminal activities," said Mary Jo White, the United States Attorney in Manhattan, in a prepared statement yesterday. "Evading and disregarding American laws in this manner significantly undermines the integrity of United States and foreign banking systems." ….."